Consolidating Your Credit Card Debt
Credit cards have revolutionized the purchasing experience since Diners
Club released the first card in the year 1950.
The Dinners Club card gave consumers limited credit that, at
times, even surpassed the personal savings of some participants. It
allowed them to buy items they usually could not afford if they were to
make a straight cash purchase. It also provided the convenience and
safety of not having to carry large amounts of cash.
On average, American households possess 4 cards or a total of 13
payment cards if debit and store cards are included. There are,
actually, 1.3 billion payment cards of assorted types in circulation in
the United States.
But, if you think that credit cards have made the lives of modern
American consumers easier, you may be wrong...
Statistics show that the average amount owed on credit cards for each household in
the U.S. is $4,800 per month. Also, there were 1.3 million card
holders declaring bankruptcy in the year 2003.
And if you still consider yourself unaffected by what you owe on your cards, then
consider this: upon retirement, most Americans can only expect to
receive about 37% percent of their annual retirement income because of
prior debt payment. This will leave many individuals depending on the
government, family and charity for economic survival.
These are some scary facts. So before you find yourself in a position
of economic uncertainty, it might be wise to evaluate your spending and what you curently owe on your cards.
If what you owe exceeds what seems to be a reasonable level,
you may want to consider credit card debt consolidation, where you take
all your card payments and consolidate them into one monthly
payment. This
way, you don't have to worry about managing the payments individually.
Aside from this advantage, it may also provide you with the following
additional benefits:
- Reduce interest payments
- Waive late and overtime fees
- Reduced monthly payments
- Debt relief in a shorter time
- Credit improvement
- Save more money in the long run
There are actually two major types. You may want to consider a Credit Card Counseling firm. They assist
consumers by consolidating all their monthly payments into one single
payment and then dispersing this to the creditors on behalf of the
consumers.
The other type is through a home equity loan or other secured loan.
This is done by exchanging an unsecured debt (such as what you owe on
your card or cards) for a secured debt (one backed by specific assets
such as real estate).
Now, credit card debt consolidation isn't a magic balm that will drive
all your credit card problems away. But, it will make paying what you
oweeasier and might save you money in the long run. Definitely
an alternative worth considering...
