How to Battle Credit Card Debt and Win

It may seem like an unsavory chore when talking to someone about the credit card debt that has piled up like Fall's leaves on your front step. A simple brush of the foot does not make this go away. Just as cleaning one's own yard takes patience and the right tools, so too does eliminating credit card debt take time and tools.
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Credit Card Debt in America

You may be surprised to learn that the majority of Americans are not encumbered by large credit card debt, as many would like you to believe. The median balance for those with credit cards in 2004 rose 10% from 2001, to $2,200, according to The Federal Reserve's 2004 Survey of Consumer Finance. The mean rose to $5,100 a total increase of 15.9% over 2001's numbers. This means that while credit card debt has risen in the country, there are still many people with manageable amounts of credit card debt. From the study, we can see that only 1 in 20 individuals have credit card debt over $20,000. If people learn to use credit wisely, then building up so much debt that it appears we are drowning will never happen again. By being responsible with our credit, we save ourselves money that would have been paid to interest, annual fees, or membership fees.

Stamping out Credit Debt

Credit debt is the antitheses of saving money. To purchase a new couch, lawnmower, computer, curtains, or other such home items using a credit card can be costly in the long run. If we look at the math we may decide not to purchase the new lawnmower using credit debt. Assuming we have the median interest rate of 11.9% on our credit card, we can purchase a $300 lawnmower in August and still owe on it in December. If we take one year to pay the lawnmower off then we can end up paying back around $33 more for the lawnmower. This may seem like a good deal, but if we use credit debt for all our purchases, then we are always racing ahead of our paychecks to increase our future debt. It means we never actually get into the black. Credit debt acts as the bridle to our long term savings, always pulling back quickly when we begin to surge ahead.

Credit Card Debt Consolidation

Like many people, the credit card debt may be setting too high to be considered manageable. This is where some outside tools may come in to play. For instance, credit card debt consolidation can be a very helpful and forgiving mechanism for any individual battling credit card debt. The credit card debt consolidation programs essentially pay off your existing credit debt, thus making you responsible to one person to pay off the debt. This can lower monthly payments, keep individuals from being harassed by creditors wanting their monthly payment (which presumably you cannot afford to pay), and lower the debt payments by a considerable amount. To explore more information on credit card debt consolidation, visit the Consumer Credit site to understand more about the process and how it will affect your finances and credit history.

Unsecured Debt Consolidation Loans

These types of loans do away with credit card debt, but have no strings attached to any asset, like a home or other investment. A person can effectively eliminate credit card debt through the use of an unsecured debt consolidation loan, but like its sister solution-credit card debt consolidation-it can be more expensive and costly to credit history in the long run. If you are interested in exploring this avenue, we recommend reading through the debt consolidation loan consumer guide found on the Debt Workout site. It is a comprehensive approach to understanding debt consolidation loans and can better assist you with understanding all the nuances of that avenue.

Other Alternatives to Consolidation

Credit card debt reduction does not have to be a solitary battle. There are many people out there who have experience coming back from extreme credit debt. Join them in forums online and learn from their experiences. They will offer encouragement as well as provide hope in troubling times. A site like Credit Help Forums can point you in the right direction, or any other forums like Credit Net or Credit Boards. Wherever you decide, become involved and share with others in the community. It will help out in the long run.

According to the 2004 Federal Reserve's Consumer Finance Survey, the median credit limit rose 25% to $13,500, while the median interest rate fell 3%. Not to paint credit card companies as bad, but they seem to be coming after people with renewed vigor. They give more credit to try to entice individuals into spending more. Just look at how low the interest rate is, they say. It cannot hurt to put all the household expenses on the card. Just use the card and receive these rewards. See how good we are to you? All of these things are lies. Credit card debt when used responsibly can enable someone to pick up a costly expense and pay it out over a few months, but the darker side of credit debt is that it can hinder economic security. Do not buy into the credit card lies. If you buy on credit, have a plan to pay off that amount, knowing full well where it will end. It may just save you money.