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It's Time To Consolidate Credit Card Debt

[Jul 11, 2010.]

 

Consumers Restrained By Credit Card Debt Slow Economic Recovery

The economy has been in trouble for nearly three years. One of the reasons the recovery is taking so long is that consumers need to reduce debt. Approximately 70 percent of the economy is supported by consumer spending. Because consumers have less money to spend, 70 percent of the economy is weaker than it should be. If magically, the American public could get out of debt, and have more money to spend every month, businesses would feel a boost, the government would have more tax revenue, and the deficit might be lower. That may sound over-simplified, because it is, but the fact is that if consumers could get out and spend more, the economy from top to bottom would improve.

Recent Statistics Show Consumers Seeking Debt Solutions

Slowly, consumers are finding debt relief. Recent statistics published by the Federal Reserve show that consumers shed credit card debt by over $80 billion in the first quarter of 2010. Total consumer debt fell 3.4 percent. The effort is nationwide. It also extends to higher income levels than usual. Normally, lower income earners or younger consumers find themselves in trouble with credit card debt. Because even top executives have taken pay cuts during this economic crisis, companies that provide debt solutions have reported that calls from high income earners have jumped. All levels of society, businesses and individuals need debt relief. When debt reaches manageable levels, the economic recovery will move from weak to stronger.

Credit Card Debt Consolidation Is A Better Path Than Bankruptcy

According to the National Bankruptcy Research Center, personal filings for bankruptcy jumped 32 percent last year. This year so far, the number of filings has jumped 16 percent. Bankruptcy ruins credit scores and makes future borrowing very expensive. It is also hard on the economy because the debts that companies are forced to write off get passed on to the rest of the population.

A better way to get out of debt is to begin a debt consolidation program. It is easier to reduce debt that has been consolidated into a program with a low fixed interest rate and set term for repayment. Debt consolidation programs can be designed with affordable monthly payments. Often, once the debt consolidation is in place, the consumer finds extra cash each month and feels significant debt relief.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.

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