IVA & Debt Consolidation Advice

With credit card debt at an all-time high, banks are writing off billions of dollars in credit card debt. Part of the problem lies with lax approval rates in the past, and now they are paying the price for those decisions. Not only that, decisions to raise credit limits without a customer asking for it and sending out black credit card checks has added to the amount of debt problems that cardholders have faced.

In order to prevent customers going into further debt, BarclayCard has begun to take auction of its own by reducing credit limits on cards and eliminating cash advances totally. In addition, they are monitoring the credit activities of their customers in order to assure that they are not acquiring an unreasonable debt load that may inhibit their ability to pay off their credit card debt. By doing this, some customers may find that their credit limits are reduced by the bank in order to assure that they do not acquire a large amount of debt and be unable to repay it. In addition, Barclaycard is declining 50% of new credit card applications in an effort to reduce costs associated with bad debt write offs.

Though these measures may seem hard for the potential new credit card holder, they are a necessary part of the efforts of card issuers to continue making a profit. That is, after all, why they are in business, and if they cannot make a profit, there is no profitability for them to continue issuing credit cards. As long as consumers continue to take on more debt then they can afford to repay, credit card issuers will be forced to maintain tighter credit policies in order to offset the losses from bad debts. Any change in that policy will need to come from consumers changing the way they handle their debt.