Consumer Debt Consolidation

Consumer Debt Consolidation is consumer credit which is outstanding. In macroeconomic terms, it is debt which is used to fund consumption rather than investment.

Some consider all debt incurred for anything else other than investments unwise, while others believe that consumer credit is beneficial in growing the economy. The difference between perspectives is often a matter of personal values, which can extend to widespread social biases. Historically, across many cultures, being in personal debt was considered almost immoral.

More recently, an alternative analysis might view consumer debt as a way to increase domestic production. If credit is easily available, the increased demand for consumer goods should cause an increase of overall domestic production.

Types of Consumer Debt

The most common form of consumer debt is credit card debt, payday loans and other consumer finance, which are often at higher interest rates than long term secured loans, such as mortgages. Interests rates vary, of course, depending on current economic situation and the financial status of the individual, but 12-15% per annum is not unusual.

Long-term Consumer Debt

Long-term consumer debt is often considered fiscally sub optimal. While some consumer items may be useful investments that justify debt, most consumer goods are not. For example, incurring high-interest consumer debt through buying a big-screen television "now", rather than saving for it, cannot usually be financially justified by the subjective benefits of having the television early.