The Survey of Consumer Finances, 2007 indicates that the percentage of families carrying a balance on their credit cards i.
e.
those who have not paid their credit card debts in full and owe money to credit card issuers on a monthly basis has gone up by a minuscule percentage as compared to the percentage in 2004.
This is good news right? This means credit card debt is under control, right? Wrong! This is very bad news.
Read ahead and find out.
The percentage of credit card debt owed by the average American family may not have risen very high in the past three years.
However, the same cannot be said about the value of the dollar.
The dollar is worth less than what it was worth in 2004.
Inflation has taken its toll and this means that the overall money value of the debt has increased even though the percentage of debt has remained the same.
This is the reason why reduction of unsecured debt is very important.
In case of secured debt, you are protected by the fact that you have an asset.
The value of asset, unlike the value of dollar, appreciates over time.
Hence, you always have a safety valve.
You can always sell the asset and recover your investment.
In case of unsecured debt, you do not have any such safety or protection.
Lenders too are aware of this fact.
That is the reason why they are very aggressive when recovering their debts.
If you have less unsecured debts, you can easily whip up cash for an emergency.
You can manage fine with the savings in your bank even if you lose your job.
So what should an individual do if he or she has high amounts of unsecured debt and is facing employment problems due to the recession? There are numerous debt reduction techniques on the web.
Some involve reduction by negotiating a brand new deal for a reduced amount of debt (settlement) while others involve negotiating small discounts and a big reduction in interest rates by going in for a consolidation loan.
Hence, do not ignore settlement and consolidation of debt by equating it with other scams going on in the world of finances.
e.
those who have not paid their credit card debts in full and owe money to credit card issuers on a monthly basis has gone up by a minuscule percentage as compared to the percentage in 2004.
This is good news right? This means credit card debt is under control, right? Wrong! This is very bad news.
Read ahead and find out.
The percentage of credit card debt owed by the average American family may not have risen very high in the past three years.
However, the same cannot be said about the value of the dollar.
The dollar is worth less than what it was worth in 2004.
Inflation has taken its toll and this means that the overall money value of the debt has increased even though the percentage of debt has remained the same.
This is the reason why reduction of unsecured debt is very important.
In case of secured debt, you are protected by the fact that you have an asset.
The value of asset, unlike the value of dollar, appreciates over time.
Hence, you always have a safety valve.
You can always sell the asset and recover your investment.
In case of unsecured debt, you do not have any such safety or protection.
Lenders too are aware of this fact.
That is the reason why they are very aggressive when recovering their debts.
If you have less unsecured debts, you can easily whip up cash for an emergency.
You can manage fine with the savings in your bank even if you lose your job.
So what should an individual do if he or she has high amounts of unsecured debt and is facing employment problems due to the recession? There are numerous debt reduction techniques on the web.
Some involve reduction by negotiating a brand new deal for a reduced amount of debt (settlement) while others involve negotiating small discounts and a big reduction in interest rates by going in for a consolidation loan.
Hence, do not ignore settlement and consolidation of debt by equating it with other scams going on in the world of finances.
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