Tag Archive | Bankruptcy

Credit Card Debt will rise to HOW MUCH in 2016??

Just about everyone is at the very least thinking about reducing their level of debt. It is no fun walking around from one day to the next, owing creditors thousands of dollars. And while not everyone will take action to reduce their consumer debt levels, the fact that people are becoming more informed about dealing with debt is most definitely a good thing. A recent study indicates that by the end of the year credit card debt here in the United States is going to rise to… wait for it… a stunning $55.billion. The study that revealed this new figure was conducted by CardHub and used information from the Fed’s preliminary G.19 consumer credit report.098303c025b64b3da866d55de5907528

According to this report, American consumers paid nearly $35 billion toward their credit card debt in just the first quarter of 2015. This represents a seven percent increase from the first quarters of 2013 and 2014. Some of this increase has been attributed to factors, like the reception of annual bonuses, New Year’s resolutions and people getting their tax returns. Whether or not these things contributed toward debt payments being so low at the beginning of 2015 has yet to be determined. The bottom line seems to be that there was just more debt to pay in 2014 than there had been previously.

Previous year’s studies have usually shown that the 1st quarter of the year regularly results in plenty of debt being paid off, only for that debt to raise back up over the remainder of the year. Going back as far as 2009, the first quarters of each year showed the average pay off level reaching $35.9 billion with the median amount being about $33.5 billion.

Back in 2009 American consumers paid off about $874 million in debt. By the time 2010 rolled around debt began to eclipse payment levels by about $2.5 billion. And when it got to be 20111, things got even uglier, with the level jumping 1,696 percent. The year 2012 saw things settling down by about $12 billion, but credit card use was still on the rise. Debt increased in 2013 by nearly $39 billion, and didn’t slow down in 2014. That year, debt increased by $57 billion. There is no doubt about it – credit card debt can increase so quickly that it is no wonder it gets out of control on a nationwide level. According to data provided by CardHub’s study, American consumers currently owe about $831.2 billion in consumer credit card debt, with the average per-household amount being $7,177.

As 2015 crept into the final quarter, the Fed’s G.19 report indicated that debt levels were continuing to rise. Revolving debt (think credit cards here) rose up to nearly $900 billion, and that after staying close to the $890 billion mark since the fourth quarter of the previous year. Credit card debt, however, was not the only type of debt to increase. The total amount of consumer debt – revolving debt, student loans, car loans, etc… – rose nearly $21 billion dollars in April of 2015. With that debt tallied in the complete number for total debt levels settles in at $3.384 TRILLION!

As much information as people have about the importance of avoiding getting into debt, it is almost shocking that debt levels continue to increase. But, with employment issues and salaries pretty much stagnating in recent years, it is understandable that many working class American consumers are simply relying on their credit cards and other forms of credit in order to just keep their heads above water each month.

Bad Credit Scores and Financial Careers Do Not Mix

credit-scoreA good credit score can get you a lot of things. You can get lower interest rates on mortgages and auto loans when your credit score is high. You might even get more affordable insurance premiums if you have a solid credit history. And here’s something you may not have considered – a good credit score can actually improve your marketability in today’s job market. There are lots of employers that use credit reports to weed out employees who have lower scores.

Can you work in Finance with a Subprime Credit Score?

Employment options in the financial sector are even more limited for people who have low credit scores. If you have the desire to be a broker, banker or to start a career in the financial industry, you may want to keep tight reins on your spending habits, and do all that you can to improve your credit score. Even if you know everything there is to know about the financial industry, if your credit score doesn’t reflect that practical, financial knowledge, potential employers may turn you down flat.

Why the Financial Industry Frowns on Employees with Bad Credit

It may seem unfair to think about the possibility of losing out on a great job in the financial industry because of your credit score. It is important, though, to consider things from the employer’s perspective. Some of the folks doing the hiring in this industry believe that if a person has trouble managing their own finances that they may not be the best candidate to handle the finances of potential customers and business clients. Some companies in the financial sector also have to consider their reputation in the market place. If word gets out that a company is hiring people with low credit scores or bankruptcies in their past, this may prove to damage the credibility of the company in question.

A Matter of Public Records

Speaking of bankruptcies, it is important to know that bankruptcy filings are readily available, public records. Companies in the financial industry regularly pull reports via the FINRA BrokerCheck system. Being as bankruptcy still carries a bit of a stigma in the world of high finances, the better brokerage firms and banks can – and very often do – avoid hiring people who have filed for bankruptcy in the past.

Loss Prevention

Although the focus so far has been on financial industry jobs, you should know that there are employers in other industries that use your credit report to determine whether or not they will hire you. As you are probably well aware, there are a lot of companies that deal with employee theft. And while a low credit score does not mean you have the potential to steal, companies sometimes believe that people with low credit scores are more apt to steal from their employers. Again, this is not fair to the overwhelming majority of people with low credit scores, but it is a policy that more and more companies are adhering to these days.

Although you may squeak by when you apply for a job at some financial-based companies, you should be prepared to undergo very intensive background checks any time you seek employment in the financial industry. Regardless of the type of job that you are currently looking for, or that you look for in the future, it is always good to have as high of a credit score as you can achieve. So do your best to improve your credit score to improve your chances of landing that job you have been dreaming about.