The world of credit might not be dead just yet but it has certainly become less appealing.
Credit card companies like Citibank, Bank of America Corp., Wells Fargo & Co. and American Express Co. have recently sent letters to their customers, notifying them that interest rates are going up, in some cases to 30% if a single payment is missed. If that’s not incentive to keep good credit scores, I don’t know what is. (LA Times).
It’s one way for banks to try and deal with their insolvency issues given the current economic conditions.
The recession might be a great time to redesign your purchasing habits and buy only what you can with cold hard cash. Old school discipline tells you that if you don’t have the cash in the bank, that you don’t have the money to spend. It is perhaps a difficult notion to accept given a culture that swears by credit. But looking at it positively, changing your behavior now might mean that when paychecks fatten up again post the recession, you might just find that you have developed a propensity to save your new earnings rather than to spend them!
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