Move into the Black with Debt Consolidation

By Debbie Wilson
Loan Page Columnist

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You can take your budget from red to black. But first you need to learn how to stop paying and start saving. That means before you can consolidate your debt, you've got to know where your money is currently going.

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Understanding Credit Card Debt

According to a recent ACNielsen survey, Americans are among the most cash-strapped consumers in the world, beating out 40 other countries. That is because our cultural emphasis on consumption and immediate gratification causes us to spend and live beyond our means.

Much of this overspending is done on credit cards with sky rocketing interest rates, reduced grace periods, and high annual fees. To win the credit card debt consolidation battle, switch to a low-interest rate credit card with no annual fee. Transfer balances from other high-interest credit cards and then pay bills on time and more than the minimum amount due. You'll find this debt consolidation technique can save you an average of $1,000 per year in interest and $60 per card in annual fees.

Loans for Debt Consolidation

In addition to credit card debt reduction, there are also other important points to consider. Many mortgages now allow for debt consolidation via refinancing, home equity loans, transferred balances, and reduced-interest rates and fees. Additionally, there are a variety of loan terms and payback options. With so many choices available, you're sure to find one that fits your budget.

Lifestyle Changes Affect Credit Card Debt

Finally, making a few lifestyle changes can also play an important role in your debt consolidation. Consider bringing your own lunch to work, drink the coffee your office provides, use your cell phone for long distance calls, cut out cable TV, use the ATM only once per month, clip coupons, and cancel club memberships you rarely use. Before you know it, you can save the typical $10,000 spent in U.S. household credit card debt and more than $1,500 per year in interest and late fees.

About the Author
Debbie Wilson owns and operates a lakeside resort. Her previous experience includes profitability consulting for a national healthcare company. Debbie holds a B.A. in Business Management with a minor in Physical Education.

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