Getting Out of Credit Card Debt - Why It's so Important

Credit cards and Americans go together like the traditional baseball and apple. Unfortunately though, credit card debt seems to also be a big part of the equation too. The average American carries a whole wallet full of credit cards with nearly $10,000 of debt to show for it. To make matters worse, they are also paying an average of over 14% interest on the balances. It's not a real pretty sight to say the least.

For many credit card holders, just trying to make the minimum payment each month can be a challenge. If you happen to be even one day late, you can expect to pay a $35 late fee. Banks and other credit card companies are the ones smiling, but for anyone caught in this trap, the question is, how do you get out?

There is no real easy answer. How is your credit rating? If it is still pretty good you will have some options. A credit card debt consolidation loan can provide some much needed help. Another option is a low APR credit card.

Try finding a new 0% introductory rate APR card that will allow you to transfer your balances from these high interest cards. This alone will save you a great deal of money on finance charges alone.

Both of these options will give you the opportunity to get back on track and get out of debt. The other step you'll need to take is to reduce spending. It will be impossible to get yourself out of debt when you continue to spend more than you make.

Credit cards can be great when you pay off your balance each month, but if you only make the minimum you'll be spending years trying to pay it off. Here's a good example. Let's say that you have a balance of $2,500 on your card and you run out and buy that new big screen HDTV for $1,500. Your credit card carries an interest rate of 18%, but you'll pay the minimum payment and be fine. Well, because of the high interest charges you're basically paying "rent" on the new TV. It will take 10-15 years at least to get it paid off by only making minimum payments.