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Major credit card company reports drop in November charge-offs

Created: On December 18, 2010 @ 6:55 pm In

Citibank is reporting a drop in consumer credit card charge-offs for November. In October, the Citibank reported charge-offs at the rate of 10.27 percent , but charge-offs for November fell to 9.4 percent. Charge-offs provide a method for credit card issuers to remove uncollectible accounts from their books, and the process typically occurs after a credit card account becomes 180 days delinquent.  Citibank, a major issuer of consumer credit cards is also reporting that its delinquency rate for credit card accounts also fell during November. This news could signal a trend toward a consumer “wake up call” and continued efforts toward liquidating credit card debt. [1] Debt consolidation can be a first step toward reducing the cost of existing credit card debt. Is debt consolidation good for resolving debt? The answer can depend on individual circumstances.

Debt consolidation loans and unsecured debt consolidation plans

Debt consolidation is the process of rolling several loan or credit card balances into one loan with lower finance charges, or annual percentage rate (APR). This streamlines your debt management activities as you’ll only be paying one loan payment instead of several. Ideally, debt consolidation loans and programs can lower the cost of existing debt and provide lower monthly payments. If you cannot qualify for an unsecured [2] credit card debt consolidation loan (personal loan) from a financial institution, you may qualify for debt consolidation help through a [3] debt consolidation and credit counseling program.

Can debt consolidation work for you?

Debt consolidation can help with organizing your bills and reducing costs, but if you’re a devotee of retail therapy or other impulsive credit card use, debt consolidation loans can lead to more debt. If you have bad credit, it can be difficult to qualify for an unsecured debt consolidaton loan. Secured debt consolidation loans require putting up your home or vehicle as collateral.  You could lose your home or car for failing to repay a secured debt consolidation loan.

 If you doubt your ability to manage debt after taking out a debt consolidation loan, debt consolidation and credit counseling can help with establishing a cash based budget, understanding how you got into trouble with credit cards, and establishing a repayment program with your creditors. These programs typically require closing all credit card accounts, so this removes the temptation of going to the mall “just this once.”

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URL to article: http://www.debthelp.com/blog/2010/12/18/major-credit-card-company-reports-drop-in-november-charge-offs/

URLs in this post:
[1] Debt consolidation: http://www.debthelp.com/debt-consolidation/
[2] credit card debt consolidation loan: http://www.debthelp.com/debt-consolidation/loan.html
[3] debt consolidation and credit counseling program: http://www.debthelp.com/debt-consolidation/credit-counseling.html