U.S. households took on an additional $8 trillion in debt over the past decade as the housing boom drove home owners to get cash out of their equity through refinancing or equity home loans, according to a recent article in Reuters.  This, in turn, made consumers less interested in saving their money as the chart below shows.

Now overwhelmed with debt, these poor choices made by consumers has resulted in a steep rise of credit card payment defaults as the next shoe is about to drop with a thud on credit card issuers, namely, the consumer debt bubble popping.

U.S. consumers have never before been so deeply in debt. There was nearly $1 trillion of credit and charge card debt outstanding as of October, up more than 25 percent since 2003, according to the U.S. Federal Reserve. That is in addition to $10.54 trillion in mortgage debt.

Unemployment, already at 15-year highs, is expected to rise to its highest levels since the early 1980s, when credit cards were not nearly as widespread.  Bottom line…there’s more debt than ever and fewer people are able to pay it.

No credit card company is safe

Losses for the credit card industry could top $70 billion, but it is hard to predict how bad the pain will be.
According to Citigroup analysts, more than one-fourth of the credit card portfolios of Citibank, Bank of America Corp, Capital One Corp, and Discover are subprime, which could lead to further losses.  Read the full story

Is there any sound help for debt-ridden consumers?  Yes…

If you are among the millions of consumers overwhelmed with debt, there are steps you can take to get rid of your debt, other than bankruptcy protection.  Here are a couple of recommendations…

Recommendation: Renegotiate and pay off your bills for as little as .35-cents on the dollar

You can renegotiate your debt with your creditors.  There are a number of companies that offer to negotiate in your behalf to settle your debt but you can actually do it yourself through the mail (that really takes the pressure off any face to face or phone confrontations), using what is known as the Accord and Satisfaction Process.

The step-by-step instructions on how to do this are outlined in the Credit Secrets Bible tutorial recommended in the Debt and Credit Solutions Section.  Another tutorial, the Ultimate Debt Guide, has been called “The best get out of debt system in history” by one of it’s readers. Details on this guide can also be found in the same section.

Recommendation: Buy income producing commercial property without cash or credit

Buying the right kind of income producing commercial property can not only get you out of debt but can also provide ongoing monthly cash flow (without property management headaches and without scrambling to find a side job for extra income) and build real wealth for you and your family.

The best type of commercial property to buy right now, in this economy, is apartment buildings.  People need to live somewhere.  As more homeowners, unfortunately, lose their homes to foreclosure in the next few years, they will be renters again.

The goal is to BUY RIGHT.  Buying the right property, for the right price, in the right area, is the way to make money with apartment building investing.  You can use the monthly cash flow to pay off your debt or you can increase the value of the property and refinance it and pull cash out to pay off the debt in a lump sum or at least a big chunk of it.

Buying apartment buildings without cash or good credit is still possible today, unlike buying a single family home. This is a strategy you need to learn along with the “buy right” elements mentioned previously.  Excellent apartment building investing guides that teach you exactly what to do is found in the Be a Better Investor Section.

There is no time to waste and time is of the essence.  Take action now to get rid of your debt and start creating a constant stream of monthly cash flow, even in this economy.

Technorati Tags: money, finance, debt, consumer debt, debt help, debt relief, credit card companies

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