Digital News Report – Consolidating debts is big business in the United States. New data released by the Federal Reserve indicates that consumer debt increased in December. This is good news for credit card companies and others who offer personal loans and lines of credit.
Consumer credit had contracted 20 straight months prior to October, putting many Americans into a financial bind. Tight credit makes debt consolidation more difficult. The increase in outstanding consumer debt in the fourth quarter of 2010 may signal a loosening of credit. This could help consumers struggling to make ends meet.
There are many debt consolidators, including credit card companies and banks. There are two basic types of debt consolidation loans: secure and unsecured loans.
JPMorgan Chase says customers can use their home’s equity to “replace credit card, auto loan and other high-interest debt.” They say that customers can lower their credit card rates by 7-10% or more.
There may be tax savings, according to the bank.
Check with your financial advisor first. Many experts recommend not securing student loans, cars and other personal loans with a home.
By Tina Brown