Credit Card Debt Relief

Credit cards have become costlier. Interest rates are as high as 29%. The minimum payment amount has also increased. To add to the troubles, credit card fees have increased too. The credit limits have been lowered. The changes have caused much heartburn to consumers and credit cardholders are almost wrestling to get credit card debt relief.

Earlier, a consumer in United States was in the driver’s seat. It was a win-win situation for all market participants. Real estate prices were high, taxes were low, employment level was high and it was much easier to get credit at low rates. Such a scenario no longer exists.

Statistical data indicating credit card debts

• As per “Flow of funds” report furnished by the Federal Reserve for Q4 of 2008, household debts skyrocketed and value of household assets nosedived. Experts are of the opinion that this is an instance of reverse “wealth effect”. The value of bonds, stocks retirement accounts and homes dropped drastically. Many companies downsized their labor force and unemployment was recorded in double digits.
• USD$10,000 is the outstanding credit card debt an average American household is having. Credit card accounts that were late by at least 30 days by the end of 2008 were 5.6%. The rate of delinquency was the highest recorded since 1991. Projections for 2009 are even worse. In January 2009 alone, delinquency rate recorded was 1.2%.
• Consumers in United States carried debt worth USD$ 2.564 trillion in debt in January. The most interesting fact is debts piled up not because of increase in purchasing power but due to delinquencies.
• Getting out of debt can be a harrowing experience. However, it must be remembered that you can’t get credit card debt relief in just one day. It demands a lot of patience and perseverance.

Given below are few of the measures you can take to get out of credit card debt.

• Try not to use the credit cards that attract high interest rates. Use the one that has a lowest interest rate.
• Pay more than the minimum amount every month. If you are paying more than the minimum amount, you are not only paying for the interest but also for the principal amount.
• You can get relief from credit card debts in 2 ways. First is to attend to debts that have lower outstanding balance and the other is paying off credit card debts that have high interest rates.

No matter which road you take, your ultimate aim is financial freedom. So, start working towards it without further delay.