Nebraska Credit Card Debt

Over 40% of Americans spend more money than they actually earn; although this number may seem shocking, it is a lot easier to understand when we look at the state of the current economy in detail. Let's take the state of Nebraska. With larger cities like Omaha and Lincoln, as well as hundreds of smaller rural communities, NE represents a wide spectrum of Americans. Furthermore, NE, like all other states, has been at least somewhat affected by the current economic recession. In fact, like the rest of America, Nebraskans have suffered job losses, employment decreases, house foreclosures and looming credit card debt that just won't go away. Fortunately, many Nebraskans have also found the relief they need in debt consolidation.

The Nebraska Economic File

Currently, Nebraska is the 20th highest state when it comes to median income. At $44,623.00, it is just above the national average. In per capita personal income, Nebraska is below the national average at $40,499.00. However, the overall tax burden is above the average at 9.8%. What this means is that Nebraskans are feeling the pinch... in their wallets.

NE's FICO rating is at 695, which is above the national average but still considered in the range of "poor." Expert analysts suggest that anything above 700 can be considered good credit scoring. Those below 700 can expect harsher loan terms, shorter payment options, higher interest rates and bleak penalty fees for missed or late payments.

One of the main reasons for the current low FICO scoring is due to outstanding debt that Nebraskans are struggling to overcome. Credit scoring works on several factors; however, two of the most important factors include outstanding debts and payment history, both of which are often impaired due to an unsettled credit card debt. An average NE credit card owner currently owes $6,950.70. At a standard annual APR of 11.47%, Nebraskans can expect to pay nearly $800.00 in interest on top of their payments. However, most credit cards offer an APR of 19% or higher. With this taken into consideration, the annual interest incurred jumps to $1320.00. Furthermore, this does not include the penalty charges and annual fees that most credit cards also charge. In fact, in 2007, credit card companies received over $18.1 billion in penalty fees alone.

So what else is causing Nebraskans to rack up their credit card bill? Well, first of all, let's look at transportation costs. As much of the population of Nebraska lives in small, rural communities, an automobile is almost necessary. With the recent increases in gas prices, Nebraskans are also suffering from the fuel crisis. Another issue comes down to housing prices. Housing costs have increased dramatically in the last ten years. In fact, in Lincoln and Omaha, housing costs rose 30% in 2004. Even renting prices have increased with the average cost of living in a one bedroom apartment in Lincoln jumping an average of 1.95% each year. More and more Nebraskans are losing the battle with the current job force with an unemployment rate of 8.5%. All of these factors, plus the rising costs of food, education, medical care and everyday needs, contribute to the escalating debt overwhelming Nebraskans.

The Truth about Credit Card Debt

Many people assume that those who are using their credit cards do so for reckless spending. After all, it is so much easier to shop online and hit the mall armed with your trusty plastic card. However, this is actually not the case anymore. Although credit cards are still used to buy that way-too-expensive pair of shoes or those front row concert tickets, more and more consumers are using their credit card for daily living expenses. Furthermore, 70% of low and middle income consumers use their credit card as a safety net for essential expenses. These expenses may include groceries, fuel, electricity bills, school fees and medical bills. The reason is because, after the monthly bills have been paid off, there is simply not enough money left over for the basic living expenses. And, thus, credit card debt continues to build. The total consumer debt on credit cards across the nation is well over $880 billion. Just 40 years earlier, this number was at $8 billion.

Families, single income households and students in NE are all struggling with this catch-22 situation. In fact, 25% of college students used their credit card to pay for their tuition. Additional purchases include fast food, medical expenses and online merchandise. There is no denying that, in some instances, a credit card is the easiest payment option; however, more and more people are finding that, unfortunately, a credit card is their only option.

Debt Consolidation in Nebraska

However, there is another choice- a debt consolidation loan. Consolidating your debt works by combining all outstanding payments into one easy monthly payment. Instead of wasting time sorting through the overdue pile every month and wasting money on late fees and rising interest rates, consolidation loans allow you to focus on one monthly payment and that's it. Consolidating your debt means you will be charged lower interest rates, lower fees and receive longer payment terms so you are able to actually work towards paying off those debts without sinking deeper and deeper into the red.

Furthermore, by consolidating your debt, you are working towards a better credit score. Consolidation offers an easy way to wipe those ‘blemishes' off your credit report so the next time you need a loan, you will be able to obtain one with low interest rates and acceptable payment terms. The loan is secured based on your personal needs. Each debt consolidation loan is individually matched based on the expert advice of a debt councilor as well as the current financial analysis of the client. With personal solutions for reform and expert advocacy, debt consolidation provides Nebraskans with a way out of the recession.

Of course, there is more than meets the eye when it comes to consolidating your debts. Although you will most certainly be saving hundreds, if not thousands, on interest costs, you are not completely out of the red. Working with a debt counselor, you will need to reassess your financial situation and work out a budget and reduction plan that works for you. Most plans offer a 2-5 year solution for your current debt problems. During this time, it is up to you to stay on target, make the payments and avoid those impulse purchases in order to eliminate the debt.

Of course, things happen. You might lose your job; you might come down with an illness; you might add a new member to the family. Whatever the case, debt consolidators are there to help you. As long as you remain communicative and upfront about the situation, then it is completely possible to readjust your plan to fit your life.

The most important thing to remember when it comes to the current economy and your financial situation is that it is possible to change. No one can predict the future but you definitely hold the key to making a change for the better. Wiping your credit card slate clean and consolidating your debt are two of the smartest moves you can make when it comes to securing your financial future.