Surviving credit card debt
Credit card companies recovering–slowly
On Friday, credit card companies unveiled their delinquency and charge-off figures for September, and the figures were mixed. According to The Wall Street Journal that day, charge-offs (accounts that issuers regard as uncollectible and sell on to collection agencies) remained high across the board and actually edged up for some companies.
However, delinquency rates (accounts that are overdue, but that have not been so for long enough to be thought of as uncollectible) generally fell. And that’s good news, because they’re seen as a predictor of future losses that may result from charge-offs a few months down the line.
Credit card debt still a huge problem
Of course, these sorts of figures are all too academic for the millions of Americans who are living with unmanageable debt and fatally wounded credit scores. And that may explain why The Kansas City Star gave a plug Thursday to a new e-book that is intended to help those whose credit card debt has led to the unwanted attentions of collection agencies.
Credit Card Debt Survival Guide?
One of the central premises of the book, called “The Credit Card Debt Survival Guide,” is that debt collection today is a numbers game. And that’s true. Collection agencies are so overwhelmed by the case load created by the credit crunch and recession that they are forced to concentrate on the accounts that they believe are likely to be cost effective to collect. Indeed, years ago–while the economy was still strong–agencies were investing in application software that would allow them to focus on debtors who were likely to pay up.
The new, 240-page book argues that collection companies are likely to put you at the bottom of their list of priorities if you show yourself to be educated and motivated enough to resist their attentions. In other words, there’s plenty of low hanging fruit for them out there so they don’t need to spend a lot of time and effort dealing with someone who’s going to give them serious hassles.
Although a glance at the “The Credit Card Debt Survival Guide” contents page suggests that it provides plenty of practical advice, it does cost $47. And it’s not clear that it contains much that, given enough research, wouldn’t be available free elsewhere online.
Credit card use when your credit score’s shot to pieces
This blog recently pointed out that those who are newly without credit cards are often disadvantaged by being unable to keep their costs down by shopping online. One way around this is to get a secured credit card, although these require an upfront deposit, which many in this position simply can’t raise.
Another solution is to find a good prepaid card. Plenty of these have very high fees that may not be obvious from the promotional literature that supports them, so take great care before signing up for one. However, one that’s well worth looking at is the MangoTM MasterCard� Prepaid Card.
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