Like so many American families living paycheck to paycheck that don’t have adequate savings or access to conventional credit cards, getting a payday loan for those “unexpected” expenses can become a real nightmare. Although it may seem like a good idea it really isn’t.

As anyone that has gotten caught up in this cycle can tell you, the main problem is that the money for your first payday loan is paid back by your next paycheck. That leaves you with less income and puts you behind on your usual expenses. So, it’s easy to see how people either go back to get another loan or renew their existing one. This not only keeps you in the hole but makes it very difficult to save money and break the cycle.

How about the costs? …continue reading the article titled Payday loans can be a vicious cycle…

There are over 1.2 billion credit cards in use in the United States.

At least 37 percent of all personal spending is paid for by using credit and debit cards.

The average US consumer, not including mortgage debt, is about $14,500 in the hole.

A typical Credit Card purchase will end up costing you 112% more than if cash were used.

About 40% of all American Families spend more than they make each year.

About 60% of active credit card accounts are not paid off monthly.

The typical American Family spends …continue reading the article titled Some interesting Credit Card facts

It’s been reported that outstanding credit card debt is standing at about $696 billion dollars. Thanks largely to industry lenders that have extended their numerous offers to people with less than perfect credit or with questionable abilities to repay the charges.

Many credit cards are coming with penalty rates above 30%, even if the individual is late on just one credit card payment. That payment might not have even been owed to that credit card company to trigger the higher rates.

Several months ago, credit card companies raised their minimum payment requirements from an average of 2% to 4%.

There are about 45 million people in the United States without health insurance or that are underinsured. 41% of moderate to middle income adults don’t have adequate health insurance coverage.

Homebuilder sentiment slumped to an 11-year low in May …continue reading the article titled America’s perfect financial storm

In February, Maine became the twelfth State to pass legislation that allows consumers to freeze their credit information. This program has been floating under the radar for quite some time and I think that if more consumers were aware of it, they would be flocking in droves to sign up.

I know that I wrote eight States and reference Maine becoming the twelfth. There is a reason for this. But first, let me explain about the program. OK fine. For those of you that are impatient, 8 States allow any consumer to participate in freezing their account. The other 4 States and potentially on a National level, you must be a victim of identity theft before you can protect yourself in the future.

California was the first State to pass this type of law back in 2003. The vast majority of Californians have not signed on because they don’t know about it.

Here is the reason behind the law and how it works:

Nearly 10 million Americans fall victim each year to identity theft. Current statistics show that a victim will spend an average of 330 hours resolving problems as a result of identity theft and paid between $851 and $1378 in out of pocket expenses (excluding a median of $4000 per victim in lost wages in 2004).

Identity theft also costs U.S. …continue reading the article titled Freeze your credit, well in eight States anyway…….

Dear Mr. Smith, thank you for your response to my offer. You are approved and here is your money! Oh yah, here is what you agreed to by accepting such a generous offer made by me and my distinguished associates.

1. You can’t sue me or be included in any class action law suit against me.

2. If you miss a payment to someone else that you owe money to, even if you’ve made all of your payments to me on time, I can charge you a higher interest rate for that.

3. I can change the terms of our agreement, anytime that I want to.

4. If you pay back all the money that you owe me, I can charge you an additional fee for that.

5. If you pay me back and you continue to not owe me money anymore, I can charge you a fee for that.

Being a “Shylock” with these terms and conditions….Illegal

Being a Credit Card company with these terms and conditions and having Congress in your back pocket….Priceless

Plain and simple. Over the past 15 years that I have been in the debt and credit industry, I have read countless articles and have met with thousands of people effected by the credit card industry that I am litterally sick and tired it. The credit card industry has been set up to take advantage of uneducated people who have been barraged day after day with ads and offers telling them that without credit, they can’t live like they should be. “Life takes Visa. You live life, we’ll help you” or some moronic statement like that I keep seeing while watching this year’s Olympics. Actually, I get to watch about 10 minutes of Olympic coverage and get to spend the next 5 minutes watching stupid pitches like this.

In this article, I am going to go over some real facts that are in these credit card company contracts and hopefully someone out there will see that this is one of the most underhanded, unregulated, profit mongering businesses out there today.

Here is some “did you know” that hopefully get’s you as angry as I am. Now on a positive note, so we don’t hurt some people’s feelings out there, credit cards are a tool that if used correctly can give you some advantages. Yah, about 5% of the American population falls into that category.

1. Chase Manhattan Bank’s cardholder agreement plainly and clearly makes you agree to give up your right to sue them: “the cardholder cannot take the issuer to court or be included in a class-action suit against the company.”

Wow, the tobacco companies should have had these lawyers on their team…Hmm, let’s see. Sorry Mr. Jones, it clearly states on the underside of the cigarette pack that you purchased, in size 3 font: “By purchasing these cigarettes, you agree that you cannot take the manufacturer of these cigarettes to court or be included in a class-action suit against the company.” I guess that was their big mistake. The warning label only states that you could die, it didn’t say anything about not being able to sue them….

2. Banks and credit card issuers spent millions, yes millions, of dollars lobbying Congress …continue reading the article titled Credit Card Companies are “Shylocks”

Consumer Credit Counseling companies are not always what they advertise to be. Be sure to check out the company and all of your options before enrolling into any type of Credit Counseling Service.

A Massachusetts credit counseling agency and its two owners must pay $4.2 million in penalties and consumer restitution to settle allegations that it misled thousands of consumers and funneled millions of dollars to related for-profit companies.

The consent judgment resolves a lawsuit filed by Massachusetts Attorney General Tom Reilly in April 2004. The suit charged that owners John and Richard Puccio violated Massachusetts charities laws by using Cambridge Credit Counseling to funnel millions of dollars to for-profit companies that they also owned.

The state also alleges that the company violated consumer protection laws by misleading thousands of consumers about the benefits of credit counseling offered by Cambridge Credit.

Under the consent judgment, both Cambridge Credit and the Puccio brothers will pay civil penalties and restitution to consumers.
The Puccios will pay a total of $2 million to the Commonwealth - including a $500,000 civil penalty, $500,000 restitution to consumers, and an additional $1 million in disgorgement of ill gotten gains from the charity.

Cambridge will pay $2.2 million — a $500,000 civil penalty and $1.7 million in restitution to consumers. The Puccios also are permanently barred from working with Cambridge, contracting with the charity, or receiving any money from the charity.

“What is clear is that the owners set up this charity primarily to enrich themselves …continue reading the article titled Non-For-Profit, not always the case

WASHINGTON — The Internal Revenue Service issued the 2006 “Dirty Dozen” — its latest annual tally of some of the most notorious tax scams — along with an alert to taxpayers this filing season to watch out for schemes that promise to reduce or eliminate taxes.

Two new schemes have worked their way onto the list in 2006. In recent months IRS personnel have noted the emergence of the two scams — “zero wages” and “Form 843 tax abatement” — in which filers use IRS forms to claim that their tax bills have been wrongly inflated.

Also high on the list in 2006 is “phishing,” a favorite ploy of identity thieves. Over the past few years, the IRS has observed criminals working through the Internet, posing even as representatives of the IRS itself, with the goal of tricking unsuspecting taxpayers into revealing private information that can be used to steal from their financial accounts
Several of the usual suspects from last year remain on the list. The IRS, for example, continues to see schemes designed to exploit charitable organizations. Some taxpayers, meanwhile, still use frivolous arguments to claim they do not owe taxes, despite the fact such reasoning has been thrown out of court time and again.

“When it comes to taxes, everyone has to pay their fair share,” IRS Commissioner Mark W. Everson said. “I urge taxpayers not to be taken in by hucksters who promise to lower or eliminate taxes. Getting caught up in the Dirty Dozen or similar schemes can lead to big headaches.”

Namely, involvement with tax schemes can lead to imprisonment and fines. The IRS pursues and shuts down promoters of these and numerous other scams. Anyone pulled into these schemes can also face repayment of taxes plus interest and penalties.

The IRS urges people to avoid these common schemes: …continue reading the article titled IRS - Releases 2006 “Dirty Dozen”

The truth of the matter is that if you keep doing the same things over and over and expect different results, you’ll set yourself up for failure. If you’re up to your eyeballs in debt and keep using your credit cards, nothing will change. I’m a strong believer that if you change your mind about your finances, you’ll change your financial status. What does all this mean?
It means that if you’re really committed to getting out of debt once and for all, you’re going to have to change your money habits - specifically, how you spend and save. So many people find any excuse to spend money to numb any pain they may be feeling in their lives. Relationship splits, job losses, whatever situation has brought stress and anxiety can also bring the “urge to splurge”, unfortunately to your own detriment.
So it’s one thing for me to say this is how it is…what’s the solution?

1. Fess up to the fact that there’s NO quick fix. Getting out of debt will take time and require that you exercise patience, discipline, sacrifice and commitment!
2. Understanding that doing the same things and expecting different results is the definition of insanity - look at what negative habits around money you have that need to change? Better question…are you WILLING do do things differently?
3. Face reality. What I mean by this is it’s imperative that you tell the truth about exactly how much debt you have to pay off. It’s easy to want to be vague - when you’re specific and clear, you’ll see the exact numbers on what you owe and it may not make you feel great. Believe me though, once you get a handle on exactly where you’re at, you’ll feel a sense of empowerment like you never have before!
4. Make a plan and Work that plan! Once you’ve decided that you’re ready and willing to make some positive changes and you’ve listed exactly everything you owe and all the money you have coming in, you’re ready to make anaction plan for getting out of debt. Restructure your life to minimize the triggers that cause you to spend money unecessarily and pick a buddy who’ll support your goal of being debt free.
5. The best way to lose weight is to go on a diet or a sensible eating plan. It’s no different for getting out of debt. When you’ve made up your mind to go on a debt free diet, you’re going to have to track every dollar you spend so it can go towards every dollar of debt you owe. Once you see your debt go down, you’ll be invigorated to keep the momentum going.

I’m going to focus several articles specificallyl on Saving, Budgeting and Controlling Spending. I”m bound and determined to help anyone who’ll listen get out of debt once and for all.

Talk to you soon,

Dee Dee Sung
Founder, Debt Free Divas, Inc.
From Self Worth to Net Worth
www.debtfreediva.com

NACS President Blasts Credit-Card Fees

ALEXANDRIA, Va. — Henry O. Armour, president and CEO of the National Association of Convenience Stores, testified yesterday before the House Energy and Commerce Committee’s Subcommittee on Commerce, Trade and Consumer Protection on the industry’s long struggle with credit-card interchange fees, reported NACSOnline.

“Interchange fees are levied in a market that is broken and something must be done to fix it,” Armour said. “This hearing is an important step toward informing Congress and the public about the impact that high interchange rates have on U.S. consumers. There has not been nearly enough information and discussion about these fees in the past, and we applaud you for your willingness to examine them.”

NACS was invited to testify as a result of its testimony in September 2005 before the full Committee regarding gasoline prices and the increasing amount of money that credit-card companies take out of every gallon of gasoline purchased, reported NACSOnline.

Armour outlined in the report four fundamental problems with the current interchange market. First, he noted that due to the market power of the card associations, retailers have no choice about whether they accept cards. Second, the card associations exploit their market power by driving up fees and by veiling these fees and their rules in secrecy. Third, these fees are bad for consumers — particularly some middle- and many lower-income consumers who do not have easy access to credit and debit cards. And fourth, consumers in the United States pay much more for interchange than other comparable countries.

Most consumers have no idea that they pay interchange fees, which are hidden in the price of virtually everything they buy and total an estimated $27 billion annually in the United States, according to NACS. Consumers do not know about these hidden fees because the credit card companies go through great lengths to assure that consumers remain in the dark about these fees, Armour said in the report.

“It’s not just consumers who are left in the dark; Visa and MasterCard refuse to fully disclose their operating rules to retailers,” Armour said. “It is remarkable that they make retailers agree to abide by all of their operating rules in order to be able to accept their cards.”

Ultimately, consumers pay the price. According to NACS, the average American family pays $331 in interchange and related fees every year. And that is true whether or not that family uses credit or debit cards. Because these fees are hidden in the cost of virtually everything consumers buy, even cash-paying consumers ultimately pay for them, according to NACSOnline.

“This results in a nasty, regressive charge,” Armour said. “Consumers with fewer resources whose credit does not allow them to have credit cards or do not have debit cards pay this fee like everyone else — as do consumers with credit cards who pay high interest rates, annual fees and have no rewards or miles programs.”

Over the next several publications, I am going to take a look at some of the most common misconceptions about credit and debt. Hope it helps….

The amount of money you make determines how good your credit is: False

An impressive salary doesn’t translate into a good credit report or good credit score. It’s true that a lender will look at the amount of money you make to determine your ability to make your monthly payments on the loan but, that’s as far as it goes.

Your credit worthiness is based upon your credit history, not your salary. Creditors use a FICO score to determine if you are qualified to get a loan, and at what interest rate that loan needs to be paid back at.

FICO scores range from 400 to 850 points. The higher your score, …continue reading the article titled Demystifying the Myths about credit: