US National debt rises to $13.2 trillion

The US national debt has reached $13.2 trillion in 2010. According to a recent survey, an average American with one or more credit card has at least $11,000 in debt. After the Credit Card Reform Act, most of the credit card issuers have imposed several kinds of fees on the plastic cards. Therefore, credit cards have become costly. This is making very difficult for the consumers to pay off the bills. As a result an increasing number of people are getting into debt problems. This explains why a number of people are taking out loans for debt consolidation.

Debt problems faced by Americans

According to a recent report an increasing number of Americans are using at least 1 or more credit cards in order to meet their basic expenses. Millions of jobless people are using their credit cards to purchase basic commodities. This is probably because it has become very tough to secure jobs as most of the employers are checking credit scores before recruiting people. As most of the unemployed people have no steady source of income, therefore they are defaulting on their loans and incurring debt. This has lead to a new problem.

As the American consumers are finding it very difficult to pay off their debts, the collectors are getting aggressive in collecting payments from debtors. According to Federal Trade Commission, harassment by debt collectors has increased by 13% (in 2010) as compared to 2009. This figure is based on the number of FTC complaints filed in the first quarter of 2010. The debt collectors are making repeated calls to threaten the consumers. Hence, the life of the troubled debtors has become hell.

Medical care has become expensive. It has been observed that major nonprofit hospitals are not informing patients that they might qualify for free or low-cost medical care. Due to this reason, several patients (even with health insurance) are struggling with severe medical debt. In the first quarter of 2010, approximately 547 patients had been treated in the local non-profit hospitals. But around 249, patients were not informed by the hospital about any medical assistance programs. Only 50 patients (with little or no insurance) were told about such programs. Approximately 339 people owned money to a hospital. In the first quarter of 2010, the average medical debt amount was around $22,652.

As the credit cards have become very costly, an increasing number of consumers are opting for payday loans. But they don’t realize that they are incurring more debt in the process as they are unable to reduce their loan amount. It has been seen that some of the payday loan lenders charge interest rates as high as 300%. Most of the consumers don’t bother to read the fine print section (where the interest rate is often written) and fall into payday loan trap. As a result, they are incurring huge debt. This explains why the demand for debt consolidation loans has increased in the last few months.

Article by debt consolidation care community member.

A possible solution to all these debt problems is debt consolidation. Several financial institutions and banks offer debt consolidation loans. The consumers can take out these loans so as to pay off their debts.