The Obama Administration`s latest debt relief efforts include new rules to help credit card holders eliminate their debts more effectively for the year 2010 and beyond. With its results likely to show in 2011, President Barack Obama is optimistic that the bill which was passed by the Congress October 27, 2010 will be the best protection for credit card holders against the uncommon and excessive fees that debt relief companies charge them.
The new debt relief rules for credit card holders ban the charging of unusually high fees and interest rates which debt relief companies fail to justify to their customers. This move is seen to make the companies become more transparent, direct, and definite in relation to what and how they charge their card holders.
Also, the Obama administration emphasized the need to end the greedy practices of the debt relief industry which take advantage of the large unemployment rate. Economists put the unemployment rate across the country at 10 percent. With more people unable to earn, the greater number of card holders are incurring
The debt relief companies have attracted an economically vulnerable market due to the inadequacy of government unemployment benefits. Because of this, credit card holders sought the plans and programs of the debt relief industry, aside from enlisting help through the courts.
Obama said that education still remains as the best debt relief plan for all credit card holders. The new rules include an education program for credit card holders on how to manage their debt easily by themselves, with consideration of the alternatives to debt. The new rules will also end the debt relief industry practice of making payment of high fees and interest rates as a requisite for opening credit lines to their consumers, especially those who are unemployed or those who lack the capacity to repay.
Moreover, the new rules are set to enforce changes in the debt relief industry by first requiring companies to prove actual debt reduction or elimination to their credit card holders before charging fees.
To protect the vulnerable market, the Obama administration warns debt relief companies of possible sanctions should they continue to use uncommon fees charged to credit card holders who are not even notified of fee additions and changes.
Experts now advise that with the efforts of the Obama administration, responsibilities still need to be carried out by the credit card holders on their own in terms of first checking the track record of their chosen debt relief company.