If You Can’t Get Out
April 24, 2008
If you have a credit card that you can’t pay, keep to a minimum or that is accumulating interest, you may feel like you are getting swamped by the world of debt. However, despite the hardships you may be going through and the massive calls you may be getting from credit card collectors, there is a way out.
Because of the large amount of bad credit, there are now programs that are designed to get you out of debt without putting you in further. One of the well known options is Specialized Funding. This operation is created with getting you out of the credit card debt system within two years, no matter what situation you are in.
The way that this program works is you sign a contract stating your situation and what is happening to put you in debt. You give the information of all of your debt collectors that are with small debt. (Not with loans such as mortgages or cars). As soon as this happens, the responsibility transfers over to the funding program. They will set you up with a consolidated debt program where you pay a certain amount to a bank once a month.
The beauty of this program is that it stops the creditors from being creditors in the modern sense. The interest is completely cut off of the credit cards. The creditors are re-directed to specialized funding so they will stop calling you. And, you can get your payments cut by up to 40 - 50%. This allows you to get out of debt completely with these cards in a matter of two years.
Of course, if you use a program like this, you want to make sure that it fits you and that you don’t have another alternative. This is for individuals who are far behind on their credit, can’t catch up with minimum payments and are being harassed by creditors. These are like debt settlement programs, but the system is designed to not be a hassle and to get you out as quickly as possible.
If you feel like there is no way out of your credit card problem, there is still a way out. Finding the right program to cut out the high interest and other creditor problems is always available - right around the corner.
Legislation to keep kids away from credit fails in Tennessee
April 18, 2008
NASHVILLE, Tenn. — The proposal failed 3-3 along party lines in the Republican-controlled Senate Education Committee on Wednesday.
Opponents of the bill say students aren’t targeted. But if a card is obtained, they say credit limits are in place to help students avoid debt.
This bill is not drastic, it does not say college kids cannot have credit cards. The proposal was to give students an opportunity to opt out of receiving offers. I think that it’s sad that students cannot choose to opt out of solicitations. They’re not denying the students actual credit cards, just giving them the option to not have it in front of them all the time.
“We think we run a responsible program,” said Hank Dye, spokesman for the University of Tennessee, one of the bill’s main opponents. “We start out with a modest credit limit … of about $300. There are safeguards in place.”
The credit limits only cover what you can spend. A card can easily go over the limit in late fees, overlimit fees, and interest fees. Once you max out one of these $300 cards the interest can put you overlimit, you don’t have a job so you’re going to incur a late fee, and then next month the same thing will happen. One $300 limit credit card can easily go over $1000 in a matter of months from just a little reckless spending up front.
The article goes on to say that of the 2,100 University of Tennesee students only 1.2 percent defaulted on the card last year. What about the rest of them? Did they ask how many had to ask their parents for help? How much in total late fees and overlimit fees were charged to these kids that don’t even have a grasp of bills or money yet?
Of course not. Having statistics like that would not look good for the credit card issuers. It’s a shame to give college-age children the power to make decisions that can really start them on a downward spiral of credit problems that can be lifelong.
Full story available from the Houston Chronicle…
Find One With Rewards
April 15, 2008
I have a Discover credit card and I find that their rewards program is far better than any MasterCard or Visa I have had in the past. I think that is one of the first things that you should look at when selecting your credit card … that along with the interest rates it has. I have one that has a great rewards so I will put everything on this credit card. I put my shopping on it, monthly utility bills, phone bill…everything will go on this credit card. I will pay it off in full every single month so I never have to pay interest on it and I get a lot of rewards back. I take the cash back rewards and put it towards next months bill. I can usually get around $30 every month in returns so over the course of a year that is not that bad…$210 just for putting everything on my credit card. However, you want to make sure that you pay it off every month. You don’t want to put everything on your credit card and have it start to accumulate because then that will defeat the purpose of getting back that rewards cash. You will be instead paying a lot of interest!!!
Before You Get Credit
April 14, 2008
With the economy shifts, the problems with getting enough to sustain us and other money problems is what most would think is an easy solution - put it on plastic. Even though most of us are trying to build our credit and are using credit cards as a means of survival, you may want to start thinking before you spend and start driving your debt up.
The number one rule that anyone who is spending money on a credit card should know is related to the ability to pay. Credit cards may seem convenient enough with the capacity to make a minimum payment on the budget that you are on. However, you never want to make just the minimum payment. This is designed to only let you pay off the interest of the card, which will always be rising and will never allow you to actually pay off the card. If you have a minimum payment box, pay at least twice as much as what it says. This way, you are actually paying something off instead of paying the creditors for giving you the bill.
If you want to keep your credit on the good side, don’t get into a credit card that you can’t handle. This always is related to APR. I’ve seen some APRs as high as 25%. Even 7-10% is a little too high. If you start falling behind, it can kill your pocket book, cause the minimum payment to raise, and put you in a complete hole, where you can’t pay off the debt. If you have to get a credit card, make sure the APR is extremely low.
Even more than this, check out the hidden fees. They are always there and are always being tagged on. Even though credit cards come with a ten page manual, all in fine print, read it all before you get involved. Not doing so can be detrimental in the long run, especially if you are trying to build credit on your record. There are hundreds of ways that credit card companies are trying to get your money. If you are going to be paying them, make sure you know what for and why.
The sound advice is to make sure you know exactly what you are going to be using before you do, otherwise it is a lot of money down the drain. With almost any credit card, the design is to keep you paying for 10 - 20 years on various things that are detrimental to you in order to have convenience of being able to get what you need. The motto to follow is, before you swipe, know what you sign.
Balance Transfers
April 12, 2008
Balance transfers can be a solution to existing credit cards with a high interest rate and an outstanding balance. Many companies offer balance transfers with a low interest rate and some offer a 0% interest rate to gain your service. This can be a good way to get your card paid off faster and with lower monthly payments.
Balance transfers can help consolidate all your credit card debts in one place. If you plan to purchase a necessary item, such as a refrigerator, washing machine, etc. and have no choice but to use a credit card, a balance transfer can help lessen the overall debt you’ll pay. Purchase the item and use your existing credit card. Then use the balance transfer with a low or 0% interest rate.
Although balance transfers can seem ideal, it’s important to read the terms very carefully. You need to understand if there are any hidden fees, what the expiration date is, what type of transfers are eligible for the low interest rate and if the interest rate is fixed or if it will increase over a period of time. If you don’t understand the terms, call the company and ask questions until you clearly understand. Otherwise, you could end up spending more than what you would have with your existing card.
For those who don’t have control over spending, balance transfers may seem an easy way to shuffle debt around in order to spend more and acquire more debt in the process. In that respect, you could get into more financial trouble. Credit cards and balance transfers can work very well, but they won’t clean up bad spending habits.
Read the terms carefully. Identify bad spending habits and make a commitment to resolving them and balance transfers may help you get out of debt faster.
Questions to ponder re: balance transfers
April 11, 2008
1) How long will my introductory APR last?
2) Whats the new APR going to be?
3) Does the introductory APR work towards balance transfers?
4) Do I have to pay an annual fee?
5) What kind of late fees pertain?
6) Are there balance transfer fees that I have to pay?
Credit Scores
April 11, 2008
What goes into a credit score and how do those outstanding credit card debts affect it? There are several different sets of data that are computed to find your credit score. First, historical data on how you have effectively (or ineffectively) paid your bills. Do you pay your bills on time? If not, is there a trend of late or missed payments? Have any payments been sent to collections? All these factor into this first category. Second, what is the ratio of amount of credit you are using compared to total amount of credit available. For example, if I own one credit card and I currently owe $500 while my total credit available is $5000, than my credit used is 10%. This is a pretty good ratio when it comes to computing credit scores. Another hovering around the 25%-33% or below is fairly healthy. The next factor is how long you’ve had credit. The longer you’ve displayed good judgment and credit the better. Next is how good of a mix of credit do you have? Do you own 10 credit cards as your sole means of credit or do you have a well balanced mix of credit cards and car/home loans? Last is how many credit applications are you filling out? Avoid applying for lines of credit in excessive patterns. This will lower your overall credit score.
Ask for a lower interest rate
April 11, 2008
If you love your credit cards, you probably have a standby card you’ve had for years. The card you pull out first when you go shopping, your number one go-to credit card.
How long have you had your favorite credit card? A year? Five years? Ten years?
Have you ever called your credit card company and asked them to lower your interest rate? There are many people with credit cards out there, but there are even more kinds of cards trying to get all these credit card customers to their card, to their good deal. You can take advantage of this knowledge without ever having to switch to a new company.
It helps if you make your payments on time, and at least make the minimum payment when you pay your bill. Find the customer service number and call. Ask the customer service representative right out of the gate, “Do you have the authority to lower the interest rate on my credit card?” If they say no, then ask to speak to someone that can. You should not have to spend a lot of time on the phone with multiple people – your goal is to get to the person that can help you as fast as possible so you only have to ask once, not a bunch of times while you’re being transferred.
Also, when you’re being transferred, ask the representative if there is a direct dial number or extension, if you get disconnected this can save you a lot of time. If there is not a direct dial number or extension, ask for the name of the department so if you have to call back you can ask the customer service representative that answers to transfer you directly to that department.
Once you’re on the line with the right person, tell them you’ve made on time payments and you are getting all these other offers in the mail…but you’d rather have your company match the offer instead of switching. They’ll see you’re a valued customer and lower the rate.
You can do this about once every six months. It never hurts to ask!
Help the World Wildlife Foundation with your credit card
April 10, 2008
If you’re going to use credit cards, why not make sure when you use them you’re helping out charities you really believe in?
Are your charities environmental in nature? Do you love animals? If either of these is true the WWF Visa Card might be right up your alley for your next credit card.
Sure it has the some great features that you’ll find in other credit card offers:
- Intro 0% Fixed APR for up to 12 months*
- No Annual Fee
- Balance Transfer Savings
- Valuable Platinum Services
But what makes this card special is that it gives back to the WWF with every purchase. From the WWF website:
Help the Wild Things Stay Wild
Now there’s a new way to help save endangered species. To date, World Wildlife Fund has received over 10 million dollars through this credit card program in partnership with Chase. With the Whale Visa® card you can enjoy great financial benefits while contributing to WWF conservation efforts. Every time you use your WWF card to make a purchase, WWF receives 1% of the sale.
Even better, you can truly feel you’re going green by filling out the online application for this card instead of wasting paper by filling out a regular application.
Backed by Chase Bank, you can help wildlife worldwide every time you use your credit card.
And if you don’t want a splashy whale tail on your card, you can opt for a tiger or a panda instead. Your favorite wildlife can grace your card and remind you every time you take out your credit card to charge something that you’re helping the WWF do amazing things!
Three ways to go green, credit card style
April 8, 2008
Everyone seems to be going green. Whatever we can do for the environment is great, because every little big helps. So, if you’re looking to make a few changes to help the environment and reduce your paperwork along the way…read on!
- Still receiving paper statements? Go paperless. - Many people are still receiving paper statements from the credit card company. Even people who do most things electronically don’t realize you can have your credit card statements stopped and you can receive them via email. Doing this reduces a lot of paper use, and less trees being cut down for you to get a credit card statement is great for going green.
- Go eco-reward. - Some credit cards that offer rewards allow customers to choose the option of cash donations for environmental groups. Chase BP Visa Rewards Card cardholders can donate their rewards to The Conservation Fund. Users earn 5 percent for every dollar spent at BP service stations G.E.’s Money Earth Rewards Platinum MasterCard allows customers to designate up to 1 percent of their total yearly purchases to buy carbon offsets to fund projects that reduce greenhouse gas emissions. The only way to apply for the card is online, which saves paper. These count as charitable contributions, so don’t forget about your tax deduction!
- Toss your checkbook. - Stop making payments using your checkbook, and start making payments using your computer. You save the paper, but you’ll also save on postage, envelopes, and the gas you’ll use driving to the post office to mail your payments. Some checking account holders use a debit or credit card instead of ever having to order checks - so the paper used to print checks never gets used.
These small steps can be your first toward going green in your life. Baby steps one at a time will take you far over time, and you’ll never feel overwhelmed. Even with credit cards, it’s time to go green.
