Credit Cards, not an option for long

Credit card companies are now bracing themselves for what could be the next crisis to hit the financial market in recent years.  As we head into post recession times, we are finding that aside from a fallout in the mortgage industry and the stock market the next market that is being threatened is the giant Credit Card industry.  With Americans using their credit cards to help make ends meet, we are finding ourselves in more debt than this country has ever seen.  While some individuals may be able to make their minimum payment, others are quickly finding themselves in a crisis of debt and fees. 

 

Current legislation allows credit card companies to essentially charge whatever rate of interest as they see fit.  Their procedure introduces potential customers with a low rate or perhaps a modified deal that calls for six to twelve months of no interest or no payments etc…  It is once these terms have reached fruition do customers see the true intent of the credit card companies.  Raising rates from 14-20% with default rates going up to as high as 30%.  Hopefully with a bill going through senate early next year, credit card companies will have several new actions in place to help control raising interest rates and terms of the debt.

The true tragedy is the situation that so many Americans find themselves in today, default.  When a customer misses a payment, credit card companies enforce a set of actions which absolutely scares me. Most of the time they will raise interest rates to default levels and charge exorbitant fees.  Then month after month when customers still cannot make their payments a credit card company will then sell that debt to collection companies that hound the victim night and day. 

I guess what I mean to convey to everyone is to stay away from credit cards.  I know your mother probably told you the same thing when you were 16 and got your first GAP card, but what held true then still holds true today.   The credit card companies will soon be downsizing further in the anticipation of the foreboding crisis.  Hopefully the idea of living beyond your means is wearing thin and Americans will not be drawn in closer to this economic crisis.