Consumer credit is one of the driving engines of the American economy. However, if you're one of the consumers weighted down with monthly payments you can't make, you may feel that you're being ground between the gears yourself.
There are plenty of ways to get out of debt, short of a bankruptcy; the first and most important is to understand the mathematics behind lending money, and learn proper fiscal management for your own assets.
First of all, banks and credit card issues make money on interest. You borrow money from them, and you pay a little more money back to them for the privilege of borrowing it. That "little more money back" is called interest. The amount you actually borrowed is called the principal. Interest rates are expressed as an annual percentage rate - if you hold on to the debt for a year, you'll pay that percentage of the principal you borrowed. Most credit cards have interest rates between 10 and 21%.
Now, what they don't tell you is that that interest compounds. In essence, if you divide 72 by the percentage points of interest you're paying, you'll find the number of years before the amount you pay in interest equals the amount you borrowed. For example, if you're getting 18% interest rates on $1,000, you'll have paid $1,000 in interest after 72/18= four years.
When you get in the habit of making the minimum payment on your cards, and running up more debt, you're only digging yourself in deeper. Eventually, you'll get to the point where everything you make is going to pay off credit card and other debts, and action needs to be taken.
Your choices of action are to reduce expenses, and focus on paying off one credit card, and then canceling it, getting a debt consolidation loan, or going to consumer credit counseling. Reducing expenses is the best in the long term - you ultimately want to learn to live debt free, on 90% of your income, saving the remaining 10% so that compound interest (on your savings account or investments) works in your favor, not your creditors.
A consolidation loan can be had by selling your debts to a single lender (who'll lend you the money to pay off the high interest rates you're getting now, and charge you a lower rate paid to them). They're getting harder to find as the housing market tightens; the usual method of getting a consolidation loan was to take a line of credit out on your home.
Consumer credit counseling can often get a good chunk of your debts written down, or a grace period granted on your interest; allowing you to catch up - the more extreme the fix, the more it's going to impact your credit score; some consumer credit counseling options are actually worse than filing a bankruptcy.
Your method of last resort is a bankruptcy, which is the thermonuclear option. It will keep you from getting any kind of reasonably priced credit for 7 years, and will likely haunt you for a decade or more. Even so, it may be the most effective way out if you've exhausted all the other possibilities.
You can find more about debt help, credit card debt, and debt relief at http://debtconsolidationevents.com

Consumer credit is one of the driving engines of the American economy. However, if you're one of the consumers weighted down with monthly payments you can't make, you may feel that you're being ground between the gears yourself.
There are plenty of ways to get out of debt, short of a bankruptcy; the first and most important is to understand the mathematics behind lending money, and learn proper fiscal management for your own assets.
First of all, banks and credit card issues make money on interest. You borrow money from them, and you pay a little more money back to them for the privilege of borrowing it. That "little more money back" is called interest. The amount you actually borrowed is called the principal. Interest rates are expressed as an annual percentage rate - if you hold on to the debt for a year, you'll pay that percentage of the principal you borrowed. Most credit cards have interest rates between 10 and 21%.
Now, what they don't tell you is that that interest compounds. In essence, if you divide 72 by the percentage points of interest you're paying, you'll find the number of years before the amount you pay in interest equals the amount you borrowed. For example, if you're getting 18% interest rates on $1,000, you'll have paid $1,000 in interest after 72/18= four years.
When you get in the habit of making the minimum payment on your cards, and running up more debt, you're only digging yourself in deeper. Eventually, you'll get to the point where everything you make is going to pay off credit card and other debts, and action needs to be taken.
Your choices of action are to reduce expenses, and focus on paying off one credit card, and then canceling it, getting a debt consolidation loan, or going to consumer credit counseling. Reducing expenses is the best in the long term - you ultimately want to learn to live debt free, on 90% of your income, saving the remaining 10% so that compound interest (on your savings account or investments) works in your favor, not your creditors.
A consolidation loan can be had by selling your debts to a single lender (who'll lend you the money to pay off the high interest rates you're getting now, and charge you a lower rate paid to them). They're getting harder to find as the housing market tightens; the usual method of getting a consolidation loan was to take a line of credit out on your home.
Consumer credit counseling can often get a good chunk of your debts written down, or a grace period granted on your interest; allowing you to catch up - the more extreme the fix, the more it's going to impact your credit score; some consumer credit counseling options are actually worse than filing a bankruptcy.
Your method of last resort is a bankruptcy, which is the thermonuclear option. It will keep you from getting any kind of reasonably priced credit for 7 years, and will likely haunt you for a decade or more. Even so, it may be the most effective way out if you've exhausted all the other possibilities.
You can find more about debt help, credit card debt, and debt relief at http://debtconsolidationevents.com