It was 1950 when Diners Club released the first credit card and since then credit cards have transformed the purchasing experience for most people around the world.

Currently the average American household possesses four credit cards and if you also include debit cards and store cards then the total jumps to 13. In the United States alone there are actually more than 1.3 billion payment cards of assorted types in circulation.

When that first credit card was issued in 1950 it was believed that not having to carry around cash and being able to manage spending in one form would modernize money and make the lives of consumers easier. For the most part however, they were wrong, dead wrong.

Recent statistics have shown that the average credit card debt for each household in the U.S. is more than $4,800. Another staggering statistic shows that there were 1.3 million credit card holders pronouncing bankruptcy in the year 2003 alone.

If you are a part of the millions of people where your credit card debt surpasses what seems to be a reasonable level, you may want to take into account the credit card debt consolidation option available to you.

So what is credit card debt consolidation?

Debt consolidation consists of the process of taking your debts from various sources (such as credit cards, mortgages, personal loans, student loans, etc.) and merging (or consolidating) them into a single debt, usually at a lower interest rate. The most common type of debt that is used is credit card debt given that this debt carries a very excessive annual percentage rate, which is usually close to 20% and even higher. The resulting single debt is also known as a debt consolidation loan.

There are actually two major types of credit card debt consolidation…

The first option to consider is a debt consolidation counseling agency. They assist you by consolidating all your monthly payments into one single payment and then dispersing this to the creditors on your behalf.

The other type is through a home equity loan or other secured loan. This is done by exchanging an unsecured debt (such as credit card debt) for a secured debt (a debt backed by specific assets such as real estate).

In cases where debt consolidation is needed, the advice from most financial planners would be to bring all your debts together. Then sit down and figure out how much you owe and what you are paying out each month. Then, shop for the best debt consolidation solution available to you before making a decision on one.

Now, credit card debt consolidation isn’t a magic balm that will drive all your credit card debt misery away. But, it will make paying all your debt easier and could save you money in the long run. Certainly an option worth considering…

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