by Alexis Cala, PICurrent Assistant Producer
Courtesy of Andres Rueda
Our current economic situation has resulted in many American’s carrying around too much debt and not enough options.
Low consumer confidence, mounting layoffs, and housing problems are taking a toll on consumers when it comes to credit card debt. However, lenders are losing money too.
Credit card write-offs, or uncollected balances, are becoming a problem for you and banks as more people lose their jobs and can no longer make payments.
Credit card lenders wrote off nearly $45 billion in bad debt for 2008, and forecasters expect this number to keep growing. The recent bank stress test, a possible worst case scenario for the economy, suggests the nation’s biggest banks may see nearly $82.4 billion in credit card losses by the end of 2010. Not to mention how much each cardholder will be left with on their bill (read the full story on The New York Times).
As the possible losses grow and many cardholders fall deeper into debt, it may be a good time to start changing the rules.
President Obama and others are pushing for the approval of a credit card consumer-rights measure that would hold cardholders accountable while helping reduce debts for many. The legislation would help get rid of some of the outrageous fees, penalties, and high interest rates that credit card companies can charge. This measure could be passed as soon as Memorial Day, making your payments more affordable and rising rates a thing of the past.
There are also things you can do now to start catching up and get out of debt:
- Talk to the creditors. Figure out how much you owe and what you can afford to pay. Discuss your situation with each creditor and try to work out a payment plan. Get any agreements in writing.
- Consider debt consolidation. This can reduce your interest rates, payments, and help you get current quickly by combining your debts together into one payment.
- There are free credit card counseling agencies, like Consumer Credit Counseling Service (CCCS) that can help you get on a budget and reduce your debt.
Check out our sister site, The Beehive, for a great section on financial fixes and help getting out of debt.
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[...] The legislation would help get rid of some of the outrageous fees, penalties, and high interest rates that credit card companies can charge. This measure could be passed as soon as Memorial Day, making your payments more affordable and … Go to Source [...]
[...] what can you do? Alexis had a great post last week on what to do if you find yourself drowning in credit cards. Our sister site, The Beehive, also [...]