Credit Card Debt Relief

The Obama government realized that more than 90 percent of the debt on the US population is credit card debt. Statistics also show that on an average each individual has 3.5 credit cards and most of them have a credit card debt. As a part of the credit card debt relief program, the government enacted a couple of laws that will increase government spending in an effort to cushion the economic recession and put curbs on the unfair business practices of credit card companies.

Debt Relief Act

The American Recovery and Reinvestment Act of 2009 (ARRA) promises 787 billion dollars in government spending. The money will go towards tax credits that will enable working individuals to take home larger paychecks to pay off their debt. Tax credits are also extended to organizations so they can keep employees on the payroll instead of firing them. The government has promised 288 billion dollars in tax credits and reforms as part of the Obama credit card debt relief program.

Some of the amount is in the form of government contracts and entitlements, to create new jobs and help those suffering from job cuts. Unemployment benefits have gone up due to the new act and government contracts in infrastructure are helping create and sustain jobs. This is being done as part of the government help with credit card debt.

Under the ARRA, the government has also increased it's spending in education grants and business grants. The budget of federal Pell grants has almost doubled with over 40 million dollars promised by the government towards these education grants. The Small Business Administration (SBA) is also helping women owned businesses secure government contracts. All of this is going to help the American consumer earn more money to pay off their credit card debt.

Credit Card Debt Act

A government act to safeguard the interest's of consumers and help people with credit card debt is the Credit Card Reform Act of 2009. This act has made some significant changes to the way the credit card companies conduct their business. Most significantly, it put curbs on interest rates charged by the card companies and their tactic of changing terms of contract arbitrarily.

Almost 15 percent of the income earned by credit card companies comes from fees and penalties levied on customers. To put a curb on this practice the credit reform act stipulates that card companies have a fixed due date for customers every month. Card companies are also asked to push the due date to the next business day if it falls on a weekend or bank holiday.

The government has also pre-decided the font size to be used for the credit card contract terms as part of the credit card debt relief act. It even requires card companies to make the contracts available online for government scrutiny. Credit card companies are also restricted from changing the existing interest rates without notifying the customer 45 days in advance.

As part of the government credit card debt relief and consumer protection clause card companies cannot sell credit cards to anyone under the age of 21 unless they have proof of income. Existing customers can also cancel their cards if they do not agree to new interest rates. Customers will be allowed 3 billing cycles to pay off their debts at old interest rates.

These two credit card debt relief acts are aimed at helping the American population get out of their debt. Along with these acts, you can also make requisition for consumer credit counseling services to deal with your credit card debt. Pick an agency which is a part of the National Foundation for Credit Counseling (NFCC) or Association of Independent Consumer Credit Counseling Agencies (AICCCA).