Days of easy credit….? Going, going, went.

Days of easy credit….? Going, going, went.

Get ready to pay cash for more things next year. While you’ve been sorting through the cards in your wallet looking for the one with the lowest balance or lowest interest rate, your credit card company has been sorting through your account history.

Big credit’s new year’s resolution for 2010? It’s to see a lot less of you.

In recent years, your credit card company has had to write off around 10% of the debt it owns. This % is not good for their business model. In recent years, big credit made up the difference by charging fees and rates that would make Tony Soprano envious. That party ends February 2010 with the new Federal regulations that will keep them from being able to extort their customers.

Consequently, it’s time for big credit to change its business model and eliminate the chafe (hint: that’s you).

I write this because as a bankruptcy attorney, I sometimes meet with clients who still have ‘some’ credit available on their cards. These folks are unwilling to file bankruptcy because they can’t imagine life without the plastic ‘safety’ net. It’s scary to contemplate; I agree.

But we are now at the point when consumers should see the writing on the wall. It’s time to start asking if plastic is a ‘safety’ net, or a fishing net?

The days of easy credit are over. We will not soon return to the days of signature applications approved without income verification.

If your credit is good and you’ve got control over the plastic, congratulations. If you’re hovering on the precipice, waking up in the middle of the night worrying about minimum payments and overnight payment addresses, we should talk.

If you don’t get rid of the cards yourself, your credit card company may be planning to do it for you. And no, they won’t do it in a way that preserves your credit score.

Filing bankruptcy will give you a fresh start without the debt lashed around your neck. You’ll be given the opportunity to rebuild and renew.

If you’re weighing the option of filing bankruptcy or sticking it out by paying minimum balances, take comfort in the knowledge that those who file bankruptcy will not be alone with their debit cards and checkbooks when big credit gets done jettisoning its customers. The difference will be that those who stick it out paying minimum balances will be at the mercy and whim of profit margins and big credit.

Those who talk to a bankruptcy attorney who will analyze their financial situation to determine if filing bankruptcy will provide a fresh start will be on their way out of this mess.

Check out this article published November 10, 2009 in the New York Times for more information about big credit’s plans for profitability.