Credit cards are now responsible for a majority of the debts
in this country. They have managed to surpass the subprime mortgage debt
figures on their way to the top. Now, defaults on credit cards in such high
numbers will surely hurt a large number of consumers as well as financial
institutions. The US credit card debts are nearing the $1 trillion mark. This
data is going to give you a clear idea of the credit card debt
situation in the US.
Half of all the credit card accounts are making the minimum monthly payments. This is further degrading the overall debt situation. Generally, the credit card debts come with an average interest rate of (13-14) %. Well, the interest rates don’t stay the same once you have higher credit card debts on you. The rates climb up to 20 per cent with high debts. Needless to say, it is not going to do you any good if you continue making the minimum monthly payments on such high credit card debts.
Now that home-equity loans are not available like they used to be before for you to use them in dealing with credit card debts, you’ll need to look for other ways to tackle the high debts on your credit cards.
- Prepare a
list – It is important that you prepare a list of your credit cards. Write
down the balances you owe along with the rates of interest and the minimum
monthly payments that you’re making towards them.
- Go for credit counseling – It is always better to have your finances analyzed by an expert. You’re going to get ideas on how to resolve your debt situation and take measures accordingly.
- Debt settlement – Proper credit counseling will help you know more about the different debt solutions that you can take great advantage of. Credit card debt settlement will reduce the outstanding balance on your credit cards and help you get rid of debt.
- Debt consolidation – You can consolidate your debts through debt consolidation programs, debt consolidation loans and the credit card balance transfer technique. The debt consolidation programs help reduce the interest rates on your credit card debts and make the monthly payments easy on you. You can take care of all your credit card debts with the debt consolidation loans and pay off the loan in installments over a period of time. Credit card balance transfer allows you to make all your credit payments using a zero-interest credit card. These cards come interest free for the introductory period that lasts somewhere between (12- 14) months. Make sure you pay the balances on the zero-interest credit card within this period. The interest rates on these cards will be sky-high once the introductory period is over.
Following the above points
can help you get rid of your credit card debts. All you have to do is stick
with the plan you choose and see that you make it to the end.