However, only 45% of Americans have credit card debt. 23% of Americans don’t even have credit cards. The remaining 32% pay their credit cards in full every month. 8.3% owe more than $9,000 on their credit cards.

If you carry a balance on your credit cards, you can become one of the 32% who doesn’t. Although it seems challenging with rising fuel and food prices, resolving to cut back on your spending can make a real difference in your ability to pay debt without truly restricting your enjoyment of life.

Total Consumer Debt Info
You may be wondering how these statistics are derived. They’re derived in part from the Federal Reserve’s Survey of Consumer Finances, which is conducted every three years.

As of June 27, Americans had a total of $2.46 trillion in consumer debt, but this figure includes mortgages, auto loans, student loans, and other non-revolving debt. Revolving debt, which is usually credit card debt, was only $904 billion. While this figure is still high, it’s not the devastating figure you’re more likely to hear on the news.

What Can You Do?
If you’re one of the people with revolving debt, you might be wondering how you become one of the people without it. It’s not easy, but it can be done. The key lies in learning to control your spending. American society doesn’t make that easy because our economy relies on spending, but if you have the willpower to do what’s right for your personal finances, you can do it.

There are three basic steps to controlling credit card use:

• Stop using them for one month. See if you can pay for everything with cash in your pocket. Checks don’t count. It must be cold, hard cash. Once you actually see the money leaving your pocket, you’ll have a much better idea of your actual spending. You’ll also discover your money cycle because you won’t be able to spend money that isn’t in your checking account. There are exceptions to this rule. For example, you can’t pay your bills, rent, or mortgage in cash. Use checks for your monthly bills, but write them out and deduct them from your checkbook balance before you withdraw cash to spend.
• Reduce other expenses to free up more cash. Consider canceling or reducing cable, conserving energy, and buying less expensive groceries. Rather than putting the freed up cash in your pocket, use it to pay off debt, especially debt from high-rate credit cards.

Avoid buying things you want, but don’t actually need. Food is a need. Dinner in an expensive restaurant is not. Shoes for your children are a need. $200 designer sneakers your child will grow out of in three months are not. Transportation is a need. Unless you live up a steep, unpaved road, a $40,000 SUV is not.

Impulse purchases are usually wants, not needs. Wait at least two weeks before buying anything. If you still want it after two weeks, it might be a need, or it might simply be something you really want. If it’s something you need, buy it. If it’s something you really want, buy it only if you can afford to pay cash without limiting your ability to pay off debt or save for retirement. If you’re still paying off your credit cards, avoid buying things you want, no matter how much you want them.

Once you learn to control your spending and differentiate between needs and wants, you can pay off debt more quickly. Soon you’ll be one of the 45% of Americans who pays off their credit cards every month, and you won’t be contributing one dime to the $904 billion in revolving debt.

Source: http://www.bills.com

Credit Card Companies Can Charge You Whatever They Want

With only 15 days notice, a credit card company can change it’s interest rate by 1/4%. This could mean a lot for a high-debt. They can also increase late payment fees and over-limit fees, without any justification to their actions. You can’t do anything about it! You could buy a TV for $1000, pay 10% interest, be late on a payment, then all of a sudden pay a $50 late payment fee and they can change the interest to 30% because you were late! See how crazy it can be? Your $2000 TV can become over $2650!

Credit Card Companies are a BUSINESS

It’s not like Santa Clause runs credit card companies. Credit card companies don’t just offer no-fee credit cards, 3-week interest-free loans, benefits and cash-back points because they are good hearted people. Credit card companies are a business, AND they are making record-profits because of US. They WANT us to rack up interest, debt and end up paying them more than we actually owe! To be honest with you, avoid using your credit card as a loan. Use it just to build credit, or at least try to pay off your debt within 3-6 months, that seems reasonable.

Credit cards are the devil! They are great when building credit and for short-term loans, but the high-interest can get you! Be smart with your plastic!

Debt/Credit Consolidation

Seeking outside help can help a lot. Others can help you see solutions which you cannot see, plus, a professional has dealt with numerous cases like yours, so you can trust that they know what to do. The only problem is that debt consolidation can get pretty expensive at times, but there are plenty of companies doing it, so you can shop around. A lot of the time, there are non-profits and government run debt consolidation companies, they will charge you very little and are working in your best interests. Give this a shot!

Debt Consolidation Loans

You can replace your high interest loans, with low interest ones. Meaning, if your credit card is $20,000 in debt at 19.5%, you can replace this with a $20,000 loan at 6% interest. This will help you get out of debt, as you will probably be paying less in your monthly payments and do not rack up as much as a debt. The only problem you may find is that the minimum payment may be more than your credit card’s, and you may have to pay an application fee which will cost you.

Cash Out

You may have enough assets and equity in your home to pay off your debt. Throw a garage sale, list your belongings on Craig’s List, Ebay and Kijiji. You may find that you have a lot of junk laying around your house which might be valuable, and will help you pay off your debt. Take a look around your home, anything you don’t need?

List Your Debts

Make a list of all of your debts. List your credit card, car loans, mortgage and any other form of loan which accumulates interest and you are making monthly payments on. You may be surprised to see how much debt you are actually in, especially when it comes to credit cards. It’s amazing to see what a little piece of plastic can do to your life.
Arrange the list in order of highest interest to lowest. So, odds are that your credit card will probably be at the top. List your lender, day debt increases, and the total amount you have to pay (including the interest). Set it up so that you know how much you need to pay off every month to get out of debt. Your goal is to pay more than that!

Pay Off Your High-Interest Credit Cards

Pay your high-interest rate credit cards first. Pay what you can, and it is even better if you pay more than the minimum payment. If you only pay the minimum payment, you are never going to get out of debt. The trick is to always pay MORE than the minimum, because that decreases the amount interest will be accumulated on. These little extra payments will end up saving you THOUSANDS of dollars in debt, because the way that the minimum payment is arranged is that it will take you countless years to pay off your debt if you only pay the minimum payment.

Practice Frugal Living (Be like Scrooge…)

Although Scrooge was an antagonist in a classic Christmas tale, we can learn one thing from Scrooge, how to be rich. Scrooge was a miser, meaning he did not spend any money! So cut off your credit cards, ask your banks to stop sending you credit card offers. Stop impulse spending.

Perhaps the most important determinant when applying for any form of credit is your credit score. This number is essentially the statistical probability that you will pay back your loan and not default. The problem with these scores is that the intrinsics of their calculations are shrouded in mystery. Although you can obtain your score for a reasonable fee ($15.95 from Equifax.com), it’s important that you know how your credit score became the level that it is today – be that good, bad, or neutral – so that you can continuously work to improve your score, and never damage it by accident.

As a disclaimer, the exact formulas that each independent credit score company uses are considered to be trade secrets, so they aren’t disclosed to the public. What we do know is the weighting that was given to the original FICO score. From here, we are going to go through each category and explain a little of how that weighting affects you.

Punctuality (35%)

As is logically expected, the bulk of a score used to determine the probability of default is the punctuality of payment. The more punctual you are at making your payments (even minimum ones), the higher your score will be. Due to the high percentage, a late payment could substantially damage your score, and many late payments are certain to make you very non-creditworthy. The moral of this story is to make your payments on time.

Amount of Debt (30%)

The amount of debt that you owe, relative to the credit limits you have been given, affects this score. Using a large portion of your limits on one or more cards can damage your score. The logic behind this is that if you’re using a high portion of the limits that have been already given to you, adding new credit is more likely to make you default because you will likely use a substantial amount of it as well. So, keep the balance as low as possible relative to your limits. One trick is to try to use multiple cards to keep this ratio as low as possible.

Length of Credit History (15%)

This one’s very straightforward. Statistically, the length you’ve had a credit history means that the models are more likely to be accurate, so they’ve baked in some “accuracy” points here.

Types of Credit Used (10%)

It is not known how this is calculated. I would suspect that safer loans (such as, perhaps, revolving credit) don’t boost this portion much, but that successfully paying off larger, higher percentage loans – such as a mortgage or business loan – might help your score a bit.
Recent Credit Search (10%)

Lenders, employers, or companies recently obtaining your credit score damages your FICO number temporarily. You want to use aggregate services, such as mortgage brokers or web sites that compare rates, as much as possible and try to minimize the number of times you apply for credit. This is an easy way to boost your score.

Final Thoughts

In conclusion, take the time to examine some of the points above as they will give you solid tips into improving your score. Simple things like making your payments on time, or minimizing the number of credit applications you make will go a long way to making your credit score better than you ever thought it could be!

Source: http://en.wikipedia.org/wiki/Credit_score_(United_States)

As you pay the debt consolidation the creditors see this and therefore in many situations will extend credit once again. This usually occurs after about six months. Debt consolidation can also help students with tuitions and loans if they are becoming a financial burden, having one payment with lower interest fees is much better when you are trying to get an education at the same time.

Some individuals think that by debt consolidation you are free of your obligations to credit companies and this isn’t true. It just means that your payments are all placed together and in most cases lower so they can be paid in a timely manner.
Amazingly, after some people have gone through debt consolidation and rebuilt his or her credit they will start to receive special offers for credit cards and so forth in the mail. Simply due to the fact that his or her credit score went up through the assistance of debt consolidation.

Another point to consider is when an individual goes through a financial institution of some type to help receive debt consolidation these places also have fees. Although it is extremely worth it when it comes to your overall credit score and lower payments each month.

Some people even find that after a few months of paying he or she has the ability to pay the debts off. This is also an option and many companies that see this will also apply that to your credit score ratings as well. Debt consolidation is for anyone struggling financially with unpaid bills and credit card amounts. It assists the individual by using what they can afford each month to pay the debts off.

For more information about debt consolidation and how you can learn more there are several web sites via the Internet. Some of these web sites give details about interest rates as well as other issues associated with debt consolidation. If there are questions you have in many circumstances the email address of the web site is there for you to use.

In addition, there are debt consolidation places locally in the area where you live as well.

By using this type of debt consolidation you can usually save on other high interest debts that are really pulling you down. And, by saving on interest payments sometimes your credit card interest rates might go down and the rates on the home equity loan might be lower as well.

There is another positive not to this type of debt consolidation and this is that you might be able to save on your taxes, in the sense that some of your interest rates that you pay on your home equity account could be tax deductible, however this is something you should check into and not assume they are. The main issue with going about debt consolidation in this form is the ultimate idea of only one payment to you debt consolidation mortgage loan, instead of having a lot of different payments to a lot of different lenders who you owe money to.

In some ways people who often find themselves in financial trouble forget about their home loans or other means of being able to get out of debt. This is where the debt consolidation companies and counseling agencies can assist you. By putting your finances obviously into one basic payment; by using your home equity loan as an outlet for this purpose.

There are however so situations where the home equity loan can not be used, and this is if you have already put this loan in a state of financial difficulty. Then you have to choose another alternative. But, once again with the assistance of debt consolidation a solution can usually be found.

This type of debt consolidation also includes certain requirements that have to be met however whichever financial institution or debt consolidation group you go through can let you know what the requirements are, and with each one sometimes the requirements will differ a bit.

It’s a great thing to know that in many circumstances outstanding credit card balances combined into one payment  can also mean that the interest rate on that specific credit card could be lowered by up to ten percent using debt consolidation.

You can often find different types of debt consolidation agencies or financial institutions that can assist you. Some are even available on the Internet and you can read through their website to determine if they are the type that can help you resolve your financial problems. Home equity debt consolidation loans can only help your finances if it is done the proper way. It is always best to use a good financial institution or debt consolidation agency for the best results on the issues you have with your finances. This way it could be possible to get your finances fixed and your credit going in the right direction to a point that it is not listed as “bad credit.”

This lets them know the numbering scale their credit report is based on. For example, if they are attempting to make a major purchase or they are financially in trouble and the status of their credit is at risk.

So, contacting Equifax is one way of getting your credit report and most of the time upon obtaining the credit report there is a fee. In most instances however the fee isn’t a large amount, after all it is your credit report. Equifax can get a copy of your credit report to you quickly.

Sometimes according to the credit report that Equifax sends you may be actually denied credit for what the report says. If you are ordering a copy of your credit report by mail it will probably be free.

Equifax does however pride itself on equality of doing everything possible to help those with credit problems.

One thing to keep in mind though, is that Equifax is not the only agency that can provide you with a copy of your credit report. It is very accurate, yet there are other agencies that are rather accurate too.

By simply doing a search about credit reports on the Internet you will receive many results with informative web sites that let you know about different ways of getting a free credit report and other information. Sometimes if you disagree with one credit report you might be able to get another one from a different web site. Although, the credit report from another web site could and probably will be pretty close the credit report you already have.
However, there are also web sites that give information about repairing your credit or keep your current credit status where it is at by some chance.

Regardless of your initial credit status, at least you will be given some kind of credit report based on your own personal finances from Equifax, that which creditors and other agencies have ultimately placed on that report.  To some people it is better to have no credit at all than to actually have bad credit, however this is a misconception, having no credit according to Equifax is worse than if you have no credit simply because you are a risk and you are basically not in the system. So how do you start credit? According to Equifax taking out a small loan and paying it back on time is a start as well as keeping up any bills that you might have to a point that they are never considered past due. This includes cell phone bills, utility bills, etc. This way your report looks positive for money lenders when the time comes that you do want to be considered for extended credit.

By doing this, you will have a better chance at credit than if you haven’t got that much really listed on your official credit report.