I want to take you on a Financial Journey of an average American with their lifecycle of debt. As shocking as it sounds, many High School students are already being inducted into the Hall Of Debt Fame by their parents who are authorizing them to apply for, carry and use credit cards. Most minor age students carry a rotating debt of $1,500. And to make matters worse, these cards carry very high interest rates. Sadly, many students are taught that owning their first credit card is a step toward adulthood and responsibility.
As these students move toward adulthood and higher education, they continue to take on additional debt via their student loans and the credit cards they are now dependent upon. The average undergrad has accumulated $3,200 in credit card debt upon graduation. It is estimated that 12 Million Students owe an average of $27,000 in student loans for their four year degree.
Many of these students will accumulate an additional $17,000 of debt for their graduate studies, and those continuing on for their doctorate work will add another $29,000 to their total debt mix. Medical graduates on average possess $113,000 in student loans and $8,600 in credit card debt. The sad part of it all is that most students have no idea how their debt will negatively impact the rest of their life.
And of course, upon graduation, many of these new workforce professionals will finance on average a $30,738 car for 6 years at 8%. This is a 40% rise over the last 10 years. Most Americans use credit to finance every vehicle they will ever own and most households own two or more cars.
As these students get established in their careers and settle down in relationships, many will buy their first home for an average of $240,000. After 30 years of making payments, they will have paid over $580,000 for their home.
The average credit card balance for an American household is $10,637. Refinancing a mortgage is often a futile attempt to consolidate an overwhelming amount of debt from a variety of sources. On average, about half of all refinances result in a higher overall loan payment.
Over a lifetime, the average American household will pay over $600,000 in interest to service their debt.
It’s time to begin a crusade to stop this devastating life-cycle of debt. WayPoints Financial Services can show you how.