05:12:34 AM Thursday, May 15, 2008
Managing Credit Card in Tough Economic Situation
The spring is in full swing. Trees are green, flowers blossom, preparing to welcome the forthcoming summer. Everything grows. The country's economics is, apparently, getting ready for the summer too. The prices are rising, the unemployment rate went up to 5.1% this March, credit card delinquencies are increasing. Everything grows.
Now that the U.S. economy is experiencing a slowdown, credit card companies and banks are going through hard times. The number of credit card delinquencies has hit the ceiling. And creditors really do incur losses. In order to make up for the losses, credit card companies toughen credit card terms, rise interests and fees, become more deliberate in the choice of clients.
How can you survive under such harsh conditions?
You clearly realize that in this situation when creditors are trying to get back on track, they would wheel and deal to make the most from their clients. Imposing penalty fees is their meat and drink. The money lenders make on all types of credit card fees about 40% of their total revenue. That is why making your credit card payments on time should be one of your top priorities. This way you will avoid default rates and late credit card payment fees.
Card holders with bad credit are the ones to suffer the most during this credit crisis. If your credit score allows you to qualify for only bad credit card deals, you should try to improve your credit. Bad credit - bad risk - bad credit card terms.
Do your best to reduce your credit debt ratio to around 30%. Do not miss your monthly payments, and make them on time. In other words, show you are a diligent, reliable, and responsible credit card holder. And that even when U.S. economy is weak, your financial stability remains unquestionable.
When credit card industry faces serious problems, there is no guarantee that tomorrow something worse does not happen. Hope for the better, but be ready for the worse. For that you need to have some emergency fund. This can be either some savings in cash, or a separate emergency credit card. Besides, having an emergency credit card is pretty smart and farsighted. In case you happen to lose your job, face some unexpected expenses, an emergency card will help you to save you from financial collapse.
Keep your debts under control. It is not the best idea to have several credit cards with significant outstanding credit card balances during economic recession. But if you turned out in a situation like this, here is what you can do. Consolidate all your debt on one credit card. Get a balance transfer card with 0% intro APR and try to pay down the biggest part of your debt until your promotional period is over.
You can use this credit-crisis-survival manual to keep your financial stability and credit score. And remember, there no unsolvable problems. And ups and downs are characteristic of economics. Sooner or later the U.S. economy will see another upturn. And once you manage to stay afloat during the crisis, you will rest on your laurels afterwards.
Russel K. 05:11 AM, May 26, 2008
yeah, credit crisis has affected borrowers, no doubt. even me. though i have a good credit score, i faced an interest jump on two of my credit cards. as for my friend with a credit score below average, he got turned down by about 4 credit card issuers over the past couple months. hope, the economy gets stable soon, so we all can feel safe about tomorrow.
July 08, 2008
The Federal Reserve recently proposed to take measures in order to eliminate unfair credit card practices performed by credit card companies and banks. The Fed also suggested toughening rules and regulations for lenders. Hidden credit card fees, unreasonable interest rate hikes, unfair charges, aggressive anti-delinquency policy and other abusive credit card practices are promised to be banned.
This would definitely bring a relief to credit card holders. But how will creditors tolerate such a policy? Banks and credit companies still trying to make up for the losses caused by credit crisis and trying to survive in the conditions of economic recession, are upset with such Fed's moves, to put it mildly. But whose prayers - lender' or borrowers' - will be heard by the Fed?
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June 17, 2008
Nothing is certain but death and taxes. This proverb is pretty old and very popular in America. And it is a rather questionable issue - what Americans hate more. Tax time can, probably, be called an antipode to Christmas time so much loved by Americans. It is really unpleasant to give your honest penny earned. It feels like you are being robbed.
Of course, we realize that the tax money goes to good causes. But still it is not easy to give a part of your income with a smile on your face thinking of some nice park-to-be or a smooth new future highway. But now you can get rewarded for paying taxes. You can apply for a credit card with rewards for paying taxes, gilding the pill thus.
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June 06, 2008
Do you know much about Australia? Canberra is its capital. Kylie Minogue, Cate Blanchett, Hugh Jackman, Steve Irwin are the most world-wide famous people born in Australia. Sydney Opera House and Sydney Harbor Bridge are among the most distinctive and beautiful architecture masterpieces of the XXth century. Aussies (informal for Australians) speak English, Australian-English, to be more exact. But did you know that Australia has a highly developed credit card industry? And that Australian overall credit card debt is lower than the one America has?
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