Some consumers have been facing financial hardship such as the lost of a job, reduced salary, divorce, death or a medical emergency. During these time loans, bills and credit cards can quickly pile up and destroy the consumer’s ability to repay their financial obligations. Not only are these obligations weighting heavily on the consumer, the various credit card lenders are increasing the interest rates and fees on the consumer’s credit cards.

So what is the consumer to do about this situation?  Some of the solutions make sound simply, in a normal economic such as:

• Borrow only what you need
• Pay all bills promptly and more than the required monthly minimum payment
• Understand your credit report
• Recognize financial situations
• Understand the type of loan you are requesting, is it an open credit, revolving or installment loan.  Know the terms and repayment requirements.

One way to reorganize their financial situation is to:

• Call their mortgage lender to discuss a loan modification – This will achieve lower monthly payments
• Order a credit report – The consumer needs to know their credit score and identify any errors.
• If the consumer currently has a good credit score, call the credit card companies to obtain a lower interest rate 

A good credit rating is one of the keys to financial freedom in today’s economic climate.

Credit card companies are hurting your credit score with the new rules that are coming out.  Across the board credit card companies are cutting credit lines, lowering credit spending limits and closing credit card accounts.  Well this may seem benign to some it is actually hurting your credit score.  When your credit card is closed, all of your credit history goes with it.  Continue Reading »