| July 5, 2011

Credit Card Debt Slows Economic Recovery

Revolving balances may be holding people back from moving forward.

Though the economy has begun its slow recovery from the recession observed late in the last decade, one of the things keeping it from equalizing more quickly may be the amount of credit card debt carried by consumers.

The average American household has relied too heavily on credit and debt to achieve stability and reach their goals. While focusing heavily and eliminating everything from car and home loans to credit card debt, consumers have not been able to aid nation’s economic recovery by increasing their spending, according to a report from the Wall Street Journal. All told, the average American household borrowed about 127 percent of their annual incomes just prior to the recession, compared with just 84 percent in the 1990s.

The trouble with this is that paying off that much of an overhang with debt has left consumers with little to spend on new purchases – something that’s going to be required to kick start the economy moving forward. Lack of purchasing activity means less profits for U.S. businesses, which means the recovery may be extremely slow going.

How to knock out your debts one by one

In reality, you don’t really knock out debts one by one, but instead you work your way down one by one to find solutions that will allow you to eliminate each type of debt as quickly as possible.

  1. Credit card debt. This is often the type of debt that causes the most problems because the amount you owe changes based on how much you charge. Luckily, it’s also usually the easiest to solve, too. You can use do-it-yourself debt consolidation solutions if you have a good credit score or enroll in a debt management program through a credit counseling agency if your credit score isn’t strong enough to solve your issues on your own.
  2. Student loan debt. Federal student loans can also be consolidated using one of five federally approved programs. You can choose a program that lowers your payments so you can get relief today or make a plan that pays off your debt faster so you can finally get it off your plate.
  3. Auto loan debt. If your auto loan is taking too long to pay off, consider refinancing to reduce the interest rate so you can pay off the principal faster. This may also be a good candidate for debt restructuring, since a bi-weekly payment schedule will help you eliminate the debt faster.
  4. Mortgage debt. If you haven’t done so already, you should speak with a HUD-certified housing counselor to see if you’re eligible for refinancing or mortgage modification under programs like HARP or HAMP. Particularly if you have an adjustable rate mortgage, you may benefit from adjusting your loan to make it easier to manage.

 

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

All Consolidated Credit counselors are certified personal financial counselors (CFC) We've helped 5 million people get out of debt! Call us today and see what we can do for you.

Consolidated Credit is honored to receive the 2012 Excellence in Financial Literacy Education (EIFLE) Nonprofit Organization of the Year award. The EIFLE awards acknowledge innovation, dedication and the commitment of organizations that support financial literacy education worldwide. See what Consolidated Credit can do for you.

Consolidated Credit is honored to receive the 2012 Excellence in Financial Literacy Education (EIFLE) Nonprofit Organization of the Year award. The EIFLE awards acknowledge innovation, dedication and the commitment of organizations that support financial literacy education worldwide. See what Consolidated Credit can do for you.

The National Industry Standards for Homeownership Education and Counseling are a set of guidelines for quality homeownership and counseling services. Industry professionals who adopt these standards can be trusted to provide consistent, high quality advice.
Click here to learn more.

Consolidated Credit Consulting Services, Inc. has been verified as the owner or operator of the Web site located at www.consolidatedcredit.org. Official records confirm Consolidated Credit Consulting Services, Inc. as a valid business. Call us today and see what we can do for you.

Consolidated Credit is a Certified ISO 9001 company, as verified through Bureau Veritas Certification.

Time tested and customer trusted. Consolidated Credit Counseling Services has been a BBB Accredited Business since 1998 and has a current A+ rating. Call us today and see what we can do for you.

View the Consolidatedcredit.org review status

Time tested and customer trusted. Consolidated Credit Counseling Services has been a BBB Accredited Business since 1998 and has a current A+ rating. Call us today and see what we can do for you.

View the Consolidatedcredit.org review status

Consolidated Credit is proud to be an ANAB accredited member. Accreditation by a recognized and respected body such as ANAB ensures the impartiality and competence of our company. To see what we can do for you, give us a call.

U.S. Department of Housing and Urban Development - HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. Consolidated Credit is proud to be a member of HUD and also part of the Hope Now Alliance.

You can save!

With this amount of debt, you'd pay around $xx.xx on a DMP.

FREE Debt Consultation
VE Interactive