Debt Relief

Okay so in todays economic climate, we are all at risk for debt problems. But here is what I don't understand: what is the logic behind credit card companies increasing minimum requirements, most likely pushing persons further into debt and basically pushing people into using debt relief programs. I do not understand how this is a good idea?

All these commercials go on and on about helping you decrease your debt by up to 70%. What they don't tell you is that first you have to be deliquent. Then they establish an account where you will deposit a set amount that you can handle monthly. Lets say you have minumum payments adding up to $800 a month. So you it would be helpful to only have to pay $500 per month. Basically you will be putting that $500 payment into a trust, once you have half of the money you owe in that account (per card) then they will negotiate with the credit card company to pay half of your owed debt. And this process continues until all yoru cards are paid off.

Great idea right?

The problem is that you can't get this help until you are behind, OR you become behind as you build the trust account because you STOP paying the credit cards. So your credit score goes down, temporarily, but once things are paid off you can re-establish your credit and build it up again.

So logic would say that increasing credit card minumums on already strapped people will just increase the likelihood that they will be unable to make their payments, finance and late charges will apply, and many people will be forced to utilize debt relief programs.

In my humble opinion, credit card companies should DECREASE minimum payments, which would help people make payments on time, be less likely to get behind on payments, maybe even spend more which inturn positively impacts the economy. Maybe Government should have gotten involved in credit card companies instead of the auto and mortgage companies.