When you think about your credit card debt, what picture comes to mind? Do you see an 800-pound gorilla sitting on top of your head? Or is it a huge pile of bills that seems insurmountable? Maybe you see your debt like the ancient Greek king, Sisyphus, who was made to roll a huge boulder uphill every day only to see it roll back down. Whether you see your credit card debt as a gorilla or a colossal stone, you’re not alone. The average credit card debt in America has become almost as immense as Sisyphus’s boulder.
The average credit card debt
It’s somewhat difficult to say exactly what is the average credit card debt in America because, as you can imagine, it grows every year and the statistics are always a year behind. However, according to one source, the average credit card debt here in the U.S, per family is $15,519. Just imagine, an average of $15,519. This means many Americans owe even more than this.
To show you how credit card debt is growing, it was about $8300 at the end of 2008. And this was an average, meaning that it included every household in the U.S., even those that had no credit cards. By the end of 2009, this had grown $10,679 and, as you have seen, it’s now probably 50% more than that.
What you can do about credit card debt
The only good news of credit card debt is that there are things you can do to relieve the stress you’re feeling. For example, many Americans turn to credit counseling services to help with what’s called a debt management plan or DMP. The best of these services are non-profits that provide their services free of charge. Many of them are actually supported by the credit providers as it is in their best interests for you to manage your debt rather than declare bankruptcy.
If you choose one of these credit counseling agencies, be sure to understand upfront if they charge for their services and if so, how much. You should also have a clear understanding as to the services they provide. The best of these agencies should be able to restructure your debt so you can get rid of it in five years or less, negotiate lower interest rates, and combine all your credit card debt into one more affordable payment.
A debt consolidation loan
A second way to handle your credit card debt is with a debt consolidation loan. Many Americans choose this as a solution to credit card debt because it allows them to take out a loan, pay off all their credit card debt and then make just one low payment a month.
While there are advantages to a debt consolidation loan, there are also disadvantages. For one thing, it will probably take you as many as seven to 10 years to pay if off vs. the five years it might take you to pay off your credit cards with a debt management plan.
Second, most debt consolidation loans are “secured” loans. This means you have to secure them by pledging an asset – most likely your house. If you fail to make payments on the loan, you could be forced to sell your house to satisfy it – and would find yourself and your furniture out on the street.
Only one way to reduce that debt legally without bankruptcy
Neither debt management via a credit counseling service nor a debt consolidation loan will actually reduce your credit card debt amount itself. In the case of debt management, you will owe the same amount but will have reduced payments. A debt consolidation loan simply shifts your debt from unsecured to secured.
There is a way to really reduce your debt and get much more favorable monthly payments. It is credit debt relief called debt negotiation. A company such as National Debt Relief often gets credit card debt slashed by 50% or more. So if you have the average credit card debt of $15,000, you could pay it off for $7,500. If that sounds like a good solution to you, check out the free debt analysis tool. Since it’s free, you have nothing to lose except maybe that immense boulder you have to keep rolling uphill every day…
I am an associate at National Debt Relief, which is a Debt Consolidation Company that has helped thousands of Americans facing credit card debt problems. We help with debt settlement, debt management, and other debt related financial crisis' facing consum