Financial Resource

Consumer debt is becoming a large concern as Americans are finding themselves increasingly in debt; in fact, America’s consumer debt has recently topped trillion for the first time. Any debt that is used for anything other than investments is considered consumer debt. The most common forms are credit card debt and payday loans. In order to help those who become over their heads in debt, many businesses offering debt consolidation and credit counseling have opened and are becoming quite successful.

Even though consumer debt is a problem in America, the picture’s not quite as bad as some may paint it. Cardweb.com reports that the average American household owes about ,000 in credit card debt; however, statistics don’t always provide an accurate picture. In reality, most Americans are not in credit card debt at all and those that do owe usually owe about 00 according to the Federal Reserve 2001 Survey of Consumer Finances. The truth of the matter is that a few individuals with very high debt provide a false image and portray a higher average debt than there truly is.

America isn’t the only country that holds a lot of Consumer debt; the U.K, India, Greece, and Turkey hold their fair share as well. Because consumer debt keeps people from spending money, it has a negative effect on a country’s economy and its GDP Governments seek to cure this problem and encourage people to spend by lowering taxes and interest rates. The sub-prime mortgage problem is another negative factor affecting America’s economy which is sure to make the consumer debt problem worse.

Should a debtor find himself unable to pay off his ,Consumer debts he should realize that there are certain method of debt collection that are illegal. The Fair Debt Collections Practices Act prevent creditors from demanding larger payments than permitted, harassing the debtor, threatening the debtor, impermissible calls to the debtor’s place of employment, revealing debt to third parties, failing to send notices, continuing to contact the debtor after receiving a cease communications letter, and failing to verify the owed debt.

If the person cannot pay back their consumer debt they may turn to a debt relief service for help. These services have proven to be quite effective at helping people get themselves out of consumer debt. Keep in mind that some of these businesses are actually owned by credit card companies so they may be preoccupied with getting as much money as possible, so make sure you know who owns the company whose help you enlist. There are also some consumer debt relief agencies that non-profits, be aware that this doesn’t stop them from collecting fees for their services.

With the economy possibly heading towards a recession if you find yourself in consumer debt you certainly aren’t alone. You can take the first steps towards improving your financial future by paying off your cards, prioritizing your debts, decreasing spending, and finding ways to raise extra money. It’s never too late to pay off your consumer debts.

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