The Forum with Michael Krasny on KQED Radio provides a highly informative discussion on the recent challenges with credit cards that consumers face and upcoming efforts from stakeholders ranging from credit card lenders to politicians to try and change the system in order to make it more effective.
Some interesting points of discussion:
- Credit cards are one of the few consumer products where terms change at the whim of the seller after the product is acquired
- The “Credit Card Bill of Rights” has stalled in the Senate under strong lobbying by the credit card industry
- The federal government has already conducted tests of consumers to identify their main points they want disclosed from credit card companies and their findings will shape new restrictions placed on lenders starting this month
The Forum also provides some valuable insight in response to cases. One caller loves gaining points with their credit card, and hesitates to switch to a new card with a lower interest rate because the point rewards are not as enticing. However, for most cards the financial gains from the point system pale in comparison to the sums accrued through carrying a high interest balance from month to month. Another caller is on the fence about contacting a credit counselor to get help, yet had not reached out. Though staying abreast of one’s FICO score is key, one who is serious about getting assistance from a credit counselor should make reaching out a part of a plan decided in advance, in spite of the impact of calling a credit counselor on their credit score. Like the benefits gained from contacting lenders early, before financial trouble hits, using credit counselors can be most valuable in as much advance of an anticipated financial problem as possible. Setting a plan and sticking to target actions, no matter how far in advance of or close to a financial crunch, will pay dividends in stress reduction, peace of mind, and confidence to work towards debt reduction.
Scott Crawford is CEO of DebtGoal.com, a do-it-yourself system for lowering your interest costs and getting out of debt. DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.
Tags: consumer protection, Credit, Credit cards, credit counseling, credit score, debt, debt reduction, debt-free, disclosure requirements, FICO score, interest rate, lending terms, rewards programs
