Where Can I Turn for Credit Card Relief?

As a society, Americans push themselves to the extreme. We push our bodies to their limits at the gym. We strive to keep a handle on things at home while grinding it out at work. And we run 24/7 and then some without much sleep, because that double-shift at work means overtime pay. You name it, we do it, and we do it to the extreme. 

 Another thing Americans push to the extreme is their purchasing power – particularly when it comes to the use of credit. And while many people may not acknowledge the depth of their credit problems or their inability to control spending, the databelow sends a different message, signaling the need for legitimate credit card relief:

• We carry a lot of debt.The average credit card debt per household hovers around $16,000. CareOne’s national debt statistics support this finding.
   
• We use multiple cards to making purchasing easy.The average number of credit cards held by cardholders was 3.5 as of yearend 2008, according to “The Survey of Consumer Payment Choice,” Federal Reserve Bank of Boston, January 2010. CareOne also found that the average American has six or seven creditor relationships.
   
• Our abuse of credit starts at a young age. The same Fed survey mentioned above reported that the average age at which a U.S. consumer under the age of 35 first adopted a credit card is 20.8 years.

Relief Through Legislation

So just like any other addiction or task we take to the extreme, Americans are clearly good at over-using credit. And as our use of credit continues to spiral out of control, politicians in Washington, D.C. are working to prevent such abuse in the first place because prevention is the first step in achieving credit card relief.

For example, the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009is legislation that ends unfair rate hikes and hidden fees, and makes it easier for you to understand what you owe your creditors. In summary, the credit card relief legislation does the following:

Benefits for You:

• Lets you pay a credit card bill the same day each month and eliminates midday and weekend payment deadlines.
• Gives you at least 21 calendar days from the time bills are mailed to make payments.
• Helps you better understand how long it will take to pay off existing debts and the how much interest you’ll incur by making minimal payments only. Monthly billing statements must show this data.

Credit Card Companies Must:

• Apply excess payments you make above the minimum due to balances with the highest interest rate first.
• Obtain your permission before charging any amounts above your credit limit.
• Give consumers 45 days’ notice if they plan to assess annual fees, raise interest rates on future purchases, or reduce credit limits.
• Post card terms and conditions on their websites so cardholders can access such information 24/7.

The legislation also requires credit card applicants under the age of 21 to have a co-signer or otherwise prove their ability to pay future bills (e.g., with adequate income).

Credit Card Relief Programs

If prevention, aided by legation like the Credit CARD Relief Act,won’t cure your credit addiction because you’ve already amassed substantial debt, then a partner like CareOne can help you achieve true relief from credit cards.

Your first step is to speak with a credit counselor, who will review your financial situation, and present sound advice and solutions tailored to your needs. Counselors can advise you on issues ranging from how to continue paying off debts on a reduced salary or amid a medical crisis, to financial fitness topics such as budgeting within your means and getting spending under control.

To attain these objectives, your counselor may talk to you about joining a debt consolidationprogram, which can address unsecured debt including credit card bills, as well as store cards, medical bills, student or personal loans, accounts in collection, etc. The two methods of debt consolidation that can help you achieve credit card relief are:

• Debt Management– This strategy consolidates unsecured debt into a single monthly payment that you send to a debt consolidation company. That company then distributes the designated funds to your creditors. The debt consolidation company works directly with your creditors to secure benefits that help you fulfill your obligations over time (e.g., interest rate reductions, late and over-the-limit fee waivers, and reduced monthly payments).
   
• Debt Settlement– This plan helps people who can’t repay their debt in full and face bankruptcy. Under this arrangement, your debt consolidation company approaches your creditors with an offer to settle your accounts for a portion of the amount owed.

If you still can’t afford your reduced monthly payment or achieve credit card relief through counseling or debt consolidation, bankruptcy is an option of last resort.

• Bankruptcy - Bankruptcy provides relief when you cannot pay your debts while returning as much money as possible to your creditors. Before you decide to take this irreversible step, consider how bankruptcy may affect you; other options may work for your situation.

CareOne Can Help You Achieve Credit Card Relief

Ultimately, you’re responsible for paying off your debts. Whether you can do that alone or whether you need the help of a credit card debt relief plan is up to you.

If you need assistance, CareOne offers useful tools and tips, including MyCareOneand our online communitywhich provides peer and expert support for those seeking debt relief, to help you stay on top of your expenses. We can also help you build a budget to help you monitor monthly expenses – a crucial part of getting and staying out of debt. Review our Resource Guidesand start taking the steps you need to achieve financial freedom that starts with credit card relief today.

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