I have received four different offers to open new credit cards as of Wednesday of this week. Lucky me. I can't say that I am surprised by this as credit card debt in America has risen to new levels, again. The good news here is that we are doing a better job at paying the debt down in a timely fashion, but if you ask me, at the end of the day, credit cards remain a large part of the financial Axis of Evil.

Did you know that the average interest rate on a credit card is nearly 15%? Simply put, for every $1,000 on your card, you can tack on another $150 in interest. It's free money - for the card company. It's also one of the major problems facing young adults everywhere. The ease with which purchases can be made with plastic is something that impacts all facets of one's financial situation. Aside from having to make monthly payments (reducing the money you can spend on other things), outstanding debt can impact your ability to purchase a home, car, or the amount that you can put towards retirement (actually paying yourself).

The best thing that you can do with outstanding debt is get rid of it. Pay it off, and quickly. Easier said than done, especially if you carry a balance on more than one card. Our advice to folks is this - focus on the card with the largest balance, and put the majority of your monthly payment toward the largest balance. Make the minimum payments on any other cards, but the focus should be on paying down the highest balance. Then focus on the next largest balance and do the same thing. It's like a firefighter working on a couple of fires in the same area. The hose focuses on the biggest fire to put it out, while keeping the others at bay. Once the big fire is eliminated, the hose turns to the next biggest, and so on until all fires are out.

We talk about free money a lot, often in the form of an employer match to your retirement plan. Credit cards can seem like free money when you use them - and it is - just not for you. Credit-card-debt-free really is the way to be.

Chuck Wade

(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).