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Falling consumer credit card debt: Are we learning a lesson?

Created: On August 25, 2010 @ 6:03 pm In

This week’s news brings interesting implications for consumer finances. First we learned that existing home prices have slumped to record lows, which has the media buzzing about the “new role” of owning a home. The new role is that our homes no longer function as limitless ATM machines. No more buying electronics, recreational vehicles, jewelry, and designer wardrobes with home equity loans and lines of credit. Under these circumstances, it appears that consumers would again turn to credit cards for the instant gratification of discretionary purchases. No way. Americans may finally be getting the message about the high cost and consequences of carrying high credit card debt.

Federal Reserve: Credit card debt decreases for 21st consecutive month

The Federal Reserve reports that credit card debt levels are continuing to fall, and that average credit card debt for individuals has fallen to $4951 as of June 30. This is the first time since 2002 that average consumer credit card debt has fallen below $5000. This is a trend worth continuing. Although [1] recent legislation helps consumers in some ways by limiting credit card fees and requiring credit cards to notify customers in advance of arbitrary rate increases, many credit card companies are raising interest rates to recoup the income they’re losing due to caps on penalty fees. High cost debt is a particularly heavy burden during times of economic uncertainty.

Debt consolidation and credit counseling services provide help, support

[2] Debt consolidation through a home equity loan or personal debt consolidation loan is often a first step to gaining control of credit card debt. What if you can’t borrow against your home or can’t qualify for debt consolidation loans? In situations where you can’t qualify for debt consolidation loans, a [3] consumer credit counseling service may be able to help. These agencies act as a credit card debt consolidation service without loaning money. Instead, consumer credit counseling services offer debt consolidation and additional benefits:

  • Reviewing your finances and developing a cash based budget
  • Designing an affordable credit card debt repayment plan
  • Negotiating with creditors to lower or eliminate finance charges and fees (based on need)
  • Communicating with creditors on your behalf, which usually stops harassing calls to you, your home, and your work
  • Administering your debt repayment plan for a low monthly fee, often based on ability to pay
  • Avoiding [4] bankruptcy through financial counseling and affordable debt repayment

Don’t put off taking “charge” of your credit card debt a moment longer. Contact a credit counseling service for debt help today.

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URL to article: http://www.debthelp.com/blog/2010/08/25/falling-consumer-credit-card-debt-are-we-learning-a-lesson/

URLs in this post:
[1] recent legislation: http://www.cbsnews.com/stories/2010/08/23/eveningnews/main6798896.shtml
[2] Debt consolidation: http://www.debthelp.com/debt-consolidation/loan.html
[3] consumer credit counseling service: http://www.debthelp.com/debt-consolidation/credit-counseling.html
[4] bankruptcy: http://www.debthelp.com/bankruptcy/options.html