Written By: Karen Deis (Special thanks to subscriber Barb Babcock, Lenders Depot, for suggesting that we write an article on this topic.)
There is a huge financial shift happening this month (December 2005) that may affect over 115 million credit card holders and that could have a substantial impact on your business.
First...the Good News - The Office of the Comptroller of the Currency (Bureau of the US Treasury) is cracking down on credit card companies on arbitrary interest rate increases, marketing tactics and account management practices.
...and the Bad News - Monthly credit card payments are expected to double (or triple) based upon the new guidelines. It could mean that a person with a credit card balance of $5,000 (now requiring a $100 per month) will now be socked with a payment of $278 per month (based on the new payment formulas).
...and the Good News - This is your opportunity to refinance credit card debt, lower their monthly payments and increase cash flow. And, you need to do it now - because the impact of the huge increases will put a severe strain on their budget - not only because of the required increases - but also because of additional spending over the holidays and increases in the prime rate.
...and the Bad News - It will have a serious effect on the underwriting of your loans too.
