Consumer Installment Debt

The difference between consumer installment debt and consumer credit card debt is the difference between a ferry ride to Staten Island and a root canal trip to the dentist's office. The one has a definite beginning and end, but the other one seems like you'll never get out of that chair! The latest statistics from the Federal Reserve have the installment loan debt at one trillion six hundred and seventeen billion dollars and credit card debt at nine hundred and sixty nine billion dollars and climbing. It's no wonder the "Feed the Pig" ads run by the government are so prevalent on the airways! Installment accounts always have the buyer dreaming of the day that the loan will be paid off, with the knowledge of the exact day it will occur. Revolving charge accounts have the consumer looking at a large bill every month and thinking, "Will I ever get out of this hole I am in?"

Consumer installment debt is the result of "Just forty-eight easy monthly payments of _____" advertising. Car dealers use the term on almost every commercial for a lease agreement and when the salesman asks, "Well, how much a month do you think you can afford?" that's the installment loan staring at the potential buyer with its very haughty smirk. Imagine eighty four months of consumer installment debt on the same vehicle that will have rust and rips in the upholstery and needing two brake jobs before it is paid off. The forty eight easy monthly payments is how carpet dealers get their new fall line sold before Christmas and the dentist's office can make Rebecca's four year orthodontist safari seem palatable. Installment loans do have the blessed ending date and that may be their only redeeming quality.

The fact remains that consumer installment debt is still borrowed money that has to be paid back. It's the freight train that comes by every month and all its cars are in tow. The revolving stuff is a single engine where the borrower can choose whether to hitch a few more cars on or not, but the installment is an all or nothing deal. And both have put consumers in more of a debt black hole than ever before. This has brought Americans into a state of not being able to save much money for emergencies and other unexpected issues. In fact, living pay check to pay check is a common experience to almost seventy percent of all households. Jesus warned all of us of being too materialistic when He said, "Take heed and beware of covetousness: for a man's life consisteth not in the abundance of the things which he possesseth." (Luke 12:15)

Getting out of consumer installment debt is always the dream of those who are in it, when looking for that big day when the last coupon in the book is sent away becomes an almost daily occurrence. Listening to the many credit gurus leads a person to the conclusion that all solutions have at least some pain attached. The first way experts suggest of jettisoning debt is to sell stuff. Look at all the property that has been acquired and start selling some of the stuff collecting dust or that really isn't as revered as before. Put it on EBay or have an auction or a garage sale, but raise money by biting the bullet and jettisoning possessions to get rid of the debt. The second way is for the consumer to get an additional job and put the extra money on the loans. Stop groaning and get going!

Most experts in the financial arena don't like any borrowing to cover borrowed money, but if consumer installment debt is closing off a person's financial windpipe, then the gurus do suggest a home equity line of credit. These lending agreements are offered at banks, credit unions and loan companies, but they are not the same in value. Banks and credit unions are demanding higher and higher credit scores because of the recent bank closures and their bar for loan qualifying was already high before that happened! The good news is that their interest rates are at least as good and may be better than most installment loans, and the payments can be spread out over ten years or more, drastically reducing a person's total monthly payment outlay if all the debts are consolidated. Loan company home equity lending agreements will often have a higher interest rate than many of the installment loans already in hand. A person will have to do the math to see if his consumer installment debt can be rid by a loan company home equity lending agreement.

Perhaps after reading this article, the reader might take a little while to ponder what got him to the place of having so much debt in the first place. It is certainly understandable why a person might find himself in a high consumer installment debt situation. Products are continually being upgraded and made to be more efficient. Advertising reminds us that we all deserve the latest and the shiniest. The American economy was not built on consumers being content with what they own. Chapters seven and thirteen bankruptcies are a devastating blow to a consumer's financial integrity for ten years and are clearly not the answer for someone struggling with the ethical and moral dilemmas these legal filings produce. Clearly, the best answer is a person changing his entire perspective on what is most important in life and living within the means provided by today's circumstances.

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