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Credit Debt Hardship

Monday, September 17, 2007

It seems like credit cards are the necessary attribute in the life of young, energetic and successful people. All credit card rewards and programs seem to be designed to satisfy the specific needs and likings of working consumers or high income clients who either use credit cards for entertainment or better financial management.

Today, however, a credit card deal debt has become a widespread phenomenon among the elderly whose only support is Social Security. And this source of income is evidently insufficient to cover all fees and rates related with delayed or skipped monthly payments.

So, what are the thoughts and suggestions of financial advisers on credit card debt crippling the slender, as it is income of the elderly? The first thing financial experts draw your attention to is the difference of debt remedies with the young and the elderly.

Most of older credit card holders cannot afford to repay the outstanding balance gradually, that is by making regular and more than the minimum monthly payments. Seniors generally cannot afford giving a larger portion of their fixed income to cover penalty interest rates, over-the-limit or late payment fees.

But, older consumers do feel they have moral obligation to repay the debt, unlike most of young and well-to-do cardholders and sometimes their honesty plays against them. They keep on struggling, trying to satisfy the debt and put an end to the annoying calls of debt collectors threatening with a credit lawsuit. And they end up with still larger balance.

Why? Because the increase in fees and rates is a usual practice with credit card companies and making only the minimum monthly payments just aggravates the situation.

Now, the basic strategy of credit card debt remedy will depend on the following factors. What sort of income do the seniors have and do they possess any assets in their name?

Let's begin with the assets. In case older debtors have no assets in their name, they have nothing to lose except their creditworthiness and reputation. But if they do possess such things as a car, home or savings, they risk having them confiscated.

Then, it is not infrequent that seniors have no income other than Social Security. In this case it is strongly recommended to contact an attorney or go directly to the credit card company or collectors. Your creditor is likely to forgive the old and current debts if you picture your situation and provide the scanty figures of the Social Security benefits.

Some customers, however, will not beg their creditors. They will rather continue paying what they can, even when they realize they can't eventually satisfy it in the end. That's the worst thing to do. With your low fixed income you may easily default on a payment and penalty fees and rates will get you deeper in debt.

According to financial experts' advice, a wiser option would be turn to court where the judge may decide in favor of lowering the interest rates and fees. The best deal would be to stop the interest at all or appoint it at no more than 12 per cent.

So, financial advisers say, if you are a senior living on the Social security, without any additional income, you'd better get a quick court judgment or even consider bankruptcy to save your money and spare your efforts to catch up.

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