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Common Debts and What to Do About Them

Common Debts and What to Do About Them
by Joe Taylor Jr.
Debt Relief Options Columnist


Credit card bills are the largest monthly expenses for many Americans. The convenience of plastic has made it easy to run up unprecedented levels of personal debt. Non-profit debt counselors suggest that you can kick your charge habit and lower your credit card bills by making daily purchases with cash. The emotional attachment we have to folding money often prevents us from making unnecessary impulse purchases.

Car loans and leases are another common form of debt in the United States. Our obsession with automobiles makes it easy to rack up auto debt loans. Experts advise buying used cars or showroom models whenever possible to save money. If you love the feel of a new car and you can keep your mileage low, a car lease can keep you from a large new car debt.

Student loan debt has escalated in America, with the number of college students growing almost as fast as the price of tuition. Because lenders cannot charge off student loans, non-payment on student loan debt can haunt you forever. Take advantage of student loan consolidation to reduce your monthly payment and avoid student default.

Mortgages and home loans are some of the largest debts we carry in our lives. By shopping for low interest rates and leveraging home equity, you can reduce the amount of interest you pay on all of your debt. Financial planners advise clients to avoid loan consolidation in cases of extreme credit card bills, however. While banks often charge off unsecured credit card bills, an unpaid mortgage can lead to foreclosure. Experts recommend paying your housing debt before anything else each month.

Sources
New York Times
PBS FrontLine
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