The growing demand for debt consolidation is largely fueled by the need to consolidate credit cards and credit card debt. If you feel like your debts and monthly expenses are growing faster than your income, you’re not alone. Statistics show that the average credit card debt for each household in the U.S. is $4,800 per month.
On average, American households possess 4 major credit cards. When debit cards and department store credit cares are included, the average number rises to a total of 13 payment cards. That’s a total of 1.3 billion credit cards and debit cards in circulation in the United States alone.
With an average of 13 credit cards and debit cards per household, it’s no wonder that your debt may be growing and you may be feeling the need to consolidate credit cards. Without debt consolidation, credit card debt can easily spiral out of control. Just in the year 2003, 1.3 million credit card holders declared bankruptcy.
Credit card debt can even affect your future retirement. 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. Before you find yourself in a position of economic uncertainty, it might be wise to evaluate your spending and current credit card debt. If your credit card debt exceeds what seems to be a reasonable level, you may want to consolidate credit cards and other debt.
So what is credit card debt consolidation?
In a nutshell, credit card debt consolidation is taking all your credit card payments and consolidating 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 credit card interest payments
- Waive credit card late and overtime fees
- Reduce monthly payments
- Get fast debt relief
- Improve your credit score
- Save money by reducing debt
There are actually two major types of credit card debt consolidation…
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 way to consolidate credit cards is through a home equity loan or other secured loan. This is done by exchanging an unsecured debt (such as credit card debt) for a secured debt (a debt backed by specific assets such as real estate).
Credit card debt consolidation isn’t a magic balm that will drive all your credit card debt malaise away. (Before you consolidate your credit cards by putting your home up as collateral, be sure that debt consolidation will improve your situation!) But, credit card debt consolidation will make paying all your debt easier and might save you money in the long run. It’s definitely an alternative worth considering…