Credit Card Debt, Borrowing Fall as CFPB Takes Aim at Add-On Costs

July as consumer debt declined, even as Americans boosted their spending by the most in five months. The Post said it was the first time that Americans cut back on borrowing in nearly a year, adding that the drop in credit card debt offsets "a small rise in a measure of auto and student loans."

This came less than a week after the Detroit Free Press said that more credit card holders and consumer groups could also be saying good riddance to very costly add-on products, such as so-called "credit-protection plans." This is because the Consumer Financial Protection Bureau (CFPB) is putting multiple institutions on notice about misleading debt-protection products and consumer insurance. These plans are under fire from the CFPB for deceptive marketing practices, and the Free Press reported that one settlement with regulators resulted in Capital One Bank refunding about $150 million to 2.5 million customers as well as paying $60 million in penalties.

While these are all encouraging developments that can hopefully help more individuals avoid the burden of credit card debt, there are still other concerns that we will discuss in our next blog post. Are you currently overwhelmed with credit card bills? You should know that filing Chapter 7 or Chapter 13 bankruptcy can end calls from debt collectors and may be able to give you a fresh start by wiping out the credit card debt or allowing you to only pay back a fraction of what you owe. Fill out the form located on this page or contact our firm at (866) 930-7482 to see what our Chicago bankruptcy lawyers can do for you.

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