Credit Card Debt: Management Tips and 2017 Trends
Dentists are no strangers to debt. Between the costs of an education, getting licensed and then opening and operating a practice, borrowing money is a necessary evil. If you find yourself overwhelmed by credit card debt in particular, you're not alone. Continue below to WalletHub's assessment of credit card debt in 2017.
Everyone has debt — be it the thousands you borrowed to go to dental school or a car loan you’ve just about paid off, most people will go through life owing money. Credit card debt is an especially insightful tool for gauging a population's financial health and predicting economic outlooks.
WalletHub, a personal finance website, crunched the numbers for 2017 and gleaned a few surprising facts about Americans’ credit card debt. With 2016 netting some of the greatest credit debt since the Great Recession, the new year was bound to face its own set of struggles.
According to WalletHub analysts, although 2017 got off to a good start with more than $30 billion in first-quarter pay down, $33 billion in new debt was accumulated over the next quarter.
“WalletHub projects that we will end 2017 with more than $60 billion in new credit card debt,” WalletHub reported. “That would mean we’d owe well over $1 trillion in credit card debt overall.”
Below are some highlights from the study, and a few ways you can improve your own credit health going into 2018.
Highlights
·The second quarter of 2017 saw the second-highest amount of credit debt since 2008.
·2016’s final-quarter debt was 130 percent above the post-recession average.
·Charge-off rates are at all-time lows, leading lenders to extend credit. Analysts believe these extensions will lead to a bubble burst.
·The average credit card debt per household as of Q2 2017 is $7,996, five percent higher than a year ago.
Managing Your Debt
WalletHub’s experts recommend the following strategies to get yourself on a path to financial health.
1. Develop a reasonable budget. While you most likely have a solid idea of what you can spend, sometimes our impulses get the better of us. Once you have a budget in place, task yourself with sticking to it by creating a rank-order, or a priority list, for your expenses. Sorry, but this means the fun stuff goes at the bottom.
2. Take the Island Approach. Sadly, this does not mean taking a nap in a hammock. The Island Approach strategy entails keeping several credit cards for different expenses. Offers that allow you to transfer your debt to another line with a limited 0 percent interest period can help you pay off your cards faster.
3. Tackle your largest debts head-on. As the old saying goes, just get it over with. Putting more money into balances with the highest interest rate and paying the minimum on your other debts will benefit your standing in the long run.
4. Reassess your life. Sometimes, the best budget planning means advancing your career or simplifying your life. If you feel overwhelmed by debt, look at your situation as an opportunity to gain new skills or move up in your field.
Discover more Dentist’s Money Digest® news here.
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