Managing your credit cards in a recession

Do you have one or more credit cards? Are you using them to pay for daily expenses like gas or groceries? Have any of the card issuers recently changed repayment terms, interest rates or adjusted your spending limit? If so, then read on.

Credit card losses are at an all-time high and, with unemployment on the rise, we can see that U.S. consumers are struggling with debt. Some have simply overspent, while others are using their credit cards to survive. Regardless of the reason, this frightening trend shows us that most consumers are not in a position to make big purchases like cars or homes, and this is not likely to change soon. At the same time, card issuers are trying to generate cash flow and cut their losses by terminating credit, raising interest rates and fees, and increasing monthly payment levels.

This lack of spending by both consumers and banks will further stagnate an already poor economy, dragging out the recession beyond 2009. So what can you or should you do about it. Should you pay down your debt, save every extra penny, or keep using those credit cards? My answer – it depends. It depends on your individual situation:  your income, assets, savings, investments, debt-to-income ratio, risk tolerance, time line before retirement, stage of life and more. All of these factors impact what you should be spending, saving or investing right now and where your money should go.

To learn how to manage your individual financial situation and protect yourself against a worsening economy, contact me for a free, no obligation consultation. I can analyze your current situation, explain what economic experts like Harry Dent, Jr. are predicting for the future, and offer you guidance on the best moves to make with your money now. The financial markets and economy are changing daily, so don’t delay. Find out what you can do to protect yourself today.

Scott K. Warner
Life Design Financial
Follow me on Twitter:  LifeDesignFin

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