Tuesday, October 28, 2008

Protecting your money: Credit card companies starting to make you pay for their bad decisions

The New York Times reports tonight that credit card companies are initially and secretly making you pay for their bad decisions and bad debt you didn't rack up.

These companies are facing a day of reckoning as defaults on credit card debt by consumers skyrocketed in the first half of 2008 to $21 billion. Another $55 billion in debt will be eaten over the next 18 months.

Americans hold $4.4 trillion in personal debt.

But even if you've paid all your bills on time and in full, the companies are reducing your credit line, which then reduces your overall credit score. So when you go to borrow money to buy a home or a car, you'll be denied that loan because of a worse credit score or you'll have to pay more money up front.


The credit card companies also are raising the interest rates you have to pay. If 15 percent was not enough, American Express is preparing to raise its rate to 18 percent. Look for other credit card companies to follow.

To read more about this despicable and deteriorating situation, go to: http://www.nytimes.com/2008/10/29/business/29credit.html?hp

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