A relatively small population with huge credit card debt balances can skew the average to make it look like the typical American is carrying a much bigger debt load than he or she actually is. Consider:

• 23.8% of American households have no credit cards at all — no bank cards, no retail cards, nothing.
• Another 31.2% of the households the Fed surveyed paid off their most recent credit card bills in full.
• So together, the households that owed nothing on credit cards equaled 55% of the total.

Heres some better news: Paying off balances actually became more common between 1998 and 2001. The proportion of households that had bank cards (Visa, MasterCard, etc.) who reported that they regularly paid off their balances in full rose 1.5 percentage points to 55.3%.

We dont carry that much debt

Of the households that did carry a balance, the median amount owed was $1,900. That means half of the households with a balance owed more, and half owed less. (Medians are less subject to the skewing phenomenon that plagues averages; thats why economists tend to favor them.)

If we dig even deeper by analyzing the credit card debts of all the households the Fed surveyed:

• Only 29% of households owe $1,000 or more on their cards.
• 21% owe $2,000 or more.
• 6% owe $8,000 or more.
• 4% owe $10,500 or more.
• 1% owe $21,400 or more.

The Fed statistics pretty much gibe with what Fair Isaac, the creator of the FICO credit score, discovered when it reviewed millions of credit reports. 

There are a few differences between the universe the Fed examined and the one looked at by Fair Isaac. For one thing, credit reports are individual — theres no such thing as a household or even a joint credit report. Also, you have to have and use credit to have a credit report. Finally, credit reports dont typically distinguish between balances you pay off and those you carry each month.

But again, Fair Isaacs statistics show a world in which most people are light to moderate users of credit:

• About 48% of credit card holders owed less than $1,000
• About 10% of card holders had total card balances in excess of $10,000.
• More than half of all people with credit cards use less than 30% of their total credit card limit.
• Just over 1 in 8 people use 80% or more of their credit card limit.

Theres still plenty of need for debt relief

Does this mean all the hand-wringing over consumer debt is so much noise? Hardly. Although most Americans seem to be avoiding the credit card trap, there are still plenty of people on the financial edge:

• More than a third — 36% — of those who owe more than $10,000 on their cards have household incomes under $50,000, according to the VIP Forum analysis.
• 13% who owe that much have household incomes under $30,000.
• The percentage of disposable income used to pay debts is still near record highs.
• The median value of total outstanding debt owed by households rose 9.6% between 1998 and 2001.
• Bankruptcies set another record in 2003, with 1.6 million personal filings, the American Bankruptcy Institute reports.

All of that is more than enough evidence to suggest that a large number of people are overdosing on debt. The average American, though, seems to be doing just fine.

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Consider the following: the average American household has upwards of $9,000 in credit card debt. These individuals and families have made the conscious decision to spend on credit, carry a monthly balance and make their monthly payments – minimum monthly payments or otherwise.

One problem arises (however discreetly) when one elects or feels that they can only afford to pay the minimum monthly payments on their credit cards. What happens is that such large balances as described above can take up to two decades to pay off if one only makes the minimum monthly payments. In the end, the total repayment cost can be double of what the original purchases were. Truly shocking.

Then all it takes is for a person to receive a pink slip, some medical emergency or other emergency to arise and then a person can truly find themselves way over their head in debt and unable to make their monthly credit card payments. What can a person or household do in such a situation?

The banks and credit card companies will start calling and sending letters, followed by the same from collection agencies. It was even in the news recently in the U.K. that a credit collector offered to wipe clean the collection charges owed by a client in exchange for sexual favors. What has the world come to?

The good news is that when it comes to credit card debt there is true debt relief available. This debt relief comes in many shapes and forms, programs and services.

Most people are familiar with such debt relief programs as debt consolidation, debt settlement, consumer credit counseling, and even bankruptcy (which should only be considered in extreme debt cases). Therefore it is advisable to seek ways to avoid bankruptcy, rather than consider it as a first option when it comes to dealing with credit card debt.

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And really, these are the 2 most important aspects of credit card debt. No one wants to enter a debt relief program only to later find that the Jones’ across the street got a better debt relief deal or entered into a better debt relief program.

Bankruptcy, this is one serious legal avenue. But the fact is that bankruptcy brings with it a host of booby traps. It can cause very serious repercussions for those who file for personal bankruptcy. For starters, as was recently revealed by FIFO, a bankruptcy filing will drop one’s credit score by 260 points. This credit report then for all practical purposes will be viewed as toxic in the eyes of creditors.

The consumer who files for bankruptcy will for many years be unable to obtain any sort of credit or financing for much needed things. In fact, in many states a bankruptcy filing will remain on a consumer’s credit record for up to 10 full years.

Debt consolidation is another debt relief avenue taken by consumers who are strapped with mountains of credit card debt. But debt consolidation also has its share of pitfalls and can be risky strategy. The reasons are as follows:

Credit card debt is unsecured debt. When a consumers enters into a debt consolidation plan that involves a debt consolidation loan or a home equity loan, the consumer is in fact exchanging unsecured debt for debt that is secured by their home.

In the event of the consumer being unable to make their monthly payments at some time in the future, they would be at very serious risk of losing their home, therefore consumer beware when it comes to both bankruptcy as well as debt consolidation.

The most effective debt relief program however is known as debt settlement. This program has shown spectacular results at both reducing and eliminating credit card debt without the need for a bankruptcy filing. But how does debt settlement work? Who is eligible for debt settlement? And how much credit card debt can be eliminated through the means of a debt settlement program?

Debt settlement is a debt relief program that works by a debt settlement firm negotiating on behalf of the consumer with the consumer’s creditors. And what are the results of these debt negotiations? In most debt settlement scenarios, the consumer can expect to have 50% of their credit card debt reduced and eliminated, and in many cases the consumer can see 70% of their credit card debt eliminated.

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An example of a book is The A Credit Fix Kit written by John Ventura. This book is very popular nowadays and it has received good reviews by a lot of people. It includes references on the basic concepts of credit. It provides solutions for credit problems and all the other information necessary to help one person maintain a good credit standing. This book caters to individuals who are not experts and who are just concerned in repairing their credit. Thus, this book is an easy read for people who want to improve their credit standing.

The internet also has a collection of hundred and thousands of electronic books which can be very useful for Credit Repair. These e-books can be downloaded straight into your personal computer, and you may just open it anytime you want. The contents of these e-books are just about the same as those in hardbound books; this is why some people consider the e-books are more convenient.

Aside from the books, computer softwares are also used for repairing credit. Applications can easily be used and viewed from your own computer. These applications can connect you straight to credit reporting agencies where you can confirm and authenticate information enclosed in your credit report. Likewise, these softwares can help you keep an eye on the status of your credit.

In buying your very own A Credit Fix kit, you should take note of some things. These things might help you in deciding which kit would best work for you:

– The kit should be able to educate you on how to read a credit report and tell you how to know your own credit Report

– It must be able to help you raise your credit Score and get better credit rating

– It should be able to make you understand how agencies evaluate and collect information for your credit report

– It should give you ideas on how to ask for the assistance of a credit reporting agency should there be discrepancies on your credit report

– It should inform you how to handle identity theft 

– And lastly, after fully repairing your credit problems, it should be able to help you avoid credit problems in the future.

These are just some of the kits that are made available for everyone who wish to have an answer to their credit problem. These kits are very useful, because they serve as guidelines for people who may have difficulties in managing their credits. But, in buying kits like this, you should always be careful. You should take into account some things that might help you in coming up with the decision.

Since there are a lot of products that are being offered all over the market, you should be able to pick out which one of these is the best for you.

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If it just so happens that your credit Report and Score falls below the minimum, don’t panic because this issue can be resolved. Never for one moment should filing for bankruptcy become an option because this will be on your record for 10 years or so. 

Repairing Your Credit may not be as bad as you think if there happens to be a mistake on your credit report. You can check on that by getting a copy for free from one of the three credit agencies namely Equifax, Experian, and Trans Union. You may request a copy simultaneously or get one at different times of the year.

Once you have it, review if there are any errors on the document. There are instances that one report will say something different.

If you know for a fact that a certain issue has already been resolved, send a request to have this changed together with a letter and the documents that prove this should be removed from your record.

But what if the credit report is real? Well, the only thing you have to do to repair your credit Score is to pay it off. If you are having a hard time due to the big amount, get help from a credit counselor who can act as a negotiator and help create a liability consolidation package. 

The debt consolidation package must be placed in writing as it signifies an agreement between you and the creditors. . This document will save your life should there be any problems in the future like if the creditors decide to void the agreement. 

Once the liability consolidation package has been made, it is time for you to come up with the money and that usually means cutting down your expenses for the moment. 

If what you are saving is not enough, you may need to make some hard choices like selling off certain valuables especially when no one will lend you the money except perhaps if you have friends that are very understanding. 

When you have finished paying off your liability that could take months or even years, make sure you get a settlement letter from them and send a copy of this to the credit bureaus so this can be updated on your credit report.

There are lessons to be learned once you have successfully undergone Repairing Your Credit. 

First, keep an eye on your expenses. If the credit given to you is quite big, don’t be tempted to max it because you will mostly have a hard time paying for it. 

Second, while most creditors will allow you to pay a minimum, whatever is left grows because of interests so you are not doing yourself any favors by not paying this amount in full.

Third, if this is something you can’t do alone, don’t be ashamed to ask for help because there are counselors ready to help you out. 

Fourth, pay all your bills on time and in full. 

Credit Improvement could have been avoided if you played it smart. Now that you are here, you have to do what is needed so it can be corrected.

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