According to democrat Barack Obama credit card companies deceive consumers into piling up massive debt they have little hope of repaying. He called for new restrictions on what he termed "predatory" companies.

"The truth is, our middle-class families are not going to be secure so long as they can't get out of debt," Obama said Monday, in a presidential campaign speech Monday. "If we're serious about stopping Americans from falling deeper in debt, we've got to crack down on predatory credit card companies that are pushing them over the edge."

Obama pointed to studies showing that consumers have an average personal debt of more than $8,000, a load driven higher by credit cards. He said soaring credit card debt could turn into a crisis as big as the one in the subprime mortgage industry.

Obama feels that "The larger risk is that what's happening in the housing market could lead to a slowdown in the entire economy,".

And he may have a point. There are some on the other side of the debate that assert the credit crunch in America and in particular the credit card debt really is not as bad as it seems. They point to the percentage of personal debt and claim it really is not too bad.

And yet, more people file bankruptcy and more and more Americans are losing their homes to foreclosure. This cannot be ignored and in large measure it is a direct result of piling up consumer debt on top of consumer debt.

There is no problem with our debt ratio in a healthy, growing economy. Unfortunately, that is something we do not have and may not have for some time.

If you are trying to buy a new home or save the one you have, you really need to get a handle on the credit cards.

A great resource that I can recommend to help you out of the hole is the Credit Secrets Bible. It is the option I recommend for most people to "do-it-yourself". We’re not talking brain surgery here. Many credit repair companies try to make the process overly mysterious in order to justify their big bill. With the guidance, forms and letters contained in the Credit Secrets Bible you can “do it yourself”. The main requirements are that you can read and write at the 7th grade level. And have a willingness to follow through.

You can also claim a free copy of The Credit Secrets Mini-Book by simply right clicking the link and “Save As”.

Bookmark It

Hide Sites

We have all heard the saying that if it is just too good to be true that is probably is. And yet we seem to keep falling for the "good deal". This saying is coming home to haunt many home buyers who took advantage of "teaser" home mortgage rates over the past several years. These teasers sucked many of the unwary borrowers into a trap that has now snapped shut and they face losing there homes to foreclosure.

Thousands of home owners have already lost their homes to foreclosure and thousands more face this possibility every month.

A plan is now being negotiated by the Bush administration and some of the major home mortgage lenders to bring some relief to the situation. Full details have not been disclosed as this is still a work in progress.

Expected to be announced within a week by Treasury Secretary Henry Paulson, the plan hopes to help virtually all groups impacted by adjustable rate mortgages (ARMs) that adjusted to levels quite unexpected by the borrowers. Those homeowners who have been unable to keep up with their payments even at the low teaser rates would not be included in the plan.

The plan was labeled "an important building block in our efforts to address the mortgage and credit crisis" by Rep. Rahm Emanuel (D-Ill.). He has asked the  administration's help in approving a House bill designed to ease the housing problem.

Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, was "encouraged" by the move to "seek large-scale loan modifications for borrowers, who, facing interest rate resets, are in danger of losing their homes."

Any plan that could help slow the worsening credit crunch in America and across the globe has got to be given careful consideration. I can't help but wonder though where the interests of our Washington representatives actually lie. Are they really trying to look out after Mr. and Mrs. America or with the large financial institutions and investors who will benefit greatly by a government bail out?

In any case, we need to keep in mind that there are better ways of buying our home with little cash and no credit than to fail prey to a broker's "too good to be true" teaser mortgage.

Bookmark It

Hide Sites