For some seniors, their biggest debt load comes from their credit cards. Mortgages can be a burden too but at least the mortgage interest rate is usually at an affordable level. That is not so with credit cards. In the present tough times the high interest rates that credit cards charge can be an almost impossible burden for seniors.
It is good to see that the credit card companies are now willing to make deals over debt.
Bank of America says it eased off on more than 700,000 credit card holders in 2008, lowering interest rates and some balances. After helping to foster the explosive growth of consumer debt in recent years, credit card companies are realizing that some hard-pressed Americans will not be able to pay their bills as the economy deteriorates.
Banks are putting in place a system for Credit card debt forgiveness.
Big banks have formed an unusual alliance with consumer advocates to urge the government to allow huge portions of credit card debt to be forgiven, a turnabout from recent years when the banking industry lobbied strenuously to make it harder for consumers to erase their credit card debts in bankruptcy. The new pilot program, which the banks hope will become permanent could involve as many as 50,000 people struggling with credit card debt. On an individual basis, the amount of debt to be forgiven would rise according to the severity of the borrower’s financial situation, up to a maximum of 40 percent.
The largest credit-card banks in the US have each set aside between $1 billion and $3.5 billion in the third quarter for losses on credit card loans as their profits plummeted. It does not remove the debt load problem but hopefully in some cases reduces the problem to a manageable level.
