Let’s hope this story turns out to be true.
I believe that the credit card industry (I spent 2 years with Discover Card) employs some of the most michevious and deceptive practices to lure naieve consumers to use their products.
Firstly, I favor never owning a credit card, except for emergencies or travel. Since most of us aren’t that disciplined (and who wants to miss out on the "free" stuff you’re getting by using the cards), I advocate that you use your cards like you use your checking account – only when there’s money in the bank to pay off the item immediately.
That said, the Federal Reserve is looking at restricting some of the practices conducted by the credit card industry, including universal default – one of the most aggregiously deceptive practices.
I’m certain that this will help some of you who continually face increased late charges, finance charges, and rising rates on all of your cards.
If you’re struggling to pay your cards, and continually getting depressed by the prospects, here are some tips to help lower your stress:
- Negotiate with the card companies to pay off your balances.
- Pay off small balance cards first, and use the cummulative payments to "snowball" toward the higher balance cards. This has two benefits: first, you gain motivation by actually seeing your debt reduce, and second you’re spending no more paying on credit cards than you previously were, but your payments to each card increase as the others expire.
- Seek counseling from clergy, financial planners and accountants, credit counselors (be wary of them), or other legal resources. Sometimes, just talking about our problems can help us develop a less-stressful outlook.
- Exercise humility. It’s not alright to continue spending a dollar to save a dime. Credit card companies and other lenders will use "incentives" like late charge or interest refunds to get you to make a minimum payment. What’s another $70 going to do for you if you’re going to be in the same position next month or in 3 months? If your debts exceed your means, there’s often a single alternative, and regardless of your efforts you’re just delaying the inevitable. Bankruptcy (see note below) might be your only/best option to keep your family fed and start building some financial equity.
If you’re interested in talking about any of these options, please contact our office.
The Note Below: Absolute Legal Services, LLC is a debt relief agency. This firm helps people file for bankruptcy relief under the Bankruptcy Code. The bankruptcy services or benefits of bankruptcy provided by the firm are with respect to bankruptcy relief under Title 11 of The United States Code. [Title 11, U.S.C.A. Section 528(a)(3) and (4).]