Consolidating means lower monthly payments
January 25, 2005
Given the dramatic goings on in the thriving housing market over the past few years, it’s come as no surprise that much of both the public’s and the media’s attention has been focused on the mortgage market—as many American’s have availed themselves of the trend either to buy new homes or refinance the ones that they already own. But, while the home mortgage boom has been quite impressive, it truly pales in comparison to the staggering amount of credit card-debt acquired by so many consumers during those same low-interest-rates cycles.
By at least some estimates, approximately 190 million credit card holding American consumers carry around something in the neighborhood of $1.3 trillion in non-mortgage debt between them, and things show few signs of letting up. But analysts are beginning to warn us that the low rates, to which we’ve all become accustomed, are expected to spike over the next few months, on both the purchase and the cash advance sides of the credit services economy. Consumers will also be receiving fewer of those currently ubiquitous introductory offers to transfer balances to fresh cards with little or no interest.
Unfortunately that information is likely to leave more us than not wondering “what am I to do?” We’ll, there are at least two fairly obvious strategies for dealing with the rising price of accruing debt: Charge much less or pay more, more effectively, toward your bottom line balance. You’ll be able to get a pretty clear picture of how effective the two approaches will be respectively by taking advantage of one of the many online credit-card debt calculators.
For example, on a typical credit-card charging a typical 15 percent interest-rate, it would take you around 48 months of $100 per-month installments to pay off a balance of the $4,000 average credit dept carried by most American consumers. But, if you were to pile on as little as another $1000 in charges while continuing to make the same payments, it could take as much as 14 additional months to repay. Conversely, resisting the temptation to charge and paying a little extra each month makes a big difference. If you pay $50 more each month, that $4000 debt would likely be gone in only 30 months.
On the other hand, if you’re someone with multiple cards and an accompanying variety of interest rates, you might just want to consider consolidating their credit dept with a home equity line of credit or a home equity installment loan. You’ll be able to use the funds to pay off debts and begin making a single consolidated monthly payment. It’s also useful to note that home equity loan types typically offer consumers significantly lower interest rates than the majority of credit cards, and they can also offer consumers a number of useful tax advantages.
In this impending climate of rising interest-rates, it's become essential for consumers to keep a firmer grip on their credit cards. Be sure to keep track of which ones interests are linked to the prime rate. If you’re the one time beneficiary of too many low introductory rate offers who’s now saddled with high interest rate debt, consider the benefits of a low interest home equity installment loan or home equity line of credit as an affordable means of credit debt consolidation.
For more information on credit card dept or debt consolidation borrowing options or to find tools, calculators and information regarding financial products ranging from home equity lines of credit, home equity installment and debt-consolidation loans to first time mortgages and mortgage refinancing, interested consumers can visit an online mortgage lending center such as www.mortgage-hound.com.