News on credit card debt

Blackmail!

With the credit crunch credit card debt is naturally on the increase. It appears that the banks have decided the system to work like bait on a fishhook. Consumers are suffering from the effects of sharp practices like unexplained raising interest rates on loans without explanation and the habit of using repayments to settle 0% loans while big interest loans are left to accumulate.

Banks have hidden behind the cloak of a heinous clause which allows the so-called ordered repayment. By this clause, banks use you repayment to pay off lower interest debts leaving higher ones in deliberate attempt to keep make you a perpetual debtor!

Part of the move to make consumers concentrate on payments is the introduction of a law, which will double minimum p repayments. This way, consumers will not fall into the trap of incurring un-necessary debts through defaults encouraged by the current system.

The banks have been accused of sharp practices and instead cleaning up their acts, they have resorted to cheap blackmail. They have warned that new credit card offers will be scrapped and lower –income applicants will no longer have access to credit cards. This is coming in the wake of government’s plans to regulate and change how things are currently being done.

Credit card debt Consolidation

Credit card debt Consolidation is a knotty issue. The question is often asked if it is advisable to add on your credit card debt to your mortgage. If current news is anything to go by however, this might not be advisable. According to industry pundits, this will mean converting a short-term loan to a long-term loan with the resultant greater interest rates.

For people who are struggling however, credit card consolidation debt companies are now offering not just an opportunity to be debt-free, but they now analyze your spending habits and provide financial plans to help you keep your head out of the water.

Robbing Peter to pay Paul

Recent data has revealed that there is a rising number of customers using equity release funds to pay off credit cards. One good news however is that burrowing levels have dropped.

Changing financial attitudes

According to the Finance and Leasing Association (FLA), both credit card debt and unsecured loans have dropped. This came to light from a recent report in August. This report confirms changing financial attitudes as result of the credit crunch.

Crackdown

It appears that people are always trying to take advantage of themselves. It has been discovered also that many companies promising to reduce credit card debts by up to 50% are actually just ripping off unsuspecting clients. It’s been observed that the firms make false promises of debt reduction services only to fail to negotiate with creditors. After months of upfront payments to these agencies therefore, consumers are being sued by creditors to collect outstanding debts.

As a result, in what is going to be a major crack down, the attorneys of 40 US states have written to the Fair Trade Commission (FTC) to tighten the noose on companies purportedly offering debt relief services to consumers.