Credit crunch or credit chaos what does it mean for you

Chaos is in the air all around us, economic crisis, mortgage industry meltdown, global markets in turmoil and in the midst of change and economic change and recovery action plans another crisis is underway. While our country is amidst change our credit card lenders, mortgage lenders and banking systems are about to undergo yet another change.

Credit laws are changing which means more stringent rules and guidelines for borrowing credit, obtaining loans and setting up both short and long term capital & lines of credit. For you as the general consumer this means acquiring financing for credit will be a monumental undertaking.

Higher credit score requirements, higher capital reserves in the bank. You will be required to work through more “red tape” to get a financial decision. Also laws will change that require lending institutions to perform more due diligence on prospective borrowers.

Not to mention the “credit card industry meltdown” we are about to go through. With consumer spending on credit card purchases soaring, people making the purchases are unable to master the method of keeping current on more than the minimum payment required are falling deeply in debt.

Most people never realize that the plan for credit card companies is to actually keep borrowers in debt for years and years to continue keeping profits rolling as well to continue the compounding interest accruing on your account at rates as high as 19.9% possibly more depending on your credit card companies fine print.

The negative affects far out weight the positive effects when it comes to carrying debt on a credit card. Your costs of the item increases by the annual percentage rates, your credit score is negatively effected by the continued debt you carry every month. Also the costs of additional stress, financial obligations increase every month that the debt is not renewed.

Your wind up paying more than the item costs, the pain of deferring the cost is greater than if you had just purchased the item outright. It’s easy to forget about your obligations when the credit card limits are higher, you have the ability to continually rack up debt on your credit cards, your more inclined to spend less wisely and more often when you have an additional limit of capital at your beck an call.

If you are prone to carrying debt on a credit card you should be aware that when you don’t make regular payments your subject to higher interest rates, additional late fees, and other terms in your individual contractual agreement. If you are buried in credit card debt there are options to get your way out of debt.

Your first option is always to pay your bills on time, secondly if you are too far buried in debt you need to speak with a debt consolidation specialist, “not debt consolidations are created equal.” You also have the ability to file bankruptcy if none of your other plans work to modify or reduce the debt.

You are the closest to your financial circumstances whether you are on top of them or not is a different story. Now more than ever financial responsibility is being shifted onto the consumers shoulder in areas of retirement and financial planning.

It’s always been the consumers responsibility to handle household financial responsibilities, yet many households are lacking in savings, deposits and financial skills to help protect and insure stability and to create a rock solid financial foundation.

If you are lacking in these areas of your life you need to find the assistance, mentor or personal guidance to get your financial affairs in order. Often times as we keep getting busier and busier with our daily lives. We get involved with our personal business, family, career, children and relatives.

We often forget to ensure that the main stability and structure needed are the seen love and caring for ones self and others; yet financial structure isn’t something most Americans seem to spend enough time on actively researching and investing tohedge against future costs. Also not enough time is spent socking away funds to shore up short falls in income.

Savings accounts, Your child’s college funds, short term savings and cash flow investments etc, back up for three to six months of required capital preserves incase of job loss due to injury,layoff or in more recent times businesses going out of business.

Take the time to prepare for your future, make the choice to be proactive in preparation of financial security. You have heard before how social security will not be there to support you when you are older. In these times of budget cutbacks, democratic policy eliminating government programs the reality of the social security system going away are more real and evident than ever.

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Tagged with: Annual Percentage Rates • Banking Systems • Capital Reserves • Compounding Interest • Credit Card Lenders • Credit Card Purchases • credit crunch • Credit Score • Due Diligence • Economic Change • Financial Decision • Lenders Mortgage • Lending Institutions • Long Term Capital • Monumental Undertaking • Mortgage Industry • Mortgage Lenders • Prospective Borrowers • Score Requirements • Stringent Rules

Filed under: credit • education • finance • money • money management

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