Credit card debt and stress

Posted by Nick Niesen on October 29th, 2010

The relationship between stress and credit card debt is a very close and, unfortunately, widespread one. A Public Interest Research Group and Consumer Federation of America analysis of accurate Federal Reserve reveals some astounding figures: the average household has debt ranging between $10,000 to $12,000 and the average number of credit cards is nine. Such statistics are representative for several other countries, besides the US, such as the UK, Canada or Australia. The convenience of using credit cards is the same everywhere, and the psychology of the human society is relatively identical. We all want to own more than we can afford and, at the moment we reach a certain social status or level, we aim for the next and so on. This ?race? also has its victims ? and they are numerous. Credit card debt is a very frequent problem and many therapists and medical staff have to attribute severe cases of depression, stress and anxiety to debt related triggers.

The crisis that develops stress

One of the most important human values is that of equilibrium, stability. Combined with the desire to feel protected and safe, the need for stability dominates our lives in adulthood. Being in debt is a strong negative factor that disrupts the balance we desire. Not only do we have to give back a lot of money, we are also in the danger of loosing what we already own. People going through prolonged periods of being in debt start developing different aspects that ultimately lead to serious medical conditions.

Depression is one of the most frequent problems related to credit card debt, combined with a feeling of being incapacitated to solve the problem. The crisis that triggers the life ruining stress may often develop throughout time, taking baby steps and creeping up on you. By the time you realize how big the problem is, there are relatively few solutions that you can take. The crisis may occur because of poor financial planning, living a life style that is beyond your financial possibilities or simply because of an emergency that drained all of your financial resources.

Tips on avoiding stress and preventing credit card debt

The difficulty of stopping a certain spending pattern is huge, and many people resort to extreme measures, such as cutting up their credit cards in order to freeze their spending. Paying the minimum monthly balance is also extremely tempting and many fail to realize that with each passing month their debt grows substantially due to the credit card?s interest rates. Here are a few ideas that will help you diminish your credit card debt or stop it from appearing in the first place:

Stop unnecessary spending ? don?t consider your credit card a loan, as this will disrupt the balance of your lifestyle and you will spend well above what you can repay. Try to plan ahead and never spend above the determined monthly amount.

Plan your budget ? examine your past spending habits and adjust them. The best way to eliminate credit card related stress is to be in complete control of your finances. When you know exactly how much you can spend, you will undoubtedly set some more realistic goals for your money and your spending will be more rational, rather than emotional.

Plan ahead for large investments ? don?t use your credit card to pay for larger investments, such as a car or home improvements. Also keep in mind, when taking a mortgage or car loan that your debt will increase correspondingly. It?s hard to believe that you will be able to avoid credit card debt if you take out a large loan and also continue to spend money just like before the loan.

Don?t pay one credit card debt with another credit card ? there?s not a lot more to say here, except that medium and long term solutions such as this will most likely lead to bankruptcy, as the interest rates are too high to recover.

Less is more ? do you really need 9 different credit cards? Are the points and reward systems offered on some so attractive and useful? Most financial consultants recommend using one or two credit cards, as this makes perfect sense for better finance management. The more cards you have to manage, the more stress you will bring upon yourself.

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Nick Niesen

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Nick Niesen
Joined: April 29th, 2015
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