May 11, 2009
-
A Call to Action, Pt.1
Help for Consumers.Good things are happening to rescue Americans from the sinking ship of credit card debt. New legislation aimed to protect credit card consumers against the unfair and deceptive practices of lenders has recently been approved by the House. It is expected to be passed by the Senate within days and on the President’s desk by Memorial Day for signing. Although the new legislation is aimed at eliminating these unfair practices, it will not eliminate the debt consumers already have nor educate them on how to stay debt free in the future. The National Foundation for Credit Counseling (NFCC) recently announced a new alliance with major credit card companies to provide consumer repayment relief for consumers who are submerged in debt.
In the past, consumers who were buried in credit card debt and looking for assistance, turned to credit counseling agencies to work on a Debt Management Plan (DMP). For 40 years the NFCC has worked with lenders who would give concessions such as waiving late fees and over-the-limit penalties as well as lowering interest rates. However, in today’s economy, many consumers are struggling to even meet the minimums of a traditional DMP. An increasing number have opted out of credit card debt by filing bankruptcy which can be very damaging to an individual’s credit score; not to mention it inhibits the ability to regain credit and mortgages for years.
The NFCC is very sensitive to the needs of these individuals having heard firsthand the horror stories of overwhelmed and frightened consumers. In response, the NFCC launched its “Call to Action” in the fall of 2008. The initiative reached out to credit card providers in challenging them to design a program that would go beyond the traditional DMP. One of the goals is to provide additional options that would make it easier for consumers to realize debt relief without having to file bankruptcy.