Originally published February 20 2005
A financial planner says that the best way to avoid credit card debt is to simply not use them
by Mike Adams, the Health Ranger, NaturalNews Editor
Financial experts in Oklahoma have said that the best way to avoid falling into the credit card trap is to not have any credit cards. Instead of counting on credit cards for large purchases, people should have a few months' worth of expenses stored in a savings account in order to cover any necessary expenses.
Financial planning experts told Eyewitness News 5 Wednesday that many Oklahomans need to start focusing on cutting out credit card debt -- and eventually cutting up their credit cards for good.
Recent consumer statistics suggest that the average household in the United States carries almost $8,000 in credit card debt.
Financial planners say it's a slippery slope that many families encounter, as well as a bad debt habit that can get passed on to children.
Eyewitness News 5 gave certified financial planners Ted Hughes and Melinda Warren the chance to speak to college students Andrea Koester (upper left) and Kim Morgel (lower right) about the importance of avoiding credit card debt and planning ahead.
Aside from deciding how to spend the weekend and what type of college meal to cook, Koester and Morgal don't have a lot of financial issues to worry about.
Both have avoided the credit card trap that so many college students fall into each year, and both are sharing rent and utilities with two other roommates.
Aside from avoiding credit card debt, building a solid savings account is the next best piece of advice for young people, Warren said.
She said it might be wise to open more than one account -- one for short-term and the other for long-term savings.
"If your fridge goes out or your transmission falls out of your car, you don't have to use your credit card you pull from your savings account," she said.
When it comes to making big purchases, Warren said, young people need to weigh wants with worth.
Andrea said she would love to buy a new car.
But buying a 1- or 2-year-old vehicle will save her thousands off the sticker price -- and she can still have the warranties.
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