This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

6 Ways To Resist Debt Pushers

Think America learned its lesson from the financial crisis? Guess again.

Americans were shaken enough by the Great Recession to reduce their debt levels -- for one year, back in 2009. Since then consumer credit outstanding has increased in each of the subsequent three years, and is rising again so far in 2013. As a result, the amount consumers owe is higher than ever.

Easy money

Part of the problem is that consumers are constantly bombarded by inducements to borrow money. The debt pushers are everywhere: credit card offers in your mailbox, extended-term auto loans at your car dealer, reverse mortgage and home equity pitches on your television, pension-advance salesmen on your telephone and payday lenders in your neighborhood.

If you respond to just a fraction of these come-ons, you will go further and further into debt. In today's society, one of the keys to getting ahead financially is learning to resist the debt pushers.

Here are six steps you can take to avoid them:

  1. Limit your number of credit cards. Do you really need more than two -- one primary card and one as a back-up? Every time you shop you'll get pestered with offers for discounts if you sign up for a store-brand card, but you could probably do just as well by choosing a good rewards card as one of your main credit cards.
  2. Pay your credit balance off every month. Credit cards are designed to be short-term sources of money. With average interest rates of around 13 percent, if you don't pay off your balance in full they turn into a very expensive way of borrowing.
  3. Don't keep extending debt. People seem to have forgotten that borrowing is meant to be temporary. Don't keep extending it with home equity loans, or auto loans that last as long as you're likely to own the car.
  4. Spend only according to budget. Debt pushers have a simple formula: They present you with something you want, and a quick and easy way of getting it. The ready availability of credit makes impulse buying a problem, but you can avoid that problem if you spend only according to your budget.
  5. Use automated savings. If more paychecks went first to savings accounts rather than checking accounts, then saving rather than spending would be the default mode for consumers.
  6. Resist the lure of instant cash. Payday lenders and pension advance loans are designed to get you to trade a future benefit for immediate cash in hand. The catch is that the value of this instant cash is generally nowhere near the value of what you are giving up, so don't be lured into this kind of borrowing.

If you think earning 1 percent or less with a savings account isn't much of an incentive to save, compare earning 1 percent to paying 13 percent on a credit card -- the saver comes out 14 percent ahead of the borrower. That 14 percent should be all the incentive you need to resist the debt pushers.


Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs