Most of our Escondido readers know that one of the most important things to do in the wake of a bankruptcy filing is to begin working on rebuilding credit - and possibly even improving it. Previous posts here have made it clear that the common belief that a person will have to deal with poor credit for a period of time after a bankruptcy filing is not a myth. However, that doesn't mean that the road to recovery is impossible.
As previous posts here have mentioned before, credit cards can be useful financial tools in the right circumstances. Many people use credit cards for the various rewards programs that many of the credit card companies promote with their cards. Others use their credit cards to build up a solid credit history in anticipation of making a larger financial transaction sometime down the road, such as applying for a car loan or a mortgage. Unfortunately, financial hardships often force people to use their credit cards in ways that could lead to the buildup of unmanageable credit card debt.
Millions of Americans have at least one credit card. Many residents of San Diego use credit cards on nearly a daily basis, and many have more than one credit card. Unfortunately, the result tends to be that there are a lot of people out there who have quite a bit of credit card debt building up.
For most Americans, the balance between the amount of income they earn and the amount of debt they owe is a delicate one. Many people are able to manage this balance in a healthy way, never taking on more debt than they can reasonably be expected to pay back in short order. Others, however, are not so fortunate. Oftentimes, due to unforeseen events and reasons, leave them with poor credit and no way to increase their income.
The holiday season brings family and friends together for parties and gift giving, but, unfortunately for millions of Americans, the aftermath of the season also brings big credit card bills. Generosity can come back and cause problems in the New Year.
With the holiday season in full swing, millions of Americans are probably making a lot of purchases on their credit cards. For some people, credit cards offer a hassle-free method of paying for all types of things, from gifts to necessities, leaving the actual payment for later. But, taking on credit card debt can be a slippery slope, and in many cases what someone once thought was a few innocent purchases can lead to financial hardship down the road.
Much was made of the efforts of millions of Americans to trim down their debt burdens and shore up their finances during the recent economic downturn. Experts noted how many people chose to spend their money a bit more wisely during the recession, and it was believed by some that perhaps that would translate into more financial security for many people as the economy improved. But, as always seems to be the case, as the economy has improved - albeit at a snail's pace - Americans are taking on more debt.
Credit card users throughout America may not have realized it, but for the last few years a law passed by the United States Congress in 2009 has been providing them with significant protection. That law is known as the CARD Act, and it became effective on February 22, 2010.
Many of our Escondido readers have probably heard financial "experts" opine on the difference between "good debt" and "bad debt." For instance, a mortgage is often considered to be "good debt" because as a homeowner repays the loan they are building equity in what was once considered to be a very safe investment - real estate.
There are a lot of nationwide problems that are being discussed by politicians and the news media these days. Immigration concerns currently top the list, but other problems, like highway funds and student loan debt, are certainly issues that have an impact on Americans in every state, including California. However, there is apparently at least one large issue that does not seem to garner much attention, but that affects nearly one-third of all Americans: debt obligations that have been folded into the collections process.