With the increased reliance on credit cards, comes in the requirement to use them responsibly. A plethora of troubles had cropped up for the people of USA very recently.

Most of us today carry more than one credit card, which tends to augment the probability of consumerist consumption. If one is wise about their credit card utilization then Consumer and business credit cards are a boon. Irresponsible handling of credit card will find you troubled with huge credit card debt and looking for a way out!

Credit card relief or Debt Relief Plans could be a feasible solution for you. But there are a few factors to be taken into consideration including your financial state and some others. If you are really serious about getting yourself out of the debt spiral, you will have to start making some reductions in your spending and begin to save money. It is simply not possible for you to continue spending wildly and at the same time improve your situation. Don’t get into the mindset of, “I’m already in debt, so a bit more won’t matter!”. It is understandable if you simply can’t make more than the minimum payments, but if you are not making payments even when you have extra cash, you are behaving irresponsibly.

If the company realizes that the customer in question is unable to pay the full amount, they may also agree upon a smaller amount. The last thing they want is for their customer to have to go bankrupt, because that means the person is no longer responsible for the debt thus the credit card company gets none of your money whatsoever.

When people seek solution to credit debt, they usually turn to financial institutions to help them with loans or debt consolidation companies. A debt consolidation company works with the creditors of the person who owes the money in order to negotiate lower interest rates and a payment plan that’s right for the person. These professionals make it so that you only have to pay one single bill per month, the loan that you take out with them, either a secured loan or an unsecured loan. The person has the option to go with either one; however there is a difference between the two. A secured loan comes with a lower interest rate but you must put your property such as your house up as collateral. With an unsecured loan you have a higher interest rate but don’t need to put any property up as collateral.

Now that you know some solutions to credit card debt, you should know that there are other ways of eliminating debt that you need to consider before you do anything else.

These are a few steps towards rectifying the situation and Credit Repair, but in dire necessity the best way is to seek professional help.

Most people today are living paycheck to paycheck and do not always have enough money to get them through the day. But consumerism being the call of the day we all enjoying spending extravagantly. Enter the requirement to better your financial situation by borrowing from friends or apply for a consumer credit card.

A lot of us lack basic financial intelligence and discipline where our money is concerned. Most of us use credit cards today. It is a most helpful concept in this age of online transactions and electronic payments. You can avoid carrying large sums of cash and in case of emergencies, putting down payments on a new/used car etc. Your monthly payments depend on the amount you spend.

 A credit card is only bad when you over step your spending boundaries. If your expenditure begins to exceed your income its only obvious that you are digging yourself a hole!

Now, Home equity line of credit is another form of credit akin to the business line of credit. This type of credit is used against the equity of your home. Homeowners use a home equity line of credit for paying off debt, emergencies, paying for education etc. Since the loan is guaranteed by the equity of your home it usually has low introductory rates and negotiable fixed interest rates. Since the loan is secured by your home you can have the interest deducted.

Some lenders may want to look at your income, credit history, debts, and other financial obligations to determine your credit limit and how much you may actually be able to repay. But if you shop around a bit with the help of mortgage brokers and lenders you can find the best deal for yourself.

In conclusion, the amount you can qualify for on a credit card is going to be determined by your income and credit history whereas with a home equity line of credit the amount you can qualify for is determined by the value of your home.

The HELOC is nearly worth the price of your home. With a credit card you build up credit that you may qualify to purchase a home, new car etc. With a HELOC it is possible for you to have your interest deducted.
Now after a little customized research, the choice is yours!

The Federal Reserve received around 56,000 responses from angry credit card customers with regards to the new rules it proposed against abusive credit card practices. The rage over arbitrary hike in interest rates based on factors apart from the consumer’s credit history is apparently pretty wide spread.

A long list of factors is contributing towards making unethical or usurious practices in banking industry the norm. The consumer rights bill sponsored by House Financial Services Committee Representative Carol Mahoney moves toward preventing credit card companies from arbitrarily raising interest rates on a balance incurred under an old rate or for unrelated reasons.

One of the major factors motivating abusive lending is the trend of larger and larger corporations. The big banks such as Bank of America, Citi Group and Chase that issue most of the credit cards can take credit risks and absorb the damage in the form of spiked interest rates and sale of bad debts.

Another factor is the focus of the company management solely on meeting the expectations, unrealistic as they may be, of the stock holders who pay them. The interests of the customers are being compromised for increased ROI’s and salaries of the upper echelons.

Not to entirely absolve the consumers and the government, the practice of encouraging expenditure in the absence of liquidity with unsecured credit cards has ruined all hopes of economic stimulus through conspicuous consumption. These lead to abusive lending practices which is another source lost for ready cash like the time when the subprime mortgage crisis hit us.

So, credit card reform is most definitely overdue but first and foremost we need a pool of people who make enough money to cover their basic needs and still have some left to spend on consumer goods. These will require some systemic changes that cannot be accomplished without bloodshed.

The bill is a good start to all of this, but the banks are ferociously fighting the bill, despite its fairly modest restraints. This resistance by the industry makes me wonder- “Has the banking industry completely lost whatever moral compass it might once have possessed?”

The problem has been long coming with a large percentage of Americans paying their credit card bills late or never paying them at all. The small businesses which rely on credit to pay their bills are suffering the brunt of this lax.
The Federal Reserve has planned to revise the credit card rules and are clamping down on credit lines. The Feds said the cause was “tight credit conditions” which clearly implies that we are still very much assailed by the liquidity crunch.
There are indications that some investors have soured on a kind of bond backed by credit card debt. Considering the past of the U.S Financial System the Feds have taken steps to make the credit card securitizations safer as per the Wall Street Journal. Such conditions in the credit card market are forcing banks to tighten their lending standards. Banks currently have fewer resources to make loans on credit cards or carry out large balance transfers.
The ripple effect of this cut down is affecting small businesses and taking away the advantages they have for expansion, categorization and tracking by using business credit cards. Todd McCracken, president of the National Small Business Association said on MarketPlace Radio that apart from high interest rates, using credit cards to fund their businesses carries other risks.
The sudden rise in interest rates can create chaos for small businesses trying to make payroll. The current policies are going to do them a world of harm.

A new business setup can get extremely chaotic and overwhelming for you. It is a little while before you can establish yourself in the business world when, it will become easier to understand how to do things the right way the first time around.
Credit cards specifically meant to help small businesses succeed are one way to ease the chaos. The advantages of a business credit card are numerous.
Business Line of Credit
The business credit cards have a higher line of credit than consumer credit cards . This helps free up some of the company’s financial resources so long as they pay the balance due each month. Using a credit card responsibly could ease your concerns until you begin to regularly make a good profit. Unexpected expenses can be absorbed without major repercussions.
Tracking Expense
Keeping track of all the company expense becomes much easier if you utilize one single credit card for all your company expenses. Some business credit card  companies also provide the facility of categorizing your business expenses making it convenient for purposes such as calculating the company tax and reviewing your initial business plan.
Establishing a Solid Credit Foundation

A good credit history abets the process and plans for future expansion that you may have. The privilege of a larger loans being approved may be the very thing you need.

There are tons of rewards cards available today. While rewards credit cards can be rewarding, the benefit that you can get out of these credit cards really depends on how you use them.

The consumer reports magazine offered some tips on how to make rewards credit cards most rewarding for you -

1 - Before choosing a credit card, estimate your spending and translate that into how much cash back or points you’ll earn through the credit card program.

2 - Rewards credit cards often charge relatively high interest rates. So if you are someone who carries a balance, rewards cards may not be the right choice for you. You may be better off with a low balance transfer card or low apr credit card.

3 - If you use an airline mileage card, then use the miles. Cashing them in has become more difficult as airlines have cut back on flights.

We hope this makes for some worthwhile reading and helps you make a slightly more informed choice next time you want to select a rewards credit card.

In a recent article at http://www.huliq.com/46843/which-credit-card-best-you the author says that choosing the right credit card is as important as choosing the right mortgage or car loan.

He further says that -

The right credit card for you might not be the right one for someone else. How can that be? Because different people use credit cards in different ways and for different purposes. The WAY you use your credit card determines which card will save you the most money.

For example, if you obsessively pay off your balance every month without fail then you may very well need a different card from someone who carries a high balance every month and only pays the minimum due. Let’s take a closer look at this so you can understand why.

If you pay the total balance due on your card every month then the interest rate that your card carries is of no concern to you whatsoever. What is of concern to you is the grace period that your card offers between the time that you make a purchase and the time that interest begins accruing, and, quite possibly, the other perks that your card offers.

In other words, if you always pay your card in full every month then you need to find a card with the longest grace period possible and you would want to look for a card that has other perks that you could use such as car rental coverage or bonus points that could be redeemed for cash or gifts at some point or low fees for cash advances.

On the other hand, if you habitually carry a balance on your card from month to month then the grace period that a card offers is meaningless to you (there is no grace period if you carry a balance from one month to another) and what you need to search for is a card with the lowest possible interest rate.

In either case the most important thing you need when looking for a credit card is CHOICE. You need to be able to see the features of dozens of cards side-by-side so that you can pick and choose which card has the best interest rate, grace period and other features that make that card a perfect fit for you, your lifestyle, and for your particular financial situation.

Humberto Cruz in an article on the boston.com site had the foll. to say about credit card debt in 2008.

Consumers, who, of course, never charge for purchases they can’t afford, will pay off all their holiday credit card bills in January.

That would be quite a change from this year. According to a nationwide survey by Fort Lauderdale, Fla.-based Consolidated Credit Counseling Services in November, 319 of 974 people who answered the question said they were still paying off holiday debt from 2006. (And 26 people skipped the question.) Of those 974 people, only 39, or 4 percent, expected to pay this year’s credit card bills right away, and 59, or 6 percent, expected it would take them as much as a year.

You can read the complete article at http://www.boston.com/business/personalfinance/articles/2008/01/09/
in_08_taxes_are_again_inevitable_but_credit_card_debt_doesnt_
have_to_be/

Okay, this one is a real off the track post. I read a press release online that suggested that credit card spending habits are influenced by star sign.

The release at thriftyscot.co.uk says that, “New research by the credit reference agency Equifax has shown that your star sign could have some impact on your spending habits.”

It seems Capricorns are the worst when it comes to credit card debt and The best star sign for not getting into debt however is Aries, although they do not like to risk any of their money in investment schemes…

Check out the entire press release at
http://www.thriftyscot.co.uk/Credit-Cards/122006/credit-card-spending-habits-influenced-by-star-sign.html

The Miami Herald describes the Cons of having store credit cards in their article “Store credit cards are not your friends”. You can read the article at http://www.miami.com/mld/miamiherald/business/personal_finance/16151792.htm

To summarize, the author talks about people who get enticed by discounts in the holiday season and end up buying more. Many of these people do not off their credit card bills in January and end up in debt. He says that credit cards offered by retailers typically carry a high interest rate — 20 percent or higher.

Further the author justifies that there is always a catch in the holiday offers that most retailers offer.

Worth a read…