Here are some sobering statistics about American debt.

• About 1.6 million U.S. households -- one of every 73 -- filed for bankruptcy in 2004.

• Average per household debt in the U.S., not counting mortgage debt, is about $14,500 -- especially noteworthy because before the 1930s, most middle and working class people had no major debts.

• Some 40 percent of American families spend more than they earn each year.

• Average personal wealth of a 50-year-old American, including home equity: less than $40,000.

• Nine of 10 Americans claim credit card debt has never been a source of worry.

• But 47 percent would refuse to tell a friend how much they owe.

• Twenty-three percent of Americans admit to maxing out a credit card.

• Eleven percent of Americans admit card debts went to collection.

• Thirteen percent of Americans have been 30 days late paying credit card bills in the past year.

• The average graduate student has six credit cards and one in seven owes more than $15,000.

• The personal savings rate in the United States has dropped from 8 percent in the 1980s to just below 2 percent since 2000.

The economy is in the tank and Americans are suffering.  It’s a natural response for the government to step in to “help”.  Last year we saw bail-outs, takeovers, and new laws all in an attempt to help stop a big problem from getting worse.   Some were probably necessary but others maybe not. 

Look at the new credit card laws.  There is no argument that Credit Card companies have been taking advantage of consumers for years.  But in the days when credit was plentiful and interest rates were low, no one really seemed to care.  It only got ugly when the economy tanked and large banking institutions started to look for ways to minimize their losses (at the expense of their credit card customers).  Banks that were losing millions in foreclosures could make up some of the loss by raising interest rates, increasing late fees, and doubling the minimum payments due.   But at what cost?   Most card issuers didn’t have to give the consumer much notice before changing these terms and therefore it took a lot of Americans off-guard and placed them in a bad financial situation.

The President, in an effort to stop consumers from being taken advantage of, signed a new law that will force the card issuers to give consumers more notice before changing terms.  In response, most credit card companies have already raised rates, increased fees and changed terms BEFORE the new law goes into effect.  And these banks have not just penalized borrowers with bad payment history--almost everyone was hit and many have even had their cards cancelled without warning further hurting their financial situation.

But this is probably just the beginning.  In the future we will most likely see all credit cards come with stiffer terms and gone are the days when you could hop from one 2.9% offer to another.  It’s likely as well that most banks will go back to cards with annual fees and offer fewer perks to customers who use their cards frequently.  In fact, a study by Synovate, a market research firm, found that U.S. households are already receiving dramatically fewer card offers in the mail.

Hopefully in the end, it will all even out but I would rather see the consumer have the option to have a card with high fees, low fees, or whatever perks are offered rather than to see the credit market so tight that you have to “take what you can get”.   Sometimes regulations end up hurting the very people they are designed to help.

Almost everywhere I turn, I find an article of editorial chronicling the mounting dissatisfaction that consumers have with their credit card companies.  And for good reason.  Card issuers have slapped more than half of Americans with higher interest rates, unexpected fees, lowered borrowing limits, and higher late payment fees.  And if you haven't been hit yet, your time may be coming soon.

More and more consumers are trying to fight back by switching to other cards or negotiating their rates.  But for some, getting a new card is becoming increasingly difficult and the higher interest rates are making it almost impossible to pay off their balances.  If you pay your cards off every month, you can probably apply for a new card and transfer your balance without too much trouble.  Remember--you are the customer!  If you are one of the 46% who carry a balance though, that solution may not be so simple--especially if your cards are maxed out and you are using them to meet your monthly expenses.  If that is the case, you need to address your situation right away before those fees force you into a bad situation financially.

A growing number of Americans are carrying high balances on their cards just to make ends meet and aren't sure when (if ever) they will be able to pay them off.  These high balances are hard to make the minimum payments but as card issuers jack the minimum payments from 2% to 5% and the interest rates from 11%-14% up to as high as 27%-30%, that can literally push these people to the brink of bankruptcy. 

If you find yourself in this situation, contact your credit card company immediately and try to negotiate a lower rate.  If that doesn't work, it may be time to turn to the experts.  The sooner you address the problem, the better chance you have of success.

If you're one of the thousands of Americans struggling just to make their minimum payments on their credit cards each month, I have bad news.   Citibank, MBNA, and Bank of America recently announced that they are raising the minimum monthly payment from 2% to 4% of the outstanding balance.  That's double and it may be just enough to send tens of thousands more Americans into serious delinquency.  Other major banks are expected to follow suit as well.

So what can you do?  The first thing is to figure out if you can continue to make your payments.  If not, you need to address the situation immediately.  The longer you wait, the more the interest, late fees, and balance will grow.

If you have savings, you may want to take some to pay down the balances but if you are truly cash-strapped and can't make ends meet then a debt settlement or debt management program may be in order.  The key to any effective debt program is to be qualified by an expert and then to get into the program before your debt escalates to the point of bankruptcy.

At First Rate Debt Solutions, we have trained experts who will analyze your situation and customize a program to meet your financial goals and budget.  Times are tough but there are answers out there for people in trouble.  If you need help, give us a call.  Toll Free (877) 332-8730.

A bill that would dramatically change the way credit card companies do business in the United States was approved by Congress this week and is on it's way to the President for signature.

The bill says that credit card companies will now have to inform their card holders at least 45 days in advance before they raise interest rates or change any other terms and conditions.  Even more importantly, the new law will prohibit the credit card companies from raising the interest rates on existing debt unless the payment is at least 60 days late.

Another big change will force the credit card companies to tell their card-holders how long and how much it would take to pay off a card if they  only make the minimum monthly payment.

These changes will not take effect immediately but will ultimately help to protect consumers who have in many cases found themselves in debt far more than they can handle and feeling victimized by the credit card companies.

The credit card companies are fighting back saying that the changes will only increase the cost of credit to consumers.   But the changes really just put more information out that consumers need when deciding to use their credit cards.

Americans held nine hundred forty-six billion dollars in credit card debt at the end of March.  Many of those are having trouble making their payments each month due to rising interest rates and other circumstances.  If you are one of the millions of Americans struggling with credit card debt, First Rate Debt Solutions has programs that can save you thousands of dollars.

According to recent statistics, there were 984 million bank-issued Visa and MasterCard credit card and debit card accounts in the United States in 2006.  If you add in American Express and Discover, that number jumps to 1.5 Billion cards in use which represents about 73.0 percent of U.S. families.

With these types of numbers, it’s no wonder that America is a nation in debt.  Credit cards have become a habit and millions of Americans are addicted. The total U.S. consumer revolving debt was $963.5 billion in December 2008 and about 98 percent of that debt was credit card debt.

These numbers can be staggering and so are the implications.  The average consumer has a total of 13 debt obligations. These include credit cards/unsecured debt (such as department store charge cards, gas cards, and bank cards) and installment loans (auto loans, mortgage loans, student loans, etc.).  Of these 13 credit obligations, nine are likely to be credit cards.

Nearly one in every three consumer purchases in the United States is made with a payment card, including credit, debit and prepaid products.  Credit and debit cards provide a great convenience but when finances are tight, 59 percent of people surveyed said they would pay their credit card bills last.

About one in six families with credit card debt pays only the minimum amount due every month and 28 percent of those surveyed say their ability to pay off their credit card balance has become more difficult in the past year.

Where all of this gets really scary is in the interest rates and fees and how quickly they add up.  Most credit cards have an interest rate of at least 12.5%, many have annual fees, and almost all have late and over the limit fees.  If you can’t pay your bill in full and on-time, these fees can substantially alter the cost of whatever you purchased on the card.  Since 55% of all consumers keep a balance on their card, that’s a lot of dough.

If you are one of the many Americans that is finding it harder and hard to keep up with your credit card debt, there are solutions.  Don't let mounting debt destroy your financial future.   First Rate Debt Solutions has answers and we can help.

(data source: creditcards.com)

Every day we are saving our clients thousands of dollars.  Just look at the most recent settlements for one of our local clients in Orange County.  They will be debt free in less than 6 months.  We can help you save this much money too!

This client had an original balance of $3,488.33 and we settled the account for $600!  Yes, that's 17% of what was originally owed.

Another account had a balance of $10,743.65 and we settled that account for $1,700.00.  That's 15.8% of the original balance.

The third account had a balance due of $5,523.37.  The settlement we obtained was for $900 which is 16.2% of the original balance.

These settlements have saved this one client $16,555.35!!!  That's a whole lot of dough in addition to the fact that he is no longer sinking farther into debt.

If you are struggling with credit card debt and would like to be debt free, give one of our experts a call and see how our program and can help you too!  877-332-8730

see the actual settlements here:

http://www.firstratedebtsolutions.com/debt-settlement-samples/debt-settlement-a.pdf

http://www.firstratedebtsolutions.com/debt-settlement-samples/debt-settlement-b.pdf

http://www.firstratedebtsolutions.com/debt-settlement-samples/debt-settlement-c.pdf

How many credit cards do you have? Chances are, more than you actually need. You probably have one that offered you “miles”, one that offered you discounts at their store, and several others that “offered” something appealing at the time. Millions of Americans receive "pre-approved" credit card offers in the mail every day. If you have less-than-perfect credit or are swamped in debt, you probably still get the offers in the mail. And if you are in debt, they may seem like the answer. But more than likely, they are the problem.

On average, Americans receive eight credit card offers through the mail each month regardless of his or her credit history. It has become a trend for creditors to offer their cards to all consumers, especially those with credit and debt problems. They know that poor credit habits in the past will cause the consumer to spend more money with their card. Only after the consumer has amassed an enormous balance do they realize that they can only afford the minimum payments. This will in turn accrue plenty of interest charges and other fees, making huge profits for the creditor. Last year, the credit card industry took in over $43 billion in card fees.

But you can break the cycle and get yourself back on track. Using your Visa to pay your Mastercard (or vice-versa) is not the answer. Getting your debt under control is.

The average credit card debt among people who have at least one card is $9,205 -- triple what it was in 1990. People using credit cards in fast food restaurants spend up to 50 percent more than when they pay cash. The average interest rate on credit cards is 18.9 percent and the typical American family today pays about $1,200 annually in credit card interest.

If you are finding it increasingly harder to pay your monthly credit cards bills, it's time to take action. First thing is to stop using your cards while to try to pay down your balances. Take all your credit cards but one out of your wallet and use that one ONLY for emergencies. It will take some discipline but it's important to stop charging while you try to pay down your balances.

But if you have too many cards and your payments are too high to manage or pay off on your own, debt settlement may be exactly the program to help you get out of debt!