Alert!New Increase in Credit Card Fees and Rates - Do You Feel the Squeeze Yet?
Because of the economic crisis the major credit card companies are increasing their fees and rates even though the Fed has cut its interest rate to an all time low.
Banks and retailers are trying to make up for their losses due to the credit crunch by increasing fees, rates and decreasing available credit on their existing customers especially the ones with large balances even if they have good standing with them.
For example, some of the companies will add new monthly service fee of $10 and will increase the minimum payments of outstanding balance from 2% to 5%.
Some credit card companies are increasing interest rates by 2% to 3 % and are eliminating incentive to accumulate points for rewards.
Some consumers are experiencing large cuts of available credit due to other card members that have mortgage loans and are not making their payments on time.
This action by the credit card companies is an about face from the normal practices of extending more credit and keeping minimum payments low so that consumers stay in debt longer and therefore pay more on interest to make the banks richer.
Why would the banks do this? It is because they are hurting and have become cash poor.
So in their brilliant thinking credit card companies believe that putting more pressure on the consumers to pay up faster will build up capital faster.
The banks are dead wrong and it is a recipe for disaster.
Making interest rates and minimum payments higher will only force many of the consumers to default when those consumers did not really qualify to have so much credit at the first place.
Now the banks loose along with the consumers.
How backwards is this thinking? Now is the time when the banks should be giving the consumers a break by lowering interest rates, minimum payments and extending much needed credit to help.
The economic crisis affects every one but unlike the credit card companies consumers do not have the luxury of making up for the loss.
This affliction run shivers in all consumers' finances.
The market has lost 40% of its value this year.
401ks and retirement accounts are taking a beating with the sliding market.
The majority of consumers have large credit card balances to begin with due to different circumstances such as hardship, divorce death or loss of jobs.
Cost of living is increasing and the amount of money coming in from consumers' paychecks to keep up with the increases has hardly changed at all.
Consumers on fixed income are the most vulnerable to the crisis and how the credit card companies are trying to make up for their losses.
Credit card companies are increasing the pressure and squeezing hard earned money out of consumers without any kind of relief and getting away with it.
How can one defend him/herself financially from what's coming due to the economic crisis? Where is the extra money for the increased cost of living going to come from? You can bet it won't be from those credit cards that you used to depend on.
Now you have to get rid of the debt and it won't be easy in today's economy.
You have to start by educating yourself on other options to get rid of the debt.
I am not talking about consolidating, counseling, refinancing or bankruptcy.
None of those options are appealing.
You have to look at real reduction of useless debt and that is credit card debt.
If you are facing bankruptcy or foreclosure because there is not enough money to pay the bills and to satisfy the greed of the credit card companies then you might want to look at getting Professional help such as debt assignment or debt forgiveness.
Banks and retailers are trying to make up for their losses due to the credit crunch by increasing fees, rates and decreasing available credit on their existing customers especially the ones with large balances even if they have good standing with them.
For example, some of the companies will add new monthly service fee of $10 and will increase the minimum payments of outstanding balance from 2% to 5%.
Some credit card companies are increasing interest rates by 2% to 3 % and are eliminating incentive to accumulate points for rewards.
Some consumers are experiencing large cuts of available credit due to other card members that have mortgage loans and are not making their payments on time.
This action by the credit card companies is an about face from the normal practices of extending more credit and keeping minimum payments low so that consumers stay in debt longer and therefore pay more on interest to make the banks richer.
Why would the banks do this? It is because they are hurting and have become cash poor.
So in their brilliant thinking credit card companies believe that putting more pressure on the consumers to pay up faster will build up capital faster.
The banks are dead wrong and it is a recipe for disaster.
Making interest rates and minimum payments higher will only force many of the consumers to default when those consumers did not really qualify to have so much credit at the first place.
Now the banks loose along with the consumers.
How backwards is this thinking? Now is the time when the banks should be giving the consumers a break by lowering interest rates, minimum payments and extending much needed credit to help.
The economic crisis affects every one but unlike the credit card companies consumers do not have the luxury of making up for the loss.
This affliction run shivers in all consumers' finances.
The market has lost 40% of its value this year.
401ks and retirement accounts are taking a beating with the sliding market.
The majority of consumers have large credit card balances to begin with due to different circumstances such as hardship, divorce death or loss of jobs.
Cost of living is increasing and the amount of money coming in from consumers' paychecks to keep up with the increases has hardly changed at all.
Consumers on fixed income are the most vulnerable to the crisis and how the credit card companies are trying to make up for their losses.
Credit card companies are increasing the pressure and squeezing hard earned money out of consumers without any kind of relief and getting away with it.
How can one defend him/herself financially from what's coming due to the economic crisis? Where is the extra money for the increased cost of living going to come from? You can bet it won't be from those credit cards that you used to depend on.
Now you have to get rid of the debt and it won't be easy in today's economy.
You have to start by educating yourself on other options to get rid of the debt.
I am not talking about consolidating, counseling, refinancing or bankruptcy.
None of those options are appealing.
You have to look at real reduction of useless debt and that is credit card debt.
If you are facing bankruptcy or foreclosure because there is not enough money to pay the bills and to satisfy the greed of the credit card companies then you might want to look at getting Professional help such as debt assignment or debt forgiveness.