Starting August 20th one of the main provisions in the bill President Obama signed in May goes into effect. While most provisions in the Credit Card Accountability, Responsibility and Disclosure Act don't take effect until next year, the advance notice requirement is part of the first phase of regulations put forth in the bill. Previously, credit card issuers could raise rates with just 15 days' notice but, with the activation of the advance notice requirement, card holders must be given a warning at least 45 days before interest rates can be hiked.

Similar to the selling off of mortgage pools to Wall Street institutions, pension funds, and insurance companies, the credit card issuers have been packaging and selling pools of credit card debt for over twenty years. The practice has accelerated over the past six years as seven of the largest issuers of credit cards packaged an increasing amount of card debt into securities and sold them to the same types of investors that buy pooled mortgages. Within the last two months, for example, JP Morgan Chase has sold over $5 billion in packaged credit card debt. 

Debt negotiation is a relatively new form of debt relief that is gaining popularity for its results in reducing credit card and consumer debt and because the process can also help homeowners avoid foreclosure by making home loan modifications more likely to be approved. There are two schools of thought on the subject; one that focuses on broken settlements, credit scores and direct negotiations while the other centers on the short and long term benefits of the practice. First, the arguments against debt negotiations:

As the major credit issuers continue to raise interest rates, fees, and payments many card holders will be looking to transfer balances to companies with, for example, lower minimum payments and fixed interest rates. For those with solid credit scores, finding new issuers that will accept balance transfers at agreeable terms will prove to be much easier than for card holders with low credit scores, large balances, and/or high ratios of debt to available credit.

A recessed economy and bursting of the real estate bubble have pushed borrowers to the point where they can no longer keep up with payments on their credit cards and consumer debt. For those searching for solutions, the decision often comes down to choosing between a variety of debt relief options. The options include debt counseling, debt consolidation, bankruptcy, and debt settlement. Of the four, debt settlement and filing bankruptcy have become the most popular of the solutions due to their advantages relating to decreasing current payments and the reductions in outstanding balances of debt. 

The lifeline for many entrepreneurs has been a battery of credit cards, used to get through slow seasons, build inventory, or buy time. According to a May 2009 study from the National Small Business Administration (NSBA), fifty nine percent of small business owners were using credit cards to finance their business, an increase of twenty percent over the level seen just five months before. The study also reported that a stunning 79% of small business owners had seen their credit cards terms get worse over the six months preceding the study. That was up from 69% in December.

The most extreme example of the hardships facing small business owners occurred in late May when credit card issuer Advanta, which focuses on small businesses, told approximately one million of their card holders that they would stop accepting new charges. The company has been hit on multiple fronts with a rise in uncollectible debt, overdue credit card payments, and the loss of its most consistent funding source, an independent trust that provides resources for new transactions. “Advanta's financial woes mean even more pressure on already-strapped business owners,” said Todd McCracken, president of the NSBA. Small businesses nationwide have been trying to replace their lost credit lines ever since the announcement.

The Credit Card Accountability, Responsibility, and Disclosure Act, which was recently passed into law, is intended to protect consumers from arbitrary and unannounced interest rate hikes, fees, and penalties charged to them by credit card companies. Despite being passed in May, the protections provided by the bill don’t go into effect until late February of 2010 which has given the credit card companies the opportunity to make everything in sight more expensive for their borrowers. Lenders have been raising rates and fees on credit cards since the fourth quarter of 2008, when the mortgage crises began taking big bites out of the profits of the issuers. Credit card companies, while fighting the passage of the bill for the first half of 2009, also anticipated its ultimate approval. That anticipation, combined with increasing losses in their credit card portfolios spurred a gradual upward creep in what it will cost a consumer to hold a credit card account.

Debt ratios for consumers across the country are at historic highs in terms of debt versus income, as a percentage of the Gross Domestic Product, and -----. As a result, a record number of consumers are seeking debt relief in the form of debt settelement, debt consolidation, debt counseling, and bankruptcy. As traumatic as going through any of these processes from start to finish can be, many consumers end up right back where they started, facing a huge debt load with monthly payments that are again out of reach. Having been buried with the burden of debt once, how does it happen that these consumers end up in the same predicament? Three behaviors typically put consumers back in harm’s way. 

As the economy continues its rough ride, the fallout from mortgage and credit card late payments and delinquencies has dropped the credit scores of consumers across the country. As credit scores take a higher profile from news reports to conversation at cocktail parties, more consumers are taking interest in their credit reports. The problem with all the information and chatter is that much of it doesn’t accurately reflect what is important regarding credit scores and what is not.

If you’re like most American’s you are doing your best to avoid new debt and pay down old debt.  However, some people are being crushed by intense credit card debt, medical bills and other forms of unsecured debt.  Many individuals are considering bankruptcy, but they don’t understand the real impact bankruptcy can have on their lives and their livelihood.

The view of people in debt changed throughout the 20th Century.  At first, it was unacceptable when turn of the century people began to buy homes however, that changed.  Debt became more and more acceptable, leading up to the roaring 20’s when people were so immersed in their debt problems that the future became bleak.  All these debt problems led to the Great Depression, which once again made debt a four letter word.  Throughout the 30’s, 40’s and 50’s, people would only get into debt to buy a home.  Heavy student loans, car loans with double digit interest rates and credit cards wouldn’t even have been considered.

Many Americans are finding themselves buried under so much credit card debt that they are considering bankruptcy.  However, there are ways to pay off your credit card debt and live a life of financial freedom, ways that are actually simpler than you might think.  Below are some tips on tackling credit card debt that will help you get through this difficult period in your life.

When you feel like you’re drowning in debt and your phone is ringing off of the hook with debt collector calls, you may start weighing your financial options. While many people rush to declare bankruptcy, ready for the pain associated with their irresponsible spending to be over as soon as possible, others are considering debt settlement. Depending on your personal financial situation, there are positives to each. However, if you don’t choose the right one for you it could leave you with years of bad credit and the struggle of rebuilding your financial future, one step at a time.

Debt problems are numerous, sometimes to numerous to think about.  Because debt causes stress, and everyone handles stress differently, there are as many different debt problems as there are people.  Debt practically robs you of money in a way that’s almost hidden.

You may not be aware of this, but credit card companies are radically altering how they charge interest rates, late fees, overdue fees and more.  You may already be drowning in credit card debt, not at all aware of how much more debt you may find yourself in.