The mortgage industry is hurting from the collapse of the subprime lending, but the credit card companies are learning to take advantage of the situation. Be careful what you borrow, whether it is for a house or for personal expenses.
Credit card companies have found that those who have fallen prey of the subprime lending market are good candidates for credit cards. As these individuals fall behind on their mortgage payments, they try to make ends meet in another way. Many are turning to the new credit card offers they are getting in the mail to receive the help they need to get by.
The use of credit cards in this situation is becoming increasingly prevalent since most of these consumers cannot refinance their homes or receive home equity loans. Credit card debt becomes the only means of receiving further loans.
This is an unfortunate situation for those who are suffering from bad mortgage loans, as they are now adding to their debt rather than paying it down in an attempt to avoid foreclosure. Foreclosure is a very scary possibility, and it seems worth the extra credit card debt to avoid.
Defaulting on a credit card by not paying on it for 180 days puts the debt in the hands of some type of collection agency. The collection agency will pursue the debt from you and are known to pester those who owe them money. Add this to the risk of foreclosure, and you are in a very uncomfortable position.
If you are worrying about defaulting on your credit card bills, talk to a credit counselor about what options you have available. A counselor can review your situation and provide you the proper information and assistance to get headed in the right direction financially. Through credit counseling you may be able to lower your credit card interest rates and even become current on those accounts that are heading to delinquency by using a program set up with your credit card companies.
By getting on track to pay down your credit card debt, you increase the likelihood of having the funds necessary to avoid foreclosure on your home. Talk to a credit counselor to get the credit card debt help that you need.
