America Debt Consolidation

Debt Statistics

Unfortunately, American’s are no strangers to debt. The typical American household possesses an average of 13, yes 13, payment cards! Payment cards can include credit cars, store cards, and other debt cards. Collectively, U.S. citizens hold 1.3 billion in payment cards! Of those 13 payment cards typically held by the average American family, around 4 are usually credit cards. In 1999 alone, Americans racked up $1.1 trillion in credit card purchases, with 43% of families spending to the point of exceeding their household incomes by 40%.

Given these statistics, it isn’t surprising that more than 71% of credit card accounts have only the minimum monthly payments met by cardholders, with 75% of the American public just a few paychecks shy of filing for bankruptcy. But, what few of these people know is that the majority of minimum monthly credit card payments are designated as 90% interest, with only 10% of payments going to reduction of the principal—or actual cost of the product/service you purchase—owed. When consumers make a credit card purchase, they are typically paying 112% more than they would if they were to pay with cold hard cash!

For instance, most Americans bear the burden of around $4,800 in credit card debt from one month to the next. When making minimum monthly payments on such a debt, at a typical annual interest rate of 17%, the debtor will making payments over the course of approximately 39 years, accruing interest to the tune of around $11,000. That would mean your total payments on a debt of $4,800 would end up costing you a total of around $15,600!

Meeting minimum payments on a debt of $8,000 with an 18% interest rate, will take more than 25 years to pay off. With interest, it will end up costing you a total of $24,000!

Of those 75% in danger of bankruptcy, 1.5 billion will actually file bankruptcy. Another 37 million will struggle with little success and at a great unnecessary cost to negotiate with creditors on their own, while yet another wiser 1.5 million will take part in credit counseling services.

If you have a minimum of $5,000 in unsecured debt, you should not hesitate to seek professional debt counseling. A debt counselor will let your creditor know that your participating in a debt management plan. In turn the creditor is likely to be more accommodating—by dropping late charges and over the limit charges and offering you a lower interest rate. Creditors will quit overwhelming you with phone calls and stacks of threatening mail, since your account will be re-aged and your payment viewed as current.

Few would argue that financial woes put major stress on marriage and family life. Studies indicate that 70% of marriages break up as a result of financial problems. Consider that just a measly 2% of houses in America are actually paid for! With an 8% mortgage, most homeowners will sell their homes with 90% of the mortgages yet to be paid. Such financial instability hardly makes for a secure home life.

Consolidating debt can make all the difference in surviving and overcoming your financial struggle. You and your family will take comfort in the fact that you are paying off your debt in a manageable way. And, you won’t even have to take out a loan!