Credit Debt and America

Most Americans have more then three credit cards in their wallet at all times which has led to an extremely high amount of credit debt in the United States. In fact, almost everyone has a credit card. With the credit companies mailing billions of pieces of advertising on a yearly basis, it is no wonder why families are wrapped up in credit debt that seems nearly impossible to pay off. Each month individuals will get an e-mail or an advertisement stating that they have been pre-approved for credit debt card. This is perfectly fine as long as this plastic is used responsibly.

Tough Debt Facts:

As of last year, the average amount of credit debt that anyone American will carry in a single month is around $9000. These individuals are also those who have more than one debit or charge card. With the incentive programs that are offered by companies that issue out charge cards, millions will sign up. This ultimately ends up resulting in a lot of credit debt that is extremely hard to get out of. When you add to the fact that every charge card in existence will have a late fee, penalties for being late multiple times an extremely high interest rates, it is not hard to believe that the average debt is close to 9k, but there is hope.

Interests on the average card is anywhere from 13% to 17% and even higher. For those who do not have perfect credit, paying interest fees around 22% are not uncommon. Adding to this, those who are given loans from bank institutions at this higher interest rate cannot afford to be late, and when they are, it in often results in back credit debt that can last for months and months. These finance issues are even beginning to trickle into our college freshman. According to recent findings, the average freshman is expected to hold at least $1000 and more in unsecured revolving debt.

Calculating how much credit debt you owe between all lenders is the first step.

For those who are close to graduating, an average debt load of $15,000 and more with 50% of the been on a charge card is also not uncommon. Many are graduating from college and are having to go into a hardship program in order to pay their bills on time. A hardship program is a program set up by creditors that allows an individual to make reduced payments each month in order to prevent from falling into arrears with their creditor. These types of programs can also give some credit debt relief but it does not eradicate the problem of having a loan with a company with a high interest rate.

Lates Fees and Too Much Credit Debt

High late fees and other penalties are also part and parcel with those who have loans. Just last year around $23 billion in penalty fees were charged to the American public. There are quite a few fees that are associated with having a charge card. For example, just as with a debit card, if you go over your balance, you could be charged an overdraft fee. This is when a bank pays out your charge even though there is not enough money left in your account to cover the purchase. The same is true with a credit card, but it is known as an over the limit fee. Over the limit fees will differ depending on what institution you have your unsecured loan with. However, you could be charged a fee each month depending on how long you stay over your limit. Penalties for this can range anywhere from $25-$30 and up depending on who the issuer is.

This is yet another reason why families have migrated over to bad credit debt consolidation loans because the fees are drastically lower and the penalties are not as stiff if a late payment is made. However, it should be stressed that once consolidation begins, that you work with a company that is able to ascertain how much you are able to afford each month and even how much you are able to consolidate at one time. This prevents you from getting into a situation that compromises your ability to be able to pay your credit debt payments on time. Penalties for debts being late or going over your limit do not look like they’re gonna change any time soon.

Those who carry high balances on a charge cards pay dearly in finance fees and may ultimately try to file bankruptcy. However, what many creditors are not telling their customers is the fact that credit debt can be eliminated through outside credit debt help. In fact, many have sought help who have gotten themselves into this type of predicament with their creditors.

Additional Facts

To make matters worse, as a whole, those who default on their credit cards is close to 30%. With more Americans defaulting on their credit debt and ultimately having to file for bankruptcy, those who can look ahead can ascertain when their situation is out of hand and if they need to consolidate credit debt before it gets too late.

Reasons why Americans hold charge cards vary. For many people, they were given a card due to a promotion. However, as fast as life is, we rarely read the terms and conditions on these advertisements. Many banks that issue credit cards are legally able to pull a promotion in the event that an individual is late or goes beyond the terms and conditions that were agreed upon in the advertisement.

This is true for almost every incentive offer that is given to the American public. This is to prevent people from taking advantage of the system but there are many innocent individuals they get caught up in the net of this safety measure that is taken by banks.

If you have found yourself in a lot of credit debt and you have no plan as to how your balances can get reduced, there is help. Companies that issue credit debt help can help you consolidate and reduce your balances so you can finally get peace of mind with your financial situation.