Recent reports have indicated that millions of Americans are overburdened with debt. Car loans and mortgages tend to be the most common; however plenty of people also need to make monthly payments on student loans and multiple credit cards.
Right now Americans have $795.5 billion in credit card debt. And while it’s down from the $957 billion that was recorded for 2008, it’s still rather high and monthly payments are burdening many.
And while debt can be very stressful, there are a number of financial ideas and possible solutions that can make payments easier to manage, like cutting down on overall expenses and even obtaining a debt consolidation loan.
To try and reduce the overall amount that a person owes, financial experts recommend spending money on only the necessities while making payments toward credit card debt, and to make sure to stay current on any secured loans. This way debt isn’t added while it’s being paid down.
It’s also a good idea to create an emergency fund that contains enough to pay eight months of bills in the event of a layoff. This way, if a person does lose their job, he or she would not have to rely on credit cards.
Debt consolidation is also another option that could work for people who are seeking relief from credit card debt. With consolidation, a person is able to combine several bills into one monthly payment, which can make it easier to meet payment due dates and can potentially help save money on interest.
However, it should be noted that while debt consolidation loans can work for some people, it is not an ideal situation to all, and the best debt relief solution will depend on a person’s unique financial situation.
Source: Digital News Report, “Debt Consolidation Loans for Bad Credit Customers,” Tina Brown, 15 March 2011