In an Ohio State study, it was found that being in debt actually added to young people’s self esteem. Both debt from paying for an education and regular spending debt from credit cards made young people feel better about themselves. This was especially true for people who came from poor backgrounds and less likely to be true for people who came from middle or upper class backgrounds.

Just the fact that any kind of debt could make people feel good is incredible and VERY SAD! Debt is never good (unless you are borrowing at low rates in times of high inflation) and it has become way to normal to have debt. Yes, debt from going to college means you went to college but it still means you have debt to weigh you down and pay back. An investment in your future doesn’t necessarily mean you HAVE to go in debt.

People in today’s world, especially young people, have no idea how hard it is to make money and repay debt. They have such an unrealistic and rosy view of the world that doesn’t include many of the financial burdens they will encounter. Too many young people just don’t realize how hard it is to accumulate money and pay off debt. Often time they don’t even know what taxes are because they have never had real jobs and had to pay it.

These are the same 20 and 30 somethings that are happy to be in debt now but will soon enough be searching for debt relief on their computers. When they get out in the real world for good and start looking for that job with the near 10% unemployment rate we have now, they will start to realize that the payments they have to make are a real pain. What about all the people who have lost their jobs and are having to file for unemployment? I’ll bet their self esteem has gone WAY down.

Much of this problem has to do with our poor education system and the often horrible job parents are doing now days of parenting. Debt should be explained to kids by their parents and taught to avoid it at all costs. Of course this is getting harder and harder as many parents are clueless themselves as we keep on voting in politicians that raise the debt in our country.

It seems everyone and everything is in debt now: but debt is NOT normal. And that is the problem that is really starting to bring this country down.

Debt is normal and everyone has it. There is nothing wrong with being in debt, any kind of debt, because all “normal” people have it. In fact, if you find someone who is not in debt you may wonder “what is wrong with them?”

These are the thoughts of Americans in the year 2011. There is no longer any stigma to being in debt. Declaring bankruptcy is no longer frowned upon, it is just something you do when you get in a bit of trouble. Debt used to be associated with buying a house or a car, two big ticket items that very few could afford to pay cash for. But now, debt is used for everything under the sun that people buy everyday.

I was taught by my parents that if I wanted something I had to save enough money before I could buy it. That’s how I paid for some of the toys I wanted that my parents wouldn’t pay for. I made money doing odd chores around the house as well as babysitting and summer jobs which helped my buy some of those things.

When I became an adult I stuck with the same principle that if I really wanted something, I needed to buy it with cash. Credit cards in my family are only used for convenience as I have never paid a cent of interest to any credit card company. I have been in debt for only automobile purchases and house purchases. I know many go into debt to finance their college tuition and that is most often unavoidable but I was lucky to have that paid for.

Everyone’s circumstances are different and not everyone is as fortunate as I am. That I understand. However, it is clear that way too many people buy things they can’t afford and have to go into debt to do it. They think that because everyone else is doing it, including our politicians, it must be okay. They haven’t learned to save before you buy and to pay for things with cash.

People are now desperate for money. This is the worst economy many of us have ever seen and folks are buried in debt, often with no way out. Unemployment rates continue to stay high and without jobs, people have little hope. In many cases the trouble they are in is because they never learned how to save for a rainy day because, people just aren’t taught to do that anymore.

It’s sad that some think that the government will help them out with debt relief grants or some other free money program. The government isn’t our safety net and never will be but too many of us think it is. Actually, our government is in more trouble than we individually are which poses a bigger threat to all of us. Having the kind of debt and the amount of debt many Americans have today is NOT normal. You may think it is based on what you see and hear but debt like this is a relatively new phenomena.

Earlier this year President Obama was successful in pushing through new rules for credit card companies that would limit late fees, interest rate raises, and all sorts of other things. The thinking was that these new rules needed to be put in to protect consumers from out of control fees and charges that were hurting regular consumers. Before a credit card raises the interest rates, it has to notify you and jump through some new hoops which help protect every day people. Sounds good right?

But it isn’t necessarily working out that way as many of these rules and regulations are making it harder for poor people to get credit cards it is raising rates on all of us. Businesses are there to make money and that will never change. When the government steps in and imposes new rules and regulations on them they usually lose money. Most of the time they then have to charge the rest of us more to make up for that lost income. That is what is happening here as credit card interest rates have gone up for all of us when interest rates in general have gone down everywhere else.

Who loses when credit card interest rates go up? Poor people do and all the people that use credit cards because they can’t afford to pay with cash. Weren’t those the EXACT PEOPLE President Obama was trying to help?

The stimulus bill and economic bailout of 2009 has also made it harder for anyone to get a loan at the bank. All lending institutions, including credit card companies, have made it harder to get credit since this economic downturn and the stimulus bailout. Right now it is harder to borrow money than it has been in recent memory. Who does that hurt? It hurts poor people that need payday loans and other loans just to pay their rent or mortgage and get by to the next pay period.

With legitimate loans harder to get because of Obama’s new credit card rules, poor people HAVE to go to all the sleazy payday loan places that charge 300% to 800%. You know the ones I am talking about: they are in strip malls in the poorer parts of town and promise to give you money right away. They will give you money but it comes with an astronomically high interest rate that hurts poor people a lot more than the small charges they might incur from a legitimate bank.

While credit card interest rates are high at 13% or 14%, that is a lot better than being charged 400%! Obamas new credit card rules hurt poor people because they push them away from credit cards and banks and make them have no choice other than to borrow money from the payday loan sharks that charge 30 times that! Or they might waste their time searching online for things like debt relief grants that don’t even exist.

Government laws are often instituted with good intentions but they often end up hurting the very people they are trying to protect. This is just one example how government does not have the solution to all our problems and often does more damage than people think.

The government is forever trying to protect us from unscrupulous marketers and apparently they think debt consolidators fall into that category. Debt relief companies will no longer be allowed to charge fees before they perform their services. It seems debt relief is a grey area where companies make big promises of eliminating your debt or at least a big portion of it and then charge an up front fee for the service. According to the FTC, the promises are often not kept and the end result of their “service” is much different than what was originally promised. With the up front fee though, they already have their money and of course the person who paid the fee is then in a bigger financial hole than they were to begin with.

Under the new ruling, debt relief providers cannot charge a customer anything until a successful negotiation has taken place involving the settlement or reduction of the customers debt. Simply put, if the debt relief company is successful in helping a client reduce their debt, only then can they charge for their service. There will have to be lots of new written agreements in place so that the fee can be charged after completion of the debt reduction service.

So many people are in credit card debt right now and this bad unemployment isn’t helping any. The economy looks to be in a funk for many months ahead as no end is in site. This is causing more people than ever to search for debt relief grants and any other type of debt relief they can find. They hope to get Obama debt relief or some other kind of handout, giveaway, or help from the government but there isn’t anything like that. At least now, starting in a couple of months, they won’t have to worry about being fooled into paying for debt help from a company that might not be able to deliver on it’s promises.

With every credit card statement or bill you get in the mail, there is always a box that tells you the minimum amount due. It may seem that that amount is the least you can pay because the credit card company likes you and wants to be nice. No, the minimum amount due is what they WANT YOU TO PAY or hope you pay so that they can make the most money possible in interest from you.

Credit card companies make money by the outlandishly high interest rates they charge you. While you can only get about 1% interest if you put your money in a bank CD or a Treasury Bill, the credit card companies are very happy to charge you rates of 18% and higher. This is where they make their money and they want you to owe them as much as possible at all times. The more you owe them, the more money they make in interest as long as you keep on a schedule of paying them a little at a time.

It will take you many years to get out of debt if you only pay the minimum due every month. You HAVE to figure out a way to pay off more unless you want to be owing them money perhaps for the rest of your life.

The chart below shows the number of years it takes to pay off different amounts of credit and the chart is based on 19% interest along with a minimum monthly amount of just 2.1% of the outstanding balance. Remember, credit cards usually require low monthly minimums of between 2.0% and 2.5% of the outstanding balance because they WANT you to only pay that much. You need to fool them and pay more if you want to be successful at erasing your debt.  

How to enroll in an online debt relief program

At first, you need to fill out an online form. Then, a consultant (on behalf of the debt relief company) will call you for a free session in order to assess your financial situation. After assessing, the consultant may suggest a debt settlement program if it is the best suitable option for you.

What happens in a settlement program?

As you enroll in a debt settlement program, the debt negotiator (on behalf of the company) will start communicating with your creditors to reduce the total amount you owe. In the meantime, you will have to deposit a monthly amount into your settlement account with which you can pay your creditors as soon as they agree upon a pay off amount.

It may happen that an online debt consolidation and settlement company offers a consolidation program to you if it is suitable for your financial condition. It is advantageous over settlement as consolidation has a positive effect on your credit report.

What happens in a consolidation program?

In a consolidation program, the debt consultant (on behalf of the company) will negotiate with your creditors to reduce the interest rate of your loans/debts. With your creditors’ approval, he/she will also decide upon a monthly payment that you need to pay towards your debts. After you make the payment, the company will distribute it amongst your creditors.

It is quite important to choose a good online debt consolidation and settlement company to pay off your dues. Therefore, check its membership with TASC along with checking the company’s reputation from BBB (Better Business Bureau) to know whether or not there are any complaints against the consolidation and settlement company.

Not everybody is in debt though and that is because many people don’t buy things unless they have the money to pay for it. It used to be that cash was king and people payed for things by reaching in their pocket for the money or they wrote a check. This meant they were never spending money they didn’t already have.

It is so easy nowadays to pay for everything with the credit card. Almost all shops and restaurants take it and just carrying a credit card is easier than dealing with cash. However, paying thing with a card has obviously not been working for many people as they continue to charge things that they can’t afford and don’t have the money for.

Of course big ticket items like houses, cars, and boats will be financed by credit more times than not but that is not what we are talking about here. People who are deep in debt and looking for debt relief grants have most often gotten there one small purchase at a time. They start off debt free but through the years they just keep on charging that card and end up with so much high interest credit card debt that they are then forced to contemplate bankruptcy.

One of the ways you can prevent this from happening is to change your spending habits. If you make it a rule to not buy anything unless you have the cash, you will be forcing yourself to cut back and show some self restraint. That means cash for all items including that $1,000 flat screen television you want and the Wii game console to go along with it. Make a new rule in 2010 that in order to buy something, you must first save up the money to buy it. Then when you have enough, you can pay cash for it or write a check.

If you make this new pledge to wait to buy things until you have the cash, you will get a good feeling inside that you have earned the item. This will allow you to enjoy it even more and it will also put the breaks on your out of control spending. You still might need debt relief but at least you will be making a good start to fixing the problem.

There isn’t, to my knowledge, any official government solution or program that will help you with your debt problems. You should try hard to pay cash for things instead of charging them but if you don’t have the cash it is difficult to do.

Debt Help 101 is a place you can go to find a debt consolidation / settlement company that will help you get back in control of your finances. Often times you can bargain with your creditors and have them forget some of your debt if you have a plan put in place where you will pay the rest. It is a good idea to have a company who knows how to do this for you so that you can get your life back and move toward becoming debt free. - Debt Help 101