From your experience, what do you see as the most common mistakes consumers make with their credit cards?
The biggest mistake is not paying as agreed; not paying the bills on time. The other mistake compounding the problem is overspending and going over credit limits.
Bankruptcy scholars have noted that medical debt is among the main reasons why people become bankrupt. Health care providers are collaborating with financial institutions to offer medical credit cards to patients for them to pay their bills. Some of these cards offer high interest rates. What is the best way to finance or pay for an unexpected medical expense?
Certainly cards and card lines of credit are one way to pay off outstanding bills and outstanding debt. But, the consumer once again, must use credit responsibly and be aware of the credit card or loan's terms before using it. We see many clients who are financially devastated with the rising cost of health care and the increase in their overall medical bills. This is clearly a problem and continues to be so. It's very complex and not easy to respond to.
I have said this often, but it really is not a shame to get into debt. It's a shame when consumers don't reach out and get help when they need it, or get help before it's too late and they have no other alternative but to file for bankruptcy.
If someone is in desperate shape, I would really encourage those consumers to reach out and get help from a qualified professional at one of our NFCC agencies.
Federal Reserve Chairman Benjamin Bernanke recently forewarned of a debt crisis and urged Congress and the White House to make policy changes to Social Security and Medicare as more than 70 million baby boomers approach retirement. He says if changes aren't made rising deficits will occur as well as a rapid growth in debt and interest rate payments. How is the credit counseling industry preparing for this wave of retirees and educating consumers about credit?
The credit counseling sector, specifically the NFCC, is concerned about the fact that more consumers are taking on more debt and not saving. Our role, our vision, is to help educate consumers to be financially empowered, better prepared for the future and to move beyond the crisis mode so they can be free of debt.
The mission of the NFCC is to set the national standard for quality credit counseling, debt reduction services and education for financial wellness through its 115 member agencies.
Last year NFCC agencies counseled nearly 2 million clients through nearly 1,000 locations across the United States and Puerto Rico. In addition to counseling individuals, we are doing a lot of education in our communities to help consumers think about their financial future and to plan for it.
We work with community groups, churches, schools, the YMCA's and community centers. We offer free education and classes. Find out where these classes are by checking with your local agency.
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