We have helpful finance management advice on debt, loans and credit cards

Whether youve used your credit cards to purchase gas, food, clothing, car repairs or luxury items, its crucial to pay your account balances off as quickly as possible to avoid paying an outrageous amount of interest.

While its true that the average American owes $9,000 in credit card debt, its also true that many people owe a great deal more than this. Unfortunately, if you find yourself in a situation where your credit card debt is through the roof and your interest rates are hovering above 20%, its not likely that you can realistically pay it off in less than 40 years if youre just making the minimum monthly payments.

For instance, if the amount of credit card debt you owe is $50,000, at an average interest rate of 24.99%, it will take you exactly 41 years and two months to completely eliminate your credit card debt. And it gets worse the total you will end up paying at the end of 41 years is a staggering $102,129, with more than half of this amount going toward interest.

Even putting yourself on a five-year plan will end up costing you. You see, if you can afford to pay $1,437.34 each month, youll end up paying a total of $86,240, with $36,240 of that going toward interest.

To avoid this trap its important to review other options to eliminate your debt. If you have sufficient equity in your home you may qualify for a low-interest home equity loan. If youre struggling to pay your bills each month, you might want to expand your options to consider consumer credit counseling, debt settlement or even bankruptcy.

No matter what your current situation, if you owe a significant amount of money on high interest credit cards its highly recommended that you choose an alternative to continually paying the minimum required payments, as this path will only lead you to several more years of high debt and payments.

In today’s plastic savvy times, it is just so easy to fall into debt. The great thing about credit cards is that you don’t need to pay anything upfront making it so much easy for all of us to shop for our favorite products. But the flip side of it is that most people do not realize that the credit card companies levy exorbitant interests if you do not pay the bills on time. The result: you are thrust neck deep into debt.

So what options do you have? Declaring bankruptcy or just hiding yourself under the bed? Hardly a solution! The first thing to do is to accept and admit that you are in debt. There is no need to be ashamed of your financial crisis. With UK’s current deficit touching the 1 trillion mark, there are a lot of UK residents who are facing similar situations.

The next thing that is likely to pop up in your mind is whether you should hide your debt status from your lenders or disclose it. Your first instinct is going to tell you to let thing be the way they are. But that is not a correct approach. Most companies will be willing to work out an agreement with you as long as you keep them informed about your inability to keep up with the payments. So go ahead and tell them about your financial crisis.

That’s done; now you must draw out a list of your debts and outstanding payments. Compile a financial statement of sorts and find out to what extent your outgoings are exceeding your income. Leaving aside the bare necessities like gas, food, water and electricity, can you cut down on any of your other expenses? Check if you are missing out on any benefits that you may be eligible for.

If status still seems abysmal, what you can do is draw out a debt consolidation loan. This loan basically wraps up all your debts into a single loan. So, now you don’t have to worry about several monthly payments. A single monthly payment will do for all other payments.

What’s great about debt consolidation loans is that they come at an interest rate that is a lot lower than the cumulated interests of your credit card bills and other outstanding payments. Add to this, you no longer have to deal with the harrowing calls of your creditors. Your consolidation loan lender will take care of all that. He will negotiate with your creditors and you have to just worry about paying this single loan and nothing else.

A debt consolidation loan will not only help you get out of your debt swamp, but also help you in improving your credit score. This is a far better option than declaring bankruptcy wherein your credit score goes straight for a nosedive. However, you must remember to pay your debt consolidation loan installments on time, lest you end up facing a legal action.