Credit Card Owners: We Are in Serious Problem

Posted by Camilo Beatriz

July 26, 2009

by Camilo Beatriz

The financial crisis has definitely left many people in ruin. Every single day, people are losing their jobs, entire businesses and even their home. These same people are the ones who some months past had credit cards and made lavish expenses and managed to pay for them in time. I the past, before the crisis that is, those who usually struggled with their bills only had the option of negotiating with credit counseling services to renegotiate payments.

However, those days are long gone with the average consumer now being hard hit cannot even afford to pay at renegotiated prices and rates. This is even surprising the usually unfeeling credit card companies and they have tried to offer deeper concessions than ever before to no avail.

Recently, The National Foundation for Credit Counseling met with the major credit card issuers to try and map out the way forward. They were attempting to come up with a deal that would assist the large number of credit card holders who cannot pay their bills under the current terms. Surprisingly, most of these companies are willing to make a deal and the group announced that they had come up with a wonderful deal to assist struggling customers under the major card issuers who include Chase, American Express, Discover, Bank of America and Capital One..

The reason why most of these credit card issuers are ready to budge is the fact that they have accepted the reality of the crisis and find it easier to accept some minimal or delayed payment rather than have the credit card holders default on their bills an cause them huge losses. This is due to the fact that the majority does not even qualify for these debts repayment plans that have usually formed part of the debt management process over the years. These plans involve the agreement by the credit card company to waive fees and interest rates in exchange for the closure of the account and a commitment by the holder to pay within the following 5 years.

However, these terms vary from company to company, and there is no standard that consumers are supposed to expect when applying for these schemes. On top of the waived fees and interest rates, consumers are now encouraged to at least pay 2% of their entire debt every month. This may not be the ultimate solution but it is definitely going to help a majority of people struggling to relieve their credit card debt.

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