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Let Savings Fall Onto Your Lap

September 23, 2011 by

savingsI’ve always believed that as long as your vacation is ahead of you, summer is clearly not over. It’s not unusual for me to wait until the fall, September or even October to make my yearly escape from the everyday grind. After all, I live in New York, so jaunting off during the summer months simply to lie on a beach is no enticement to me; we are frankly surrounded by beaches.

In fact, many New Yorkers save their vacation time for the winter months; that’s about when we start to get homesick for our beach-lying days. As a massive money-saver, I really enjoy the fact that my off-season vacationing can lead to a lot of savings, but most of all I appreciate dealing with a lot less crowds! Does anyone feel like Disney?

Vacation when no else is

The Travel Industry Association estimates that 23% of people report taking their vacation in the fall, which is a sharp drop from the 38% who reported a preference for vacationing during the summer months; fortunately, as the masses reduce, so do the prices. In resort areas known for their postcard-worthy beaches, the price drop is particularly noticeable. The Caribbean and Florida are two prime examples of this; hotel rates alone can see their rates drop almost 40% compared to peak season.

There are some places where tourism never seems to cease, big cities like New York and Chicago never seem to offer a prolonged period of off-season rates. But I live in New York and assume Chicago is pretty similar. Why would I want to go there?

Utilize credit cards to your advantage

I also fill out a lot of credit card applications throughout the year, simply to enhance my vacation savings when the time comes. Like many, I only associated the frequent flyer miles on my credit card with vacation savings, over the years I have expanded my repertoire, using different credit cards for everything from gas to hotel stays, each with their own built-in savings. Of course the flyer miles are probably still the best savings there is, but even with that, I no longer settle for just the typical 20,000 miles or so. Why would I when there are offers out there of up to 100,000 miles. They are not as easy to come by, but they do exist.

Do your research first

A lot of cards offer hotel programs:   these can lead to major savings, but it does take a little more work to do a proper comparison shopping on these cards. Often they will have a lot of blackout dates and capacity limitations. The ones that claim there are no blackout dates will instead have some strong capacity restrictions. Do your homework on these and you can save some serious cash. For local trips I, of course, have a gas card credit card that I use. Of course, with the high price of gasoline over the past several years, I often think it would be cheaper just to fly. Sometimes taking the scenic route can end up being the best part of your vacation. If it makes you feel any better, think of it this way:  using a gas card which earns money back means the more that you spend, the more you are actually saving. OK, so it’s a bit of a justification, but it is true nonetheless.

One other tip I learned the hard way: it you are going overseas on your vacation, make sure you use a card that at doesn’t charge a foreign transaction fee. Most do and you will end up paying more for every purchase that you make â“ a real vacation killer for me!

Filed Under: Budgeting, Credit, Debt, Life Experience, Travel, World Finance Tagged With: , , , , ,

5 Ways to Maintain a Clean Credit Score

September 19, 2011 by

clean credit scoreThe American public has been both confused and incensed at the debt debate, by not only at how prolonged and divergent both sides have been, but also at how the government allowed us to get into this unfortunate and avoidable situation. With a little bit of planning and diligence, bad credit can be avoided whether it belongs to the average consumer, or big government. It’s actually pretty easy to maintain a clean credit score.  An ounce of prevention is worth a pound of cure and there are some simple steps you can take before your credit rating starts to plummet.

 

Know Thy Credit Score

Credit scores are based on a combination of factors. Five key factors are as follows: payment history, mix of credit, level of debt, credit age, and recent credit. Even if you pass the test in all of these categories, keep in mind that credit reports are not faultless. An error on your credit report is not an unusual occurrence. For this reason alone, it is imperative that you check your credit report regularly; besides simple error, there is also the risk of identity theft and credit card fraud.

 

Keep Thy Balances Low

While it can be gratifying to be extended to a higher credit limit, it is no reason to run out and max out your cards. Keep in mind that the higher a balance you are carrying, the less available credit is being offered to you. This will adversely affect your credit score. Every so often, lenders will raise your credit limit if requested to do so; if you’ve had a credit card for a couple of years without an increase in your limit, it may pay to call the lender and request one.

 

Limit the Amount of Credit Applications

While credit inquiries are only a small part of your overall score, (10%), they do in fact count. There is no need to go crazy filling out credit card applications. Carrying one each of the three major cards should suffice for most consumers’ credit card needs. The same holds true for loans; applying for loans will lower your score. Keep in mind that new cards or loans will also lower your credit age when averaged in with your current number.

 

Keep Inactive Credit Cards Open

Contrary to what many would believe, closing unused or old credit cards will actually lower your credit score. Credit age counts for 15% of your overall score. Closing an older credit card will shorten the length of your credit age, thus lowering your score. Many erroneously believe that this act will be to their advantage, but in the end, they suffer lower credit scores.

 

Pay Off Credit ASAP!

The old belief was that credit card companies prefer those who paid off only the minimum balance due on their cards: it makes sense because the lender makes more money off folks who handle their credit in this manner, given the high cost of interest. The sluggish economy, rising unemployment rates, and collapse of the housing market now have lenders making a slight adjustment in their thinking. The borrow-and-quickly-repay crowd is now their preference. Every bill you pay has the possibility of ending up on your credit report, even non-credit bills. While most won’t, should you happen to fall behind on your payments, it may very well end up  on your credit report.

 

Go Forth and Keep Thy Credit Score High!

So there you have it, a few simple steps that you (or elected officials in Washington) can take to derail the momentum of credit catastrophe and maintain a clean credit score. Of course, the politicians seem to feel they have averted the problem for now, but these tips are still worth keeping in mind. Ten years goes by quickly and Washington’s budget problems are never solved; they are only postponed.

 

How about you?  What has worked and what hasn’t for your credit score?  Share below with your experiences!

 

Filed Under: Credit, Debt Tagged With: ,

Is Free College Money Still Possible?

September 5, 2011 by

debt dealIf you are struggling to find money for college, there are large sources of interest-free money available to you in the forms of federal and state grants. Typically, scholarships comprise only 2% of all student financial aid, while grants make up roughly 40%. Student loans round out the rest of the financial aid package. If you need money to pay for college, apply for grants, rather than loans, because you do not have to pay grant-awarded money back.

With a debt deal up in the air, many college students and their families are left wondering how their financial futures will be affected. The current debt deal will cut the nation’s spending by more than $2 trillion, but it will increase federal spending limits on higher education. Free money is still possible through this deal, available in the form of the Pell Grant program.

Pell Grants

The Pell Grant program is by far the largest grant program available for college students. The amounts range from just a few hundred dollars to over several thousand dollars. Pell Grants are based strictly on need, the college the student will attend, and that school’s federally approved guidelines. These colleges are given only a certain amount of Pell money for each school year, so once the funds are awarded, the money is gone.

The Debt Deal’s Effect

While the debt deal will drastically decrease subsidized student loans for graduate and professional students, there will be more money funneled into Pell Grants for undergrads. The changes currently being made to government-provided student aid are likely to increase the nation’s spending by at least $7.4 billion over the next three to four years; however spending will decrease in the long run by roughly $4.6 billion over the next decade.

The Pell Grant program, originally expected to shoulder drastic cuts in finances, will actually see an increase of $17 billion that will span three years, thanks to the debt deal. Previously, the highest amount that could be awarded from a Pell Grant was $819, but the new budget will increase the amount to $5,550. The increase is mainly due to the recession and greater numbers of eligible students. The size of the increase has caused the overall cost of the program to double in the past two years, reaching $32 billion for the 2010 to 2011 school year.

Even though the hike is drastic and is aimed to help students receive interest-free money for school after the deal is voted on, some people feel students will still need to apply for student loans and acquire debt before they graduate. The increase will cover less than one third of the average cost of a traditional, public college for four years, so students still need to find other sources of money to afford the cost of school.

Changes Ahead

Most graduate and professional students will unfortunately see an elimination of their federally subsidized student loans. These loans, unlike privately awarded loans, do not accumulate interest while the students attend college. Rebates will not be issued to students who pay their loans on time, yet borrowers who pay with bank-issued electronic debit cards will receive deductions. These changes will eventually allow the government to save $21 billion for the next 10 years.

(Jessica Bosari is a prolific writer who specializes in personal finance. She writes about topics such as government grants and finding free money.)

photo by woodleywonderworks

Filed Under: Debt, World Finance

Keep Your Sanity, Use Cash

August 26, 2011 by

cash onlyCredit and debit cards carry with them a terrible temptation. There is no discomfort when you use them. Making a large purchase with cash requires you to literally surrender real money from your hand. The pain comes immediately, whereas a credit card carries with it an “I owe you” quality and a debit card doesn’t provide that proverbial sting, because the transaction is conducted electronically.

 

My experience

I suffered this problem when I first got a debit card. It seemed effortlessly to offer a cashier my card, as if someone else was paying for a book, movie, or food. I also got into a predicament when I began buying a stream of books through online sites such as Amazon. It wasn’t until later that I realized how much I had spent in such a limited period of time, because I was not very thorough with my checkbook.

Maintaining an accurate and updated checkbook is one solution to the problem, but I also found another viable method which hopefully you can use and integrate into your own methods.

 

Solutions

First, write out your budget for the month. Now, separate them into two categories: One for purchases, such as rent, which remain constant month after month. The second category is for purchases which can vary, such as gasoline and entertainment, and change frequently.

Take the second list and determine what can be paid for with cash and how much you are able to afford to allocate towards the second category each month. The rule of thumb is to be more liberal than conservative on the estimate.

Have this amount withdrawn from your paycheck or bank account at the beginning of each month and place it into either a specifically marked envelope or in your wallet and wrap it with a rubber band.

Then, simply use cash for your purchases. When you fill up your car at the gas station, eat out, or buy a movie or a video game, use cash.

What this does is make it easy and simple for you to determine how much money you are able to spend per month. All you have to do is look inside of the envelope or your wallet. Whatever you have left is what you can spend.

 

Observing other people’s mistakes

Working at a sporting goods store, I witnessed hundreds of customers spend over $1000 in a single purchase. Every time they did, it was with a credit card. I sincerely believe if they had reached into their wallet and taken out the cash equivalent, they would have taken a long second look at the items were they on the verge of buying and discovered it wasn’t worth the cost to them.

In fact, customers who did pay in cash often reduced the number of items they bought when they realized they didn’t have the necessary amount to pay for it. Rarely did they resort to their card to cover the discrepancy. When people lack of actual money to buy something, it creates a psychologically reaction, which usually makes them hesitant enough to not go through with the purchase. It’s reality politely telling you to ease off on the spending.

And it’s better than watching a cashier swipe your credit card, only to inform you that it’s been denied because you’ve reached your spending limit. Unlike Congress, you can’t raise your credit card limit just because you’ve hit the ceiling.

Certain items, however, can only be bought on the internet, and if you use eBay frequently, it is required to use a credit card. In this case, set up a separate bank account and have a scheduled transfer at the beginning of every month from your primary checking account. If possible, use a certain credit card only for such purchases. As before, it is imperative that you do not initiate any other transfers. Self-control is paramount.

A separate bank account and cash on hand will give you greater flexibility while also maintaining a limit on spending.

 

Cash makes you think twice

In a digital age like the one we live in, when you use cash, you avoid making purchases you’ll later regret, and it will spare you from a lot of grief which plagues those addicted to card-swiping.

The tale of the Pied Piper of Hamelin is a moral lesson on fiscal responsibility; the people of the town took an “I owe you” on his services, and then regretted their purchase and refused to pay for it. Didn’t quite work out the way they wanted.

Think of the stereotypical adult, who is commonly is depicted buried amid a mountain of monotonous receipts as they attempt to balance their checkbook and confirm the accuracy of every bank statement. It is a tedious and painstaking process which can be circumvented in many instances.

If you use cards less and cash more, you decrease the number of bank transactions, thereby making it less arduous to navigate when you’re inspecting it for any oddities. Additionally, it decreases the chances of identity theft and are easier to detect them they occur.

A lot of identity thieves rely on the proliferative use of credit and debit cards to hide their activities. Often, they will make small, discreet purchases, which will easily blend in with other similar transactions, to test their victims. If no alarms are raised, they will continue doing so until they make such a large purchase that their cover is blown. Prevention requires either a vigilant consumer or a wise consumer.

Ultimately, using cash is a way to prevent bad debt. When you pay with cash, you’re paying up front. There is no monthly payment, no fees, and no interest rate.

photo by seanmcmenemy

Filed Under: Credit, Debt, Life Experience Tagged With: , , , , ,

Credit Card Mistakes To Avoid at All Costs

August 18, 2011 by

credit card mistakesIn many people’s lives, credit cards tend to take on one of two roles. One is that of an indispensable ally, one that is always available to bail you out of a tough situation at any hour of the day or night. The other? Well, that is of a cruel enemy, dragging you into a deep pit of debt and then slapping you with extra fees when you are down. Even when things are harmonious in your financial house, credit cards can be fickle friends. Make one mistake â“ a single missed payment, one charge too many that pushes you over your limit or simply apply for too many cards â“ and it can have a negative impact upon your credit score. That, in turn, can result in higher interest rates and other bad news for your budget.

Here are a few of the most common â“ and not to mention expensive â“ credit card blunders that are best avoided.

Late Payments

It may be fashionable to be late to a party, but it’s downright dumb to be late paying your credit cards bills. Not only will missing a payment cause your card issuer to charge you a late fee, but it will lead to them increasing the interest rates on your account. Your payment history accounts for about 35% of your credit score and one single messed-up payment can cause your score to take a serious dive. If you are not set up to make payments online, make sure you drop your check in the mail well in advance of its due date.

Making the Minimum

If you are trying to pay a balance, you must make more than just the minimum payment. Consider this example put forth by the website, omaha.com:

With a $5,000 balance and annual interest of 14 percent, a $100 minimum payment will pay off the bill in 22 years, with $6,110 going for interest. If you pay $150 a month, the bill is gone in four years with $1,369 in interest.

Federal Laws are now in place requiring lenders to display, on every statement, how long it would take you to pay off a balance making only the minimum payment. This as well as the monthly amount you would need to pay, in order to pay off the debt in three years.

Withdrawing Cash On Your Card

DO NOT, as in ever, ever, ever, use a credit card for cash advances, except in the instance of an absolute emergency. Aside from the dizzyingly high interest rates associated with pulling out cash on your cards, there are typically additional fees. Also, interest begins to accrue IMMEDIATELY on the amount of cash withdrawn which means that you will be paying back much more than you borrowed even if you quick about it.

Paying An Annual Fee

Some rewards cards come with an annual fee and sometimes those rewards are tied to the amount you charge. So no matter how nifty the perks on your plastic, they may not be worth what you will be paying for them. Make sure you are not tempted to spend more than you normally would on your card just to get those rewards.

You should always take the time to make sure you understand the exact terms of your credit card. That way you will avoid unnecessary fees and penalties. If you are in the market for a new card, comparison sites such as credit land can be an invaluable tool. If you know how to use your credit cards mindfully, your wallet will house plastic pal instead of foes.

photo by moneyblognewz

Filed Under: Credit, Debt, Frugal Living Tagged With: , , , ,

Banks Lose $16 Billion in Swipe Fees

August 6, 2011 by

bank feesThere were no winners when, this month, The Federal Reserve announced its concluding regulations that will cap debit card swipe fees charged retailers at 21-cents per transaction. Financial institutions argue that they stand to lose approximately $16 billion per year in revenue collected from merchants, while merchants criticize that the 21-cent cap does little to alleviate their debt burden to the banks and lenders. With neither side celebrating the passage of this regulation, it is difficult to see who exactly benefits or what effect this regulation will have on consumers.

The lending industry currently claims an average debit card swipe fee of 44-cents, thus, imposing a 21-cent cap would greatly diminish their profits. But as every lawyer and financial expert knows, it’s all in how you crunch the numbers.

The 44-cent average swipe fee is actually a composite of two numbers: fees charged on credit card purchases (exempt from these regulations), averaging 56-cents, and fees charged on debit card purchases, averaging 23-cents. With conditions in place that will sometimes allow the 21-cent fee to be raised as high as 24-cents, retailers argue these new laws are essentially pointless.

Lawmakers had originally been proposing a 12-cent cap on debit swipe fees, and while this would have been a much better resolution for retailers, the banks claimed the profit loss would be great enough as to practically make it unprofitable to maintain debit card purchasing as-is. The compromise was to set the cap at 21-cents, plus 5 basis points on the amount of the transaction for fraud costs, plus 1 cent for fraud prevention costs.

Also, financial institutions with $10 billion or less in assets, governmental benefit cards, and certain prepaid cards are exempt from the new law.  There are fears on the part of all credit lenders, exempt from the new regulation or not, that merchants will begin steering customers away from using their debit cards by offering special deals to those who pay with cash or credit, thus furthering their loss.

The results of these new regulations for the consumer will most likely be slow and subtle. Over time, the financial institutions may look for ways to regain whatever monies are lost. A loss of income is rarely just accepted. Higher ATM fees, tighter restrictions, or simply doing away with free checking are all possibilities, as is the implementation of a debit card swipe fee passed directly to the consumer. Simply upon hearing of impending debit card swipe fee reductions, major lenders such as Wells Fargo, Chase, and SunTrust either eliminated, or greatly curtailed, their rewards programs.

As there is little a consumer can do, caught in middle of this power play between the banks and merchants, it could actually work out to the consumer’s advantage. Should retailers offer discounts to those willing to pay with cash or credit, the consumer will profit from this, much to the chagrin of the banks. However, the banks may decide to make up their losses in other ways, so keep an eye on your interest rates and rewards programs to see if they start to fluctuate.

According to a recent poll taken before the Senate vote, the U.S. News & World Report noted that two-thirds of those polled were against a delay in implementing the new swipe fee limits and would view their Senators less favorably❠if they voted to approve the delay. Why consumer opinion would come down on the side of the retailers over the side of the banks, may have more to do with politics than the bill’s ramifications for the consumer. Since the $700 billion bailout for banks in 2008, these financial institutions have not received much sympathy from the American people.

While the banks and retailers hammer out a compromise, be on the lookout for credit card specific sales. As well, be cautious for increased prices on goods as this law goes into effect this coming October.

Filed Under: Credit, Debt, General Finance Tagged With: , , ,

In Debt? Debt Eye to the Rescue!

August 3, 2011 by

Debteye is an automated tool that helps you negotiate with your creditors to get out of debt.     However, one main question is how well this automated software works when dealing with creditors?   I was curious to see how credit card companies respond to faxes/letters compared to the traditional phone method.   I’ll save the answer after we go through their product.

 

What is Debteye?

As I mentioned, Debteye provides an online software that helps people get out of debt.   Unlike many debt relief companies, they don’t charge huge up-front fees to get started.   They are not your typical debt relief company that you hear on TV.   Debteye provides recommendations on how to get out of debt using existing debt relief options out there today.   They are: debt settlement, credit counseling, and accelerated repayment (I think this is debt stacking).

 

Debteye Advantages

Besides the obvious of being a cheap alternative compared to debt relief companies, the biggest advantage is that it truly provides an unbiased solution based on your financial needs.   Consumers are able to track, manage, and view their progress online, which is something that traditional debt relief companies don’t offer.   They allow you to choose your payment and choose your program and never force you into any direction.   Many people get stuck in the beginning trying to figure out how to tackle their debt, but Debteye does all this for you!

 

How it Works

You start by filling out some very basic personal information.   Next, Debteye will obtain a copy of your Transunion credit report.   The cool thing about this is that you can exclude any creditors that you don’t want in the program.   You also have the option to dispute❠a debt if you don’t’ recognize the creditor.   If Transunion doesn’t pull a creditor that you KNOW you have, you can add your debts manually as well.   Next, it will recommend the optimal solution for you.   You can pick your own payment and it will auto-calculate how long it will take for you to get out of debt.   They are extremely transparent with the information they provide.   All the benefits and drawbacks are listed before you pick a program.   Another great feature of Debteye is that they pay your creditors for you.   I’m sure this will be useful for those who hate remembering pay dates!

 

My Thoughts

If I was the CEO at Debteye, there are a few minor changes I would probably make.   When I enter my creditors manually, there’s a HUGE list of creditors I can pick from.   It would be nice to be able to type in your creditor while it begins a search in their database.   I must admit, it was pretty annoying going through that list.   Secondly, I’m not sure if I would give them my checking account information to begin the program before I spoke with a live person.   I think the whole concept of these programs needs to be explained in further detail when someone signs up for it.

The real question is really whether Debteye can deliver on their promise and help you get the same kind of results that professionals❠can.    Are creditors really as willing to negotiate with individuals as companies?  There’s no doubt in my mind that Debteye will be the next big thing in the industry if they can.

Filed Under: Debt

Alcohol Consumption Puts College Students in Credit Card Debt

August 2, 2011 by

beer moneyAccording to the Trends in College Pricing 2010 report compiled by The College Board, the average estimated undergraduate budget❠for a   student during the 2010-2011 academic year is $20,339 for a four-year public school and $40,476 for a four-year private school. These numbers factor in tuition and fees, room and board, books and supplies, transportation and miscellaneous expenses. But do those numbers include the $500 a year that Rachel Barrington of the University of Wisconsin claims the average college student squanders on alcohol?

Gayla Martindale’s estimate in her article, A Look at the Spending Habits of College Students, posted on the stateuniversity.com blog is somewhat jaw-dropping: Each year, American college students spend $5.5 billion on alcohol.❠That’s a lot of money to be pouring down the hatch, especially in light of the fact that most students enter the workforce after having earned their post-secondary degree, carrying debt that they accrued along the way.

So how is the average, financially-strapped college kid affording all of this booze?

Some students spend using credit cards. In fact, most students â“ some 75% of females and about 70% of males â“ have 1-3 credit cards. The cost of teenage alcoholism is high, from the expenses they incur during their drinking sprees to the toll it takes on their health.  Plastic is used by many to charge school necessities such as books, supplies, and even tuition. Credit cards are relied upon by students for discretionary spending as well. While it can be advantageous for a student to begin building his or her credit score while still in school, the risk is that the temptation is there to fund fun nights of drinking with friends while sinking into a pit of debt.

According to a 2009 article published by Sallie Mae, entitled How Undergraduate Students Use Credit Cards, Undergraduates are carrying record-high credit card balances. The average (mean) balance grew to $3,173, the highest in the years the study has been conducted. Median debt grew from 2004’s $946 to $1,645. Twenty-one percent of undergraduates had balances of between $3,000 and $7,000, also up from the last study.â

At California State University Fullerton, workers in their administration office claimed that their institution sees more students discontinue their education due to credit card debt more often than due to academic failure these days.

The National Association of Scholars (NAS) uncovered in a 2009 article that A recent survey of more than 30,000 first year students revealed that nearly half were spending more hours drinking than they were studying.â

That means many college undergrads are opting to drink away dollars that would better serve them by being put towards school-related expenses. In turn, perhaps less drinking would result in fewer students dropping out due to their insurmountable debt.

If it’s true that, as Caralee Adams reports in her article Lack of College-Educated Workers Will Hurt Economy, Americans that have graduated college with a bachelor’s degree earn an annual salary that is an average of 74% higher than those earned by workers with only a high school diploma. Students who focus on overdrinking during college, rather than studying, may be doing much more than merely drinking away time and money that could otherwise have been better spent. They could very well be drinking away their future earning power.

photo by greencolander

Filed Under: College Finances, Credit, Debt, General Finance Tagged With: , , ,

5 Signs It Is Time to File for Bankruptcy

July 5, 2011 by

bankrupt

How long have you been treading water in the name of avoiding bankruptcy? And, is it even worth it? True, many sources would have you believe that bankruptcy is a bad word. That’s understandable. After all, no one likes to admit that they’re struggling financially, and bankruptcy may seem like an easy way out to some and a complete cop-out to others. No wonder bankruptcy is so taboo. So, is it ever good to file for bankruptcy? And, if so, under what circumstances is filing for bankruptcy the RIGHT decision? Here are five signs it is time to file for bankruptcy:

You find that you are unable to keep up with even your minimum credit card payments

You may be only skipping a month here and there, but those late payments are reported to the credit bureaus. Also, keep in mind that this type of payment plan comes with a repayment term of forever.

When you sit down to make a budget, you find that your current expenses outweigh your income

If this is the case, you will never get ahead, but will rather have to continue to borrow money just to survive, which is a recipe for disaster.

You are borrowing money to pay your bills

This is a vicious cycle that only results to you getting even more in debt. The longer you continue to do this, the worse your financial situation.

Collection agencies are calling you

When your phone begins ringing in attempts to collect money from you that you can’t afford, you know your situation is spiraling out of control. In addition to the money you owe, you are now accruing late fees and collection fees and, if you couldn’t pay on your debt before, there is no way you will be able to pay an even greater debt.

Your financial situation is so far out of your control that you no longer keep track of your debts

You can’t pay them, right? So why even bother to think about it? This type of thinking means that you’re fed up, and also that you need help. In cases like this, bankruptcy may actually be the only responsible option you have.

Bankruptcy should not be taken lightly, as it effects your credit for ten years. At the same time, bankruptcy should not be disregarded as an option if you really need it. If you are only compounding your financial troubles by avoiding bankruptcy, then you must remember that those troubles will also stick to your credit report, just as a bankruptcy will, but that they will continue to get worse while a bankruptcy could serve as a means to an end of your financial woes. If this is the case, it’s time to seriously consider bankruptcy as a smart move on your way to economic health.

(About the Author: Holly is a full-time ultrasound technician by day and a writer and blogger by night. She enjoys writing about personal finance, credit repair, bankruptcy, and more. She stresses the importance of taking control of your financial future.)

photo by notions capital

Filed Under: Debt

Online Help With Credit Card Debt

June 28, 2011 by

Customers in the USA are still very much global leaders in terms of credit card debt. And yet, they have started to considerably restrict the use of their Visa-, Amex- and Master-cards: The number of people making late payments recently hit a 17-year low, according to credit reporting agency TransUnion. In contrast, the UK sadly seems to be catching up. In the first quarter of this year, building societies and banks wrote off £1.89bn, of which a towering £866m consisted of credit card debt. No wonder, then, that all across the country, schemes aimed at providing credit card debt help, both online and offline, have proliferated: Celebrity expert Dave Ramsey is offering courses teaching participants how to deal with credit card debt. Barclay’s have introduced a credit card which promises âžbreathing space for your finances and help with your shopping. And there are even âžonline credit card debt help tools to facilitate keeping track of just how much money you still owe. Need any more proof that credit card debt has long turned into a serious issue, which could affect you, too, in the not too distant future?

Online help for credit card debt

Fortunately, online help for credit card debt is readily available. Today, cornucopias of companies have sprung up to offer advice and assistance. Most of them seem to suggest that credit card debt is substantially different from any other kind of debt. This, however, is only partially true. The biggest convenience and at once the biggest inbuilt danger of credit cards is their ease of use. Credits cards allow you to go on a wild online shopping spree, pay for your clothes at expensive fashion stores without having to put any money on the counter and to make purchases which would otherwise seem outlandish by allowing you to borrow from them without any kind of palpable restrictions. Of course, these comforts are bought at an expensive price: Loosing track of your finances and considering money a resource which can infinitely be replenished. In reality, however, by using a credit card, you’re not just buying more than you can afford and piling up debt. You will also have to pay interest on this debt, which will accumulate even more and add up to vertiginous sums over time.

Steps against credit card debt

And yet, these facts do not make credit card debt inherently different from any other kind of debt. It can still be broken down to two fundamental issues:   Wrong spending patterns and a discrepancy between your income and spending. Which is why a good debt management company will be able to offer you a wide range of services aimed at resolving your personal credit card debt problems. Apart from bankruptcy, these include help in adjusting your spending habits, debt management plans, individual voluntary arrangements, debt relief orders and plenty more. In many cases, the first step towards credit debt help can be taken free of charge and by filling out an easy online form. To prepare for this, you should try to arrive at a meaningful estimate of your credit card debt and how precisely it is distributed across different credit cards. Depending on these facts, the company will then be able to suggest practical measures and concrete help.

Ultimately, when it comes to choosing the right provider for professional credit card debt help, you should apply the same criteria as for any other kind of debt. The Debt Advisory Line, for example, have already helped thousands who thought bankruptcy was their only option.

Filed Under: Credit, Debt