Practical Credit Card Debt Info

Consumer debt is a major financial problem in today's world. Just look at this credit card debt info:

• Consumer debt is growing from year to year
• Over 40% of American families spend more money than they make every year
• As of October, 2003 consumers owe $1.98 trillion (that's 12 zeros!) which is up more than 40% from 5 years earlier

This overspending and rapidly increasing consumer debt has implications beyond the person or family dealing with it as well. Eventually, people cannot continue to spend money they don't have - the debt will catch up with them eventually.

When this happens, spending will slow, affecting the entire economy. When people buy fewer items, it can lead to job losses, higher interest rates and higher inflation.

The credit card companies - Visa, Mastercard, American Express and all the rest - are all too happy to see everyone charging up their credit cards, buying things they couldn't otherwise afford. They even encourage it with their advertising, showing people enjoying the "good things" in life.

The truth of the matter is that every $1000 of credit card debt takes more than 9 years to repay if you only make minimum payments every month. And for many people making the minimum payment debt will continue to grow because they just keep charging more and more.

This can ultimately lead to serious financial problems. The debt often grows to the point where maintaining it takes every dollar available. No money gets saved for emergencies, retirement or large purchases such as a house or car.

There are a number of ways to reduce credit card debt - debt consolidation, credit counseling, home equity loans, even bankruptcy if taken to the extreme.

The key to avoiding serious problems is to stop spending before it's too late. Before you start searching for the lowest debt consolidation prices, here are a few ideas for ways to save money that can be used to pay off credit cards:

• Use your annual tax refund to pay down credit cards rather than making a large purchase
• Consider using part of your savings account to pay off your debt, then start paying the money back into savings that would have gone to credit card payments
• Sell high cost items (and things with high maintenance costs) such as boats, recreational vehicles, expensive tools, etc. and use the proceeds to pay off debt
• Rent out a room in your house
• Use unexpected money to repay debt (things such as lottery winnings or an inheritance for example)

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