Credit card debt is a serious problem in the USA.  Even though the recession should have taught a lesson to everyone it seems that there are still many people in the USA who have lost control of their credit card debt.  The total consumer debt on credit cards is $900 billion which averages at over $5000 per card.  That may not appear to be too serious but statistics also reveal that the average debt of those in financial trouble exceeds $15,000.   Companies promote the convenience of their cards but looking beyond that the interest rate that they apply to balances that are not paid off in full at the end of the month are extremely high.  The reality facing someone that simply pays off the minimum the credit card company requires each month is that they will be paying interest month after month without really reducing their balance.

Do you see yourself here?  As a matter of priority anyone with a problem should address it immediately.  Indeed someone with a number of different financial liabilities should list them all and against the debt write down the interest rate being paid.  The picture may not look too good.  If you are earning regular income but it is going out each month to pay creditors life will be stressful to say the least.

Perhaps Negotiate?

One thing to try is negotiation; perhaps your credit card company will agree to reduce your interest payments to help you clear the debt.  It may leave you without a credit card to use in the future depending upon the attitude of the company involved but if you succeed you will be able to remove one of your liabilities, and likely the one incurring the highest interest.

Years ago there were several companies offering 0% balance transfers that would take on the debt; those options are more limited these days, especially if you have a poor credit score because of your financial problems.  Even if you can do that it will only be an introductory offer and a high rate of interest will click in after a specified period.  If you can transfer a debt you will get some breathing space but then make plans to clear the debt completely.  The best way to do that is to look at online lenders who will approve a loan application if the applicant can demonstrate a regular income and the ability to repay the bad credit loan.

IMG_35882 by eric731, on Flickr.  This work is licensed under a Creative Commons Attribution 2.0 Generic License.

Credit Cards: Good and Bad

There are occasions when a credit card is very useful.  The easiest way to book any travel, hotels, flights, etc. is using a credit card.  It means that it is certainly worth keeping a card as long as you have the self-discipline not to build up balances once again.  If you do not reach a stage of confrontation and default letters then you should be able to retain your card; you may even have more than one.  Ironically if you do and you can stay comfortably below the total credit limit on each card it will help your credit status because you are clearly living within your limits.

Times have been difficult recently but the US economy is improving.  If you have problems currently there are solutions and online lenders are there to help.  They inevitably have a quick and simple application process and any applicant that can afford the repayments on the loan required is likely to have the money within a single working day.

Loans

There are times when taking out a loan can be a positive way to improve your financial position.  That is certainly the case when you take at a loan at an interest rate that is far less than is being charged on your credit card.  It will save you money while every time you make a repayment on time that will go on to your credit history, and improve your credit score.  Improving your credit score will not happen overnight.  It is something that will take time and self-discipline but it is worthwhile.  Everyone should take a little time to look at their finances.  Some modern day services such as online lenders can be just the answer to seemingly insoluble financial problems.