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Delinquent On Your Credit Card? You’re Not Alone!

Created: On December 16, 2008 @ 5:18 pm In

According to [1] BusinessWeek.com, Capital One Financial Corp reported that charge offs in their U.S. credit card business rose to $403.7 million in November from $222.4 million last year. The annualized net charge off rate rose to 6.98 percent from 5.34 percent. Delinquent loans — those delinquent by 30 days or more — rose to $3.28 billion from $2.49 billion in the U.S. card business.

One in every fourteen Capital One credit card accounts are going at least 180-days past due and being charged off by the company.

Fitch Ratings recently announced as part of its [2] Retail Credit Card Index that 60-day delinquencies have increased by nearly 24 percent since August and charge offs are expected to exceed 12 percent in the first half of 2009.

If you have recently fallen behind on your credit card payments, or fear that you soon will, you certainly are not alone. Consumers are no longer able to easily consolidate debt, obtain new credit, or borrow against the equity in their home to pay off existing debts.

Most consumers struggling with consumer debt are faced with four options:

  1. Cut spending and make sacrifices. It may make the most sense, if you haven’t yet fallen behind and can afford the minimum monthly payments, to adjust your lifestyle so you can begin to aggressively pay down your outstanding debt.
  2. Consumer Credit Counseling Service (CCCS). If you can afford the minimum monthly payments and have very few, if any, late payments, you may qualify for a consumer credit counseling debt management program. A CCCS will work with your creditors to reduce your interest rates and work with you to put together a budget and repayment plan to get out from under your debt.
  3. Debt Settlement. If you are unable to afford your minimum monthly payments and have incurred a financial hardship, debt settlement may be your best option and a way to avoid bankruptcy. Whether you attempt debt settlement alone or with a debt settlement company, the goal is to settle your debts as quickly as possible. It is not uncommon for consumers to settle their debts for less than 50 percent of what is owed.
  4. Bankruptcy. If you do not have enough income or assets to successfully settle with your creditors, bankruptcy may make the most sense. It is best to consult a bankruptcy attorney who can help you understand which type of personal bankruptcy you qualify for and how the process will work.

Regardless of which strategy you choose to eliminate your consumer debt, it’s important to understand that you are not alone. You can and will recover financially. The most important thing is to take action and do something.

About the Author:
Chris Rocks is the Regional Director of the [3] National Credit Federation (NCF), a consumer advocacy group that assists small business owners and consumers overcome debt and credit challenges. He can be contacted by visiting his personal site, [4] GoodCreditLiving.com.

Article printed from DebtHelp.com Blog: http://www.debthelp.com/blog

URL to article: http://www.debthelp.com/blog/2008/12/16/delinquent-on-your-credit-card-youre-not-alone/

URLs in this post:
[1] BusinessWeek.com: http://www.businessweek.com/ap/financialnews/D9537KHO1.htm
[2] Retail Credit Card Index: http://www.bizjournals.com/baltimore/stories/2008/12/15/daily4.html
[3] National Credit Federation: http://www.nationalcreditlawyers.com
[4] GoodCreditLiving.com: http://www.goodcreditliving.com