Debt Consolidation When Credit Card Debt Reaches a Lifetime High

Jeanne McTaggartDebt Consolidation

Debt Consolidation

If you compare yourself to the average American, you may feel embarrassed or elated by your personal finances. However, many people deal with credit card debt that reached all new highs this past year. According to a recent article by fool.com, you can avoid becoming a bad credit card or debt statistic by looking into debt consolidation. A credit counseling company fills you in on what you need to do to consolidate your credit card debt into one manageable payment. You will likely feel motivated to pay off credit card debt after comparing your personal financial situation to that of other Americans.

Collecting credit cards

If you have the habit of collecting credit card, consider debt consolidation. When you enroll in a debt management plan, you stop taking out new credit. According to the Federal Reserve Bank of Boston, 72 percent of American consumers have at least one credit card. If you have a handful of credit cards, you are not necessarily doing anything wrong. However, if you only pay the minimum, it’s a sign you need debt consolidation.

Paying off your debt balance

With debt consolidation, the goal is to improve your credit over time by satisfying creditors. You enjoy the feeling of satisfaction of paying off what you owe. At the same time, what you owe goes down because of credit counselors who negotiate a better interest rate for you. As far as how much debt is “normal,” CardHub reports the average credit card debt was about $7,800 per household. If you owe $8,000 on one credit card alone, you likely need as much help as a consumer who has eight credit cards with $1,000 balances on each.

Credit card delinquencies or failing to pay your bill on time hurts your credit score. Experts say the answer includes debt consolidation as well as good budgeting. Some tips for improving your financial situation include putting aside money for emergencies, paying off credit card debt and making payments for your debt management plan. With automatic payment, you protect your credit.

At Christian Credit Counselors, we educate consumers to help their financial standing. For more information on debt consolidation, please contact us.

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