Credit card debt has been rising since the 1980s, reaching epic proportions today. According to the Fed, the 2007 average household credit debt was $8,500. The Center for Media Research reports that the average consumer has a total of 13 credit obligations on record at a credit bureau. The government reported in 2006 that the national savings rate WAS negative 0.5 percent, not since the depression era years of 1932 and 1933 had the savings rate been negative. So how are Americans coping with negative savings and increasing credit card debt? Not very well.

The total US consumer debt (excluding mortgage debt) reached $2.46 Trillion in mid 2007, an increase from $2.398 Trillion in 2006. American consumer revolving credit debt reached $904 Billion in mid 2007, a jump from $879 billion in 2006. Also, according to the Fed, the average credit card balance is now almost 5 percent of the average consumers’ annual income.

No matter how you look at it, Americans owe too much to credit card companies. The problem is only compounded by the high interest rates of 12 – 30%, extravagant fees, confusing credit card offers, and difficult to understand credit card disclosures.

No wonder, people are falling behind in their payments. Compared to Home Equity Lines of Credit (HELOCs), card interest rates are about twice as high and are not tax deductible. But due to the variable nature of HELOCs interest rates, these aren’t palatable options in high interest rate environments.

Getting rid of debt should be the main priority for majority of Americans, as majority of them have some form of credit debt. In several cases the cycle of debt never ends, costing many a lower credit rating, credit score, and thousands of dollars in preventable interest.

Due to lack of savings, people are using credit cards more often to pay for everyday purchases.

Credit debt relief, credit help, and debt consolidation have become popular with consumers as a way to access debt management tools offered by credit counseling services.

According to Georgetown University’s Credit Research Center, approximately 2.0 to 2.5 million Americans seek debt help of a credit counselor each year. In the last decade of 1990 – 2000, the number of Americans seeking credit debt relief doubled.

Also, the average consumer seeking a consumer credit counseling services carried a balance on two credit cards. So more and more people are turning to the help of a trusted professional, in order to salvage their credit history and get out of debt

It looks as if credit card companies are under the scanner of the Democratic led Senate. Credit card issuers of late have been under the microscope of not only the Congress but consumer groups as well. The card companies have been under scrutiny by the lawmakers for making sudden changes in interest rates in many cases without merit, which encumber consumers further.

The woes of millions of consumers who have had consumers credit rights dictated to them by card companies are seeking redress. For too long, the nexus between credit card lobbyists and lawmakers has produced watered down consumer credit protection legislation. Such special interest filtered laws have produced weak consumer protections that have led Americans to being slaves to compounding interest rates, hidden fees, and inscrutable terms.

As such, consumer groups have long lobbied Congress to have fair and just credit card protection laws. Many have pushed for a Consumer Bill of Rights. Without proper consumer protection laws to rein in abusive business practices, credit card companies have come to believe that they are accountable to none.

Herein, under pressure from consumers and consumer groups, the Senate is paying heed. The first week of December, saw the Senate Permanent Subcommittee on Investigations, a subcommittee of the Senate Committee on Homeland Security and Governmental Affairs hold a hearing with a focus on unfair interest rate increases.

The subcommittee hopes to explore practices of credit card companies that seem to show a pattern of exploitation of consumers. The main issue being examined is the sudden hike in interest rates by card companies for even individuals with good credit and payment history.

Most importantly, the subcommittee will attempt to understand the basis for the policy of interest rate hikes for cardholders who are in compliance with contractual terms of their credit cards.

It seems that the credit card companies promise a certain interest rate in the original terms and expect the cardholder to fulfill their end of the contract, while card companies feel they have no reciprocal obligations under the original contract. They seem to erratically change interest rates and terms of the contract at will just because they include in the original contract a statement, “terms of contract subject to change without notice.” This is unjust and unfair to consumers. Even if a written notice is provided, it is veiled in complex legal terms that cause even seasoned Financial Advisors to scratch their heads. Then how is the average American consumer excepted to understand the change of notice, let alone the original contract.

No wonder, so many Americans are using credit cards, as if they didn’t understand fully how these instruments of debt work. Most likely they don’t understand the complexities of plastic money, growing their credit card debt daily. Today, many consumers seek credit help of credit counselors , debt counseling or debt consolidation experts to get out of mountains of credit debt. In some cases, seeking credit repair, improve credit scores, and credit relief from consumer credit programs.

Hence, the issue of interest rates hikes and the credit card company policies supporting them are just the tip of the iceberg, Congress needs to delve into the crevices of all the practices of card companies. Consumer interest can only will by examination of and an end of unethical practices by credit card companies.

American consumers are always struggling to keep up with their monthly bills, especially credit card bills. In addition to skyrocketing gas prices and rising household expenses, credit cards are being used more often to pay for nominal items.

Credit services that offer credit counseling have seen a sharp increase in the number of families seeking help. These families have let their credit card debt get out of control, thus seek debt management programs to pay down their balances.

More and more people are using cards to get by on a daily basis for various reasons, but the main reason seems to be that they don’t have enough cash flow to sustain themselves every day. Unfortunately, this is an unending vicious cycle of debt because these people see plastic cards as the only answer to every day survival.

Credit counseling services are receiving increasing calls for debt consolidation and/or debt elimination. According to the debt counselors, credit debt help is still the most sought after service, even amid rising mortgage defaults and foreclosures.

According to the Federal Reserve (Fed) recently, outstanding credit card debt grew at an annual rate of 4.4 percent to $920.1 billion in September 2007 up from $917 billion in August. Before, plastic was used by consumers mainly for emergencies, but now it used to pay for even a stick of gum. It is mind boggling, that someone will buy $1 gum and pay up to 28% for in interest.

Alas, the consumer debt problem is of staggering proportions, at the national and individual level. At the individual level, credit repair of consumers’ credit scores and credit reports is of alarming concern as well.

It is a multi-pronged strategy that has to be implemented under the debt management program (DMP) to find resolution to the people’s concerns. The counselors negotiate with card companies on your behalf to reduce interest on debt, pay pennies on the dollar, and cut penalties.

Even though, debt counseling services can get the companies to forgo or lessen penalty fees and reduce interest rates; you also have to engender fiscal responsibility.

Getting out debt is the answer but financial discipline is the key to long-term financial success. Monthly budgeting plans and knowing your cash flow can help make implementing a financial plan easier.

The growing debt burden in America crosses every demographic: from single to married, every race, every ethnicity, and every age group. It is not uncommon to see retirees, whose only source of income is social security with five figures worth of unsecured debt.

Overall, if you find yourself in an unmanageable debt situation, haven’t been able to do it yourself, then professional help may be the answer. But the most important thing in the whole debt elimination process is serious commitment to change and a new start. Without a forthright commitment, debt management will only be a short-term resolution, not a long-term solution.

Over the years, credit cards have become an increasingly valuable financial tool. No longer are banks the only company who issue credit cards; now every department store, retail store, furniture stores, and gas station offer consumer credit through their own name-brand credit cards. Furthermore, each credit card offer comes with a perk that makes it a must have. So how are you supposed to manage all of those cards? Here are a few tips to keep from maxing out your existing cards and paying off those pesky balances.

Cut, leave, lock or shred them. The quickest way to stop yourself from using credit cards that may already have a high balance is to remove them from your sight. Take them out of your wallet, leave them at home, cut or shred them, or even lock them up. By removing the cards from easy access, you limit yourself to how much you are able to use them. Just remember that they aren’t in your wallet (it could lead to an embarrassing situation in a store if you forget they aren’t there!) and be sure you have access to the numbers in case of emergency.

Close accounts you don’t use. If you don’t have a balance, the card is not the oldest credit card you have, and the rewards or perks aren’t the best, close the account. There is no reason to leave multiple cards open, especially since it is possible to have too much credit, which can negatively affect your credit score. Just make sure to close accounts every three months so the activity doesn’t negatively impact your credit score and if you plan to make a major purchase in the next six months or so, it may be better to close one and then wait a little while to close the others.

Do the math. Take a few moments to calculate the true cost of those cards. How much are you actually spending in interest? Say you have about $10,000 you owe on a few different credit cards with interest rates around 15-20 percent. If you were to just pay the minimum on the cards, you could end up paying nearly $60,000 and it could take almost 30 years to repay all the cards, assuming of course that you do not make any additional purchases while paying off the balance. That’s enough to make most people stop spending.

Ask. Call your creditor and ask for a lower interest rate. If you pay on time and don’t have a large outstanding balance, you may be able to get your interest rate lowered a few points, which can help save money in the long run, should you ever need to carry a large balance on that card.

Consolidate. If you have large outstanding balances, credit consolidation with one payment and a lower interest rate may be the best way to save not only your sanity with managing multiple bills and due dates, but also your credit score. You can transfer your balances to one card with a lower interest rate, or take out a personal loan.

Know what people are saying about you. Check your credit score regularly. It is important to know what is on your credit report as that can impact your finances for the rest of your life.

Treat yourself. Set goals for yourself on going credit card-free. At the end of the month, or whatever time period you set, reward yourself. After all, you’ve probably saved a bundle on future interest payments by not spending any additional money.

By doing a little research and exercising a little discipline and self-control, it is easier than many people think to stay on top of your credit cards. Resisting new offers can be tough, but just remember how much “just one more” card can hurt you in the long run. Researching to find the best reward card for you and using only that card is the safest bet to managing credit cards.

Credit card debt can be a scary situation to find yourself in. Luckily, you aren’t alone. Millions of Americans not only have credit card debt, but many are also carrying balances of $10,000 or more. Plus, recent studies have shown that most Americans hold at least four credit cards, with 14 percent holding 10 or more cards. That’s a lot of credit cards, which can equal a lot of debt.

Using credit cards can quickly lead to debt, especially if you don’t keep a close eye on how much you are spending. One of the simplest ways to keep credit card debt from taking over is to take the cards out of your wallet, keeping only one for emergencies. However, if you know you will not be able to keep it in your wallet without using it, take them all out.

Close out cards that you don’t need. You should not close out a credit card that still carries a balance, or the only card you have with available credit. You must pay off a credit card in full or transfer the balance before you can close the card. Also, if you have maxed out your cards, do not close the only one with available credit – you may need it for an emergency situation. Also, try not to close your oldest card as most credit bureaus base their rating off how long you have had credit. You may get turned down for a credit card in the future if it seems you have a short credit history. If you can’t close the account, shred the cards. This way you can still pay down the balance, but you won’t be tempted to use the cards.

Having credit cards requires a great deal of responsibility. To keep your credit rating in good standing, managing your balances and paying them on time is vital. It only takes a few late or missed payments for creditors to report you with bad credit to one of the three major credit bureaus. Preventing this from happening is easy – monitor your bills and make sure to pay on time. Many credit card companies or banks have automatic bill pay features that will deduct a balance you determine from your account on a specific day. You can set up the automatic bill pay to deduct only the minimum payment, that way if you want you can pay more later but at the very least, you will know your credit card bill was paid on time.

Monitoring your individual credit rating is vital for all parts of consumer shopping. Your consumer credit score affects the interest rate you will receive not only for other credit cards, but also car and home loans, personal loans, or any other type of loan you may need to obtain in the future. It will also affect whether or not you are approved in the first place for the loan or consumer credit.

If making the minimum payment on your current cards is overwhelming and it seems like the balance may never be paid off, you can also ask your creditors to lower the interest rates on your card.

For consumers who make at least the minimum payment on time each month, many credit card companies are willing to lower the interest rate at least a point, if not more. This could save hundreds or thousands of dollars in the long run, you simply have to call and ask.

Or, consolidate your debt with a personal loan or low interest balance transfer. Both options will allow you to make only one payment with a lower interest rate. This also helps consumers see an end date for paying off debt, as most loans or balance transfers are shorter term, less than five years.

Credit cards are a financial tool that can be intimidating or extremely helpful; it all depends on how you chose to manage them. It is important to stay on top of credit card payments, as with any other payments, in order to not become a slave to credit card debt.

Credit card debt has been growing at a steady pace for many Americans over the years. Millions of Americans are having difficulty even keeping up with minimum monthly payments, let alone have the ability to pay off the debt. For most, the debt cycle is an unending one, in many cases requiring credit counseling to end it.

But the debt, especially credit card debt can be a costly affair not just in terms of monies owed, but in the realm of your credit score and credit report. Unpaid debt can be lead to a lowered credit score, affecting negatively the credit report requiring time consuming credit repair.

The last thing you want to do after paying off your debt is to get back into debt again. However, statistically it has been shown over and over again, that once people get out of debt rehab, they go back to credit card addiction.

Henceforth, it is time to shift your mind away from the cycle of debt, debt consolidation, and credit counseling. It is time to start anew. It is time to shift your thoughts away from just debt reduction to how you can avoid debt.

But remember, not all debt is bad, home buying, student loans, and school loans are considered good debt. You will always have some form of debt in life, the Super Rich among us even have it, but they are more sophisticated in their use of debt, they call it leverage.

According to the Federal Reserve Board’s Surveys of Consumer Finance, the country’s richest 1% piled on $342 billion in new debt between 1998 and 2004. The richest 1% of Americans are households with net worth, (including primary residence) of at least $6 million.

The richest 1% of Americans, own 34% of all privately held wealth, never has wealth been so highly concentrated in a relatively few hands. Such disproportionate control of wealth is accompanied by a holding a disproportionate amount of debt. The same 1% holds 7% of the nation’s total consumer debt, roughly $650 billion.

Unlike the average middle class American who spends his paycheck on a new car or a big screen TV, the rich leverage debt or invest it to make more money.

The reason I am sharing this with you is not because I want you to start playing the credit card arbitrage game, but to avoid and stay off consumer debt. It is going to be a lifestyle change, a change of habits, and a change in thinking; this must be done to avoid consumer debt.

Here are Six Simple Rules for avoiding debt and controlling your finances:

Start an emergency savings fund, preferably to meet three to six months of expenses. Mitigate risk. Get proper car insurance, home insurance, health insurance, disability insurance, and life insurance. Recognize you weakness with regards to credit card use and change the habits. Budget monthly. Track your income and expenses on a monthly and yearly basis. Think long-term. Don’t be myopic with your finances. Do long-term financial planning Stay vigilant of your finances and disciplined in your spending.

If you follow the above rules you will be okay in your finances for the long-term.

Credit cards have become omnipresent; they have now eclipsed cash as a common method of payment in America. Plastic money is the new American currency. The use of credit convenience has evolved into a nightmare of credit card debt inconvenience for many Americans. The lure of plastic cards has made it difficult to imagine life without them. It is the appeal of not seeing cash money leave your pocket that spellbinds consumers, hence for many of them begins an unending cycle of expensive consumer debt. Consumer credit issues involve debt consolidation, credit card consolidation, or credit counseling. Before debt becomes an issue and you have to seek out the guidance of a trusted consumer counseling service, learn to be an educated and savvy credit consumer and avoid the future pitfalls of debt. Even if you are already in debt, unless you plan on stop using cards in the future, this article can give you guidance on how to avoid any future debt pitfalls. These are the seven smart tips about credit cards:

1. Shop around for the best deal

You are probably inundated with credit card mailers and phone calls soliciting your business. With literally hundreds of credit card offers to choose from, it’s smart to shop for the best deal. At the basic level, which meets the criteria of most American consumers is a card with a low Annual Percentage Yield (APR) and no annual fee. It is a boring proposition, but read beyond the promotional rates and go where the asterisks lead you, the zone of fine print.

The fine print is where you get the real information, such as when does the promotion rate expire, what does the rate jump up to, what are the late payment penalties, and if you make a late payment how does that affect your APR, amongst other components of your credit card.

2. Build a good credit rating

Avoid late payments by paying your credit card bills on time. Also, pay your credit debt off completely, if you don’t it could negatively affect your credit rating. A diminished credit score can be very expensive in terms of getting approved for low interest loans and employment offers that require good credit history. So if you stay within your means and pay your bills on time, you can avoid getting into debt, having a bad credit report and needing credit repair. The axiom is pay on time and stay within your means.

3. Make online shopping safer

Before making purchases online, read the website privacy policy as well as the security features. Only, if you are satisfied with the website policy in these two areas should you endeavor to shop. Also, some credit card companies provide a one-time use account number for large online purchases so that you don’t have to use your real account number for the transaction.

4. Limit the number of your cards

Stop carrying a bulky wallet filled with credit cards. At most you need two to three cards. Having too many cards can work against you when it comes to apply for a loan or mortgage. Your loan lender may determine since you already have access to so much money through your cards, the added loan debt may strain your ability to repay the loan.

5. Understand your consumer credit rights

Know and understand your rights as a consumer under the Fair Credit Reporting Act, Equal Credit Opportunity Act, Fair Credit Billing Act, Electronic Fund Transfer Act, and the Fair Debt Collection Practices Act. You can get more information about these important federal laws and consumer rights on the Federal Trade Commission’s (FTC) website, The FTC’s Bureau of Consumer Protection works for you, the American consumer.

6. Switch balances carefully

Don’t transfer your high interest rate balances or do a credit card debt consolidation to a lower interest rate credit card, until you read the fine print. The low rate for the balance transfer most likely is for a limited time, involves transaction fees, sometimes up to 4 percent of the amount transferred. The hefty fees charged, may outweigh any savings provided by a lower interest rate. Also, if you don’t pay off your complete transferred balance before the limited time offer expires, a new high interest rate sets in.

Educate yourself about the total costs of having credit cards; you owe it to yourself.