Browsing across the web, you stumble upon interesting things, some of which are quite informative. Dave Ramsey and others point out that early in the 20th century buying on credit was frowned upon:

History also teaches us that debt wasn’t always a way of life. In fact, three of the biggest lenders today were founded by people who hated debt. Sears now makes more money on credit than on the sale of merchandise. They are not a store; they are a lender with some stuff out front. However, in 1910 the Sears catalog stated, “Buying on Credit is Folly.” J. C. Penney department stores make millions annually on their plastic, but their founder was nicknamed James “Cash” Penney because he detested the use of debt.

Henry Ford thought debt was a lazy man’s method to purchase items, and his philosophy was so ingrained in Ford Motor Company that Ford didn’t offer financing until 10 years after General Motors did. Now, of course, Ford Motor credit is one of the most profitable of Ford Motor’s operations. The old school saw the folly of debt; the new school saw the opportunity to take advantage of the consumer with debt.

Now it seems as many people have debt in their lives and unfortunately it’s the high interest kind. Car payments, credit card debts, 2nd mortgages, and regular mortgages take a chunk of, if not your whole paycheck. It’s a struggle that many deal with, but few are willing to change.

Does that mean that having debt is ok? Not necessarily. Having a mortgage is debt, but it is a way for

USA Today points out the average credit card debt for an American household is $8,565. How does translate to monthly payments?

Using a typical interest rate and the standard minimum payment, here’s how it breaks down:

If you paid the minimum payment every month, it would take you 249 months to pay off your debt and you would pay $7,486.48 in interest.

It will take you 46 months to be rid of your debt if you pay $256/month. In that time, you will pay $3,108.88 in interest.

Source: Bankrate.com

Can you imagine having credit card debt that can take longer than many student loans?! What do you have to show after 249 payments (20 years)? Most likely, nothing that you originally purchased will be around. We live in a consumer society, which can include disposing of things on a regular basis.

Don’t let the ‘normalcy’ of debt convince you to keep the cycle going. Make it your goal to get rid of your high interest debt as soon as possible.

How do you do get rid of debt?

  1. Stop using credit cards. Hide them or perform a plasticomy.
  2. Discover the exact amount of debt you’re in. You can’t come up with a plan until you know what you owe.
  3. Work to see if you can lower your interest rates. If you can’t, you may consider choosing a 0% card to transfer your balance. Balance transfers are a temporary fix and do not address the root problem.
  4. Control your spending and write a simple budget.
  5. Automate your bills and put aside some money for savings.

It’s not easy, but the steps are simple. Here are some articles that can help you plan your escape from debt.

This post was included in the Carnival of Personal Finance #170 @ The Personal Financier.

Photo Credit: aussiegall