It should not come as any surprise in this economy that credit card delinquencies are up.   According to this article, they are now at 5%, or one out of every twenty accounts.   Analysts to not expect this to change much until the unemployment rate starts to decline.    That rate is currently at 9.7%, the highest it has been in over 25 years.    On the other hand, delinquencies on other types of loans such as auto loans started to fall.   Even better, most consumers are saving more money act using more caution.

Interest Rates Rise Too

By now, just about everyone who has a credit card has received a notice that their interest rate will be going up.   For people like myself, who always pay their balance in full every month, the notices are casually discarded.   For others, they bring deep concern.   I found this article in the Washington Post to be a fascinating case study in exploring your options when your interest rate goes up.   In it, a card holder is facing a rate hike from about 7% to almost 15% on her balance of $10,000.    Ultimately, the card holder is advised to reject the rate hike and pay the existing balance at the lower rate.     She is given the sensible advice to not incur any more credit card debt until this card is paid off.

Evaluating Strategies For Paying Off Credit Card Debt

The Consumer’s Union has an article about different strategies for paying off your credit card debt.   I am not an expert in this subject, but then again, who is?    Either you don’t have credit card debt and have little experience paying it off, or you do have credit card debt, and you haven’t been successful at paying it off.    Sadly, few people seem to  successfully “recover” from their reliance on credit cards as a method of finance.

While using credit cards to finance anything has always been a bad idea, it is only getting worse.   As interest rates rise, credit cards become a poorer and poorer value.    At the very least, home equity loans have lower interest rates that are also tax deductible.

Amex Ends Fees on Gift Cards

In a small piece of good news, American Express moved to end monthly fees on gift cards, acording to the New York Times.   You will still have to pay a purchase charge when you initially buy the gift card, but then there will never be any monthly usage fees.    According to the article, “The company’s decision, which takes effect immediately, goes further than legislation Congress enacted in the spring that would limit, but not eliminate, monthly fees on gift cards.”

I am not a big fan of gift cards, but I suppose they do have their purpose.   Now, they are a bit more useful I suppose.

This entry was posted on Thursday, October 1st, 2009 at 20:00 and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.