In the United States alone 29% of the households that have credit card debt actually owe $1,000 or more on their credit cards, 21% owe $2,000 or more, 6% owe $8,000 or more and 5% owe $10,000 or more. But on average the amount owed on each household's credit cards is $1,900. This is actually quite high when you compare it to the fact that over 55% of American households actually have no credit card debt due to various reasons.

It is because of these high balances that people have on their credit cards that more and more people are looking into credit card consolidation. Not to mention the fact that our economy is currently heading towards a recession. And if we end up in a recession these households that are currently facing high credit card debt might run into even more financial problems because of the loss of a job or the increase in prices on other goods, which basically means they might not be able to afford their credit card payments.
 
So what many people are doing is looking for ways to consolidate their credit card debt because it is getting out of control and they want to make sure that they get some type of control over it before we face a recession. But another reason that people are looking into credit card debt consolidation is because it is one of the fastest ways to get out of credit card debt. The reason that it is one of the fastest ways to get out of credit card debt is because there are various types of loans and programs that you can choose from to reduce your credit card debt. But all of the loans and programs have a few things in common they are designed to help you pay a lower interest rate, which means a lower monthly payment, not to mention that all of your credit card bills have now been consolidated into one loan which means you now only have one monthly payment to make rather than two or three.

But getting out of debt or controlling your credit card debt isn't the only reasons that people consider credit card debt consolidation.

Here are some other reasons that you might be considering credit card debt consolidation.

• You are stuck at only paying the minimum payments and you don't see any signs of that changing for a long time.
  
• You try and avoid opening up your credit card statements because you don't want to see how much you still owe.
  
• You have problems falling asleep because you are constantly stressed out about the debt that you owe.
  
• You have several major credit cards that you have an outstanding balance on.
  
• You are close to or actually over the limit on all of your open credit card accounts
  
• You are avoiding answering the phone because of the fact that it might be collectors calling for payments on your unsecured debt
  
• Because of your financial situation you are actually experiencing added strain in your relationship

Here is a look at some of the various types of credit card debt consolidation loans and programs with a description of how each program works.

Home equity loan or line of credit:
These types of loans are advertised as the quick and easy way to get out of your credit card debt. The basic pitch for this type of loan is that by using your property's value you can get extra money to consolidate those high interest credit cards and also get a tax break in the process. The reason that you can get a tax break is that in most cases the interest that you are paying on your home equity loan or line of credit is going to be tax deductible, but you need to know that in some cases it can be limited. And just because you are most likely going to be getting a tax break with this kind of loan that doesn't mean it is the best choice. What the advertisements fail to mention is the fact that is you do end up defaulting on your loan you can actually lose your house because when you get a home equity line of credit or loan you are putting your house up as collateral. Something else that you need to know about this type of loan is that the banks will tell you how much you can borrow, but this doesn't mean you need to borrow the entire amount, but the sad thing is most people do and find themselves deeper in debt.

Zero percent credit card:
This option is used a lot by people who do not have a home, but what happens is that credit card companies offer new customers these zero percent interest rates as teasers. What they are trying to do is to get you to switch credit cards by offering you this really low interest rate. But what you need to know is that this is actually only a short term fix to your solution mainly because that zero percent or single digit interest rate is only going to last for a short period of time. So if you do decide to go this route you are going to need to look into how long this rate will last for and once it is over what kind of an interest rate you can expect. Another good thing to know about these types of credit cards is that the low rate only lasts if you pay your payments on time, in fact just one single late payment can cause your rate to jump to the higher amount with no warning. The only way that this type of solution would work for people is if they stay on top of their payments and make sure that they switch the balance to another low interest rate credit card before the previous rate expires, but doing this means opening new credit card accounts which can negatively affect your credit.

Debt consolidation loan:
This type of loan is probably the most heavily advertised solution to your debt problem, in fact you probably see a few in your email box each day. But how these loans work is rather than paying all different creditors at different times of the month with their different interest rates you simply take out one big loan to pay off all of those debts and then make a single payment once a month. The best thing about this method is how easy it makes paying your bills, but just because it is easy that doesn't mean you are going to be saving any kind of money in the long run. What you need to do before getting this type of loan is to make sure that the costs of the new bundled loan will actually be less than what you are currently paying your other creditors. You need to keep in mind that because you are currently having credit problems you are not going to qualify for the lowest rates out there and if you have nothing to secure the loan with such as your house chances are you are going to be paying a higher rate as well. So what you want to do is to figure out the interest and fees from all of your existing accounts to determine the total that you are currently paying and then compare that with the consolidation numbers to figure out which is the better plan.

Debt Consolidation Programs:
This actually only works well for people who have an average of $5,000 or less in unsecured debt, the unsecured debt can be medical bills, credit cards, personal loans, etc. But the goal of the program is to reduce your overall monthly debt, save you money on interest fees, help you establish a budget, and improve your credit rating by paying creditors on time. But this type of program can also help end the collection calls to your house. How the program works is that you have a fixed monthly consolidated payment, which is figured according to the lowest payment amount accepted by all of your creditors. Then once a month you pay the company that you have hired and they in turn pay your creditors what they are owed. But one thing that these programs can do is to reduce or stop your interest fees by working with your creditors. In fact these programs have been known to lower rates that were around 12% up to 24% to as low as 10%, 8%, 6%, or even 0%. But one thing that you need to know is if you choose this type of program as an option then you are going to need to close your credit card accounts, which isn't a bad thing because it will stop your spending which is probably what caused your debt in the first place.