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Cardholders Expected to Get Better Credit Scores

By Sally Maison
Published: Thursday, October 15th, 2009

Industry specialists predict a brighter financial future for cardholders. They noted that credit card owners have been more prompt in paying back what they owe and have been more vigilant about their right to better deals from banks. Consequently, card issuers have are issuing new consumer-friendly offers which has significantly boosted consumer activities in the card sector.

Cardholders Expected to Get Better Credit ScoresRed Bluff bank client Ann Minch may have started it all but Americans in the entire United States are out to prove that they can continue what they call a “revolution.” Consumers supported her call on social networking site YouTube where she uploaded a video saying she will stop making payments if Bank of America does not drop her rates. She got what she wanted and so did most consumers. Banks are now giving consumers lower interest deals and relatively higher limits which were deprived from them at the height of recession and during the commencement of new credit card legislations.

But experts note another good sign for American consumers. Charge-offs started to decline which means card holders have been more successful in meeting their debt responsibilities. After five straight months of poor payment, Americans finally bounced back in July by managing to decrease charge-off rates for the first time in almost half a year. According to Fitch, July’s decrease in charge-offs is the only improvement they have seen since May this year. Specialists say that although 63 percent more consumers have been written off by banks this year compared to 2008, the slight decrease still means a better sign for the economy. They add that it verifies America’s recovery from recession and projects better financial future for the whole country.

Experts say charge-offs can seriously hurt credit score and continue to show its damaging effects on a person’s name for up to seven years. They note that cardholders are usually written off if they do not pay their balances 180 days past due. Once a consumer is written off, banks will no longer collect from him but he is still liable to whatever he owes. 10.55 percent of cardholders are currently written off but experts comment that the slight decrease is still to be regarded as a sign of recovery. They also note that the increase in America’s outputs, as summarized in US GDP, means that more manpower will be needed in the future. This implies lesser unemployment percentage in the next few months with American companies needing to meet worldwide demand for their products and services. Debt experts conclude that better economic climate could finally help consumers rebuild their credit scores.

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