Currently, retirement accounts are many Americans' largest assets. That's why some people are turning to their retirement savings to pay down credit card debt that has spun out of control. However, according to financial experts interviewed by CNNMoney, this is a risky endeavor that often backfires.
In the wake of the economic recession, Americans guarded their pocket books closely and shied away from using credit cards for purchases. However, according to a recent report on consumer spending from the Federal Reserve, Americans are once again racking up debt.
It is often assumed that people who get in over their heads with credit card debt do so by spending irresponsibly, making lavish purchases or buying things they know they cannot afford.
Anyone who has a credit card has probably already heard this advice: Make sure you scrutinize each bill you get. A new report serves as a good reminder that consumers must be extra vigilant about doing a line-by-line check of the bill. According to this new report, people in Wisconsin file more complaints about Capital One than any other credit card company. Citibank and Bank of America rounded out the top three credit card companies with complaints.
Within the past couple of decades, debt consolidation has become a popular way for many consumers in Wisconsin to get their finances back on track. When you over-extend yourself due to unforeseen circumstances, loss of a job or lack of planning skills, combining all financial obligations into affordable monthly payment may be the most effective venue. Each state has its own laws, but several options are available to alleviate or reduce the debt presently owned.
Wisconsin consumers may be interested to know that the Mississippi Attorney General has filed a lawsuit against JP Morgan Chase for illegal credit card collection practices. The bank has previously found itself in trouble for its methods.
Wisconsin residents who have struggled with credit card debt may be interested to see what the government has done to help. In 2009, Congress passed the Credit Card Accountability Responsibility and Disclosure Act to protect consumers from predatory lending practices. Recent research suggests that as a result of this law Americans may have saved as much as $209 billion in charges related to credit card debt.
For people in Wisconsin and around the country, understanding credit cards can help avoid financial downfalls. Due to their simplicity, credit cards make it almost too easy to create mountains of debt.