Debt Free Money
http://creditfederal.com/article/articles/550/1/Debt-Free-Money
By CreditFederal.com - A good or bad credit personal loan, auto and mortgage financing, and credit card resource.
Published on 08/8/2008
The government free money (stimulus checks) may have stimulated the economy at the expense of digging consumers deeper into credit card debt with new expenses added to bills they already cannot repay. Consider credit counseling, debt consolidation, or negotiate chargeoff settlements.
Credit Card and Loan Borrowing Surge
The government free money strategy to stimulate the economy actually worked... Instead of using the tax rebate stimulus checks to payoff debt, many consumers applied the free money towards new debts by using the money as partial payments on purchases. June actually had the fastest borrowing pace in seven months, according to the Federal Reserve.
New debt rose $14 billion in June from the previous month to a total of $2.59 trillion, more than the $6.4 billion over-the-month increase economists had forecast.
Demand for nonrevolving credit (loans) to finance cars, vacations, education and other things, rose at a rate of 6.6% in June, much higher than May's 1.5%. Revolving credit (credit card debt), rose to a rate of 6.8% in June, versus the 7.6% growth rate in May. The increase in credit card debt is blamed on lower approvals by banks for loans (nonrevolving credit). The government's calculations; however, do not include any debt secured by real estate, such as mortgage or home equity loans.
While all this extra spending and credit obligations may help stimulate the economy, many consumers are becoming more heavily burdened with individual debt. Of the options of credit counseling, debt consolidation and to chargeoff debt via settlement, which one is more likely not to harm the economy?
Credit Counseling: Getting a handle on income and debt is the key to personal financial success. Getting all we want and to get it right away; on credit, has become the new American way-of-life. We must get back to basics and control impulse purchases, and learn to earn instead of relying on credit and building a legacy of debt. This common sense approach also has a low affect on the economy because it still allows for spending, yet exercises control.
Debt Consolidation Loan: Getting new credit to payoff credit; while helping preserve the economy, could cause more damage to individual personal finances than credit counseling. The danger is that consumers; after paying off their high interest debt, will rack-up more debt because they haven't done anything to change their spending habits.
Chargeoffs: This option is typically the least desireable all around. It leaves creditors and investors holding the bag which will make getting affordable credit more difficult, if available at all, because consumers who chargeoff debt typically suffer bad credit scores.
Preserve the economy and improve personal finances. Credit Federal has made available to U.S. consumers free computer software to create a household budget, manage checkbook register entries, calulate credit card payoff, credit card interest debt as well as monthly mortgage and auto loan payments.
New debt rose $14 billion in June from the previous month to a total of $2.59 trillion, more than the $6.4 billion over-the-month increase economists had forecast.
Demand for nonrevolving credit (loans) to finance cars, vacations, education and other things, rose at a rate of 6.6% in June, much higher than May's 1.5%. Revolving credit (credit card debt), rose to a rate of 6.8% in June, versus the 7.6% growth rate in May. The increase in credit card debt is blamed on lower approvals by banks for loans (nonrevolving credit). The government's calculations; however, do not include any debt secured by real estate, such as mortgage or home equity loans.
While all this extra spending and credit obligations may help stimulate the economy, many consumers are becoming more heavily burdened with individual debt. Of the options of credit counseling, debt consolidation and to chargeoff debt via settlement, which one is more likely not to harm the economy?
Credit Counseling: Getting a handle on income and debt is the key to personal financial success. Getting all we want and to get it right away; on credit, has become the new American way-of-life. We must get back to basics and control impulse purchases, and learn to earn instead of relying on credit and building a legacy of debt. This common sense approach also has a low affect on the economy because it still allows for spending, yet exercises control.
Debt Consolidation Loan: Getting new credit to payoff credit; while helping preserve the economy, could cause more damage to individual personal finances than credit counseling. The danger is that consumers; after paying off their high interest debt, will rack-up more debt because they haven't done anything to change their spending habits.
Chargeoffs: This option is typically the least desireable all around. It leaves creditors and investors holding the bag which will make getting affordable credit more difficult, if available at all, because consumers who chargeoff debt typically suffer bad credit scores.
Preserve the economy and improve personal finances. Credit Federal has made available to U.S. consumers free computer software to create a household budget, manage checkbook register entries, calulate credit card payoff, credit card interest debt as well as monthly mortgage and auto loan payments.