Donald Trump's campaign for president on Wednesday proposed raising the interest rates on some home loans to as much as 15 percent.The Trump Mortgage Bank, a subsidiary of his campaign, is the first big mortgage lender to go ahead with such a plan.The move comes after Trump, who has proposed closing the so-called revolving door between Wall Street and the White House, said in a recent interview th...
Credit cards, mortgages and other debt products have become a huge source of consumer debt, which is now the third biggest source of private debt worldwide.
However, these products are also a growing source of concern.
This is because the credit card and mortgage market has seen a dramatic rise in the number of defaults and bankruptcies in recent years, particularly in countries with weak banking systems and a growing number of consumers who are turning to online payment options.
It is a major concern that the growing number and popularity of online payment solutions could lead to defaults and bankruptcy, says James T. Wilson, a financial services professor at the University of Illinois.
“It’s the biggest concern I’ve heard about online payment for years, and that’s not something that has changed in the last three years,” he said.
A lack of regulation and a lack of transparency in the way consumers access these online payment products, Mr Wilson said, have made them a growing threat to consumer safety.
Credit card debt, on the other hand, has not seen much change.
In fact, credit card debt has remained relatively stable for most of the past five years, according to the Bank of America Merrill Lynch research firm.
The latest figures show the total debt that consumers carry is estimated to be $6.5 trillion in the US, according the credit bureau.
But it is only about $1.4 trillion more than it was just five years ago, which means that credit card companies are now more than five times as likely to default on consumer debts.
According to a recent report by the Credit Card Industry Council, the average amount that consumers are likely to end up owing on credit card loans is $1,639 on average.
When combined with the fact that many of these debts are still secured by the same underlying credit, this creates a significant risk that consumers may end up defaulting on their debts and becoming victims of fraud, says the Credit Cards Association.
Many credit card users, including consumers who have not taken on new debt, are now turning to alternative payment options, such as using credit cards to pay for purchases online, and credit cards and mobile apps.
There is also a significant shift towards prepaid cards, which are not subject to the same level of scrutiny as other consumer debt products, and which can be used to make online payments without having to pay monthly fees.
Even in areas where online payments are prevalent, such the US and Europe, consumers still tend to use their credit cards for shopping, entertainment and other routine transactions.
So what can consumers do to protect themselves from credit card defaults?
Firstly, there is no substitute for a good credit score.
Some credit scores can be useful for identifying the creditworthiness of a person and help identify the likelihood of a default.
To get a good score, you should be able to get a loan approved for a credit card from one of the major credit bureaus, including Experian and TransUnion, and be eligible for a free credit report from Equifax.
If you don’t have a credit score, it is a good idea to get one to help you determine how much interest you should pay on your credit card.
Another important step is to get the loan secured and have it processed in a timely manner, says Mr Wilson.
Finally, you may want to consider using a debit card instead of a credit one.
This is particularly true for those who have a low income and are unable to pay the full amount in cash.
More: How to avoid credit card fraud