Financial analysts are urging Americans to pay off their high-interest credit
card debt. The reason? Credit card debt may cost you and your family thousands
of dollars in interest if you only pay your minimum balance each month.
It is estimated that the average family carries approximately $10,000 in
unsecured debt. Unsecured debt includes anything from personal loans and store
tabs to credit cards. We all need to take advantage of unsecured credit
sometimes, but with unsecured debt come extremely high interest rates.
You may wonder why your mortgage interest rate hovers around 6 percent while
your credit card rates are near 29 percent. The reason is simple. If you default
on your mortgage payments, the bank can take your house and recoup some of their
loss, but unsecured debt can not be recouped if you default on your payments.
This is a huge risk for lenders, and to offset that risk, they charge
astronomical interest rates.
These high-interest rates do a lot to protect lenders from loss, but do nothing
to help your financial situation. The truth is that if you carry a $2,000
balance on an account with a 29 percent interest rate, you could be paying
nearly $50 per month in interest alone. And that is only one debt. The average
household has three credit cards.
The solution is simple. All you need to do to save hundreds of dollars in
interest each month is to pay off the debt. But what can you do if you can not
afford to pay more than your minimum monthly balances? You can still pay off
your debt with a debt consolidation loan.
By consolidating your high-interest monthly obligations into one loan you can
save a great deal of money. First, you save money by getting a much lower
interest rate. Second, you save money by making lower principle payments.
And getting a debt consolidation loan is as easy as applying for other types of
loans. Most lenders will even take care of paying off your debts for you so you
don’t have to even write a check. There really is no reason to continue to pay
off high-interest debt. Turn your high-interest debt into a low-interest loan
with consolidation today.