With all of the banks in a panic to reduce their losses to their mostly fraudulent practices, many of the larger lenders are putting into place more restrictions to yet again deter the hard working citizens from escape of the debt trap. Recent news coverage and yet more to come are announcing changes that will affect life as we know it- even for the responsible card holders and especially for the predatory lending practices for high interest consumers today. So be on the lookout and be very wary of up and coming changes to your credit, may it be bad or good.
• Use it or lose it policies: Big name credit card companies have been closing accounts for "inactivity". Which means, even if you have great credit and keep cards around for emergencies, these accounts can be closed without notice due to the liability that the are "dead wood" clients. This may drop ones credit score dramatically- up to 40 points.
• Limits being lowered below current balances: Lets say you have a credit card with a $5000 limit and you have $4000 in charges on that card. Soon these companies can reduce the available balance to lower than the balance that you currently owe. What does this mean for you? #1 It will show you being maxed out or even about your credit limit, which could include over the limit fees but further more increases your debt to income ratio. Yet another drop in your credit score.
• Retroactive increase in interest rates: This is the only industry that is able to retroactively increase rates imposed on a person's credit (even if the consumer has never missed a payment.) Pay very close attention to your statements.
• Universal default laws: Although this has been in practice for a few years now, more and more frequently it is being enforced. Credit card companies raising interest rates simply because a creditors rating has gone down, even if they have never missed a payment with that company.
• Late penalties: These are being challenge by senate but how is it they can charge excessive late fees after even one day late on a payment... what if the mailman delivers your envelope one day late? Should you pay excessive fees for that? And does that give these BILLION dollar companies the right to raise your interest then to over 30%?
Put your cards on ice-literally! Freeze them in a bowl of water for emergency use only (and don't microwave them for easy access- you'll ruin the card). This is one of my favorite methods to deciding whether I really need to use it. After the 30 minutes it take to run under hot water I usually can find something more important to spend my hard earned dollar. If you are experiencing difficulty managing your bills or even making the minimum payments; NOW is the time to begin a debt free life.
How Will Debt Settlement Affect My Credit Score?
The most frequent question that is asked is how are credit scores affected while enrolled in a debt management program. Let me first start off by stating that any and every debt relief or management program will negatively affect your score. In fact, anything short of paying off debt in a timely manner will negatively affect ones credit score. Now, that “disclaimer” is out of the way, let’s get to the facts.
What Options Do I Have to Get Rid of Debt?
Thoughts of a looming depression are causing widespread panic for the average citizen, here in the U.S. and globally. While the President conducts secret meetings and aids big businesses (even those that have committed high end fraud), the risk of hundreds of thousands of jobs are on the line. The normal citizens have been (so far) left out of the equation but left to pay for the years of greedy Wall Street capitalization and the like.
Predatory Lending and Criminal Credit Card Corporations
More and more families are relying on credit cards to weather the storm during economic dowmnturns and are being lasered in on by billion dollar credit card companies and their criminal practices. Recent emphasis on this topic has been making headlines but little has been done to crack down on predatory lending practices, in fact our "government" have given them $700 billion...
