Credit Card blues

A growing recession and leftover Christmas Debt is expected to make January through March the busiest's times's of the year for financial planners. MPB's Lawayne Childrey reports.

Racking up credit card debt is part of the Christmas shopping routine for John Davis of Jackson.

"I bought a book for my mom, I think that was around $50 and then uh some stuff from Bass pro Shops for my dad so uh. And then i got a sister and a brother inlaw, total probably $300 or so".

Surveys show that as home sales decline and home equity loans dry up, consumers are turning to their credit cards as a source of cash. Sherry Rainey is with the Consumer Credit Counseling Service of Jackson. She says business always spikes right after Christmas but this year is expected worst.

"Because of the economic hardship sometimes it's just so much easier to use that card in lew of money because it's obviously providing you with whatever that need is or that want is in some cases. but people often pay the consequences long after that purchase has been made trying to pay it off".

Rainey believes many consumers may already be feeling the credit card blues.

"And when those times happen we advise them to sit down with a blank sheet of paper , write down everyone they owe and how much they owe. And we advise people to pay more than the minimum. That's hard for a lot of people but honestly that's the only way you can ever get ahead and see some immediate results".

Missing payments can lead to even higher interest rates. But for Davis it also meant having to deal with the hassles of collection agencies.

"they backup and then people call your health and want money and you know you're young and do stupid stuff and you have to learn the hard way. you know I think everybody goes through that kind of thing".

Paying the full balance at the end of the month is the best way to avoid credit dilemmas. But when a person is consumed with debt, Rainy says it may not always be so simple.

"They've used their mortgage money or their utility money to shop for christmas. And then after they realize Christmas was one day and now they've got the rest of the year to live for they don't know where to turn and so they come in looking for our help. and we're able to look with that person at what their income is and what their expenditures are and they're able to offer some sound advice about how to pay off that credit card debt".

New federal rules set to go into effect in 2010 will block lenders from reprising interest rates. It will also require banks to give consumers a reasonable amount of time to to make credit card payments. For MPB News, I'm Lawayne Childrey.