I was speaking with a young couple that are settlement recipients and heard a familiar story regarding why they are considering selling their structured settlement. With lost wages, increasing health insurance costs, and rising food costs, the family had begun to run up the balances on their credit cards. They weren’t too stressed yet because they still had plenty of room on their credit limits in case things got worse.
But there was one thing they hadn’t counted on – the credit card companies themselves. With people around the country facing foreclosures and other serious financial crises, many of them have defaulted on their credit card payments. What happened next has impacted people all over the country – even those who had not missed a credit card payment.
The client opened up one credit card statement and found that the company had cut her credit limit down to the exact amount that she owed. When she called to inquire about this change, she was shocked to find that the company she had done business with for years had determined that she fit the profile of a high risk account, and that the company had acted within their rights.
Frustrated, but realizing she didn’t have an option, she and her spouse just moved on. Unfortunately, it was only a matter of a couple of months before the other credit card companies began to follow suit. Not only did this eliminate the couple’s ‘safety net,’ but it caused their credit score to dip because all of their credit cards were now ‘maxed,’ a status that wasn’t true before the credit card companies made their changes.
Before they knew it, interest rates on their cards were rising, with the company giving them the option to agree to the new terms or close the account. The couple was in an even more difficult situation. The changes in the credit markets are negatively affecting peoples financial situations. Luckily for this couple they have the option they are exploring to convert some of their future annuity payments for cash. In their challenging situation at least they have an option most others do not.