The economic recession has not only made things a nightmare for home owners, it has also made life hellish for people that have large charge card debts and have fallen behind on their payments.
President Obama is trying to provide some relief these people by trying to get his bailout bill passed. Never before in our credit card history era has there been a bill like this that has been proposed, but is it enough? Lets take a closer look at it in detail to find out.
There are many consumers that owe so much on their credit cards that it seems like they will never pay it off. The Obama bailout bill will not erase any of the principal amount that is owed on any of your cards but it is designed to help lower interest rates to a more manageable level , and it does this in several ways.
If you have fallen behind on the monthly payments of your by just a few months, the credit card companies will raise your interest rates into the stratosphere. The proposed bill says that for instance you decided to start repaying your bills and do it for a full six months you can regain the old interest rates that were there before you started missing your payments.
This is a great compromise proposal as it takes into account the good faith efforts of the responsible charge card holders and treats them on a case by case standing. Another benefit to this bailout bill is that it would prohibit the companies from increasing interest on your past buys on one condition: that you are not late on those payments by 60 days or more.
Now once you have started to repay your monthly payments again for 6 months it does not stop there, because lenders can reevaluate you again every 6 months after that so you should not let your guard down just because you have gotten past the first 6 month hurdle.
In closing, while I still think some of the principle should be shaved off, this is still a pretty good bill as it gives credit card account debtors some breathing space to collect their thoughts and give them enough incentive to start paying again instead of trying to go through the bankruptcy route which will ruin not only their FICO score but any chance of borrowing any more money later on.
Everyone is hoping it will pass in a week or so, and if it does pass it will be one of the most monumental moments in credit card account history.
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Tags: charge cards, credit card debt, credit cards, Finance, personal finance
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