America and its’ people are mired in debt. The country’s national debt is tremendously large and continues to grow. The American people are not well off either. In fact, just five years ago, they were responsible for $1.7 trillion of debt. Before you get the wrong idea and think that is article is about irresponsible Americans, that this isn’t the case. American’s are encouraged to make purchases on credit. Our economy is built upon it. In fact, nearly 2/3’s of all purchases are made with credit. If there was no credit, our economy would collapse.
Most individuals don’t have the money to pay for a home, car, appliances or other major purchases without credit. Things are just too expensive and it would take too long to save up the amount of money necessary. Instead, we use credit cards or some other type of loan.
In most homes across the country, both parents, are forced to work in order to make ends meet and many are still struggling. With a slowing economy, high gas prices and a broken housing market, many people are having a hard time paying back what they owe. In fact, many people are being forced to use credit just to get by.
In 2002, it was believed that average amount of debt that an American consumer has is $120,000. This includes things like one’s home, cars, credit card debt etc. That’s a lot of debt and a huge burden for some families. As a result, more and more people are foreclosing on their homes or filing for bankruptcy. For those individuals that are able to deal with their debt early enough, they may be able to consolidate their debt and work with a company that is able to help them lower their interest payments and decrease the amount of money that they pay out monthly. This can be a good way to deal with debt if you have enough money to pay back what you owe but you need a little bit of guidance, support and organization.
Having too much debt can be incredibly stressful. Note that the operative word here is “too much.” Like stated earlier, there is a place for debt. You may need to borrow money to purchase a home or a car. However, beware of consumer debt that comes with very high interest rates. It is the most dangerous debt and can get you into trouble very fast. Again, if you find yourself with too much credit card debt, then debt consolidation is a very good option. These companies may be able to help you lower your interest rate, which enables you to pay back your debt much faster.