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Will the Credit Card market Crash?
What happens when your credit runs out in 2011? What happens when your loans dry up? What happens when you have no other method of paying bills, apart from your basic salary? Who will bail you out? Your parents? Family? Your friends? That Lottery ticket you bought last month but never bothered checking? The Banks? Was that laughter I heard down the back? To pay your bills, what will you turn to? Black Magic? Religion? Will you stick your head in the sand, and wait for it all to pass? The imminent collapse of the credit card market – which is coming, believe me, is another horror story that hasn’t fully played out yet. But it could be happening.
It’s as sure as another downturn, just like the one we are still having. You may have heard people refer to a double curve in the financial down turn in the current play of things, in our mostly western financial and economic outlook. The apparent phenomenon where-by - just when things are improving and getting better, they suddenly collapse again. The smart money is on a massive dive in our personal financial circumstances. Has anyone said anything about interest rates going up eventually? Any idea what that does to a credit card debt?
How compound Interest works...
Everyone used to think the Mortgage market used to be safe as houses once. Yeah, we all know about that too! The average American family is leveraged up to the tonsils and it takes approximately 18 months for a repossession notice to come through, so Americans need the old Credit Card to keep things going in the meantime. Things like the car they drive. And that won’t last long, believe me. The debts will be replaced by even bigger debts. More problems are just waiting to invite themselves to the party. That’s the trouble with parties, soon as things get swinging, everyone wants to come and join in. So when the final day comes and that person simply cannot go any further with his or her finances, and loses that credit card, and has no other “cards” to play, what then? Because it’s what comes next that seems to worry the hell out of people. The word Bankruptcy terrifies people. One must ask – can the economy handle another downturn? Is there money available for yet another bail out? What has the average American being doing to plan for that day? Uh, you are planning something, right?
Wait a minute. This isn’t one of those smug sanctimonious articles that just dumps in your lap and leave you to it. Hell, I’m not that evil. What if I had some news for you there and it may help you. It isn’t a terribly comforting thing to hear, but it’s a lot better than most other solutions. It is simple, and more then two thirds of Americans could easily do this. They are trained or have the capability to do this. I am talking about doing something that most tax paying salary workers in America normally wouldn’t think of doing...
I’m talking about going out on your own and setting up a business, and simply work your way through the financial storm. You need to be busy working and earning and spending your way out of this financial turmoil. (Which was started by some other wealthy schmucks who just got to greedy!)
You are probably thinking – is this really possible? The answer for someone who truly wants to get out of this rut is - Yes. I have a hub page dedicated to how to deal with this - setting up your own business and earning from home. And I am going to show you what happens and how to do it? Are you ready? It's simple and costs you about as much as you need to set up and write your own hub page or blog...
Now click the link and discover some useful ways to make some decent income...
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Comments
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Hy acaetnna: you got rid of the credit card. Wow, you are very brave to do that. I chucked mine well over a year ago. I have saved thousands by doing that. You did the right thing. You get my respect for that. The bank keeps offering me credit cards however, and it's a royal pain. Those swines want me to get back into having debts so they'll make money out of me. Grrh! LOL!
You make a lot of sense here Cheeky Girl. I have decided to no longer have a credit card. Yes it has been a challenge but it so helps to live within my means!
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Not having a credit card is tough, Cathy. Having a credit card is tough. Heh! No, that's not a contradiction, it's the truth, but pay the sucker off on time and don't incur penalties and you might be fine. It just encourages you to live beyond your means, that's all. Compare the interest rate on it to other cards, just for fun, see what other banks say. I got bad news about your Debit Card. It's more expensive to use abroad than most Credit Cards. Not a lot of people know that, except Banks of course. XXX
I think there will be hell to pay when people realise that they have maxed out their cards and have only their salaries (even if they have jobs) to pay their way. When will banks start loaning again? I am glad I don't have a credit card, though my bank keeps sending me offers. They sent me a card this week. What should I do? Keep it or return it?
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Hy De Greek: Yes, this problem is with the interest rates. All the more reason to not rely on the credit card to get one out of a financial mess, when it will just create a brand new one. Thanks for the comment.
Ah.. but if on resoprt to credit cards for salvation, with their high interst rates, perhaps the game is already lost before it begins? :-)
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Hy DREAM ON: There's a salutary lesson in what you say! Borrowing from another credit card to pay off thr american credit card is near to what some of what is happening. America is creating as many problems as it is solving. Credit cards are not the answer. Somehow, America has become a huge welfare state with all the money owed and that famous pioneering spirit - wow, where has it gone? It needs that will power ad determinaton you spoke of. It needs it badly! Great comments, here my friend! Thanks for this!
I am afraid that the bailouts of the banks is a sign of the times.People want to give up and let the government take over.The GREAT AMERICA was built on struggling and success of people against all odds succeeded by there own will power and determination.The great stimulous plan is another bailout?Some people think it is free money.It is very decieving.It is a question of borrowing from Paul to pay Peter.We owe China the money.It is like we borrowed from chinas credit card to pay off another credit card.It is suppose to create jobs and stimulate the economy.Very doubtful...
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Hy DREAM ON: It's nice getting your comments here. You make some interesting points here. Paying back the banks is not quite the same as paying back the credit card companies. And you are right about the interest rates. For some people they are not affordable, since it's easier for many to simply default on the repayments. It is large scale defaults that has so shocked the credit system - which rocked the system and brought it down to where it is now. In a tough economy, its almost sounding like a bad case of every worker for him or herself. Businesses also need credit. Our system of economics can't work too good without it. That has been found to be a deadly flaw.
You ask a good question here - the banks - if they asked $100 or £100 from every worker in the respective country to repay the debts owed, it would always never be enough. The figure just keeps going up. It took America 2 presidents Trillions to bail out the American Banks, and they are still in the rough. The rest of the world is in a somewhat similar way. The "price" of bailing out the banks has been just guesses at best. The banks don't fully know how much of what is really owed. Which begs the simple question why?
Either way, living off a credit card will never be the same ever again.
You have many valid points.You have a good alternative of getting out of debt.The truth is I don't think the credit card companies really want you to pay them back.If they had reasonable interest rates say 6%.People would keep there cards and pay off there debt.Most people are responsible and don't want a bail out.Just help in a tough economy.I am sure if they had the cash they would pay.If banks got all the money from being bailed out why can't they help the very people whose money bailed them out.
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@ Lindsay Godfree: Yes, we seem to be oblivious to the storm ahead with those darn credit cards. Thanks for that, I do try to vary the mix a bit! Happy New Year to you too, Lindsay. : )
I really enjoyed your article and am in total agreement with seeing trouble ahead in the credit world. It certainly has come to a screeching hault in my own economy and I imagine that I am not alone. You have many interesting topics and writing style. Happy New Year to you!
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@ Ellen Garrison: Thanks - I just read your comments there, and I will adoopt your idea as suggested. Way to go! : )
People switching away from credit cards may not be such a bad idea, it's definitely safer. You have some good comments here, and you have made me think about some things too. I appreciate your feedback! Happy New Year, Ellen!
Its nice to see that the world is not totally ignorant of what is happening with people's miss-spending of money and the foolish way money is being misused and thrown away. I have a financial background and see trouble ahead for car owners and people who buy online with credit cards. They will soon be forced to resort to other methods of payment. There is a big switch now to "debit" cards. People have lost the concept of "making money work" for them. You are a good writer, I read your other page with interest.
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@ TattoGuy: Aw, I'm not like that. Me scary? No one ever said that about me before. People need to be aware of the oncoming issues surrounding credit cards. The whole issue of bad credit hasn't run its full course yet. What happens when people can't live off their credit cards any more and banks won't give people with bad credit new ones? Then what? Time to find another way of making money or time to start supplementing that income. hence the link to the "Starting your own business hub". That's my logic. And I welcome any and all views on that.
Nice lil hub that, scare the shit out of the buggers and then get them to join up, clever lil thing aren't ya ; )
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