Credit Card Debt

A National Plague

Credit card woes

If you would like to start consolidating debt because you have credit card problems, you are most certainly not alone. In fact, there are about 1.2 billion credit cards in existence in the U.S. With that many cards floating around, it’s not surprising that credit card debt has become such a national epidemic. Consider the following statistics on credit card debt:

• One out of every 73 U.S. households filed for bankruptcy in 2003
• About 24% of personal expenditures in the U.S. are made using credit and debit cards
• The average American household has $14,500 in debt
• The average credit card purchase costs 112% more than if the consumer had used cash
• 60% of credit card accounts have a revolving balance
• 40% of U.S. households outspend what they earn each year

Get yourself initiated by learning about credit card debt

Credit card debt is high-interest, unsecured debt. Unsecured debt refers to financial obligations that are not linked to a piece of property, such as a car or a house. Aside from credit card debt, common forms of unsecured debt include medical bills, personal Loans without collateral, and phone or electric bills for which the service has already been disconnected. Debt consolidation companies mostly only deal with unsecured debt because lenders are more willing to compromise on these types of loans. If a lender can simply seize a piece of property when a borrower doesn’t pay as agreed, of course they’re not going to be as flexible in negotiations. In the U.S., the average credit card interest rate is around 16%. If you have bad credit or have missed payments in the past, your rates will be much higher.

Credit card debt consolidation is one of the most effective tools you can use to tackle troublesome high-interest debt. One of the debt consolidation companies in our network will be more than happy to help you start consolidating debt whenever you’re ready. Here are a few other strategies you can use in addition to consolidation to help you overcome credit card debt:

• Create a budget. Once you start consolidating debt, you will need to stick to your payment plan if you want to overcome credit card debt quickly. Unless you have a budget, consistently making your payments might prove challenging. Before you consolidate, realistically assess your income and spending. If you regularly spend more than you bring in, you will need to make adjustments until you have a surplus.
• Talk to your creditors. You might be able to renegotiate the terms of your credit card debt without the assistance of a consolidation company. It’s at least worth a try to call your creditors and ask for better interest rates. If they refuse, you can either transfer your balance to another card or recruit the services of a consolidation company.
• Focus on the cards with the largest interest rates. If you’d rather start consolidating debt on your own, try focusing your repayment efforts on the cards with the highest interest rates first. Make the largest payments you can toward these cards while making minimum payments on your other credit card debt.