Consolidating Debt

Beginning with the first lines of credit in ancient Greece debt has become prevalent in our world. Debt effects everyone from your family, to your relationships and lifestyle.Here are some facts that show how rampant debt has become in our society.

• Some 1.6 million U.S. households -- one of every 73 -- filed for bankruptcy in 2003.
• There are roughly 1.2 billion credit cards in use in the United States.
• Today roughly 24 percent of personal expenditures in this country are made with credit and debit cards.
• A typical credit card purchase ends up costing 112 percent more than if cash were used.
• A $1,000 charge on an average credit card will take almost 22 years to pay, and will cost more than $2,300 in interest ($3,300 total) -- if only 2 percent minimum payments are made.
• About 60 percent of active credit card accounts are not paid off monthly.
• Average credit card debt among all American households is $8,400.
• Average card debt among people who have at least one card is $9,205 -- triple what it was in 1990.
• A typical American family today pays about $1,200 annually in credit card interest.
• The average interest rate on credit cards is 18.9 percent.
• Last year the credit card industry took in $43 billion in card fees.
• Twenty-three percent of Americans admit to maxing out a credit card.
• Eleven percent of Americans admit card debts went to collection.
• Thirteen percent of Americans have been 30 days late paying credit card bills in the past year.
• The average graduate student has six credit cards and one in seven owes more than $15,000.

The list shows a demographic from college students owing student loans and or credit card debt to anyone over the age of 18.

Debt Consolidation is just a simple way of saying you will be in debt longer, but it will be cheaper monthly  with extended payment regiments. However, you will in the long run pay more money to the consolidation company because you are paying extended INTEREST payments. Single monthly payment: Consolidation program requires you to make a single monthly payment towards your bills and debts. That is, you make one payment to the consolidation company every month. The company will divide and disburse the funds to all your creditors. So, you don't need to make multiple payments to individual creditors at different rates of interest. The Average time of Debt Consolidation is 4-6 years versus 20 years without consolidation.

Dave Ramsey, an expert in finances, and self made millionare, believes debt consolidation is not the smart way to get out of debt. He states, "A friend of mine works for a debt consolidation firm whose internal statistics estimate that 78% of the time, after someone consolidates his credit card debt, the debt grows back. Why? He still doesn't have a game plan to either pay cash or not buy at all. He also hasn't saved for "unexpected events" which will also become debt." So why is this? Why people do debt consolidation? Because it sounds so good, but in the long run you will most likely regenerate your debt. Debt like any so many others is a sign of bad spending habits. So to break these habits The way you get out of debt is by changing your habits. You need to commit to getting on a written game plan and sticking to it. Get an extra job and start paying off the debt. Live on less than you make. It is not rocket science, but it is emotional, which is why most people need help getting through it from someone like Dave Ramsey. Don't try debt consolidation!

The information is in front of you. It is time for you to get rid of your debt and move on with your life. Research both sides of the opinion and decide for yourself and make a lifestyle change. Debt is a burden on your shoulders that needs to be eliminated like any bad habit. Nip it in the Bud!

Hope This Helps and God Bless!

-The Franklin