Credit Card Debt Out of Control? Help May Be on the Way
As 2009 gets under way it’s painfully obvious that the economy is still struggling. Sales are continuing their downward trend, unemployment is rising, and many Americans are still having trouble paying their mortgage. After struggling through 2008, the average consumer is facing the New Year at a financial rock bottom. The best indicator of this sentiment has been the dramatic 50% increase in credit card debt from the last economic downturn in 2000. Americans are now struggling with an outrageously high $970 million in debt via credit cards.
Many of those Americans are fellow small businesses owners who are being forced to use their credit cards to make up for shortages in their monthly cash flow. The National Small Business Association estimates that 44% of small businesses use credit cards to fund their business. With setbacks like slower sales, delinquent payments from customers and loss of revenue, credit cards are being used to finance payroll, purchase inventory, and to pay monthly utilities. Credit card companies are struggling themselves and are panicked by the prospect of consumers defaulting on that $970 million in debt. This realization has caused many credit card issuers to substantially raise interest rates, cut credit limits, and in some cases revoke credit all together. Credit card companies are using these tactics in response to late payments, charging over the limit, and simply for being at your account maximum balance.
While the consumer credit crunch of 2009 will most likely be the biggest struggle for the New Year, there is hope on the horizon. The good people at the National Foundation for Credit Counseling (www.nfcc.org) have been actively petitioning the credit card companies to establish a workable re-payment plan for consumers to prevent an unnecessary rise in bankruptcies. On November 18, 2008 the non-profit organization issued a Call to Action outlining a proposal that will help keep consumers out of debt and allow credit card companies to recoup the debts owed to them. Key points of the debt management plan proposal include a 2% cap on interest rates for credit cards, waiving late and over limit fees, and the option to trim interest rates on the cards to ensure that the outstanding debt can be repaid in 60 months or less. The NFCC is requesting that these concessions be enacted by March 31, 2009.
If you find yourself or your business struggling with the exorbitant interest rates and reduction of credit that I have mentioned above, I encourage getting help now. Why spend another day feeling like you are helplessly falling behind? You can contact the NFCC for a free counseling session by contacting www.NFCC.org and locating a nearby office. They work to ensure that your best interests are being protected- not the creditors.
January 12th, 2009 at 11:13 am
This is very helpful. Does not apply to my case as of now, but I would not be surprised if it did in the near future.
Thanks!
January 12th, 2009 at 11:33 pm
This is very useful information. I have had to turn to credit to keep my cash flow…things are not out control yet, but its good to know about the NFCC in case it does. I have never been one to carry debt, but here I am accumulating!
I left a “cubicle” job in 2007, carefully started a business venture, it unfolded in 2008 and now I find myself just barely making it through….I have to find a job, and put the business on hold for a couple of months just to get back on a financially healthier track.
Thanks for this invaluable information and encouragement. I am still very hopeful!
January 13th, 2009 at 10:45 am
Hang in there Rodrigo…you are not alone! Sometimes it’s two steps forward and one step back….this is just one of those steps back. You’ll come out of it stronger, just don’t give up on the dream (and keep learning)!
January 13th, 2009 at 2:32 pm
Yes what the government has failed to do is bail out small businesses. Very good information Heather and you should be commended for a very well written article here. Thanks!
January 15th, 2009 at 7:30 pm
My situation is similar to Rodrigo. I started my small business in 2006. I could not even get a business credit card with a decent amount. I ended up using personal credit cards, with really small limits, whitch resulted overcharges, than interest increases. Now the sales are down, and I’m sitting deeper and deeper in trouble.
I have never had debt before in my life.
I must check out NFCC.
Thank You!
January 15th, 2009 at 11:46 pm
Good News for people who are troubled by credit card debt. Luckily, I’m not among them now, but I’ve been unemployed and had to rely on credit cards in the past,fortunately I paid off all my debts with discipline, determination and a system. You definitely need a system to get out of debt.
I learned a lesson; I now make sure that I have enough money in my savings account to last me at least six months in case of emergency.
January 17th, 2009 at 11:23 am
…Something tells me that ASKING credit card companies to make these concessions will do exactly nothing.
January 28th, 2009 at 9:21 pm
What gets me is the utter lack of knowledge of how credit works that the majority has! It’s the perfect time to start and your blog is very concise about the details. Get great tips about running a small business. YORE Foundation
January 30th, 2009 at 4:33 pm
I don’t know anything about the NFCC or how well they really help people as I have not researched them yet, but I will. I do know that anyone that suggests contacting creditors to ask them to work with you are giving you bad advice. It will just be a waste of time, but go ahead and try it. You’ll see that I’m right. They do not want to work with you! They want to make as much money from you as they can.
They don’t care if you end up not paying, they are just going to write off the bad debt and get a big tax break, then sell off the collection rights to a 3rd party collector and make more money there. They get made whole in the end and do not take any loss. Especially since the money they supposedly “loaned” you was actually money they created when you borrowed it. It didn’t exist until then. Don’t understand what I’m talking about? Find out by going to http://www.endyourcreditcarddebtnow.com.
Most people are decent, hard-working people and try as hard as they can to pay their credit cards, and the banks and collection companies know it. So while you are taking every penney you’ve got from your paychecks, your retirement, the equity in your home, your kids’ college fund, etc. to pay them, they are making big bucks on the interest & fees they are charging you and you will be left with nothing!
They can raise your rates as high as they want, for whatever reason they want to. And raise them they do! And, as soon as you start having problems making your payments, they hit you even harder! They don’t want to help you.
They may put you in a “hardship program”. In these programs they might lower your interest rate from 28% to 25% or some similar numbers like that. They might let you make lower monthly payments. But, that only lasts for 3-6 months and then it goes right back to where it was. What kind of help is that??
They can lower your interest rates and payments if they wanted to, but they don’t and I would be very suprised if they agreed to anything that would actually help the consumers instead of feed their own greedy pockets!
Then there are debt consolidation and debt negotiation companies all over the place. Even the Federal Trade Commission warns consumers about these companies! All they do is keep collecting payments from you until they have collected all of their very high fees. They don’t start trying to negotiate or consolidate any accounts for you until their fee has been paid and there is actually some of your money in the “pool”. Meanwhile, your creditors are coming after you! And, these companies don’t offer you any help when that happens. Do you know that 80%-85% of all accounts with these companies fail?
Then there’s the bankruptcy option. The only people that will qualify for a chapter 7 since the bankruptcy laws were changed in 2005 are the ones that have very low income and no assets. These new bankruptcy laws were written by the credit card companys’ attorneys and are meant to “Leave no creditor behind”.
Most consumers will end up in a chapter 13 in which they will still have to pay the creditors plus their interest and fees. There are a very large number of consumers that have tried filing bankruptcy and ended up dismissing their bankruptcy because they couldn’t afford it.
Believe me. I speak from my own past experience and now the great new knowledge that I have since I found the right help!!
I KNOW how frightening and stressful it was for me! I didn’t know what was going to happened or what we should do! I was searching the internet and checking out every website, forum and blog I could find for months! I ordered ebooks & other things that were supposed to help me! I met with 2 different bankruptcy attorneys!
Now, I am trying to get the word out there to consumers who are in the same boat that my husband and I were in and I am an Independant Consultant for the company that helped us.
When I found this company and heard what they said they could do, I didn’t believe it at first. I checked them out thoroughly, we spoke to the founder several times and to one of their attorneys. We waited several months before we decided to actually sign up with them because we wanted to keep looking and be sure that it was the right thing. It seemed too good to be true so I kept looking for anything negative about them, but I couldn’t find anything.
Now I can say with a happy heart that it was the right thing to do and we are so glad that made that decision!
Find out how you can get help too by going to my website at http://www.endyourcreditcarddebt.com. You’ll have the opportunity to watch several videos that will explain how the banking system works, how the collection companies work and how you can get real help dealing with these creditors and get some immediate relief by being able to legally STOP paying your credit cards right now.
This is no joke and this is not a scam! I emphasize that because I know I ran into a lot of those when I was searching for answers. Email me at Tammy@endyourcreditcarddebtnow.com. Give me your phone number and I will call you personally! As the first video you will see says, I want to invite you to one of the live, interactive telephone calls where you will hear from the founder of the company (the man in the videos) and you will be able to ask any questions you have.
I encourage anyone that is strapped by your credit card debt to take this step to at least educate yourself. Whether or not you decide that this is the right approach for you, you will gain a lot of knowledge about your rights and how these systems of banking and collections work to help you make the right decision for you.
Sincerely,
Tammy
February 1st, 2009 at 6:24 am
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February 1st, 2009 at 11:26 pm
I actually found great success myself by negotiating settlements with my creditors. I ventured into a business in 2007 that led to over $212,000 in credit card debt that wasn’t going to be paid off easily once the economy starting tanking. I was paying $3600 a month in interest and facing bankruptcy when I learned that it was possible to settle my balances. The problem was, when I started looking for information on how to do it I couldn’t find any, just a lot of companies who wanted me to think i couldn’t do it myself so I would pay them to do it for me. In the end, I got my debt down to only $30,000 in about six months and wrote a book about it so that others going down the same path would have the insights of someone who went before them. It’s called “The Do-It-Yourself Bailout” and available on my website. http://www.settleyourcreditcards.com.
February 23rd, 2009 at 2:04 pm
I never paid more than 20% of the balance to settle. Have to wait for the 5th month b4 making an offer. Collection agencies will buy your chargeoff for 5% and will settle for 10% but then your CB gets a double whammy. Don’t forget this guy has to pay taxes on the $172,000.
March 11th, 2009 at 12:00 pm
why don’t they freeze interest rates maxs 18% and let the consumer write off the interest on ther taxes.
March 28th, 2009 at 5:35 pm
Greetings all members,
I would just like to say hello and let you know that I’m happy to be a member - been a lurker long enough
Hope to contribute some and gain some knowledge along the way….
October 11th, 2009 at 11:34 am
Its very intresting and Informative stuff. Women finds it difficult to manage their cost, save $1 a day and you can see the difference it makes
October 12th, 2009 at 11:32 am
I like your post. No matter what amount of debt a person has, willingness to retire is the first step
October 13th, 2009 at 10:11 pm
It’s really amazing. Debt can be rescued by reducing expenses not by increase income
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joseph
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June 17th, 2010 at 10:35 am
I actually plant zealous success myself by negotiating settlements with my creditors. I ventured into a playing in 2007 that led to over $212,000 in assets correspondence debt that wasn’t effort to be paid off easily erst the saving play tanking. I was paid $3600 a month in diversion and application bankruptcy when I scholarly that it was allegeable to descend my balances. The problem was, when I started hunting for substance on how to do it I couldn’t acquire any, just a lot of companies who loved me to reckon i couldn’t do it myself so I would pay them to do it for me. In the end, I got my debt set to only $30,000 in most six months and wrote a aggregation around it so that others effort perfect the corresponding route would have.
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rowanat01
September 6th, 2010 at 4:44 am
This is the kind of information that one should be aware of. Debt can be reduced by proper planning. One should make extra efforts to increase his income and reduce his expenses, so that he may save money for repayment of debt.
September 8th, 2010 at 3:21 am
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October 21st, 2010 at 7:17 am
this is the good idea for those who are troubled by credit card debt. I am lucky I had paid all debit.I think government should need to take a actions against him.
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Consolidation Debt
March 2nd, 2011 at 11:51 pm
I actually constitute outstanding success myself by negotiating settlements with my creditors. I ventured into a business in 2007 that led to over $212,000 in approval correspondence debt that wasn’t leaving to be professional off easily erstwhile the system starting tanking. I was paying $3600 a month in powerfulness and facing bankruptcy when I learned that it was realizable to place my balances. The difficulty was, when I started sensing for aggregation on how to do it I couldn’t attain any, retributive a lot of companies who desired me to consider i couldn’t do it myself so I would pay them to do it for me. In the end, I got my debt doc to exclusive $30,000 in about six months and wrote a product virtually it so that others exploit plumage the unvaried line would,
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oleg 10
March 3rd, 2011 at 3:54 am
This is the form of content that one should be alive of. Debt can be reduced by decorous planning. One should play histrion efforts to increment his income and shrink his expenses, so that he may forestall money for quittance of debt.
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rcruz
March 5th, 2011 at 5:46 am
Ditch debt by going absolutely stealth until the statue of limitations runs out. Then tell them that the prescription has expired. The trick is to hide all job, bank, and equity locations: What they can’t find, they can’t garnish, seize, or lien.
March 9th, 2011 at 4:28 am
Hi!
I like this post.
I actually plant success myself by negotiating settlements with my creditors of a creditcard company.
Hope will continue to share info in the same way!
eprofile
March 21st, 2011 at 10:34 pm
Being in debt is painful experience. I myself owed on many credit cards and i lost my business in a banktrupcy. Being Bankrupt UK was very difficult and forced me to move to a different country. Today creditors still are after me, and trying to apply for a loan or mortgage is a nightmare.
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