Credit Card Debt & US Economy
Many of the American families are being troubled by the most feared credit card debt menace today. Statistical data say that an average American family owes a debt of over $8000 on their credit cards. The first quarter of 2009 has a record of a steep rise (33% higher than in 2008) in the number of bankruptcy filings. Even citizens that could have withstood the falling housing prices and the monstrous recession, failed miserably when the loan sharks and credit card debts pinned them down. Former employee of American Bankruptcy Institute (ABI) and an authentic figure in the field of finance agrees that there is a correlation between the troublesome conditions in the US economy and the credit card debt.Analyzing Credit Card Debt
Unlike the interest rates charged by bank or other lending organizations, credit card interest growth rate is near exponential. A simple arithmetic on credit card debt will enlighten you on the amount of financial burden it places on you. For example, to repay a credit card debt of $8000, if you pay the modest payment toward the card say $20 a month as required by most credit card companies, you will be in debt for 33+ years repaying almost 6 times the value you had borrowed. When it comes to calculating the interest on the principle at a rate of 18% you will have to pay a total sum of $47,520 to the credit card company. Different types of credit cards charge various interest rates ranging from 12% to 28% and imagine the late fees and other penalties levied by the credit card company crushing you under its mighty arm. This is why people opine that credit card companies are legitimate lenders thieving the innocent borrowers.Credit Card Debt Solutions
Are you scared by the facts and figures? Remember there is always hope and a way out. If you are trapped in the iron fist of credit card debt, debt counseling centers can help you. Debt consolidation is one way of reducing your financial burdens. In case you have multiple credit card debts, you can avail a single loan to clear multiple debts. The greatest advantage of debt consolidation loan is that it has fixed interest rates that are much lower than those levied by the credit card companies. In case of severity experienced debt consultants can help you avail low interest mortgage loans to pay of devastating credit card debts.Debt settlement is another tactic used by the debt counseling agents. It involves the art of negotiating with your lenders. Wise people trained in debt settlement negotiation skills can reduce your loan amount drastically and this usually ranges from 25% to 65% reduction in the total sum depending on the negotiation skills of your agent. While the above mentioned are for those who are already in debt, it is wise to adhere to the proverb 'prevention is better than cure'.
