If you have inadvertently gotten yourself into debt trouble by relying too heavily on credit cards, you are not alone. The reality is that Americans use credit cards as an everyday form of payment. Unfortunately, they don’t always pay off those credit cards as they had intended. According to the Federal Reserve from a recent survey, 56% of Americans admit to carrying a credit card balance over the prior twelve-month period.
Facts About Credit Card Debt
The Federal Reserve goes on to report that 60% of American households have an outstanding credit card balance of $1,000 or more. Of those households, 25% of them admit to over $10,000 in credit card debt. If almost 14% of their disposable income is being used to service this debt (as reported), it’s hard to imagine why more families aren’t experiencing moderate to severe debt problems. Of course, the longer that debt remains unchecked, the more likely families are to start needing help.
The Debt Consolidation Solution
No matter how bad your debt problems may seem, it’s not something you have to sit by and watch destroy your financial stability. The reality is that you do have options. If your debt situation has not yet reached totally unmanageable levels, you might stand to benefit from a debt consolidation loan. These types of loans are perfectly suited for individuals who seemingly have the means to handle their debt, but they just need a bit of relief from the rigors of dealing with bills and credit card companies. The three most basic reasons why debt consolidation loans provide such a simple solution are:
1. Immediate Relief to Debt Problems – If you qualify for a debt consolidation loan, some or all of your prior lenders are paid off with the proceeds. The late payments, late fees, collection calls and never-ending bills come to an immediate halt. You would be amazed at how fast this begins to relieve your anxiety and associated levels of stress.
2. Immediate Financial Benefits – As part of the debt consolidation process, your effective interest rate and monthly cash outlay will most likely improve rather significantly. As the debt stops accumulating and you stop hemorrhaging cash, your overall financial situation is most likely going to improve. With more available cash, you can avoid using credit cards in the future. Also, you will usually have enough financial flexibility to start accelerating debt payments in an effort to get out of debt sooner rather than later.
3. Minimizes the Effect on Your Credit Rating – The simplest way to save your credit rating when derogatory remarks start appearing is by paying off that associated debt. Once those lenders are satisfied, you can approach them about removing unwanted remarks, which dramatically helps repair your credit score with minimal effort.
At Rescue One Financial, our professional debt counselors stand at the ready to help you with your debt issues. If you would like more information or assistance regarding a debt consolidation loan, we are available to help you through the process and hopefully ease your debt-related stress and concerns.