Rising interest rates and higher gasoline prices are putting the squeeze on consumers’ budgets, and many are finding it harder to keep up with their bills.
Credit counseling agencies say that consumers are coming in in droves seeking help.
I think what's not good for the goose...
...shouldn't be ok for the gander. Businesses ought to take a lesson here.
“My phones are going crazy,” said Howard Dvorkin, president of the nonprofit Consolidated Credit Counseling Services Inc. in Fort Lauderdale, Fla. “Consumers are carrying an exorbitant amount of debt — and they don’t have any savings to fall back on if things don’t go right.”
How many of us know businesses that engage in many of these same practices? Robbing Peter to pay Paul. Taking 60 to 90 days to pay invoices. Paying partial balances, just enough to keep the creditors frustrated but not in a legal frame of mind.
An important measure of consumer financial distress, late payments on credit cards, ticked up in the first quarter, according to figures from the American Bankers Association. The Washington, D.C., based trade group said the percentage of bank cards 30 or more days past due increased to 4.40 percent in the January-March quarter from 4.27 percent in the final quarter of 2005.
Fuel prices are continuing to spike up. The Fed continues to raise short-term interest rates. Hiring is slowing. The belt tightening signs are all there. Without a plan and a reserve, businesses as well as people are going to feel the pinch.
Now, if I can just get my client's to stop making partial payments...
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