Overall debt in South Florida is decreasing

You may have learned the hard way that it’s always good to keep your debts down to a minimum. Some types of debt, such as a mortgage or car loan, are often a necessary part of life, but others, particularly from credit cards, are best avoided or at least kept as low as possible. However, the lure of a few thousand dollars in credit and a competitive interest rate is hard to resist for many Floridians. Surely it’s okay to spend a few hundred on clothing or home furnishings, and pay it off with low monthly payments, right?

A financial planner from Plantation has advised that keeping a credit card balance is a sign that you’re living beyond your means, and credit card debt should only be reserved for emergencies. Reducing your consumer debt is an important step toward financial freedom, and also allows you to save more for retirement–which is something everyone should be thinking about.

It seems that many people in South Florida have been paying attention to advice like this. New data from consumer site CreditKarma.com shows a reduction in overall debt in our area, especially with credit card debt. The average credit card balance in South Florida dropped about 12 percent from last year. Overall mortgage, credit card, student loan, and car loan debt is 2 percent lower than it was in March 2012.

Reducing debt is a wise choice. It’s not always easy to cut expenses, and sometimes paying down debt can be very difficult for a family facing unemployment or other financial challenges. Speaking with a bankruptcy lawyer can help people with limited options find out the steps they can take to help with their unmanageable credit card debt.

Source: Sun Sentinel, “South Florida debt drops, especially credit card balances,” Donna Gehrke-White, April 19, 2013