The Credit Card Debt Crisis
By Allison Roberts on Wednesday, November 7th, 2007 :: 2:04 pmCategory: Financial News
More American families are relying on credit cards to make ends meet. Credit card debt in America grew 315 percent from 1989 to 2006, according to a report released today by Demos, a non-partisan public policy research center. The report equates fluctuation in family incomes and flat wages to the need for credit cards to cover necessities.
Home equity loans for debt relief compound the debt crisis further. According to the report, Americans have cashed out $1.2 trillion from 2001 to 2006 in equity to cover credit card debt. This seemingly quick and easy answer has put families’ financial well-being at even greater risk.
It is clear from this report that moving your credit card debt to loan debt alleviates one problem and creates a greater one – home equity loans tie you to loan debt for as long as 30 years. Over that amount of time, even though your interest rate and monthly payments may be lower, you can still end up paying thousands of extra dollars.
Other statistics from the report include:
- Nearly six out of 10 households with credit cards revolved their balances in 2004. The average amount of credit card debt among those households reached an all-time high of $5,219, an increase of 89 percent from $2,768 in 1989.
- Between 1989 and 2006, Americans’ overall credit card debt grew by 315 percent from $211 billion to $876 billion (2006 dollars).
- In 2004, the average credit card-indebted family allocated 21 percent of its income to servicing monthly debt compared to the 13 percent dedicated to debt payments among all households.
- From 1989 to 2004, the percentage of cardholders incurring fees due to late payments of 60 days or more increased from 4.8 percent to 8.0 percent.
An easier answer to credit card debt exists with Credit Solutions debt settlement service. Our service can make you credit card debt free in 12 to 36 months without taking on extra debt like a debt consolidation loan.
Author Bio: Allison Roberts is a graduate of the University of North Texas Department of Journalism. She has experience in agency and in freelance public relations. Allison currently writes for Credit Solutions and she is completing an unfinished work of her late grandfather. For more articles by Allison on bankruptcy visit Credit Solutions.
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