Lexington, KY - New rules on credit card practices, handed down by the Federal Reserve Board, went into effect in February. According to experts, these rules seek to curb many extremely lucrative practices in the banking industry that have proven abusive to credit card holders.
While credit card issuers reportedly are primarily concerned about how the regulations may impact their high profits, users of the ubiquitous cards should be equally apprehensive of what may happen next.
"The world of debt - everything from credit cards to mortgages and student loans - is completely different," says Jordan Goodman in his just-released book Master Your Debt. "The game has completely changed."
Changes in credit card regulations are just one part of the changing landscape of debt management, Goodman says in his book written with consumer advocate and mortgage expert Bill Westrom. The dramatic changes, he insists, are here to stay.
The consumer, he says, will see the credit card offers that used to fill mailboxes disappear. Teaser rates will be gone, replaced by "interest rates so high you'd think the Mob was involved," he says. Consumers may find it impossible to borrow money at any price.
What hasn't changed, he tells us, is debt. According to the Federal Reserve, American consumers owe close to $3 trillion, not including mortgages. The average credit card holder owes $11,000 in debt on 13 cards. One in every three homeowners owes more on their homes than the homes are worth.
The good news, Goodman says, is that the pull back is positive. The existing American debt levels were unsustainable in the long term. There is "a renewed feeling of responsibility in the air as banks and consumers ratchet back," Goodman says. There are more new ways of protecting your credit score, your home and your family.
Goodman's book is "news you can use" for consumers. Up-to-date information detailing new changes, and those still to come, make the book today's financial essential. A 30-year career journalist with Money magazine, Goodman delivers practical suggestions in ways that can be easily understood and applied. While there are numerous authors writing on the importance of lowering debt or becoming debt-free, Goodman's valuable tips and awareness of current circumstances make him the expert every consumer should read.
Jordan is a straightforward, enthusiastic coach for all of us with debt. Given the opportunity to share a single piece of financial advice, he says he would suggest this: "Don't lie to yourself about your money."
Once you stop lying to yourself about how much you owe, your credit card interest rates and your home value, you can improve your financial situation. In order to find a starting point, honesty is the only policy.
Next, you need financial records, he says, and these include doing the type of assessments often associated with business. For effective financial management, the author recommends preparing net worth and cash flow statements, as well as performing a risk test and debt analysis.
This is the foundation needed to improve financial standing, including credit and debt. It also creates a sense of control when you make this type of fresh start.
The author deals with the issues of the day, telling us that "the old rules and ways of managing money and debt won't work." The new answers are well researched and should be read by every consumer. New products and services are presented that are invaluable for navigating the new debt and money management landscape.
Touted as his "favorite secret," Goodman reveals a mortgage "equity acceleration" plan used extensively in Australia and the United Kingdom. This is not the biweekly mortgage payment plan that surfaced a few years ago. Based on understanding how interest is calculated in a mortgage, it can pay off a 30-year fixed rate mortgage within five to seven years.
Mastering debt and financial management must be permanent, lifelong strategies, Goodman says. In concluding his book, he gives strategies for every age, from teenagers to seniors. Whatever your age or financial status, if you want to master debt, this is a superb guidebook to help you start the trip.