Many stores will offer you 15 percent off when you sign up for a credit card. That 15 percent savings can end up costing you more in the long run; maybe you get hooked into using the store’s card and building your personal debt. Additionally, you may pay around 19.5 percent interest and if you make the minimum payment each month, you’ll be lucky to have the merchandise paid off by 2012. You wind up paying three …continue reading the article titled Beware of Credit Card Sweetners

In January of 2003, the Consumer Federation of America released a study entitled “Facts about Consumer Debt and Bankruptcy”. The study compiled data from the Studies by the Congressional Budget Office, the Federal Deposit Insurance Corporation, and independent economist’s link to the rise in consumer bankruptcies directly to the rise in consumer debt.

HOW MUCH IS THE AVERAGE AMERICAN FAMILY INDEBTED TO THE CREDIT CARD COMPANIES AND HOW DID THEY GET THERE?

Currently, there are well over a billion credit cards in circulation. The average American household has about a dozen credit cards and carries a balance of more than $10,000. Approximately 60% carry the balances owed …continue reading the article titled Bankruptcy Reform and the Credit Card Industry – when a good plan goes bad…

This was an interesting article that I read and I thought that I would pass it on. The article was written by Linda Stern and published in Reuters.

By Linda Stern Sat Aug 19, 9:31 AM ET

WASHINGTON (Reuters) - It’s not your fault. Mind games you learned as a child might be to blame for that rising MasterCard balance.

“We make decisions about money and debt and spending from what we saw as children,” says Stephanie Jaeger, a consultant whose “Mind Over Money” business counsels everyone from currency traders to cash-crunched young adults. “Most people have experiences … (as children) that they spend the rest of their lives recreating.”
Jaeger’s theory is that people overspend and get into trouble with debt because they are using their adults powers to soothe their childhood hurts. Someone who heard “no!” all the time as a child might like to go shopping and say “yes!” to himself, for example.

People are taught, in very subtle ways, that money is laden with messages that they need to address. One person might think money is dirty or tainted, and need to get rid of it as soon as possible… by spending, of course. Another might think they have to spend profligately to feel good about themselves.

There are myriad other emotional reasons …continue reading the article titled Show & tell your kids about debt

Tapping into your home equity or your retirement account to pay off credit card or other unsecured debt is always a bad idea. It seams like more and more lenders and other financial services companies are encouraging you to do both. Don’t do it and here’s why:

Home Equity Loans to pay off credit card and other unsecured debt –

Sure, it’s advertised that using a home equity loan or line of credit is an easy way to get out of those “high interest rate” credit card debts. The logic is that the home equity line of credit or refinance loan (debt consolidation loan) interest rate is lower than the interest rates you would be currently paying on your credit cards. You save money. Great! The second rational is that the interest rates on the line of credit or home equity loan is usually tax deductible. Greater still! You save more money.

Based upon the above, many Americans have taken advantage of these types of loans to pay off their credit card bills. Actually, by the end of 2004, the Federal Reserve reported that Americans borrowed a total of $826 billion dollars against the equity in their homes. To put that into perspective, in 1997 (just 7 years earlier), Americans borrowed $416 billion dollars. That’s about a 50% increase in borrowing.

So, why are so many Americans still in debt? …continue reading the article titled Two of the biggest mistakes you can make when paying off credit card debt:

There are many telltale signs that will indicate you may be headed for debt trouble. I have gathered about a dozen areas for you to look at. If you answer yes to a couple of them, be warned.

1. Are your credit card balances rising while your income level has stayed the same or has decreased?

2. Are you only paying the minimum or less than the minimum balances …continue reading the article titled Financial trouble ahead?

The only one that is going to get you out of debt is you. That doesn’t mean that you have to do it alone. There are many programs available that can assist you in becoming debt free.

One of those options is to hire a Debt Settlement company to negotiate your debts with your creditors on your behalf. Debt Settlement has been recognized by Master Card as a legitimate course for individuals looking for debt solutions, read more by visiting:
http://www.mastercard.com/us/personal/en/securityandbasics/debtknowhow/payoffyourdebt/index.html

Some readers have emailed us asking advice about choosing the right company. Here are some of the questions …continue reading the article titled How to Choose a Debt Settlement Company

Four out of every five cards issued today come with a variable rate. Most also come with a Universal Default provision (meaning that if you are late on any payment, it doesn’t have to be to that particular creditor, your interest rate can increase to as much as 30%).

The variable interest rate has been on the rise and is continuing to increase. The rate is tied to the Federal Reserve. As the Federal Reserve raises short-term rates, …continue reading the article titled Credit Card Interest Rates are on the Rise…

If you have fallen behind on your credit card payments, you can expect a phone call. OK, you can expect a lot of phone calls. If you are going to attempt to deal with the debt collector on your own, remember that you are going head-to-head with a tough professional that does this everyday for a living.

It pays to know your rights. Keep a detailed record of all of your communications when you speak to them. Note the time and date of the call, the person that you spoke with (get their ID number if they have one) and everything that they said.

Before talking to any debt collector, review the Fair Debt Collection Practices Act. This is a general “rule book” that the creditors have to play by. Follow this link to better prepare yourself for battle. http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm. Many states also have their own “rules of engagement” that you should know. You can find out more about what your state allows a debt collector to do by contacting your local attorney general’s office. Just do a quick Google search; attorney general California debt collector (for example) and there will be a direct link about that States Fair Debt Collection Practices Act.

After you have beefed up on the FDCPA, here is what you should do next:

Prioritize your bills. –

No matter what a debt collector says, when you are having financial difficulty, the most important bill to pay is not your credit card bill. Providing for your family comes first. You need to make your mortgage, vehicle, utilities and insurance payments. Provide for groceries and other life essentials as well. If you don’t make your mortgage payments, you run the risk of losing your home to foreclosure. If you don’t make your vehicle payments, you run the risk of having your vehicle repossessed (not to mention that in most cases, you won’t be able to get to work to make money to take care of your bills). Not eating and skipping required medications is not a good idea for obvious reasons.

If you don’t make your credit card payments, they would have to sue you first before they could do anything to you. This process will normally take several months to get to. They can’t garnish your wages or put you in jail or whatever other things a debt collector will say to get you to pay them right away. So remember, take care of your family and your most important bills first.

Estimate how much you can afford to …continue reading the article titled Negotiating Tips when dealing with Credit Card Collections