CLARKONOMICS: Americans reduced their credit card debt by 10% during the month of February, according to new figures.
The Federal Reserve has been tracking typical credit card balances for 41 years. During that time, the reduction seen in February has only happened once before in the past 4 decades!
People are tired of being held over a barrel by the big banks that operate credit cards. If you owe money, you're putting yourself in danger of some bank jacking up your interest rate overnight.
We're getting calls from people who have had their rate jump from 8% to 30% while they were making timely payments!
Meanwhile, a
new piece of legislation going into place next summer will ban such retroactive increases on existing balances you carry. So the cynical "banksters" have responded to that threat by trying to rush in the increases right now.
Another danger people are facing is that their credit line may be reduced or closed in the blink of an eye. That's why Clark recommends that you open additional lines of credit as a form of insurance against possible closures of your existing cards.
When you consider that 30% of a credit score is determined by the amount of available credit that you're using, you can see the importance of the consumer champ's advice. A low credit score could ultimately cost you a job or bring higher insurance rates.
So keep paying down your debt, but also be strategic about how you handle credit. You don't want to get in a situation where you're put in a penalty box even though you consistently make timely payments.
