Debt Relief Services – Is The Debt Crisis Due To Increased Applicability?
After the dot com bubble came the credit bubble in the country. During this period banks and card companies cave loans to all and sunday without proper assessment of their ability to repay. In fact the eligibility factors for getting a credit card were so low that almost everyone could get not just one but many cards. The result was that people got carried away by the easily available credit. On one hand they kept maxing the cards they already possessed and on the other hand there was no dirh of new cards being actually thrown at them. This kept on until the debtors realized that they had incurred huge unsecured debts. This was in addition to the various other necessary loans like home loan, car loan, consumer loans etc.
However the question arises that how the common individual get so entrapped by debt. The answer is the avarice of the credit card companies. These companies charged exorbitant interests on card loans. This meant that the first few installments would cover the entire money that the credit card company had spent. This is the reason that they dialed out credit cards by the hundreds. Getting a credit card was never so easy as in the times before the credit bubble burst. People did not realize that they ever had to repay the money they were spending with huge interests. They just got entranced by the easy credit available due to easily available credit cards and continued to live beyond their means.
Only when they ended up with huge card bills every month did the debtors realize their mistake. They found that paying the minimum amount each month was not enough to pay off their credit card loans. In fact these payments were probably only covering the interest. At such a pace it would take them 10 to 100 years to repay their debts. A lot of such debts started opting for debt settlement or worse still bankruptcy. This is when the card companies realized their mistake and started taking damage control steps. However it was too late for both parties and the debt situation in the country had hit a crisis like one never seen before.