November 20, 2008
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News: Shoppers, No Bailout For You.
Don't expect it, no bailout for you. Straight from Consumer Reports, not gonna happen. So be frugal with your credit cards this Christmas. You already owe a trillion dollars, that's enough. It's bad enough that 12 million of you still haven't paid for last Christmas. Still, it's expected that 38 percent of you will still do it, charge up Christmas. Maybe even more then you did last Christmas. Just remember, if you get yourselves in trouble with the old credit card, the gov is not gonna bail you out. If you max out the credit cards and can't pay, you're on our own.
It's not just credit cards. Watch out for those gift cards, also. If the merchant takes a dive before you redeem the card, you may lose it. Ditto for unused cards. About $8 million just defaults back to the retailer for unused gift cards, according to the New York Times. Same goes for those extended warranties, you never know. There are initiatives on-going for better protection for consumers; things like losing expiration dates and service fees, but it's not here yet. Many people believe it's safer to go with debit cards. Not necessarily. If you're the kind that gets carried away with credit cards and becomes engulfed in high-interest debt, then maybe debit cards are better for you. Just remember that credit cards generally limit your risk of fraudulent charges to only $50. Fraudulent charges on debit cards can rack up your loss to $500 if you don't report the problem within 3 working days. They can drain your whole checking account without you knowing. Then you have all kinds of other problems, as well.
Beware, in any case, of how the credit card industry is changing as you read this. Rates are being hiked, spending limits reduced and penalties stiffened. Service charges are being formed for those who carry a large debt for a long time, even if you pay ahead and over. Accounts are being closed right up for non-use and greater restrictions for new accounts are becoming the rule. Credit ratings are just starting to plummet for those who have too many accounts open, even if everything else is fine.