dcsimg

Credit card debt decreases compared to 2011

April 2, 2012
By Karen Lawson

U.S consumers are carrying less credit card debt than at the same time last year, according to consumer advocacy organization CreditKarma.com. As of February 2012, the average U.S. consumer with at least one credit card owed $6,105 in credit card debt, down 15 percent from February 2011.

How does your use of credit compare to the average? If you’re struggling with above-average debt, do-it yourself debt relief options may include refinancing your home loan or rolling your home equity loan into one mortgage at a lower rate. But closing costs reduce potential savings on refinancing, so make sure to include estimated closing costs when using mortgage calculators or discussing refinancing options with lenders.

Consolidating credit card debt can also simplify debt management and reduce finance charges. Homeowners may qualify for a home equity loan or line of credit for consolidating credit card debt, but this option has risks. If you’re unable to pay off the home equity loan, the lender can foreclose on your home. You may also face the temptation to accumulate more credit card debt, and if this happens, you’ll owe more on your home and still have credit card debt.

Debt consolidation cuts costs, but doesn’t pay off your debt

Another option for those with good credit is transferring balances from one card to another by taking advantage of a new card’s initial offer of low or no interest for a specified number of months. Credit card companies usually charge a balance transfer fee of 3-5 percent for each balance transferred, so remember to factor this into your savings calculations. Balance transfers are worthwhile only if you’re able to save on overall finance charges and can commit to not spending more with your credit cards than you can pay in full at the end of the month.

For those overwhelmed with credit card debt, a debt consolidation plan through a consumer credit counseling agency may be helpful. These organizations will negotiate payment plans in exchange for a fee, but be sure to check the Federal Trade Commission’s guidelines for verifying the legitimacy of your credit counselor before you commit to any plan.

Share this article with:

1 Comment »

  1. June 29, 2012 at 2:25 am Anonymous NEIL says:


    CHEAP GENERIC PHARMACY : -==== Men’s Health Drugs ====-

    Buy Cheap Generic Drugs Now!…

Leave a Reply