Impact of Recession on Consumer Credit
November 9, 2009 by Admin · Leave a Comment
The US economy has started the long slow process of recovery and now many consumers are wondering what it all means for their future. The banks and financial institutions are in much better condition though it’s still not possible to say they are fully stable.
More bank failures are likely to happen in 2010 so consumers need to make sure they keep their money in FDIC insured banks. But a big question remains as to the condition of the credit industry. Will consumers be able to get things like auto loans, personal loans, equity loans and so on?
Pick up the newspaper on any day, and there’s sure to be an article about tight consumer credit markets. Members of the National Association for Business Economics reported it believes that financial markets will be weak and slow down the progress of economic recovery until well into 2011. In
Many Americans Paying Down Their Debt
November 7, 2009 by Admin · Leave a Comment
When the economy is strong, consumers tend to spend freely, save less, and rack up credit card and other debt without a second thought. When economic uncertainty sets in, however, the reverse is true—spending comes to a screeching halt and consumers begin repaying debt diligently. In fact, in July of 2009, Americans repaid $21.6 billion of credit card and other debt. This represents the biggest drop in consumer debt since 1943, which is the first year the Fed began keeping track. July’s figures translate into an annual debt repayment rate of 10.3 percent. Additionally, compared to last year, outstanding consumer debt has dropped by 4.2 percent. If this trend continues, it could permanently alter the U.S. economy.
Uncertainty Begets Frugality
Economic uncertainty inevitably elicits newfound thrift in consumers, who become more fiscally conservative the less secure they feel about their future. Ram
Falling savings rates could increase risk of debt
November 7, 2009 by Admin · Leave a Comment
Personal finance website Moneyfacts has claimed that one in ten variable-rate savings accounts have had their rates cut since the beginning of March.
10.1% of these accounts have had their rates reduced since March, when the base rate was cut to a record-low 0.5%.
Meanwhile, just 3.5% of accounts have seen their interest rates increase in this time.
A spokesperson for company Gregory Pennington said that by discouraging saving, falling rates could increase the risk of debt.
“Savings are not just security for the future – they also offer short-term protection against unexpected costs, and can help people to stay out of debt if any financial emergencies arise. Lower rates simply mean fewer people are inclined to put money into savings.
“It`s important to remember that earning interest isn`t the only reason to save.
Credit Card Debt Becoming Big Problem
November 3, 2009 by Admin · Leave a Comment
Most people know that credit card debt can seriously hurt a consumer’s financial situation and credit rating, but now, it seems that even the credit card companies themselves are suffering from the staggering amount of money that is owed to them in the form of consumer debt.
Looking at circumstances from the perspective of these large companies, if a small minority of their customers accumulates too much debt and cannot afford to pay it off, the companies can write those individuals off as losses and still make a handy profit from the interest on other people’s payments and the fees they charge merchants. However, if an inability to pay becomes the rule instead of the exception, the payments can eventually become insufficient enough to offset the amount that people actually owe.
Thus, the current problem facing America’s credit card industry is billions of dollars in losses, much like the investment banks that suffered from bad subprime loans, and with the new credit card reform legislation on track to hit later this winter, these companies have been forced to react. Wheth
Credit Card Consolidation Help No More Struggling With Different Bills
November 3, 2009 by Admin · Leave a Comment
You may have realized that handling more than one credit card is the most difficult task in the world. It is really confusing to decide which credit card’s debt has to be cleared first and which can be postponed. In fact, the innumerable credit card bills that are lying unpaid can cause a major problem to you sooner or later. Debts grow at quick pace only to show up as a monster that ruins your entire financial status in a short span of time. Credit card consolidation help is apt for people who have more than one debt to be taken care of.
Some people get into debts due to negligence of credit bills while some others do not know how to manage their debt payments. No matter what caused you to turn into a debtor, the best debt relief program that you can go for is debt management plan. Read more…