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SolveYourProblem.com
Article Series: Debt Relief & Debt Consolidation
I Want To Get
Rid Of My Debt...NOW!
Get
Out Of Debt: Debt Relief
From A Unique Perspective
Debt problems,
debt consolidation programs and debt management are so pervasive
in society today, I thought I might share a unique perspective you may not be aware of. This point of view is from a business
standpoint.
- Do you want to know why you receive endless streams of credit
card offers?
- Are you curious why creditors hardly ever show up for consumer
bankruptcy hearings to dispute your filing?
- Have you wondered why debt consolidators are all over the
TV, radio, print and internet?
Quite simple: it's a business.
Need proof? Of course you do.
Have you ever looked at a credit card company's quarterly
filing (10-Q) or yearly filing (10-K)? You may be surprised
at what nuggets of information you find. For the purpose of
illustration, I've chosen two leading New York Stock Exchange
(NYSE) traded companies. Both shall remain nameless, yet the
facts can be gathered and confirmed quickly with a little research
by you.
> Credit card
company 1: For the quarter ended March 2005, default
rate was 3.5%
> Credit card
company 2: For the quarter ended March 2005, default
rate was 3.0%
What does this mean? It means about 3 - 3.5 out of every 100
people they issued credit cards to couldn't pay them back and
were written off.
Why is this important?
It's
a NUMBERS GAME. This is built into their business model
and taken into account when they issue these mass "pre-approval" letters
and sign up new customers. They know a percentage of you
will never be able to pay them back. It's a risk they are
willing to take. What's more is both companies still made huge profits (and
one even announced a quarterly dividend!).
> Credit
card company 1 still managed a $500 million net income
for
this
quarter.
> Credit
card company 2 still managed a $515 million net income
for
this
quarter (before one-time charges).
How do debt consolidators fit into the equation? Before you
consider bankruptcy or defaulting on your balance, their
job is persuade you to pay back these credit card companies
an amount you can better afford. In return, these debt consolidators
receive a flat fee or % of your outstanding balance. By performing
this service, the credit card companies make more money than
they would had you simply defaulted - and debt consolidation
becomes a booming industry. With average family debt between
$8,000 - $10,000 (and growing) you now can see the business
side of this. The bottom line is money.
Before you get
severely depressed or consider doing something rash you might
regret later, remember that this is a business.
Customer default rates are built into each credit
card company's business model. They know a certain
percent of you won't ever be able to pay them back. Yet,
they are still raking in
the money and printing pre-approved credit card offers
at an incredibly rapid rate.
The bottom line here is to understand the corporate
perspective. If you cannot pay back your creditors or are
in a hole so deep
you cannot get out of, shed the stigma and obligation of "I
must pay them back or else the apocalypse will come to me." To
them, you are just a number, a figure, a percentage.
Take this knowledge and choose the best option for YOU to
get out of debt.
Repeat this phrase: it's not personal, "it's
business."
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SolveYourProblem.com
: 2006
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