A Credit Card Debt Crisis May Be Coming
Credit card debt just reached over $1 Trillion according to the Federal Reserve. With student loans coming due we may be in for a credit card debt crisis. On this week’s episode we will discuss credit card debt and the best strategies for paying it down. Check out the full episode and if you have questions about how to get started with Homeowner Prep, be sure to reach out to us or drop your question in the comments.
What You’ll Learn from this Episode:
- Credit Card Debt Statistics
- How Student Loans Will Impact Credit Card Debt
- The Right Way To Repay Credit Card Debt
- And much more!
00:00 Is There A Credit Card Debt Crisis Coming?
00:37 Welcome To The Homeowner Prep Podcast
00:54 Credit Card Debt Statistics
01:17 Average Household Debt
01:35 Why Is There A Credit Card Crisis To Come?
02:04 How Much Debt Do You Have?
02:44 Create A Debt Snowball Plan
03:15 The Mistake That I Made…
04:34 Getting Started With Homeowner Prep
04:57 Connect With Us On Social Media
“I’ve made the mistake of paying off a lot of debt at one time, and man, did that hurt my credit score.”Eric Hellon
Full Episode Transcript:
Have you heard personal credit card debt is at an all time high and with student loans coming due soon, we may just have a credit card crisis. So on today’s episode, we’re gonna talk about credit card debt in the right ways to pay it down.
Welcome to The Homeowner Prep Podcast, where every week we educate and encourage aspiring homeowners to help them buy their first home faster. If you aspire to own a home, you’re in the right place, so enjoy. Do us a favor and leave a review, a rating, and be sure to subscribe. Now, let’s get to this week’s episode.
Hello and welcome to another episode of the Homeowner Prep Podcast. I’m your host, Eric Hellon, and on today’s episode, I don’t wanna scare you, but we are facing a little bit of a crisis to come. Our credit card debt in America is at an all-time high. We’ve seen credit card debt in the last quarter alone go up $45 billion, and this all time high is at $1.03 trillion in credit card debt now, that’s according to the Federal Reserve, but I wanna talk to you about your own personal credit card debt because chances are your household may be holding a little more or a little less credit card debt than normal.
The average American household right now is holding over $9,300 in credit card debt, and yes, that is still an all time high and so there is some concern there because the biggest thing that is coming in October is the restart of student loan payments. A lot of millennials and Gen Zers are about to have to start repaying their student loan debt, and we’re gonna see how that’s gonna impact their ability to still pay their credit card bills. The bad thing about this coming in October is that we may see a lot of defaults to come. In fact, the government is very concerned with the amount of defaults that they’re expecting on credit card payments. So I wanna talk to you today about the right way to pay down your own credit.
The first thing that you have to do is you gotta know where you stand, how much credit card debt do you have? What are the balances? And the best way to do that is to look at your credit report, see what it’s reporting, pull your statements together and see how much debt you truly have. It’s important to know the total amount of debt because you wanna know what you’re truly paying in those credit card statements.
Now they have to show you that if you continue to make the minimum monthly payments, how long it’s gonna actually take you to pay off your debt and how much you’ll actually be paying back. So take a look at your statements, take a look at your credit report, get an understanding of where you stand today.
The second thing you can do is to create a debt snowball plan. A debt snowball plan basically will take a look at all your credit cards, and you find the one that has the lowest balance and you start making the payments on that first and making minimum payments to all your other credit cards. Once that card is paid off, you can take that chunk of money that you’re putting on that one card and add it to the next, and you keep going down the ladder. This is important because it’ll help you pay off that credit faster and save you some money on interest charges.
The third point is actually a mistake that I’ve made. I’ve made the mistake of paying off a lot of debt at one time, and man, did that hurt my credit score. So think about paying off your debt over time, it’ll actually keep your utilization at the level it needs to be in order to improve your credit score instead of paying off a lump sum at one time.
When I did that, I took a 49 point hit to my credit scores and that hurt because as you’re building credit, as you may know, it’s very easy to mess it up, to have your score go down, but it takes time and it takes real effort to build it back up and have that credit score come back. So I’ve made that mistake. Don’t make that same mistake.
Even if you have a lump sum of money and you want to get rid of this debt because you just don’t like having a lot of credit card debt, still take your time, make incremental payments. Set up a snowball plan so that way you can pay off that debt over time. That way you’re utilizing your credit as you should be and building up your credit score.
If you need help in creating a debt snowball plan, that’s actually what we do with Homeowner Prep. As we’re preparing you for home ownership, we want you to build up your credit score as fast as possible, but we want you to do it the right way and so we can help you with that.
If you wanna reach out to us to get started, you can text the word START to 619-848-3700 or you can visit us on our website at www.homeownerprep.com/start there you can reach out to us, set up an initial consultation and get started on your debt repayment plan.
If you just have a general question or a scenario that you wanna run by us, feel free to reach out to us. The easiest way to reach out to us is on social media. We’re on all social media channels, but we tend to get the majority of our questions on our Instagram account @HomeownerPrep.
I hope you got some value from today’s episode. It wasn’t meant to scare you, but it is meant to prepare you so that way you can start paying down your debt and getting ready if you do have student loans to come. I look forward to providing you with some more great content on the next episode, and until then… be blessed.
If you’ve enjoyed this show and got some great value from it, please be sure to rate and review and if you’re checking it out on YouTube, please be sure to subscribe. That really does help us to continue the show and bring in some great guests to help you on your home buying journey.
Connect with Homeowner Prep:
Want to buy a house, but not sure how to get started? Visit our Start Page and we can help you, no matter where you’re at on your homeownership journey. If you enjoyed this episode of The Homeowner Prep Podcast, be sure to subscribe on iTunes and leave a review. It means so much to hear your feedback and we’d love for you to help us spread the word!