Tag Archives: DebtManagement

Republican Tax Modifications Aim to Make It More Difficult to Take on Debts

The American debt crisis has gotten way out of hand. According to government data cited in a recent LA Times article, US consumer debt has reached 12.58 trillion, topping the amount of debt in 2008 which led to the recession. Data indicates that borrowers are more responsible in repaying their debts now, but the amount of debt is still very alarming. Legislators are now aiming to pass legislation that would make business have to pay taxes on debts that they take out. New Tax Modification Explained The new modification is the elimination of the ability for businesses to write off debt interest as a tax deduction. Republican lawmakers propose that this new tax revision will generate about 1.5 trillion in government revenue over a decade. Private equity companies and wall street companies who have debt-oriented business models would be most affected. This change is designed to limit the amount of…
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Why Is Consumer Debt at Record High Levels?

According to a 2017 first quarter report completed by the Federal Reserve Bank of New York, consumer debt is now at an all time high in the United States, reaching $12.73 trillion. This means that now more people than ever before are experiencing serious debt problems. The biggest contributors to the increase in debt are student and auto loans. Reasons Why People Get Trapped in Loan Debt Bad auto loans: As with all debts, borrowers with lower credit scores are the most vulnerable. One of the main reasons for the increase in auto debt is that loans are easy to get for people with bad credit and little financial knowledge, making them very vulnerable to predatory lending practices. Taking on an auto loan with bad credit will get you a loan with a higher monthly payment and interest rate. Failure to pay on the loan can cause the debt to…
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Why Store Credit Cards Might Be a Bad Idea

A store credit card can seem like a great option for shoppers who frequent certain stores. What is the harm in getting additional credit, when you will make the money back through the awesome discounts the store salespeople are offering, right? The reality is, most people will lose more money than they will gain by signing up for a store credit card. How Do Store Credit Cards Cause Debt? Easily obtainable: Store credit cards are often issued to people with financial troubles who may not even qualify for a regular credit card. Retail associates may not be trained in explaining the true extend of the financial burden that the card entails. This causes serious debt problems for those who are already financially vulnerable. Many retailers may not even check a borrower’s credit history. Excessively high interest: The majority of store credit cards charge an interest rate on purchases that is…
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