Sunday, April 26, 2009

Credit Card Debt, Bankruptcies, What Happened? [Part 2]

Continued from part 1

When the credit card was introduced for the first time credit companies you qualified as a bank and more consumers for credit cards apply to qualification requirements for release. As the use of credit cards has increased and basically everyone had at least one hour, pre-business blindly send cards with credit limits you in the mail. I remember having received numerous credit cards pre-mail in the meadow with cash advances and checks easily have in my hands up to $ 100,000 credit just wait my signature. This is the trend, there is no demand for lending money or guarantees required, just put your signature on the plastic card and the only limitation is you. People generally feel that if a credit card company has sent them this line of pre-credit they deserve and can afford it because the lender has sent you right? Here is the root of the problem, the decision was left to us, the consumer, which must be reasonable credit and take responsibility in controlling the urge to spend more than we can afford to let this card, take instead of money in our wallets. The good thing about money in your wallet is physically see the money go if you pass it and implement, there are more days to pay with a credit card, it's still there for you to use it.

According to recent reports from major banks and lenders there is a sharp increase in late payments on loans, credit card balances and mortgages. Many families are on top of their debt, which is returning home loans where people have accumulated years of

of debt carried reckless spending. Another common mistake is for consumers to manage their credit card payments to the limit and apply for loans to transfer balances credit card. A way out of debt, as it is well to avoid interest charges of credit cards if you stop for loading and repay the principal of loans. Rather than many consumers to repeat the same mistake and continue to receive their purchases on the credit card to the limit. This created a bigger problem if the house is mortgaged over and there is no equity left to borrow against. When the owners are not emergency funds in place, they are at risk of losing all their assets including their homes, if they are late on payments. The fact that credit card companies have lowered the credit limit available or canceled credit card accounts without any notice immediately made this serious problem in our economy. This combined with the current housing crisis is stripped of equity in our homes and leaves no cushion for consumers to rely on that in the past.

As we experience a slowdown in the economy we need to understand the many aspects that contribute to the current economic situation. There May be a long future for the economy and it is perhaps not as self-healing as it was in the 70's, 80's and 90's when baby boomers were in their peak spending years in using their credit cards up for large purchases unaffordable, cars and housing. This generation is entering their retirement years and in May we not be able to rely on their buying habits en masse to pull the country out of recession this time. Being part of the generation of baby boomers we realize that during our lifetime, we have been the wave that creates markets, mussels and society, we are again changing the world that we are moving to retire with new habits of saving and spending.

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