If a consumer is already feeling the crunch from a rising mortgage payment, increased credit card interest rates will surely push them over the edge
Agawam, MA (Vocus) February 14, 2008
In January, the Federal Reserve made unprecedented interest rate cuts to stave off what many experts feel is a looming recession. Most consumers had hoped that these reductions would help them pay down the nearly one trillion dollars in credit card debt they’re struggling with from month to month. Unfortunately, the Fed’s rate cuts are producing the opposite effect – banks are actually raising interest rates for consumers. The result may prove disastrous for many.
A few months ago, a consumer carrying an $8,000 balance on a credit card at 15% interest was probably facing monthly payments of roughly $180. If that interest rate increases next month, let’s say to 28%, the new minimum payment would be $266.67 - an increase of 48%. That’s a budget buster for most families, especially those straining to meet their mortgage payments.
“If a consumer is already feeling the crunch from a rising mortgage payment, increased credit card interest rates will surely push them over the edge,” notes Christopher Viale, president of Cambridge Credit Counseling Corp. “Americans need rate reductions similar to the breaks that banks are getting from the Federal Reserve, not higher payments.”
Most consumers would be surprised to learn that there already are some options available to them. For example, some people are able to renegotiate their interest rates directly with their credit card companies. A reputable credit counseling agency can advise you how it’s done. Others may only need to prioritize their debt, or to learn how to apply basic budgeting strategies to create savings or adequately fund their retirement plan.
“People shouldn’t despair when it comes to their credit card debt,” advises Viale. “There are many options available to help individuals deal with debt and get back on track financially.”
Cambridge’s certified credit counselors speak with thousands of consumers every month, helping them develop comprehensive financial plans based on their unique circumstances. Individuals who find themselves struggling with credit card debt are encouraged to call Cambridge for a free consultation. The organization’s counselors work with consumers to develop solutions to deal with rising debt, build savings, and create a sound, long-term financial plan.
To receive a free consultation, consumers should call 1-800-CAMBRIDGE to speak with a counselor. Cambridge can also be contacted via the Internet at http://www.cambridgecredit.org.
ABOUT CAMBRIDGE CREDIT COUNSELING CORP.
Cambridge Credit Counseling Corp. is a professional debt counseling agency dedicated to educating young adults on the importance of sound financial management and providing financially distressed Americans with education and debt management services appropriate to their needs. For more information on this article or to schedule an interview, please call 413-821-6919.
Visit Cambridge Credit Counseling Corp. online at http://www.cambridgecredit.org. To learn more about Cambridge Credit Counseling Corp. in the community, please visit http://www.youtube.com/CambridgeCredit. For more helpful information, check out the Cambridge Credit Counseling Corp. Financial Literacy blog at http://www.cambridgecredit.blogspot.com.
Cambridge Credit Counseling Corp.
tfox @ cambridgecredit.org