| Is the economy facing a debt trap? |
| By Ankit Sharma |
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At times when the problem becomes worse, there are wider options available that range from a debt management plan to filing for bankruptcy. A debt management plan is an informal arrangement between you and your creditor as to how much you can pay, and for how long - it usually involves freezing interest as long as you pay back the principal. On the other hand one can file a bankruptcy when all the assets are sold out. Also there are individual voluntary agreements (IVA). These are legally binding agreements between you and your creditor for paying off, only a part of the debt in small installments, over a much longer period of time. IVA providers as well as a debt management company charge a fee for providing their facility. Such refinancing options would always help a person escape from bad times but it would always shift the problem for the future. Thus there is a need for a formal law to overcome debt problems and save the economy from falling into a trap. Avoid a debt It is advisable to prevent oneself from getting into a bad situation. There are some everyday tips that can help one from falling into a debt trap. - You may be tempted to buy a lot of things with credit cards. Use credit cards sensibly. One of the easiest ways of getting into a debt trap is courtesy a credit card.
- Stay within 30% of your credit limit and try to pay off the entire amount of outstanding dues before the last date. If you carry forward the dues, by just paying the minimum amount you end up paying a lot more in the long run. Banks charge highest interest rates for credit card dues.
- Always think about the incidental costs after you take a decision to buy any expensive item. You may think that buying a car will just involve paying off the loan amount. It comes with lot of other maintenance and fuel charges, which you should be geared up to pay.
- Never pay for daily requirements with credit cards. Once you get addicted, it is very difficult to get out of the credit trap.
- If you are planning to buy a house through a home loan then make sure monthly EMIs don't exceed 40-45% of your take home salary. If you are going for car, or any other loan, your EMIs should not exceed more than 10-15 % of the take home salary.
- Always keep a contingency fund ready by saving a certain amount of your income. You never know when an emergency may arise. Borrowing from the bank or anyone else is not a good idea. With interest rates soaring, it is better to keep away from personal loans.
- If you do not have ready cash to pay for anything, don't accept offers on credit unless you read the fine print of the offers. Many shops offer goods on credit. Make sure you know every detail about the deal.
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| (Comments Posted : 7) |
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| 1. |
The dangers cancer cards of India.
It is better to call the credit cards as cancer card of the nation Take for the example,
The CANCER cards of India ( Credit card) . The simple interest rate is 39% 46% PA. The street goons interest is less than 36% PA. That too with out late fess, service charges, hidden costs etc.
If you include the service charge and annual fee, late, fee once in a year, the interest rate is very close to 50% to 55 percent. Naturally, out of 100 people, 15 to 20 percent card members fail to pay and become defaulters and want to create a situation like USA?
The risk is deliberately created by private banks and foreign banks to justify the high rate of interest. All banks admitted that the risk factor is near about 3 to 4 percent in USA
Were as in India or at any developing countries the risk factor is 4 to 6 percent .
if we believe the Credit card issuing banks arguments. The figures may be right.
But, It is very difficult to understand the logic. Just for 2 percent extra risk 200 percent extra interest rate?. It may be true that two percent risk factor is high in India Just for two percent risk 200 percent high interest? USA Credit card interest rate is 12 to 15 percent PA with out goons. It is clear path for exploitation in the name service, investment etc.
Recently, The many private banks applied against the consumer court judgment related to interest rate etc. The bankers claims that the customers agreed and signed. Is any other part of the world the credit cards issued with out taking any signature of the card holder ? As there are many points to rise, the list is endless.
It is surprised to note , why Government and concern authorities are extremely silent ? There must be some reason for the inaction and for the smooth operation of exploitation!! Who all are the gainers out of the exploitation behind the screen?
The silent and inaction is the proof, that some benefits is passed on by banks to
Exploit people of India in the name of free market and investment.
In practical, it is basically allowed for free to loot, and free to exploit.
It is a passion of many foreign and private banks to hire goons for recovery.
The bankers officially termed them as recovery agents. It is surprised to note the banks appointed recovery agent .Is the banks do not aware that India have judiciary systems?
Is the bankers feel the law of the nation is useless and weak? Or the bankers feel that they are above the law of our nation? The surprise element of the government role was silent. why concern authority not questioned about the recovery agents of Bank?
What is massage to the world and to people of India please? Few valuable lives too lost due to the harassment of goons.
If, concern authorities and finance related department is not aware and unable to manage the private bankers. The Government must allow people to appoint recovery agents to collect the excessive charges from the bank. If bank have the right to appoint recovery agents, why people of India don’t have the same right?
The Govt must allow or introduce a law to form a recovery agency from the bank for excessive charges . The law should be equal to every one. The foreign and private banks have no respect or least cared the law of our nation. The concern authority only needs some good dinner party at good star hotels. The people’s grievances are pushed back..
The govt may at least apply a strong regulation to stop the exploitation..
Free market does not mean exploitation. FREE TO LOOT!!!
The best thing is to do just boycott the services of exploiters. If there is no customer to sign for the bank service then there is no exploitation. They will come down. if they want to do business with people of India. As, they are not doing business only with so called VVIPS.
The farmers fail to pay the loan amount, the Govt jumped with a package of 60000 thousand core. It is good. But, want about EMI payer’s and Credit card holders interest?
If, the credit card interest rate between 18 to 22 percent is justified. We don’t believe in charity too . We want justice only!
The interesting part is of the EMI payers and credit card members put together, it is near about 36 million to 40 million members , they are very effective voters too. Plus the family members of EMI payers and credit card holder are not less than 80 million to 100 million.
If , any political part wish to rise the issue for political gain. They may be getting near about 4 to 5 percent vote. If they come to power , the situation may be worst than Singur.
Before election let the political parties decide is they want the exploiting banks or people of India . The 4 to 5 percent vote , for coming election with out any extra efforts.
Is any one there to take the issue please. |
| pavitran (Posted: Oct 19, 2008) |
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| 2. |
There is an asset bubble in the economy. Unfortunately, it is so bad, that even homes re-possessed are not finding buyers at the current rates. Instead of letting asset prices cool off, the Govt. has started tinkering with lending to builders and businesses to get the heat off. This liquidity infusion will continue and will lead to a bigger mess in another 12-18 months. Till then, sit back and relax, and enjoy watching the fun. The middle class has always been a silent spectator. It happens to be election time in both the US and India, and whoever wins, will regret having won. |
| Rajan R Vaswani (Posted: Oct 15, 2008) |
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| 3. |
Let us see what happen in the next three to four months.I hope that it will good.
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timothy
[url=http://www.stop-credit-card-debt.com]Credit Card Debt[/url] |
| timothycrew (Posted: Oct 15, 2008) |
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