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The average American pays $280,000 in interest
Marketwatch, Jan 14, 2015
By Quentin Fottrell

The average American consumer will pay nearly $280,000 in interest over their lifetime, a figure that varies dramatically from state to state based on credit scores and mortgage size....

Your credit score plays a significant part in how much and at what rate a bank will lend you money, but of course people will pay more interest over their lifetime if they have a large mortgage. That’s why in states with cheaper housing, residents pay much less in interest over their lifetimes....

American credit-card debt hits a post-recession high

Marketwatch, By Quentin Fottrell, Sept 13, 2014

U.S. consumers may be relying too heavily on their plastic.

Americans added $28.2 billion to their credit cards in the second quarter of 2014, the largest amount in the last six years and nearly 200% more than in the second quarter of 2009, when the economy emerged from the depths of the Great Recession...

But some Americans are living beyond their means: 20% of people say could not make ends meet without the use of credit and 22% say they would have to make “significant lifestyle changes” if they cut up their credit cards, according to a new poll of 1,878 credit-card users by the National Foundation for Credit Counseling. “Breaking one of the basic rules of personal finance — spending more than you make — is not likely to have a positive outcome,” says Gail Cunningham, spokeswoman for the NFCC....
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About 30 years ago, I read an article that said the average American spent $350,000 over a lifetime on cars, most of which was a combination of buying cars frequently and buying cars on credit. I was floored by how huge the number was. Talk about one step forward and 2 steps back! How could anyone save money and get ahead while spending so much on cars?

Later, when I bought my first house, I added up all the interest and was equally shocked. Mortgage rates were higher then, but even today the mortgage interest can add up to almost as much as the actual price of the house.

Not to mention credit cards. Even today, when interest rates are very low, credit card interest rates are high.

The lifetime cost of debt and interest payments can be huge. HUGE!!!

Since the financial crisis, Household Financial Obligations as a percent of Disposable Personal Income and Household Debt Service Payments as a Percent of Disposable Personal Income has dropped to the lowest level since records began in 1980. Consumers have realized that getting into debt is setting them back.

The way to get ahead financially is:
1. Live Below Your Means

2. Keep your fixed costs low. Buy less house than you can afford. Buy cars infrequently. Maintain them carefully. Pay cash when possible.

3. Pay off credit cards in full every month. If you can't, shift the balances to low-cost credit and pay off the higher-interest cards first.

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