According to the Federal Reserve, the credit card charge-off rate for the first quarter of 2009 jumped over 80% to a record 7.51% – meaning that the balance on roughly 1 out of every 13 credit cards is in default.  Additionally, in May, the number of bankruptcy filings reached 6,020 a day, which represents a 33% increase from a year earlier.  To address the concerns of the multitude of consumers facing these challenges, CardHub.com, the leading and most robust online credit card marketplace, today announced the addition of a Credit Card Debt Center to its site.  Launched in July 2008, Card Hub continues to revolutionize the consumer selection process for products and services in the personal finance space.

The Credit Card Debt Center includes two key features: Debt Help that provides consumers with customized debt management advice and Debt Education that offers an in depth understanding of the pros and cons of various debt solution options.  Highlights of these features include:

Campbell Norwood has written a book that will be of great interest to our Wallet Blog “Deals” readers. Titled Recession $urvival Guide: Low-Cost and No-Cost Strategies to Spend Less, Save More!, her book is full of low- and no-cost opportunities for stretching one’s household budget.

“I wrote the Recession $urvival Guide from the perspective of knowing that there are a lot of families in our area, and around the US, who have never dealt with economic recession. They’re scrambling, embarrassed, and don’t know what to do,” Norwood said. “My goal is that readers will be empowered to make no-cost and low-cost changes.”

College, the key to a better paying career, is not without its financial burden.  The price of tuition around the country is going up.  Plummeting stocks have hurt university portfolios as well as the portfolios of alumni and professors.  Because of this, American universities are receiving fewer contributions from private sources even as they continue to pay for tenured senior professors who, having lost their nest-egg, are stalling their retirement.  Public universities face these dilemmas as well as a dwindling slice of the state budget that funds them.

Of course, students still need to go to school during these hard times, but the rising price of tuition and the absence of job opportunities for graduates just entering the work force has made the once viable option of student loans less and less attractive as there is little guarantee that a job will be waiting after graduation.  Today’s graduating senior can expect to acquire $22,000 in student loans by the time they graduate and have no guarantee of entering into a career just out of school that will help them to pay off this debt.

President Obama has asked his cabinet to cut 100 million dollars of government spending by finding ways to make government more efficient.  His hope is that by finding 100 million dollars worth of waste, he will help to restore taxpayer faith in their government’s attempts to keep the economy healthy.

The subject of government spending is a hot topic here at Wallet Blog.  We are in agreement with the President’s basic philosophy that the government needs to spend money to get us out of this recession—it’s about the only thing that helped the United States get out of the Great Depression.  The system needs money and that money has to come from somewhere.  If regular citizens are unable to stimulate the economy, then the government must intervene.  To this end, we support, generally, President Obama’s decisions to inject cash into the system so as to support fiscal growth and to create job opportunities in a period of rampant unemployment.

As more and more big name companies become insolvent, taxpayers and shareholders in these companies are losing money.  Bondholders, on the other hand, are not feeling the hit and are actually making money out of bailed out companies.  Given the size of America’s economic problems and the ways in which these problems seem to affect all of us, it makes no sense that bondholders aren’t feeling the effect as well.

A bondholder is essentially someone who has loaned money to a company.  When a company needs cash, it either issues stock to shareholders or takes out loans.  Thus far, if the stock goes down, investors take the hit.  If the company requires government bailout, taxpayers must pay for the company.  However, even when a company is on the brink of total collapse, and must be brought under federal regulation to keep it from failing, that company is still expected to pay off its debt at the rate set at the time of the loan.  So long as the company has not gone bankrupt, it must still repay its creditors, including its bondholders.

As we discussed, in our previous post “Stimulus Plan Misses A Golden Opportunity“, the Obama administration spending bill concentrates on mending America, whereas it should be concentrating on getting America set to make a strong return to the world market after the recession.  In this post we’re building off of that idea and making some suggestions about how the government spending should be used to support America as a global economic leader.

President Obama is now in a position with his spending bill to invigorate the economy, just as Presidents have done in the past.  What we should remember is that when the American government has, historically, spent money to revive the economy, its most notable successes were not related to improvement or repair, but to innovation.  A concentration on the development of new technologies has always signaled eras of prosperity for America.

The Obama administration’s stimulus plan is commendable for its size, its urgency, and its impact.  At Wallet Blog, we believe that it will be a powerful force in getting us out of the recession.  We do not, however, agree with the areas and projects to which the money is being funneled because the concentration is not on innovation.  The competitiveness of our country comes down to how much the world wants to buy from us, rather than how much we want to buy from the rest of the world, and the stimulus plan does not concentrate on the development of new products.

Instead, the areas of spending are aimed at areas like increasing the quality of America’s roads and bridges, providing incentives for the weatherizing of homes, and providing tax cuts. All of these improvements are good in the plan’s short term goal of ending the recession, but they do nothing towards making the rest of the world want to buy things from us.  Part of the reason we are in a recession is America’s inability to sell new products in the international marketplace. 

Money shows should not treat finance as entertainment by turning the buying of stocks into a joke or by turning a discussion of serious economic situations into an occasion for groundless argument.  These shows discuss issues directly involved in the managing of people’s money, pensions, savings, and 401ks. The networks that produce these shows, then, have a moral responsibility to treat the subject matter with the seriousness that it requires. 

To fulfill this obligation, the networks should do two things.  First, the network should only invite experts to discuss financial topics.  Participation should be limited to those who have actually worked in the field that they will be discussing.  All too often, financial reporters who have little or no work experience in a particular field are invited to comment on very serious economic issues and their presence drowns out the founded insights of real experts who should be listened to.  Second, the networks should see themselves as obliged to foster a healthy debate founded on factual evidence and cogent argument, and not gut feeling.  The moral obligation of these networks should be a constant pursuit of the truth.