It's Eye Opening When You Really "Check" The Facts!

It's Eye Opening When You Really "Check" The Facts!

The recent message that consumers have been PAYING down their existing revolving debt balances, couldn't be further from the truth.

From the 2nd quarter to the 3rd quarter of 2010, credit card debt DECREASED by about $10 billion dollars, according to the official report by the Federal Reserve, yet they do NOT report HOW this happened. The inside story is that banks "charged off" approximately $16.7 billion dollars in the 3rd quarter of 2010, meaning that consumers actually CHARGED another $6.7 billion dollars in NEW credit card debt that QUARTER. It's eye opening when you really "check" the facts!

Many consumers are merely UNLOADING debt rather than PAYING it off. While banks may not be happy with the large number of charge offs, the retail sector is VERY happy about consumer spending. Black Friday, is a term used by retailers as the FIRST DAY of the year that they come out of the "red" financially and into the "black". 2010's black Friday certainly lived up to its name.

We've all heard the phrase "creative accounting" well, what many banks are engaged in today is "creative nickel and diming" It's costing YOU money just to have your money in their institution. While increased consumer protection for credit cards has created positive consumer awareness about the potential problems a credit card may bring, the newest hurdle of exorbitant BANK FEES does very LITTLE for consumer confidence in most financial institutions.

While credit cards are still largely elective, banking at local banks is not. In a common-sense world, there would be a premium to access things you didn't have, but want. However, being charged to gain access to your own money, is not right!

Ok, so what's the bottom line here?

While media reports may have brought optimism and renewed confidence to many, news such as "pre-recession" spending levels should not be considered a free ticket to rack up more credit card debt. You can't continue to do the same thing and expect a different result which is commonly referred to as, the definition of "insanity."

As for the banking industry and other fee charging financial institutions buyer beware! While the banks place much of the blame on new banking regulations, most of the blame is theirs to claim. The bottom line here is the customer should always be treated fairly, regardless of how much profit the bank's board of directors wants to earn each year. Hold your bank accountable! Ask to speak to the manager, and negotiate better rates or a reduction of fees. If they balk, shop around for a new customer-friendly bank.

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