Eliminate Credit Card Debts

Eliminate Credit Card Debts

Credit Card Debt by the Numbers

The numbers speak for themselves:

• The average of all household credit card debt is $9,312. It would take 13 years to pay off that amount assuming a conservative interest rate of 14% and assuming you only pay the required monthly minimum (assuming your creditors have adopted the new amount of 4% of your balance instead of 2%). This means you'll be paying $3,778.81 on this balance in interest (on top of the amount owed) so you pay back $13,090.81.
• Now let's assume you owe $10,000 in credit card debts and your interest rate is 18.5%. At this rate, it could take you 32 years to pay it off, and you'll end up spending $24,500 overall if you don't pay more than the required monthly minimum (we're assuming a monthly minimum that's 2% of your balance).
• The average college student owes $2,800 in credit card debts, and that doesn't include any student loans. If he pays $50 a month and the interest rate is 18%, it will take him more than 10 years to pay it all off, and he will have paid $6,154.
• The total balance of all U.S. credit cards is $665 billion
• A study done by the American Bankers Association showed that 4.81% of all credit accounts were past due by 30 days or more.

Are we a nation that needs to eliminate credit card debts or what? The problem is, most of us don't know how to do it. Some pay the minimum on everything and try to pay more than that on the credit card with the highest interest rate. Some consolidate debts by transferring their credit card balances to a card with a 0% introductory rate and try to pay it off during that time frame. A lot of people turn to a debt management program as a last resort, mainly because they just don't know all that much about them. Fear of the unknown holds a lot of people back.

The thing is, to eliminate credit card debts beyond one of the methods we already mentioned, you might need to enlist the help of a debt management company. There are at four different types of debt management programs designed to deal with credit card debt:

• Debt consolidation - This program gets your interest rates lowered and consolidates all your credit card payments down to one. As a result, you can eliminate credit card debts in five years.
• Debt consolidation loan - This is simply a loan given to you to eliminate credit card debts, which you do immediately, but then you have the loan to pay back. No worries though, because the interest rate is so low that you can have it paid off in five years--without paying more than you were before on monthly minimums. However, you need collateral.
• Debt consolidation mortgage - This is an excellent way for homeowners to eliminate credit card debts. It is similar to a debt consolidation loan in that you get a check to pay off your credit cards, but the amount you borrow is added to your mortgage, so you get that same low interest rate.
• Debt settlement - This gets you reductions in your total credit card balance of 60-80%. However, you have to pay off the new balance immediately, and it could hurt your credit a little bit.

The numbers talk, and so do we. The numbers showed you how much people need debt help, and we tell you ways to get it.