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Should the Deeply Indebted Get Credit Card Forgiveness?

Consumers are increasingly defaulting on their credit card balances and banks are suffering because of the massive debt write offs due to the defaults. To remedy the situation, an alliance of financial industry interests and consumer advocates proposed a special program to the government. As legislative director for Consumer Federation Travis Plunkett says, "In this case we have a clear common interest."

Most of the biggest credit card banks are on board with a pilot program that allows lenders to forgive up to 40 percent of a borrowers debt, with the maximum forgiveness going to consumers nearing bankruptcy. Existing rules that allow for the reduction of principal require the debt to be paid in a matter of months, while the pilot program will allow the remaining debt to be paid over several years.

Do you think the pilot program is a good idea?


Join The Conversation
nowcow1 nowcow1 8 years
What about the small business owners that opened before this terrible economic turn down. I would love it if someone would work with the business debt I have incurred and now can't pay back. My sales are down, I am managing my inventory and payroll, but it is not enough.
Amandaletta Amandaletta 8 years
I'm so glad I was smart enough not to use my credit card when I didn't need to. But I could use a little help on my student loans! :)
snowysakurasky snowysakurasky 8 years
thats ridiculous! unless its just the interest money that would be forgiven?
allysin allysin 8 years
If we forgive credit card debt, then we have to forgive student loan debt.
prestopink prestopink 8 years
I absolutely agree to this, I feel it is utterly absurd to give so much credit to people who do not have the money, resources or even credit score to back it up. Credit card companies can not say they did not see it coming because they saw the prospect financial situation before the approval. When companies only look at profit and operate on how to keep and maintain profit everywhere you have this growing problem where unfortunately the gig is up. And guess what, they could not pay then, nor could they pay now.
misslilad misslilad 8 years
i think that people should be held responsible for their debt. I am not against letting them have more time to pay it off, but they should pay it off. This is coming from someone who has been slowly paying off her debt (over 25K) by herself. As of this month, I am now down to 10K and will only have 2 cards to pay off, instead of 3. Most of my debt was accrued when I was unemployed so it wasn't frivolous, but it is still my debt and I am responsible for it. I have such a feeling of accomplishment knowing that one is down and two to go
FashionLuvr FashionLuvr 8 years
Copyeditor alert: the headline should read "Should The Deeply Indebted Get Credit Card Forgiveness?" But really, it doesn't seem fair that people aren't held accountable for their own debt.
hardcorecupcakex hardcorecupcakex 8 years
I agree with RosaDilia 100%.It these people fault who brought stuff knowing they couldn't afford it to start out with or they thought could afford later on then they couldn't.
amers230 amers230 8 years
i'm all for no interest or limited fees but seriously, you bought it you pay for it, end of story. so not fair to those of us who worked hard to actually get out of debt (or are in the process lol)
geebers geebers 8 years
No I can understand when this comes to student loans or homes (and even though I truly question those that buy a home they cannot afford). I have a hard time supporting it for people who charge and don't have money to pay. Seriously- learn to manage your money and start buying what you can actually afford. But I suppose that if people all go bankrupt or just add to their debt it could spiral out of control. I really like rosadillia;s suggestion.
sundrops sundrops 8 years
For somebody who is NO LONGER using credit I think an interest free payback plan would be soooo helpful. However for someone who is continuing to use credit they would just fall right back in to where they were.
Berlin Berlin 8 years
It's one thing to have forgiveness when you're losing your home for not being able to make the payments, but running up a credit card on frivolous expenses? Not a chance!
Jude-C Jude-C 8 years
Savvy, you meant the deeply indebted, not deeply the indebted, right? ;)
GlowingMoon GlowingMoon 8 years
Shadowdamage Shadowdamage 8 years
Debt forgiveness? No. I think that's a bad idea to be honest. But a freeze on the card, and subsequent fees and extraneous "overlimit charges", I think, is prudent. Its blatant robbery to charge people more than once over their limit, lock down the card, charge the appropriate interest rate and work out a suitable payoff plan.
colormesticky colormesticky 8 years
Nope. If you can't pay it, don't use it.
psterling psterling 8 years
I'm all for helping people, but this plan just rewards bad behavior and makes responsible people like me mad. If credit card companies really want to do help, they ought to reduce or eliminate interest on the principal for X amount of months and get these people on a plan to pay them back in that time frame.
CaterpillarGirl CaterpillarGirl 8 years
No way, This encourages bad behavior and rewards it.
sweetpeabrina sweetpeabrina 8 years
Nope. I think help should be given to people with student loans instead. :) At least that money (hopefully) wasn't wasted keeping up with the Jones'.
lil_bit_edgy lil_bit_edgy 8 years
i agree with everyone else but if someone is really down on their luck wit medical debt they put on their CC and loosing their job, then i think they should get a break.
heartbreakerx62x heartbreakerx62x 8 years
I agree with all of you! Why should people who lived beyond their means and charged vacations, stuff at Gucci and expensive dinners be forgiven? If that is the case, then why didn't I do that!
syako syako 8 years
All these plans simply reward bad behavior What happened to live and learn?
Shopaholichunny Shopaholichunny 8 years
I agree with Rosa. This is their own doing and they deserve to pay for the consequences. (literally)
nslods nslods 8 years
I agree with RosaDilia. The consumer should have to face the consequences for running up debt they can't afford. Why let them get an easier way out of their debt that they created in the first place?
RosaDilia RosaDilia 8 years
IMO, I think the creditors should freeze the individual's credit card when they've reached their limit and/or don't make payments on time. Once they've paid at least 70% of the balance then the card is again available for use.
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