Americans In Debt: What And Why?

People in America are fighting with debt and the outlook doesn't seem like it'll present itself with instant relief for many people

. Employment is progressively harder to find as there are more people looking for jobs than actual job openings.In one month alone during 2012, more than 63,000 financial loans backed by the Federal Housing Administration went through foreclosures. These loans go back to being funded in the years 2008 and 2009. This trend is growing as more people in America are losing their homes because of their struggles with finances.

Another alarming issue is the unemployment rate. Companies in the United States added only 69,000 jobs last May. This is the smallest number of jobs added in a year. This is in comparison to the 650,000 people in America that entered into the work force; most still without jobs. Going from 8.1% to 8.2%, the unemployment rate has seen the amount of Americans who have been out of work for at least six months go up by 300,000. This has equated to a staggering 5.4 million people battling monthly costs and simply trying to keep a roof over their heads and take care of their families.

With this news of the rise in home foreclosures and unemployment, recent reports show an elevation in charge card usage. Using these plastic cards to keep up with monthly expenses, U.S. credit card holders have upped the usage volume by just about 10% from March to April. Too many people are relying on credit just to make it from paycheck to paycheck. Having no other options, credit cards are being used as a temporary fix but becoming long-term problems with high balances and interest charges.

The usage of pre-paid charge cards has gone up as well. Consumers don't run the risk of overcharging or incurring late fees and interest charges, though. Consumers can load a specific amount to the card after which they will use it just like a bank account or charge card but with no long-term repayments and charges. The card holder can reload money to the card for a small fee, usually $4-$5. Some card companies will bypass or decrease these charges altogether via a rewards program. People are prepared to pay these costs knowing there are no long-term financial commitments following the use of the card. Some cards companies even offer budget programs and other tools which will help the consumer be financially responsible and organized.

A payday loan is an option for those who are in need of some immediate cash but don't want to take out another credit card or have to go to a bank to get financing. Not meant to be a long-term debt, these types of loans are approved quickly and most often funded overnight with the intention of being repaid with the borrowers next paycheck. Used responsibly, payday loans can be a helpful solution to a financial need.

by: Melissa Daley

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