By Valencia Higuera
WWR Article Summary (tl;dr) So many people have fallen into the credit card trap, Americans owe a collective $1 trillion in credit card debt, according to the Federal Reserve.
When used responsibly, credit cards are a useful addition to your wallet. They’re not only safer than cash, they can also build your credit rating. And some cards include rewards programs, helping you save money on future purchases.
But with the accessibility of credit, there’s also the risk of overuse and debt. So many people have fallen into the credit card trap, Americans owe a collective $1 trillion in credit card debt, according to the Federal Reserve.
And, a recent GOBankingRates survey found respondents have nearly $7,000 in credit card debt, on average.
Among the major reasons people are piling on more credit card debt:
–– Splurging on a wedding: A fairy-tale wedding can create a memorable day for couples and their guests. But some couples go overboard and end up spending more than they can afford on a wedding. The average cost of a wedding in the U.S. has skyrocketed to a new high of $35,329, according to The Knot 2016 Real Weddings Study.
“Putting most of your wedding expenses on a credit card is a bad idea, and what may not seem like much starts to add up very quickly and soon becomes overwhelming,” said Ogechi Igbokwe, a certified financial educator and founder of OneSavvyDollar, a website that helps students manage their personal finances. “It’s dangerous to start a wedding on credit because it shows you’re not planning adequately as a couple.”
Rather than feel the pressure to throw an impressive wedding, be realistic about what you can afford as a couple, create a budget and then stick with this budget.
“The wedding doesn’t have to be elaborate as long as both parties are present with their loved ones,” Igbokwe said.