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A few weeks ago, the Federal Reserve released a report stating Americans have the most outstanding revolving debt in history at $1.021 trillion. This substantial revolving debt consists mostly of credit card debt. According to the Federal Reserve, the annual growth rate of revolving credit is 4.9%. A reason for this growth is that consumers are getting access to more credit cards recently.
Credit cards can be a great way to build up your credit history, as long as you use them responsibly. Also, as long as you can avoid interest or late fees, you can maximize any rewards you get while you spend. On an individual level, there are easy ways to ensure you don’t become part of the national statistic and face your credit card debt.
If you are using a credit card, you should always stay disciplined not spend more than you can afford to pay off on time and in full. Consumers make the mistake of charging what they are unable to pay for with cash. But by paying your balance on time, you will avoid interest and late fees. A habit of responsible spending will ensure that you’re staying out of debt.