The Average American holds seven credit cards in their wallet at any given time, and one out of every seven Americans has 10 credit cards! The credit card debt in America has been steadily rising over the last decade.
Some studies have shown over 70 percent of consumers use cards for most purchases! This produces results like VISA being held accountable for over 830 billion dollars of charges for the year of 2008. Americans are looking for ways to lower their credit debt or eliminate their credit card debt, without adding any additional debt (loans).
The most radical way to reduce credit debt is by cutting up your cards! Cut up cards, do not sign up for new ones, and pay with cash. When you pay with cash, the money must physically be in your hands to make a purchase; therefore you’re less likely to impulse buy, or to purchase unnecessary items. If getting rid of your credit card isn’t an option, or you would like to keep one for emergencies only, try a debit card instead.
Debit cards are useful because they withdraw electronically from your bank account. It’s a good way to keep from spending money you don’t have, but on the other hand you can’t physically see all the money you could be spending, so impulse buying is still likely.
The best way to lower your debt is to be aware of your surroundings and your financial situation. Try making a budget with a free online budget planner, or write your plan down. You can cut out monthly expenses and the average American could save 300 dollars a month just by planning a budget. Not only will you lower your debt by being aware of financial income and expenses and knowing what you can and cannot spend, you will also be able to use the extra money you saved toward paying off your credit debt!
Feb 14 2010
Debt Consolidation Loans to Consolidate Credit Card Debt
Maybe you owe credit card debt to a host of different credit card companies and are weary of the work and expense that goes into meeting your various monthly obligations. Or maybe you owe money in medical expenses, and would like to find a way to lower the interest rates paid on your outstanding balance. In either case, know that a refinance loan to consolidate debt could provide the solution you seek.
A refinance loan to consolidate debt use your equity in your Florida home as collateral. Since they are secured loans anchored by a powerful asset – your home equity – they are typically available at lower rates than you’re probably paying on your current credit card or medical expense debt. However, the ultimate goal is consolidating your debt into one lower monthly payment; thus allowing you to possibly save hundreds each month. For these reasons, debt consolidation loans are an excellent option for Florida homeowners seeking to consolidate their debt at the lowest interest rate possible.
Locate stellar Florida debt consolidation loans
As is the case with all loans, different lenders offer Florida debt consolidation loans at different rates. To get the best deals, you’ll have to look around. Today, you can find the right debt consolidation loan for your Florida home by searching one of the many quality online lender networks. These sites give you instant access to hundreds of the top Florida mortgage lenders. In addition to your local bank, these online sites allow you to compare different programs so you can make an informed decision.
Some of the things to consider when applying for a loan to consolidate your debt are interest rate and closing costs. When you consolidate your debt you want to make sure that it is into a lower interest rate than you are currently paying. High fees and other closing costs can eat away at any monthly saving you may have with a lower rate so make sure to shop around for a low cost, low interest rate debt consolidation loan that works best for you.
Apr 09 2009
Is Debt Consolidation Good or Bad?
Many people suffering from deep debt obligations often look towards debt consolidation as the answer to their problems. Sometimes the debt is so painful, they don’t always look at both the pros and cons of this debt solution though, so we’ll take a brief look here.
First though, what is debt consolidation? Simply put, it’s the process of combining all your debts into one. If you have ten debts of $10,000 each, then you have a total debt of $100,000. Some of those debts however, might be generating an additional 10% interest, while others are generating 15%-20% interest. In other words: Some of your debt is more expensive than others.
This is where debt consolidation comes into play. In theory, you’d take out a loan for $100,000 at a reasonable – or hopefully low – interest rate. Then you’d use those funds to pay off all ten of the smaller debts. This leaves you with just one payment to make each month, and one interest rate to manage.
Consolidating debt can be done with debt consolidation loans, by transferring your debt to zero or low interest credit cards, and by taking out a home equity loan.
Using the equity of your home to pay off debts can be risky, because if you default on the new loan, you could lose your home.
Likewise, using zero interest credit cards could also be problematic in the future, because these offers are usually designed to lure you in. The zero interest doesn’t last.
Debt consolidation loans might be helpful, but be aware that when you have debt problems to begin with, you might not qualify for low enough interest rates. So if you choose to go this route, be sure to do all the math: Figure out whether the consolidation loan actually will reduce your overall payments – including the total interest you’ll be paying for the life of your loan.
Some credit and debt counselors feel debt consolidation of any kind is a bad move to make though. In fact, it’s estimated that 70% of americans who take out some sort of loan to consolidate their debt end up with the same or worse debt problems within two years.
A better, more long-term solution might be to consider using a debt counselor. Professional counselors negotiate with your creditors to lower your payments or interest rates, while at the same time coaching you to manage debt more effectively. The unfortunate side effect of using counselors though? Your credit report will take a hit because you’re not technically paying your bills as originally agreed.
So there you have a general overview of debt consolidation, the common solutions and options, along with pros and cons of each. Be sure to research all your options completely before making a decision of course, because you don’t want to make your debt problems worse in the long run.
Feb 05 2009
Consumer Debt a Large Concern
Consumer debt is becoming a large concern as Americans are finding themselves increasingly in debt; in fact, America’s consumer debt has recently topped $2 trillion for the first time. Any debt that is used for anything other than investments is considered consumer debt. The most common forms are credit card debt and payday loans. In order to help those who become over their heads in debt, many businesses offering debt consolidation and credit counseling have opened and are becoming quite successful.
Even though consumer debt is a problem in America, the picture’s not quite as bad as some may paint it. Cardweb.com reports that the average American household owes about $8,000 in credit card debt; however, statistics don’t always provide an accurate picture. In reality, most Americans are not in credit card debt at all and those that do owe usually owe about $2000 according to the Federal Reserve 2001 Survey of Consumer Finances. The truth of the matter is that a few individuals with very high debt provide a false image and portray a higher average debt than there truly is.
If the person cannot pay back their consumer debt they may turn to a debt relief service for help. These services have proven to be quite effective at helping people get themselves out of consumer debt. Keep in mind that some of these businesses are actually owned by credit card companies so they may be preoccupied with getting as much money as possible, so make sure you know who owns the company whose help you enlist. There are also some consumer debt relief agencies that non-profits, be aware that this doesn’t stop them from collecting fees for their services.
America isn’t the only country that holds a lot of Consumer debt; the U.K, India, Greece, and Turkey hold their fair share as well. Because consumer debt keeps people from spending money, it has a negative effect on a country’s economy and its GDP Governments seek to cure this problem and encourage people to spend by lowering taxes and interest rates. The sub-prime mortgage problem is another negative factor affecting America’s economy which is sure to make the consumer debt problem worse.
Should a debtor find himself unable to pay off his, Consumer debts he should realize that there are certain method of debt collection that are illegal. The Fair Debt Collections Practices Act prevent creditors from demanding larger payments than permitted, harassing the debtor, threatening the debtor, impermissible calls to the debtor’s place of employment, revealing debt to third parties, failing to send notices, continuing to contact the debtor after receiving a cease communications letter, and failing to verify the owed debt.
With the economy possibly heading towards a recession if you find yourself in consumer debt you certainly aren’t alone. You can take the first steps towards improving your financial future by paying off your cards, prioritizing your debts, decreasing spending, and finding ways to raise extra money. It’s never too late to pay off your consumer debts.
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