The Debtonator

Get Rid Of Your Cable Bill

2011-06-15T16:53:00.000-05:00

The rising cost of EVERYTHING has forced me to ponder the unthinkable: Trimming some fat from my family’s budget. That means that spending $200 per month to watch television is a luxury I could do without. As someone who consumes reality television, pro wrestling and movies with the passion that some reserve for five-star restaurants, I knew it might be difficult to resign myself to that fate. So I spent some time figuring out how to watch television online for free.

Here's what I discovered: There's enough free entertainment out there to make you wonder why you're paying for cable to begin with. From the network news to serialized primetime shows to cable programming, the show you want can almost always be found online. In most cases, all the viewer has to do to access it is watch a short 30-second ad before the opening scenes, or a longer two-minute ad where a commercial break would normally be. Not a bad price, considering most of us watch ads anyway when we tune into our expensive cable channels.

If you're ready to cash in on these freebies yourself, here are my top four tips:

1. Use Hulu.com. As most people under age 25 know, the website Hulu.com makes it easy to watch many shows for free, including fan favorites such as The Daily Show with Jon Stewart, The Office, and Modern Family. With limited ads and easy streaming, the only downside is that not all shows are available at all times.

2. Before paying for a new episode of your favorite show on iTunes, do a Web search with the name of the show and the words "full episodes." Networks don't always make it easy to find the latest show through their websites, but a Web search with those terms will help turn it up. This technique helped us find the latest 60 Minutes, Survivor, and Amazing Race episodes, for example. But it can also turn up spam sites. Steer clear of any urls that you don't recognize.

3. Take advantage of the online content you might already be paying for. If you subscribe to a cable provider, you might be able to watch even more of your favorite shows online than you can find through your TV screen. For example, the HBO Go app allows users to access all episodes of shows such as Curb Your Enthusiasm and Sex and the City. We were happy to rediscover these long-lost (to us) shows. (To access to shows, you must be a HBO subscriber.)

4. Check out iTunes, and not just for music. Networks often make their shows available through iTunes at low or no cost to the user. We also figured out that it was easier, and in some cases cheaper, to rent foreign films through iTunes than it would be through a video rental company (such as Netflix or Redbox). For just a few dollars, we downloaded an amazing French film (The Heartbreaker, for anyone who wants a recommendation) and watched it in high-definition on our laptop.

The good news: Our television started working again after a visit from the repair shop. So I'm back to watching Real Housewives and 16 & Pregnant on the big screen--but I'm still finding new ways to apply these TV-for-free techniques. We invested in a USB device that allows us to stream shows from our iPad onto the bigger television screen, so we can still watch all our new Internet shows for free.
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79.9 % Credit Card

2011-02-09T13:40:00.000-06:00

Toni Riss had a credit card with a 79.9% interest rate.

The 58-year-old woman from Texas thought she struck gold when she found the First Premier card, which is aimed specifically at consumers with poor credit.

"I had an accident on a motorcycle, went through bankruptcy to pay for medical expenses and my credit went to hell in a hand basket, so I was looking for credit cards for people with bad credit" Riss said.

They granted her a card with a $300 limit -- typical for new customers -- and a starting rate of 29.9%, which Riss said she considered decent given her credit score.

But about six months after opening the card -- at the end of 2009 -- she received an unwelcome surprise in the mail.

"I about had a heart attack when I got a disclosure notice saying that my starting rate of 29.9% was going up to 79.9%," said Riss. "It was ludicrous. Talk about a highway robbery."
At that same time, First Premier Bank launched a new credit card with the sky-high 79.9% rate.
The card proved popular with consumers, said First Premier Bankcard CEO Miles Beacom, but the performance was bad: "A lot of the people ran up the card, defaulted and went directly to charge off."
As a result, they dropped the rate to 59.9%. "We also tested it at 23%, 33%, 45%, but 59.9% is the one that shows the best performance and where the organization can market the product," he said.
Since then, nearly 700,000 people have signed up for the card -- and more than half of them carry a monthly balance.

And yes, that rate is completely legal. The Card Act, which was passed in late 2009 to protect consumers from predatory lenders, only prevents issuers from raising rates retroactively. Credit card issuers are free to charge whatever rate they want at the front end.

Beacom, however, denied that Riss would have had her rate jacked up. He said they only issued new cards at that APR.

Still, Riss insisted that she was offered the 79.9% rate, and that when she tried to cancel the card, it took nearly six months. And, she said, First Premier charged fees the entire time and then put her in collections when she didn't pay.

Beacom didn't deny that First Premier has high fees. In fact, he said that before the Card Act capped the charges at 25% of the credit line, First Premier relied on them to offset the risk of its customers.
"Before the new regulations we had the ability to hold specific individuals accountable for their own actions by charging these fees," he said. "Now we must spread this risk out among all our customers through higher APRs."

First Premier charges a total of $135 per year in fees. It starts with a $45 processing fee to open the account. Then there's an annual fee of $30 for the first year -- $45 for every subsequent year. Plus, there's a monthly servicing fee of $6.25 (or $75 a year).

Cash advances will cost you $5 or 3%, whichever is greater; late payments ring up at $35. The bank will also charge you $35 if a payment on your account is returned due to insufficient funds or any other reason.

But Beacom said the bank used to charge $175 for just the processing fee and annual fee alone.
And yet the customers keep coming. The company said it serves nearly 3 million customers nationwide and receives anywhere from 200,000 to 300,000 applications a month.

There is a huge -- and growing -- need for cards serving customers with "less than perfect credit," Beacom said. However, he added, the company is now more cautious due to the Card Act, so it is only opening about 50,000 accounts a month.

The company said this has forced it to cut its workforce by more than 20% last year, and it will reduce its headcount by another 400 to 500 people this year.

In an attempt to find a new product that will bring in fees and customers without being as risky, First Premier plans to start testing a card with a $700 limit and a 25% interest rate.

"The approach is much like high-risk auto insurance," Beacom said. "If you have a bad driving record, you have to pay more and once your driving record has improved, your premiums will come down When the cardholder's credit score improves, they may start to qualify for more traditional types of credit card offers with better rates and less fees."

That's what Riss has done, but no thanks to First Premier. She said she has slowly built up her credit since ditching the card and eventually qualified for a card with a much lower interest rate and fewer fees.

"I eventually picked myself up and re-established myself, but I want to be a warning to people who would ever think this is a good deal," said Riss.

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5 of the Biggest Myths About Your Credit Score

2010-11-09T10:00:00.000-06:00

http://finance.yahoo.com/banking-budgeting/article/111090/biggest-credit-score-myths?mod=series-m-article-c

As important as your credit score is to your financial health, very few people truly know how their scores add up. And plenty of consumers get it wrong on the important questions, like how to raise your score or how long a black mark lasts.

MoneyWatch's Jill Schlesinger asked John Ulzheimer, president of consumer education for Credit.com, to name the most common misunderstandings -- and to tell us what will really hurt (or help) your score.

1. Paying Bills on Time Will Improve My Score
"That's definitely a good start," says Ulzheimer. "But it's not the key to the kingdom." With FICO scores typically ranging from 350 to 850, 35% of the points on your score are directly tied to whether you're making your payments on time, says Ulzheimer. That leaves 65% of your score that has nothing to do with missed payments. "You cannot hang your hat on whether or not you are just making your payments on time, and assume you have fantastic credit," he says.

2. Carrying a Balance Is Good
"I'm quite sure the credit card industry started that [rumor]," Ulzheimer says with a chuckle. Although carrying balances will cost you in interest and financing charges, from a credit score perspective, there's nothing wrong with carrying a balance on your credit card. But very large balances will affect your "creditization" -- the percentage of your credit limit that you're carrying as a balance.
Maxing out your credit cards will hurt your score. What you really want is a relatively low balance -- never more than 15 percent of your overall limit.

3. HR Can See My Credit Score
Although a lot of people treat them as though they are interchangeable, credit reports and credit scores are two completely different things. Employers in most states can look up your credit report as part of a pre-employment screening (and during your term of employment) -- but they do not have access to your credit score.

Who can see your score? Any lender, insurance company, landlord, or utility provider can buy your score from one of the three accredited credit report agencies. They use that score to determine the amount of risk they're taking in doing business with you -- then use it to grant or deny you, and to set the terms.

4. Foreclosures and Bankruptcies Stain Your Score for 7 Years
This one is partly true: Whether you face a short sale, a foreclosure or bankruptcy proceedings, you'll have that black mark on your credit report for at least seven years. (A bankruptcy will actually be on there for 10.) But your credit score does improve as that item gets older; you just need patience and good behavior. And as a matter of fact, you can have a very solid credit score in three or four years. Just don't fall back into the same bad habits.

5. Short Sales Are Better than Foreclosures
The assumption is that a short sale is actually better for your credit score than a foreclosure, but in reality, they have the same effect. It's certainly better for the neighborhood than a foreclosure would be -- someone is keeping the house clean, mowing the lawn, not ripping copper piping out of the wall -- but from a credit-score perspective, there is no difference.
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Everything You Wanted To Know About Foreclosure But Were Afraid To Ask

2010-11-01T21:38:00.000-05:00

The rising foreclosure rate in the United States is at the highest level since the Great Depression, and more and more homes are being abandoned when homeowners can't pay their house payments. American families are falling behind on their mortgage payments due to illness, resetting adjustable mortgages, job layoffs, rising costs of living, business failures, divorce, and simply poor financial management decisions. When these or other circumstances prevent homeowners from being able to make their mortgage payments, foreclosure and the loss of the home is the unfortunate result.

Foreclosure is financially and psychologically devastating to these families and the stability of their lives.

An estimated 12 million American mortgage holders now owe the bank more than their homes are worth. And with housing prices sliding still and the credit crunch worsening, the number of so-called upside-down mortgages is expected to rise to record levels. Within a year, Moody’s Analytics predicts, a whopping 30% of all U.S. mortgage holders will owe more on their homes than they are worth.

Many homeowners who cannot afford their house payments simply walk away because they don't realize that banks and mortgage companies may be willing to work with them in an effort to avoid foreclosure. Foreclosures are costly and time-consuming for financial institutions, and depending on the state in which you live, the process can take months. Besides valuable time, foreclosure costs a considerable amount of money, and lenders would much rather keep the lines of communication open and work with those who can't pay their house payments to find a mutually beneficial solution. They may not be aware of the alternatives, but there are some alternatives available for those who qualify.

Here are some of your options if you are a homeowner facing potential foreclosure:

FORBEARANCE PLAN.
Forbearance means you are allowed to delay or reduce mortgage payments on a temporary basis with the agreement that another option will be used at the end of that time to bring your account to current status. Most lenders have a forbearance program available, but you need to be diligent and immediately contact the lender to report a temporary loss, hardship and/or reduction in income and to request a forbearance agreement. Your lender, if in agreement, will then temporarily cease legal actions (or not proceed initially, whichever the case may be).

Lenders may agree to combine your forbearance with a reinstatement or a repayment plan if you can provide adequate assurance that you can raise the needed funds to bring your account current by a specified date. Be sure you are provided this agreement in writing. Forbearance programs are best for people who have experienced sudden unexpected income loss or debt, and simply need some extra time to readjust their spending and recover financially.
SHORT SALE
Those who can't afford to pay their house payments and know they can't afford to keep their home can request a short sale. A short sale is when a lender accepts a discount or shortage on a mortgage balance to avoid a possible foreclosure auction or bankruptcy. Depending on your particular situation, this could be one of the best alternatives to foreclosure. Mortgage companies and banks that offer a short sale as a option are sometimes willing to take less than the amount owed on the home.

Depending on circumstances, lenders are often willing to completely forgive the homeowner of the debt. In many cases, the homeowner and lender have certain provisions that must be adhered to when transacting a short sale. For instance, many lenders require the home to be on the market for a minimum of 90 days, have established maximum commission levels for any real estate agents involved, and may require the broker be a member of the Multiple Listing Service (MLS). A hardship letter explaining the reasons for financial problems as well as a list of debts and income are required, as well as any other bank-specific paperwork and forms. If you can't pay your house payments and can prove financial hardship, a short sale could be one of the most viable alternatives to your financial problems.
DEED IN LIEU OF FORECLOSURE.
As a last resort, you may be able to voluntarily "give back" your property to the lender. This won't save your house, but may increase your chances of qualifying for a mortgage loan in the future. A deed in lieu of foreclosure may be a viable option for individuals who can verify they are incapable of paying their mortgage payments due to financial hardship. This option may save lenders the time and expense caused by homeowners who abandon their homes, and it can be one of the best long-term solutions for all concerned.

Before most lenders will offer a deed in lieu of foreclosure, a typical requirement is that the house must be listed for sale at fair market value. The homeowner needs to demonstrate that they are trying to find a solution, therefore lending credibility to the homeowner through the action of actively trying to sell the home. If the market is stagnant and the home doesn't sell, and you qualify for a deed in lieu of foreclosure, the lender may allow you to sign off on the house and walk away without owing on the mortgage.

The deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The principle advantage to the borrower is that it immediately releases him/her from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms that he or she would in a formal foreclosure.

The alternatives above are the three most common situations utilized to avoid foreclosure. Contingent on the type of mortgage loan you have, there may be others. Specifically: if you have a Federal Housing Insured (FHA) loan, you will want to contact HUD/FHA for guidance. The Department of Housing and Urban Development (HUD) has been instrumental in establishing guidelines to assist homeowners experiencing financial hardships. The goal is to offer financial alternatives to foreclosure, while allowing lenders to make determinations based on certain risk criteria.

Additionally, here is a link to a website which provides guidance applicable to homeowners with FHA Insured loans.

For Veterans Administration (VA) loans, you will want to contact the United States Department of Veterans Affairs; here is a link directly to the page addressing foreclosure alternatives.

HOW WILL THESE ALTERNATIVES AFFECT MY CREDIT?

We went right to the myfico.com "Credit Education Center" to ask that question. Here is the answer verbatim: "The common alternatives to foreclosure, such as short sales, and deeds-in-lieu of foreclosure are all "not paid as agreed" accounts, and considered the same by your FICO® score. This is not to say that these may not be better options for you from a financial perspective, just that they will be considered no better or worse for your FICO score.

If you are considering bankruptcy as an alternative to foreclosure, that may have a greater impact to your FICO score. While a foreclosure is a single account that you default on, declaring bankruptcy has the opportunity to affect multiple accounts and therefore has potential to have a greater negative impact on your FICO score."

Businesses Get The Cash You Need NOW!

2010-06-14T14:20:00.000-05:00

Small and mid-sized business owners know that credit crunch is far from over.

No matter what the financial pundits say about the recession being over the truth is that banks are still being cautious about lending money to small and mid-sized businesses, causing the recovery to be slow and painful.

In an article written for Bloomberg Businessweek Steve Matthews and Vivien Lou Chen seem to be on the money when they wrote “Owners of small businesses across the country are telling Fed officials that they would expand and hire more workers if only they could get financing.” It’s not a secret that business owners need cash flow to expand and with current banks situation, it is high time that they look for an alternative to bank loans.

One such alternative to a bank loan is a merchant cash advance which allows suitable small business owners to get up to $250,000 in business funds in less than a week. Let’s face it… there are numerous disadvantages of a bank loan. There are issues such as lack of flexibility, long waits for approval, interest amounts, possible binding covenants etc. Rather than waiting on banks to loosen their standards, small business owners can take matters into their own hands and apply for a merchant cash advance.

One of the best things about a merchant cash advance is that eligible business owners can use their funds as it pleases them. Business owners can use the funds for working capital, to renovate the business or to purchase inventory and/or advertising, the opportunities are endless.

Another unique feature of a merchant cash advance is that the business owner does not have to make a fixed monthly payment. The only time a business owner makes a payment is when his / her business processes credit card sales.

When customers pay using credit cards, the merchant cash advance provider deducts a small percentage of the sale and applies it to the business cash advance repayent.

Eliminate Your Debt By Yourself

2010-05-25T10:37:00.000-05:00

Credit card debt is the main concern of many Americans nowadays. The habit of "swipe first, pay later" is the main cause. When the debt has become unbearable, it is time for the cardholders to search for ways to reduce their debts.

There are many different ways you can use to eliminate your outstanding balances. You may look for settlement companies or settlement lawyer to negotiate with your creditors on your behalf but you need to allocate some money to pay for the debt reduction service. In order to save cost, I strongly recommend you to manage your debt on your own. Bargaining with your creditors is not hard and you don't need to feel embarrassed.

In order to "execute" the debt negotiation process successfully, you need to get yourself ready, both financially and emotionally. Let me share with you some useful tips:

· Before contacting your creditors, you need to find out how much your outstanding balance is for each of your card. Get the total sum of your debt. Then, you need to calculate carefully how much cash on hand you have so that you can propose a reasonable settlement amount to your creditors. This step is important because you must determine whether you are qualified for settlement or not.

· You are required to have good interpersonal skill when you are dealing with your creditors. When the communication between both parties takes place, you need to stay calm and be patient. Hence, before you call up your creditors, you need to make sure that you have strong emotional intelligence. By having this element, you will be less depressed and less stressful when you are making your request. The negotiation process will become much smoother.

· Now, you need to use the right tactics when you propose your settlement offer. You may first propose to the creditors to reduce partial of your total debt. If it is not agreeable, you may request them to reduce or freeze your current interest rates. Besides, you can also request them to waive all types of fees. You must stick to the main principle, i.e. reducing your financial cost.

· When you are dealing with your creditors, you need to show your sincerity and your commitment in settling your debt. Show your willingness to pay off partial of your debt by giving the creditors the date you are going to make payment.

This is to prove to your creditors that you really take up the responsibility.

By following the tips above, I believe that without external assistance, you still can get rid of your credit card debt smoothly on your own.

Negotiate Your Way Out Of Debt

2010-05-23T10:35:00.000-05:00

You decided to go for debt settlement and don't know how to treat your creditor? Then you need some tips on how to get a favorable debt settlement deal with your credit card company. I'm sure you are going to find these tips quite interesting.

1- Do your homework. Come with a plan regarding your finances and why you cannot pay your debt. This is a good way to show your creditors that there is no possible way you could pay as much as they ask you too. Also, if you can, you can make a payment plan on your own, come with that too because you might impress your creditor with it.

2- Be polite. Don't forget your manners just because you have to make a negotiation. In fact, all successful negotiators care about manners a lot. So, try to be polite and speak clear without having a threatening tone.

3- Be serious. If you are going to convince your creditor that you want to pay your debt and you won't miss your payments, chances are that they might agree with your offer because you will seem reliable.

4- Learn your rights before the negotiations. Ask a lawyer or get some financial consulting before going to negotiations about your rights. It's very important to know them since you need to win your negotiation and benefit from the law. Also, if your creditors see that you are knowledgeable they might bargain with you less.

5- Don't annoy the creditors. I know you are supposed to make a negotiation, but if you see that your creditors don't want to bargain with you then you should stop. Perhaps choose another time, wait a couple of months until things settle down and ask for a reduction again.

Of course, you don't really need these tips if you choose a professional debt settlement company, since they do it all for you. But if you choose to represent yourself and deal with your creditors alone, then you will definitely need to respect the advice above. Whatever you do, debt settlement is a better option than bankruptcy, so you should definitely avoid that.

Debt settlement is a legitimate alternative to filing bankruptcy. If a consumer has over $10k in unsecured debt and is currently experiencing a financial hardship then debt settlement can make financial sense.

Home Foreclosures Rise In 1st Quarter

2010-05-19T10:33:00.000-05:00

WASHINGTON – The number of homeowners who missed at least one mortgage payment surged to a record in the first quarter of the year, a sign that the foreclosure crisis is far from over.

More than 10 percent of homeowners had missed at least one mortgage payment in the January-March period, the Mortgage Bankers Association said Wednesday. That number was up from 9.5 percent in the fourth quarter of last year and 9.1 percent a year earlier.

Those figures are adjusted for seasonal factors. For example, heating bills and holiday expenses tend to push up mortgage delinquencies near the end of the year. Many of those borrowers become current on their loans again by spring.

Without adjusting for seasonal factors, the delinquency numbers dropped, as they normally do from the winter to spring.

More than 4.6 percent of homeowners were in foreclosure, also a record. But that number, which is not adjusted for seasonal factors, was up only slightly from the end of last year.

Stocks slid Wednesday as investors looked past a rising euro and focused on the U.S. economy, including the rising number of foreclosures. The Dow Jones industrial average fell more than 100 points in early trading.
Jay Brinkmann, the trade group's chief economist, said the foreclosure crisis appears to have stabilized. Seasonal adjustments may be exaggerating the change from the previous quarter, he added.

"I don't see signs now that it's getting worse, but it's going to take a while," he said. "A bad situation that's not getting worse is still bad."

Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit. But homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures.

Those borrowers made up nearly 37 percent of new foreclosures in the first quarter of the year, up from 29 percent a year earlier.

The risky subprime adjustable-rate loans that kicked off the foreclosure crisis are making up a smaller share of new foreclosures. They made up 14 percent of new foreclosures in the January-March period, down from 27 percent a year earlier.

Success Secrets Of The Millionaires

2010-05-18T10:11:00.001-05:00

They’re just like you.

But with lots of money.

When you think “millionaire,” what image comes to mind? For many of us, it’s a flashy Wall Street banker type who flies a private jet, collects cars and lives the kind of decadent lifestyle that would make Donald Trump proud.

But many modern millionaires live in middle-class neighborhoods, work full-time and shop in discount stores like the rest of us. What motivates them isn’t material possessions but the choices that money can bring: “For the rich, it’s not about getting more stuff. It’s about having the freedom to make almost any decision you want,” says T. Harv Eker, author of Secrets of the Millionaire Mind. Wealth means you can send your child to any school or quit a job you don’t like.

According to the Spectrem Wealth Study, an annual survey of America’s wealthy, there are more people living the good life than ever before—the number of millionaires nearly doubled in the last decade. And the rich are getting richer. To make it onto the Forbes 400 list of the richest Americans, a mere billionaire no longer makes the cut. This year you needed a net worth of at least $1.3 billion.

If more people are getting richer than ever, why shouldn’t you be one of them? Here, five people who have at least a million dollars in liquid assets share the secrets that helped them get there.

1. Set your sights on where you’re going
Twenty years ago, Jeff Harris hardly seemed on the road to wealth. He was a college dropout who struggled to support his wife, DeAnn, and three kids, working as a grocery store clerk and at a junkyard where he melted scrap metal alongside convicts. “At times we were so broke that we washed our clothes in the bathtub because we couldn’t afford the Laundromat.” Now he’s a 49-year-old investment advisor and multimillionaire in York, South Carolina.

There was one big reason Jeff pulled ahead of the pack: He always knew he’d be rich. The reality is that 80 percent of Americans worth at least $5 million grew up in middle-class or lesser households, just like Jeff.

Wanting to be wealthy is a crucial first step. Says Eker, “The biggest obstacle to wealth is fear. People are afraid to think big, but if you think small, you’ll only achieve small things.”

It all started for Jeff when he met a stockbroker at a Christmas party. “Talking to him, it felt like discovering fire,” he says. “I started reading books about investing during my breaks at the grocery store, and I began putting $25 a month in a mutual fund.” Next he taught a class at a local community college on investing. His students became his first clients, which led to his investment practice. “There were lots of struggles,” says Jeff, “but what got me through it was believing with all my heart that I would succeed.”

2. Educate yourself
When Steve Maxwell graduated from college, he had an engineering degree and a high-tech job—but he couldn’t balance his checkbook. “I took one finance class in college but dropped it to go on a ski trip,” says the 45-year-old father of three, who lives in Windsor, Colorado. “I actually had to go to my bank and ask them to teach me how to read my statement.”

One of the biggest obstacles to making money is not understanding it: Thousands of us avoid investing because we just don’t get it. But to make money, you must be financially literate. “It bothered me that I didn’t understand this stuff,” says Steve, “so I read books and magazines about money management and investing, and I asked every financial whiz I knew to explain things to me.”

He and his wife started applying the lessons: They made a point to live below their means. They never bought on impulse, always negotiated better deals (on their cars, cable bills, furniture) and stayed in their home long after they could afford a more expensive one. They also put 20 percent of their annual salary into investments.

Within ten years, they were millionaires, and people were coming to Steve for advice. “Someone would say, ‘I need to refinance my house—what should I do?’ A lot of times, I wouldn’t know the answer, but I’d go find it and learn something in the process,” he says.

In 2003, Steve quit his job to become part owner of a company that holds personal finance seminars for employees of corporations like Wal-Mart. He also started going to real estate investment seminars, and it’s paid off: He now owns $30 million worth of investment properties, including apartment complexes, a shopping mall and a quarry.

“I was an engineer who never thought this life was possible, but all it truly takes is a little self-education,” says Steve. “You can do anything once you understand the basics.”

3. Passion pays off
In 1995, Jill Blashack Strahan and her husband were barely making ends meet. Like so many of us, Jill was eager to discover her purpose, so she splurged on a session with a life coach. “When I told her my goal was to make $30,000 a year, she said I was setting the bar too low. I needed to focus on my passion, not on the paycheck.”

Jill, who lives with her son in Alexandria, Minnesota, owned a gift basket company and earned just $15,000 a year. She noticed when she let potential buyers taste the food items, the baskets sold like crazy. Jill thought, Why not sell the food directly to customers in a fun setting?

With $6,000 in savings, a bank loan and a friend’s investment, Jill started packaging gourmet foods in a backyard shed and selling them at taste-testing parties. It wasn’t easy. “I remember sitting outside one day, thinking we were three months behind on our house payment, I had two employees I couldn’t pay, and I ought to get a real job. But then I thought, No, this is your dream. Recommit and get to work.”

She stuck with it, even after her husband died three years later. “I live by the law of abundance, meaning that even when there are challenges in life, I look for the win-win,” she says.

The positive attitude worked: Jill’s backyard company, Tastefully Simple, is now a direct-sales business, with $120 million in sales last year. And Jill was named one of the top 25 female business owners in North America by Fast Company magazine.

According to research by Thomas J. Stanley, author of The Millionaire Mind, over 80 percent of millionaires say they never would have been successful if their vocation wasn’t something they cared about.

4. Grow your money
Most of us know the never-ending cycle of living paycheck to paycheck. “The fastest way to get out of that pattern is to make extra money for the specific purpose of reinvesting in yourself,” says Loral Langemeier, author of The Millionaire Maker. In other words, earmark some money for the sole purpose of investing it in a place where it will grow dramatically—like a business or real estate.

There are endless ways to make extra money for investing—you just have to be willing to do the work. “Everyone has a marketable skill,” says Langemeier. “When I started out, I had a tutoring business, seeing clients in the morning before work and on my lunch break.”

A little moonlighting cash really can grow into a million. Twenty-five years ago, Rick Sikorski dreamed of owning a personal training business. “I rented a tiny studio where I charged $15 an hour,” he says. When money started trickling in, he squirreled it away instead of spending it, putting it all back into the business. Rick’s 400-square-foot studio is now Fitness Together, a franchise based in Highlands Ranch, Colorado, with more than 360 locations worldwide. And he’s worth over $40 million.

When extra money rolls in, it’s easy to think, Now I can buy that new TV. But if you want to get rich, you need to pay yourself first, by putting money where it will work hard for you—whether that’s in your retirement fund, a side business or investments like real estate.

5. No guts, no glory
Last summer, Dave Lindahl footed the bill for 18 relatives at a fancy mansion in the Adirondacks. One night, his dad looked out at the scenery and joked, “I can’t believe we used to call you the black sheep!”

At 29, Dave was broke, living in a small apartment near Boston and wondering what to do after ten years in a local rock band. “I looked around and thought, If I don’t do something, I’ll be stuck here forever.”

He started a landscape company, buying his equipment on credit. When business literally froze over that winter, a banker friend asked if he’d like to renovate a foreclosed home. “I’m a terrible carpenter, but I needed the money, so I went to some free seminars at Home Depot and figured it out as I went,” he says.

After a few more renovations, it occurred to him: Why not buy the homes and sell them for profit? He took a risk and bought his first property. Using the proceeds, he bought another, and another. Twelve years later, he owns apartment buildings, worth $143 million, in eight states.

The Biggest Secret? Stop spending.
Every millionaire we spoke to has one thing in common: Not a single one spends needlessly. Real estate investor Dave Lindahl drives a Ford Explorer and says his middle-class neighbors would be shocked to learn how much he’s worth. Fitness mogul Rick Sikorski can’t fathom why anyone would buy bottled water. Steve Maxwell, the finance teacher, looked at a $1.5 million home but decided to buy one for half the price because “a house with double the cost wouldn’t give me double the enjoyment.”

ORIGINAL STORY HERE

Your Debt Is Forgiven

2010-05-17T19:37:00.000-05:00

Settlement companies are doing a lot of business these days. As so many people are facing severe financial problems, there is no scarcity of clients for these companies. Hence, you don’t need to be worried about scarcity of choices. How you will face a problem when it comes to finding legal choices?

You will see that every company pretends to be legitimate but the facts are very different. The truth is rarely mentioned by these firms. How do you ensure that you are looking at legal options in case of consumer debt bailouts or not? If you are looking for the best source of legitimate consumer debt bailouts, you should contact TASC (The Association of Settlement Companies).

What kind of help can you expect?
TASC (The Association of Settlement Companies) can be termed as the encyclopedia of settlement firms. You can know each and everything about a legitimate organization. We hear about countless settlement companies every day. Are all of them reliable? Can you trust them for successful consumer debt bailouts?
Some companies will present lame excuses if TASC does not have updated records about them. For instance, you may be told that the registration status has expired recently. Never even think of believing such an explanation. In addition to that, never underestimate scammers. They have a wide array of techniques and tactics to fool the clients.

What is the best way to combat recession?
You need to handle each recession effect individually. For instance, unemployment is one of the effects. As people are being thrown out of their organizations without proper reasoning, you need to put in extra efforts. Your boss should be confident that the organization needs you. Nowadays, companies are trying to survive with the minimum number of employees. Even one extra employee is a problem for them. Even if you lose your job, don’t waste your savings in bank payments. Go for consumer debt bailouts so that you do not have to pay a large sum of money.

Inflation is another recession related problem. As organizations are going in a loss, they have to increase the prices of their products. However, companies are not increasing the salaries of their employees. Hence, a lot of us are facing affordability issues.

Consumer debt bailouts also depend on your credit card company. If it is desperate for money, it will even accept twenty percent of the actual dues. However, strong financial companies are not that lenient.

How Long Can Negative Information Remain On A Credit Report?

2010-05-15T09:59:00.001-05:00

The Fair Credit Reporting Act or the FCRA was enacted into law back in 1970 to protect consumers from unfair, misleading and erroneous credit reporting. It also established a time limit for the reporting of bad credit on a report. There is a limit to how long something that is negative yet still accurate can remain on your report.

If there is inaccurate reporting on your account, be it outright mistakes or just misleading and not completely truthful information you have the right to dispute this information to get it removed. The credit bureaus have 30 days from receipt of a dispute to verify the accuracy of their information or to delete it from the report.

However, accurate and truthful information should remain on your report but only for as long as the statute of limitations will allow. The FCRA explicitly outlines the length of time that negative credit information can continue to be reported.

Contrary to what many believe, the time period for reporting is not from the last activity on the account so making payments or partial payments does not affect how long the negative credit can remain on the report. The time limit starts immediately upon the date of the first delinquency with the exception of unpaid tax liens and unpaid Federal student loans. These two items can remain on the report indefinitely but everything else will drop off within a specified period of time.

The majority of items will drop off in 7 years regardless of when or even if they have been paid. This includes late payments and if there are multiple late payments on a single account each one will be treated individually, dropping off 7 years from the date of the late payment. Chapter 13 bankruptcies and tax liens or student loans that have been paid in full will also drop off automatically after 7 years.

A charge-off and a collection account will drop off 7 years plus 180 days after the date of the first delinquency. The majority of collection accounts have been charged off from the original lender so these accounts are typically treated the same as a charge-off. Collection accounts often change hands among different agencies, yet that type of activity cannot legally change the statute of limitations. Both a charge-off and a collection account must drop off 7 years plus 180 days from the date of the first delinquency.

There are a few variables from the 7-year rule. A Chapter 7 bankruptcy will stay on your report for 10 years. A hard inquiry will only stay on a report for 2 years. And of course, if you fail to pay your tax liens or your Federal student loans they can be reported forever or until you pay them off at which time the statute of limitations time period begins.

There are many things that you can do to repair and improve your credit even during the 7 to 10 years that most negative credit must be reported. And while you make improvements make sure that you keep your credit good and eventually all of the bad credit will be erased from the past.
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Know The Rules Before You Play The Game

2010-05-08T14:14:00.000-05:00

Establishing credit early may help consumers build the credit report needed in order to obtain favorable interest rates on loans - if they put strong money management skills to use.

The U.S. Department of the Treasury recently stressed the importance of this financial literacy after an exam taken by the nation's high school students found that many had substantial room for improvement. The 76,000 participants in the National Financial Capability Challenge scored an average of 70 percent, according to a release from the Treasury.

High school students from all 50 states partook in the challenge, which was launched in December. The highest scoring states were Idaho, South Dakota and Wyoming, according to the release, while Virginia, Iowa and Wisconsin had the highest participation rates.

"I'm so proud that so many teachers turned out to help teach students the basics of personal finance," Department of Education Secretary Arne Duncan said. "But the low scores on these test show us that, when it comes to financial literacy, we've got a lot more work to do to get our students where they need to be."
Teachers participating in the program received an Educator Toolkit to complement their lessons. Some administered the exam before teaching students about financial literacy, according to the release, while others used it as a gauge for the students' success. The highest scoring students will receive $1,000 scholarships through the Charles Schwab Foundation.

About 2,500 educators administered the challenge, according to the release, averaging about one for each of the nation's schools. Stonewall Jackson High School teacher Terri Carson was among these teachers. She implements a "financial literacy boot camp" to help students at the Manassas, Virginia, school improve their money management skills.

"Schools need to provide children with personal finance education to help them navigate our very complex economic system," she said. "My students will use the financial literacy skills that I teach them in my business classes every day of their adult lives."

Duncan and Treasury Secretary Timothy Geithner urged more teachers to embrace their role in shaping their students' financial future.

In addition to the Treasury and Educations Departments' efforts, President Barack Obama has recently put an emphasis on improving Americans' money management skills by declaring April National Financial Literacy Month. Many public and private organizations have seized this initiative to educate consumers about eliminating debt, avoiding risk and properly disposing personal documents.

Government Grants For All

2010-05-06T11:36:00.000-05:00

Many people are starting to drown in debt. Credit card debt levels progress each year and have reached $8,000 per individual, according to some statistics. You definitely want to get out of debt; otherwise you would not have been reading this article. Or, probably, you are seeking ways to earn more and spend less with better education or job?

If you are a single parent and are raising kids on your own, barely making the ends meet, you may find it interesting that there are free money giveaways by U.S. Government for qualifying single moms. Many of us came across information online that there are grants available for those in need, with no need for repayment. Many have wondered whether it is true.

Despite What Many Think Government Grants Are Widely Available
In fact, it is. While the money is there to be given out, there is some research and legwork to do in order to get it. You should learn about grant options available for you to use. There are many government-funded programs within an easy reach for single mothers. Well, if you are not a single mother, do not get discouraged - there is money for many others in financial need.

There are grants available for funding many life activities, such as going back to school, getting professional training, or helping to take care of family in difficult times. Such assistance programs, however, are not always easy to find.

U.S. Government Hides Information About Free Money
The matter of fact is that U.S. Government, boasting endorsement of social programs to improve their electorate approval ratings, makes such programs hard to find. While millions and millions have been set aside for grants, details of them are hard to obtain. Therefore, some research is required.

Investing time and effort in digging out grants and financial assistance programs is well worth it. Few people know of existence of such programs, and even more do not believe that there is in fact free money out there for people to claim.

What kinds of assistance are available, you may ask. There are grants out there at all levels waiting for you to claim: federal, state, county, and city programs are available. Besides those, there are private associations and community groups willing to issue grants to people in need. While many people may qualify for those, they are of especially great help to those, falling into minority groups.

You CAN Accept Credit Cards

2010-04-30T12:47:00.000-05:00

The Credit Card processing permits an Internet Enterprise to a great extent in accommodating a wide range of the potential in its customers. The principle deliberation in the Credit Card Processing is in preparing for the Online Enterprise. If you desire for the acquaintance of the Credit Card Processing then this entire article is prepared for you. This article will focus on the benefits that are offered to the Credit Card processors in their online trade.

The credit card processing services enable the businessman to achieve their targets and also offer a lot of services to the clients. With the help of these terminals you can organize your business in amore convenient way. You can enhance the working by adding this great technology which will definitely bring benefits to the business. It will serve you with profits and many advantageous features too.

Additional to this you will be able to make the work suitable for the impending customers with whom you are dealing. By the aid of the various cards you can make a transfer of the money. You can check the places and send the orders of the money for the products that you purchase. These systems provide you with the detailed account of the plastic cash. The system supports the easy deal that is smoothly executed.

The Processing system is a vital part in processing your online transactions. Computerization is what you will require to make 24/7, even at the time you are online. The Processing provide you with the ideal options that serve in the diverse areas like supervision and intervention. The soul of the processing in the Credit Card is the merchant account.

The merchant account can provide you the best service through the use of the processing terminals. A few of them even charge a fee for the account while a few of them are available free of cost or on yearly basis. Price is not a factor of concern but quality is what is needed to carry out the transaction. Thus one should always remember that the entire support of the business lies upon the best processing services.

Therefore the merchants must go for the best available option to provide the best customer support to its clients. It is really essential that the traders work for the customer satisfaction and make give them the effective means of payments. So make the most appropriate choice of the credit card terminal that helps in flourishing your business.

Is Your Business Thinking About Accepting Credit Cards?

2010-04-29T11:10:00.000-05:00

Credit card processing fees are one of the major considerations while subscribing the services. Every business owner who wants to buy a credit card processing terminal takes special care of the processing fee. The merchant who offers you the terminal or the services, ask you a fee that may vary as per the specific conditions. However understanding the complexity of fees is really difficult yet essential in order to secure a profitable deal.

Moving ahead in this article we will explain the different sort of credit card processing fee. Knowing these beforehand may save you from being trapped. When you go for setting up a merchant account, you will encounter a variety of fees. Sometimes these are charged upfront while quite often these are hidden. Thus it is always better to investigate for these well in advance;

1. Application Fee
While applying for a credit card merchant account, a fee is charged to process the application, known as application fee.

2. Annual Membership Fee
Yearly credit card processing fee is charged in order to allow you to accept special industry cards. If you are signing up an account with any trade organization, it is necessary that you purchase a membership. Apart from this the yearly payment is changed against your right to access.

3. Set-Up Fee
If you want to get an access to the secured Payment Gateway, a fee will be charged to active or process your merchant account.

4. Gateway Access Fees
To use the secure server facility for processing and approving transactions a fee is charged which is known as gateway access fees. It may be treated as a part of the month wise processing fee or can be treated as separate line item.

5. Monthly Statement Charges
In order to get an automatically generate statement you need to pay Monthly statement fee. Only a few institutions charge it.

6. Fixed Transaction Fees
These are the charges in addition to the discount rate. This is the flat charge payable for each car processing.

7.Cancellation Charges/Penalties
At the time of discontinuing a merchant account an additional processing fee is charged as the cancellation penalties.

8. Monthly Minimums
This is a "floor" on the amount of credit card processing fees you pay for your merchant account and applies if other fees total less than the minimum.

Aside the above discount rates, Address Verification Service charges and chargeback or reversal fees are some of the other important payables that you need to pay while using, subscribing or discontinuing this service.

Think SMART And Do The Right Thing

2010-04-28T12:18:00.000-05:00

Getting into credit card debt causes many consumers to end up in over their head. The debt that is paid off in minimum payments will take years to fully pay off, if it ever occurs at all. Credit cards are designed to keep the user in debt constantly paying high amounts of interest for years and years. While it is far better to never get into debt at all, for many people this advice comes too late. There are some things that consumers can do to dig their way out from under the crush of credit card debt.

First, make a list of all of your debt and the amount of interest that is being paid on each card. If you can get a debt consolidation loan, this will not eliminate the amount that you owe, but it will reduce the amount of interest that is being paid on it. A debt consolidation loan can also lump all of your credit card bills into one monthly payment that is much easier to manage but it generally makes an unsecured debt secured by property and really not a very good idea at all..

This is NOT te time to make rash, impulsive, unintelligent decisions

If a debt consolidation loan is not possible, you should begin making larger payments than the minimum. For those with multiple credit cards to pay off, concentrate on one at a time and pay it off while you pay the minimum on the others. You will instantly begin to reduce the amount of interest you are paying, once you begin to eliminate each credit card payment.

Debt management companies can also help you to get out from under your debt. These businesses help you to better manage your monthly payments and will help you work out a budget. You may also be able to negotiate a better deal with your credit card companies if you are working with a debt management company, but steer clear of the CCCs (credit counseling companies) It has been my experience with clients tha enrolled in their prorams that they are far worse off than they were before.

These are a few of the things that you can do to manage your credit card debt. Explore all of your options and find the one that works best for your situation. Getting out of debt is not an easy task. Nor is it a quick fix. It took a while fr you to get into debt and it will take you a while to get out and recover from it.

It is essential that you work on a budget and stick with it. To make extra payments on your credit cards, you will have to make cutbacks in other areas. Go over your budget with a fine tooth comb to find every area that you spend extra money.

It will be well worth the struggle once you have your debt paid off and you are debt free. It is a good rule of thumb to only make purchases with a credit card that you will pay off at the end of the month. The credit card compaies considr people that do this as deadbeats because you don't pay interest this way. Even if you find a great sale on an item, if you do not plan to have the money at the end of the month, do not make the purchase. You will not be saving anything if you end up paying interest on that sale item.

With a little hard work, you will have your finances completely under control, which will put more money in your pocket in the end.
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You Can't Have It Both Ways

2010-04-27T13:47:00.000-05:00

Corporate profits appear to have returned in full, manufacturing is picking up around the world, commodities prices have rallied and the Standard & Poor’s 500 Index is up about 60% since last March.

That makes a pretty compelling case for what some analysts are calling a “V-shaped” recovery. But even with all the momentum the economic recovery has accrued, that kind of talk may be a bit premature.
To be sure, anyone looking to make the case for a V-shaped recovery has plenty of data to fall back on:

The U.S. economy expanded by 5.6% in the fourth quarter of 2009, and most analysts believe it grew by another 3% in the first quarter of this year.
The economy added jobs at the fastest pace in three years in March, as payrolls edged up by 167,000.
And earnings for companies in the S&P 500 - which more than doubled in the fourth quarter of 2009 - likely rose an additional 30% in the three months ended in March, according to analysts’ estimates compiled by Bloomberg.

All of this data indicates that the U.S. economy is on far more stable ground than many analysts had originally anticipated it would be. And the result has been a huge bull-run in stocks.
Still, a closer look at the data shows that any appearance of a V-shaped rebound is illusory.

http://www.dailymarkets.com/stocks/2010/04/26/don%E2%80%99t-bet-on-a-v-shaped-us-economic-recovery/

Your Debt Relief Is Here

2010-04-25T10:17:00.000-05:00

There’s a commotion today not only in the US customers but even worldwide of the tricky money circumstances the people are running across in these current times.

The best chaos is many of us can’t make their both ends meet because many have got downsized and hence they can not pay their obligations ; therefore, they need assistance – serious help.

This nonpayment of debt have led to an adverse effect on some business sectors and one of these industries which are running into problems of picking up payment is the Mastercard industry. One of the main reasons that many of the card holders are encumbered by their debt is due to the unreasonable interest rate imposed by the Visa card corporations.

Many think the IR of about 222% imposed on the acquired amount by the Visa card firms are thought of as cruel, unethical and impractical. It is reasonably cheating when cards are offered to potential clients because most frequently mastercards are dropped at your office or residences without even asking for for it. Additionally it is given for free but without your understanding it is included in your monthly billing.

It is unlucky that there isn’t any clear reason on the IR charges and other penalties and they deserve to be partially blamed on this problem. So , the reason for the issue of ballooning card debt of the clients can also be partially traceable from the card corporations who are promoting obscure Mastercard programs not disclosing its significant point.

It is quite understandable that customers of the credit card companies are requesting for a relief of their debt and many people clamoring for the government help. Hence, several years ago the U.S. Congress enacted a bill which is called the National Economic Stabilization and Recovery Act (NASARA) whose purpose is to forgive the debt of the credit card holders.

However, because of the vast influence of the some businessmen in the industry they were successful in deliberately holding its implementation and consequently the law has not been put into effect. Even without the law the credit card companies should heed this call of credit card debt forgiveness as part of their social responsibility towards their customers. Anyway they have grown to this level of becoming one of the most viable businesses and this should give due consideration on this request.

Debt Collector Abuse

2010-04-19T09:58:00.000-05:00

Debt collector abuses are nothing new.

But consumer advocates fear the abuses will grow more widespread in numbers and scope at a time when millions of Americans are struggling to pay their bills.

“There’s no doubt that the debt collection industry is thriving. You can’t get blood from a rock, but these guys are trying,” said Ira Rheingold, executive director and general counsel of the National Association of Consumer Advocates, a consumer advocacy group based in Washington D.C.

Hundreds of consumers have posted complaints on ConsumerAffairs.com’s site, alleging that scrupulous collectors have threatened arrest and jail, made harassing phone calls, contacted third parties and told about the debts, called employers at work and also tried to collect a debt not owned by the consumer, all violations of the Fair Debt Collection Practices Act. More alarming, consumers have complained that debt collectors have gained access to their bank accounts and made withdrawals without their consent.

Last year, consumers filed 119,549 complaints against third party and creditor debt collectors claiming violations of the FDCPA

Living On The Cheap

2010-04-17T12:44:00.000-05:00

Don't judge this penny pincher by his cover. Jeff Yeager may be the author of The Ultimate Cheapskate's Roadmap to True Riches--which one might assume to be filled with coupon-clipping strategies and saving tricks--but his philosophy isn't as much about how to get more for less as it is learning to live with less, period.

Sure, he blogs about "12 Surprising Ways to Reuse Aluminum Foil," making cider bisque out of your jack-o-lantern, and using just enough toilet paper, but the bigger goal here is to live green, not just cheap. Ultimately, Yeager says, consumers should direct their frugal efforts toward downsizing their lifestyle--in major areas like housing and transportation--rather than saving a buck here and there. U.S. News recently spoke to Yeager about the most effective ways to economize.

Excerpts:
Explain your 'cheapskate' philosophy.
I don't really write about penny-pinching tips. I focus more on quality-of-life and happiness issues ... especially the idea of deciding what "enough" is for you. Most people don't ask themselves that. What would be enough money and enough stuff for you? My wife and I answered that question early in marriage, in our 30s. We were living a comfortable lifestyle--why would we want to spend every last dollar we earned as our salaries increased over the years? We established what I call a "permanent standard of living," a level we still live comfortably at today, even though we could afford to spend more ... we managed, for example, to pay off our house in 15 years and essentially retire in our 40s. It's all about the decisions you make.
[See 21 Things We're Learning to Live Without.]

What sorts of decisions?
Well, for me, it's all about the bigger financial decisions in life. I rail against the latte factor ... for 20 years, pundits have been saying that if you give up your daily Starbucks cup and bank the money, you can attain financial security. That may work on paper, but I don't think it works that way in reality, for most people. One [of the bigger decisions] is housing. I'm a big believer in finishing in your starter home: Buy a modest home when you're first starting out and ignore people who tell you not to pay it off right away. Pay off your mortgage as quickly as you can, settle in and get to know your neighbors, and make your house your home.

The conventional wisdom before the housing bubble burst was that if you could afford to pay down your mortgage early, instead take that extra money and invest it because mortgage money is relatively inexpensive to borrow. The financial pundits at the time said that any idiot could make a return on their investment above 5 percent or 4 percent of their mortgage interest. ... Well, it didn't work out that way.

These days with the tight economy, you hear so much in the media about economizing. But that's almost always about "how to get more for less" ... how to clip a coupon or find a bargain. But I think we're missing what could be the golden epiphany of these hard times: We shouldn't be asking ourselves "How can we afford it?" We should instead be asking, "Do we really need it?" There's lots of social science that shows that once you're above poverty level, more money and more stuff doesn't contribute to happiness. I believe that most Americans would be happier, and the quality of their lives would increase, if they would only spend and consume less. If you believe as I do, I think there will be a lot of upsides to the current recession in the long run.
[See 12 Hidden Costs of Homeownership.]

What are those upsides?
For example, when gas was $4, we all complained about it, but two-thirds of people reported that they changed their driving habits as a result. And unless I'm missing all the horror stories, nothing awful happened because of it. Certainly driving less is better for the environment and better for our pocketbooks, so where's the downside? Another example: Since the start of the recession, the size of new homes being built in the U.S. has dropped by about 11 percent ... 300 fewer square feet. Again, that's a change, but I don't think that's a bad thing. Think about the tremendous financial impact that the decision to live in a smaller home will have on your life.

Not only it cost more to buy [a larger home] in the first place, but once you have those extra 300 square feet, you have to insure it, decorate it, heat and cool it, maintain it, repair it, and pay taxes on it. That's the kind of fundamental decision that has enslaved so many Americans to the yoke of too much debt. So apparently now were going to be living in slightly smaller houses, but why is that a bad thing?
[How to Gauge Your Middle-Class Status.]
If you read the book The Not So Big House, it says that as humans, we're uncomfortable in big spaces. If we have a chance to move into the mansion on the hill, we're not really comfortable with it. We're learning some lessons in the recession. Personal savings rates are up. Even though things are tighter now, we're somehow magically able to put money in the bank. Go figure.

Aside from driving less and being happy with a smaller house, what other significant things we should cut back on?
Eating lower on the food chain, for one. I try to spend only a dollar a pound on food. It's a myth that it costs more to eat healthy. You can spend a lot, but when you think about the kinds of things we should eat the most of--whole grains, legumes, and produce--they tend to cost less per pound than things that are bad for us like red meat and many processed foods that are high in trans saturated fats. I encourage people to eat more meals at home. Forty-five percent of the average U.S. family food budget is spent on food prepared outside of home. And they cost an average of 80 percent more than preparing the same food at home. There's a lot of waste, too. According to the USDA, about 25 percent of food is thrown away, so arguably you could reduce your spending here by 25 percent simply by being smarter about food storage and portion control.

You write a lot about the relationship between being frugal and environmentally conscious on thedailygreen.com. Any takeaways?
For most Americans, the greenest thing you can do is consume less, which probably means spending less. I think there's some hypocrisy in the current green movement, even though I've been an ardent environmentalist my whole adult life. I fear that the so-called green movement is catching on now because there's a bunch of cool, expensive green stuff we can by. It's become what I call a "cause de stuff." Much of the current environmental movement in the U.S. seems to be built around the very thing it should be seeking to combat ... rampant consumerism.

Take green cleaning products. They tend to be more expensive than the toxic products. But you can clean almost everything with baking soda and vinegar, which are safer for the environment than green products and cost less than any other cleaning products, green or toxic. Hybrid vehicles are another example. It's cool now to own a $35,000 Prius, although driving a gas guzzler to work instead is better for the environment IF you carpool with four friends. Sure, the greenest choice would be to carpool in a hybrid, but I don't see Americans being that committed to environmentalism. We're really mostly committed to buying cool, expensive, green stuff. That's the hypocrisy I'm talking about.

You must make big purchases every now and then. What's your strategy?
I'm a big believer in the Consumer Reports approach to shopping. Buyer's remorse is at epidemic proportions. How is spending money on something we'll regret later a good thing? It makes us poorer, and clearly hasn't made us happy. My advice is to have a mandatory waiting period. Wait at least a week after you see something in the store that you want. I guarantee that half the time, you won't go buy it.

Once or twice a year, I look at the things I've spent more money on, and ask myself one simple question: "If I had it to do over again, would I have spent that money?" I call it a 'what heck was I thinking? audit." Maybe you'll see that you spend a lot on restaurant meals that you regret. I noticed that when I had a regular 9-to-5 job, when I was stressed at work, I'd often buy things I regretted later. It's a way of helping you learn from your mistakes and change your spending behavior.
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The Collection Letter Arrives

2010-04-16T11:27:00.001-05:00

So you opened your mailbox and found a collection letter. Do not fret. Credit repair offers a range of resolutions. Take the right steps and watch your stress melt away. Credit repair will give you the power to turn the tables on aggressive collectors. With the right technique you may even see the collector slink away, never to be heard from again. Are you ready to take control of the situation?

Open the Envelope
The first step is to overcome fear and open the envelope. Any delay on your part can hinder your credit repair plans. Per the Fair Debt Collection Practices Act you only have a thirty day window of opportunity to ask the collector to provide documentation of their right to collect and the amount of money claimed. This process is called debt validation and we will discuss it more in a moment.

Identify the Debt
Before you decide on a credit repair strategy you must do a little homework. Examine the collection letter carefully. Do you recognize the account? Collection letters must include a fair amount of information including the original creditor name. Mistakes are not uncommon. If the debt is not yours, pick up the phone and tell the collector. An experienced operator will get you off the account. But if they take an aggressive stance you will want to validate the debt, which should produce something to support your case.

The Statute of Limitations
Collectors have a finite amount of time to sue you for the money. This length of time is called the statute of limitation (SOL), and can make a world of difference to your credit repair effort. Beyond the SOL a collector has no leverage to turn the collection into a judgment. If they sue you after the SOL expires you must raise the time limit defense, but you will prevail. Statutes of limitation are state and debt type specific, and are almost always far less that the seven year reporting limit. If you are past the limit you can communicate without worry of legal action.

Validate the Debt
Debt validation is an important credit repair tool and easy to manage. Remember that you only have thirty days from receipt of your collection letter to request validation. You must request validation in writing, and it is helpful to specifically ask for proof of ownership of the debt as well as an accounting of the amount. If they cannot produce the documentation they are supposed to stop all collection and not report. If they do validate, you can decide on the next step with the comfort of knowing that the debt is legitimate.

Negotiate a Payoff
Once you determine that a debt is legitimate you may opt to negotiate a payoff. This is where the information produced by your credit repair efforts will pay off. Your debt validation provided balance information, and your statute of limitation research told you if the collector has any legal leverage. If the debt is beyond the SOL, know that you are in the driver seat. Let the collector know that you are aware of the SOL and be confident. You will prevail.

Fixing Bad Credit In A Bad Economy

2010-04-15T10:36:00.000-05:00

Lots of people have bad credit these days, especially with the relatively recent collapse of the economy. If you have bad credit, there is no magical way to "fix" it, although you can "correct" it slowly, over time, simply by getting on top of your debts, taking care of them responsibly, and then letting that new, responsible behavior appear on your credit report to represent the "new" you.

The thing about bad credit is that it's time sensitive. That means the older the bad credit is, the less likely it's going to have a big impact on your present day score. What does that mean for you when it comes to fixing bad credit, then?

What that means is that you need to begin to be responsible with your finances NOW. If you've run up a lot of credit card debt, stop. Cut up your credit cards or at the very least put them away someplace where you can't easily get to them, and begin to pay them off.

You can use a credit-counseling agency to pay off your credit card debt, but in fact, this is going to a waste of money for you. Not only will the credit counseling agency take part of the payments you give them as their fee, but in fact, what they do may not show up on your credit report at all. Instead, put the money you would pay a credit-counseling agency toward paying off your debt.

So, sit down and figure out your budget. How much do you have coming in in net income (after taxes), and how much do you have in NECESSITIES going out? That is, rent, mortgage, food, utilities, car payments, student loan payments, and so on. "Necessities" do not include trips to the mall to buy clothes or other items/services you want, but don't need.

Once you've got this broken out, you should have a certain amount of money left over at the end of every month. Now, take that extra money, and put 10% of that in savings for an emergency fund. DON'T spend that 10% in savings on anything but unforeseen necessities, like paying for basic expenses because you've lost your job, or paying for a large medical bill that has suddenly appeared that you weren't expecting.

Now, take the rest of what you've got left over, and put it toward paying off credit card or other debt. For all but your highest interest rate credit card, pay the minimum payment, and then put the rest of the money you've got toward that card.

Do that until this first card is paid off, and then move on down the line, starting with the next highest interest rate card and repeating the procedure. That is, pay the minimum payment on all but the highest interest rate card, and apply the balance of what you've got left to that card. This should help you pay off your credit card debt very quickly.

This also works for other kinds of debts as well, such as car loans, and so on. The point is, by being responsible with your debt by paying it off, and by paying your bills on time, you're going to improve your credit rating simply because you are now acting responsibly.

Keep it up, and you should see your credit score began to rise markedly. Within two years, your so-called "bad credit" behavior won't matter nearly so much as your new, responsible "good credit" behavior. So begin to act responsibly with your finances and credit now, pay your debt off, and you'll soon have truly good credit.

Fighting Back Against The Debt Collector

2010-04-13T10:53:00.001-05:00

America is a very litigious society.

We DO love our lawsuits. And with credit cards debt skyrocketing over the past few years it's no surprise that FDCPA lawsuits would soon follow in those footsteps. With credit repair and debt settlement companies playing a greater role in advising consumers about their rights, debt collection agencies are being held to the letter of the law.

The FDCPA, or Fair Debt Collection Practices Act, was passed by Congress in response to abusive practices by collection agencies. Stricter bankruptcy laws have forced a large number of Americans to deal with these collection agencies. Predictably, the lawsuits set a record high in 2009.

Charge-Offs Increase
In January of 2010, the credit card charge off rate, as measured by Moody's Credit Card Index, reached an all-time high in their 20-years of documenting this statistic at just above 11%. That's nearly a 49% increase in the number of accounts that credit card lenders had to write off as a loss from the same time period just a year ago. 2009 was a record year for credit card defaults, and the increase has so far carried over into 2010.

The increase in charge-offs means more accounts end up in the hands of debt collectors. While these collection agencies are generally given a lot of leeway when it comes to collecting debts, the law does set limits on their conduct.

FDCPA Complaints Follow Suit
It was unavoidable that the number of FDCPA would follow in line with the significant increase in credit card defaults. It's simple math really, more debt means more collection efforts. Increased collection efforts means more complaints to the Federal Trade Commission citing that the FDCPA was not adhered to and consumer's legal rights were violated.

In 2008, there were 5,188 FDCPA lawsuits filed. In 2009 this statistic rose almost 60% to 8,287 filings. With charge off's still trending upwards we can only assume that 2010 will be another record breaking year for this type of legal action.

When Will this Trend Stop?
It's normal for debtors who have fallen behind in paying their bills to have trouble with collection agencies. As a result they enlist the help of a credit repair or debt relief organization. Having a firm grip on the laws, these companies are informing their clients what is, and more importantly what isn't allowed by law.

Until we see a drop in the charge off rates, which is so heavily tied to our reeling economy, this upward movement is bound to continue. While debt collectors have the right to that money, the FDCPA will ensure that they do so ethically and legally.

Cheap Home Loans

2010-04-12T14:52:00.001-05:00

Interest Rates Have Nowhere to Go but Up

On Sunday April 11, 2010, 1:00 pm EDT

Even as prospects for the American economy brighten, consumers are about to face a new financial burden: a sustained period of rising interest rates.

That, economists say, is the inevitable outcome of the nation’s ballooning debt and the renewed prospect of inflation as the economy recovers from the depths of the recent recession.

The shift is sure to come as a shock to consumers whose spending habits were shaped by a historic 30-year decline in the cost of borrowing.

“Americans have assumed the roller coaster goes one way,” said Bill Gross, whose investment firm, Pimco, has taken part in a broad sell-off of government debt, which has pushed up interest rates. “It’s been a great thrill as rates descended, but now we face an extended climb.”

The impact of higher rates is likely to be felt first in the housing market, which has only recently begun to rebound from a deep slump. The rate for a 30-year fixed rate mortgage has risen half a point since December, hitting 5.31 last week, the highest level since last summer.

Along with the sell-off in bonds, the Federal Reserve has halted its emergency $1.25 trillion program to buy mortgage debt, placing even more upward pressure on rates.

“Mortgage rates are unlikely to go lower than they are now, and if they go higher, we’re likely to see a reversal of the gains in the housing market,” said Christopher J. Mayer, a professor of finance and economics at Columbia Business School. “It’s a really big risk.”

Each increase of 1 percentage point in rates adds as much as 19 percent to the total cost of a home, according to Mr. Mayer.

The Mortgage Bankers Association expects the rise to continue, with the 30-year mortgage rate going to 5.5 percent by late summer and as high as 6 percent by the end of the year.

Another area in which higher rates are likely to affect consumers is credit card use. And last week, the Federal Reserve reported that the average interest rate on credit cards reached 14.26 percent in February, the highest since 2001. That is up from 12.03 percent when rates bottomed in the fourth quarter of 2008 — a jump that amounts to about $200 a year in additional interest payments for the typical American household.
With losses from credit card defaults rising and with capital to back credit cards harder to come by, issuers are likely to increase rates to 16 or 17 percent by the fall, according to Dennis Moroney, a research director at the TowerGroup, a financial research company.

“The banks don’t have a lot of pricing options,” Mr. Moroney said. “They’re targeting people who carry a balance from month to month.”

Similarly, many car loans have already become significantly more expensive, with rates at auto finance companies rising to 4.72 percent in February from 3.26 percent in December, according to the Federal Reserve.

Washington, too, is expecting to have to pay more to borrow the money it needs for programs. The Office of Management and Budget expects the rate on the benchmark 10-year United States Treasury note to remain close to 3.9 percent for the rest of the year, but then rise to 4.5 percent in 2011 and 5 percent in 2012.
The run-up in rates is quickening as investors steer more of their money away from bonds and as Washington unplugs the economic life support programs that kept rates low through the financial crisis. Mortgage rates and car loans are linked to the yield on long-term bonds.

Besides the inflation fears set off by the strengthening economy, Mr. Gross said he was also wary of Treasury bonds because he feared the burgeoning supply of new debt issued to finance the government’s huge budget deficits would overwhelm demand, driving interest rates higher.

Nine months ago, United States government debt accounted for half of the assets in Mr. Gross’s flagship fund, Pimco Total Return. That has shrunk to 30 percent now — the lowest ever in the fund’s 23-year history — as Mr. Gross has sold American bonds in favor of debt from Europe, particularly Germany, as well as from developing countries like Brazil.

Last week, the yield on the benchmark 10-year Treasury note briefly crossed the psychologically important threshold of 4 percent, as the Treasury auctioned off $82 billion in new debt. That is nearly twice as much as the government paid in the fall of 2008, when investors sought out ultrasafe assets like Treasury securities after the collapse of Lehman Brothers and the beginning of the credit crisis.

Though still very low by historical standards, the rise of bond yields since then is reversing a decline that began in 1981, when 10-year note yields reached nearly 16 percent.

From that peak, steadily dropping interest rates have fed a three-decade lending boom, during which American consumers borrowed more and more but managed to hold down the portion of their income devoted to paying off loans.

Indeed, total household debt is now nine times what it was in 1981 — rising twice as fast as disposable income over the same period — yet the portion of disposable income that goes toward covering that debt has budged only slightly, increasing to 12.6 percent from 10.7 percent.

Household debt has been dropping for the last two years as recession-battered consumers cut back on borrowing, but at $13.5 trillion, it still exceeds disposable income by $2.5 trillion.
The long decline in rates also helped prop up the stock market; lower rates for investments like bonds make stocks more attractive.

That tailwind, which prevented even worse economic pain during the recession, has ceased, according to interviews with economists, analysts and money managers.

“We’ve had almost a 30-year rally,” said David Wyss, chief economist for Standard & Poor’s. “That’s come to an end.”
Just as significant as the bottom-line impact will be the psychological fallout from not being able to buy more while paying less — an unusual state of affairs that made consumer spending the most important measure of economic health.
“We’ve gotten spoiled by the idea that interest rates will stay in the low single-digits forever,” said Jim Caron, an interest rate strategist with Morgan Stanley. “We’ve also had a generation of consumers and investors get used to low rates.”
For young home buyers today considering 30-year mortgages with a rate of just over 5 percent, it might be hard to conceive of a time like October 1981, when mortgage rates peaked at 18.2 percent. That meant monthly payments of $1,523 then compared with $556 now for a $100,000 loan.

No one expects rates to return to anything resembling 1981 levels. Still, for much of Wall Street, the question is not whether rates will go up, but rather by how much.

Some firms, like Morgan Stanley, are predicting that rates could rise by a percentage point and a half by the end of the year. Others, like JPMorgan Chase are forecasting a more modest half-point jump.

But the consensus is clear, according to Terrence M. Belton, global head of fixed-income strategy for J. P. Morgan Securities. “Everyone knows that rates will eventually go higher,” he said.

Stop Unauthorized Use Of Your Credit Report

2010-04-09T14:23:00.000-05:00

Identity theft and credit fraud is the largest form of white collar crime going on today.

An individual who gets your personal information can ruin a good part of your life when they steal your good name and destroy your credit. One of the best ways to limit the chance of someone getting your identity is to put a stop to unauthorized requests of your credit report. Many credit solicitation companies pull your credit report prior to sending you an offer. This will not only leave you open to identity theft, but too many requests on your report can lower your overall score. There are a few things you must do to stop this unwanted practice.

1. Review all your credit card agreements. In these agreements you will find that the credit card issuer states that they will sell your name and information to outside companies. You must call a specific number on the agreement to have your name and information withheld. If you do not have a copy of their agreement, visit their website it will be posted there.

2. Contact your bank and/or other financial institutions. They will also have a clause in their financial agreements stating they will sell your information. Again, you will need to contact the right department to have your name removed from their selling list.

3. Be careful whom you release your personal information to when signing up for clubs and newsletters. Most of these companies will sell your information to anyone because this generates a lot of income for their company.

4. Finally, contact your credit bureaus. You can contact your credit reporting agencies and follow their specific instructions on how to block your credit report from unauthorized usage. This should put a halt to unsolicited offers of credit.

Following these simple steps will help you ensure that your credit is protected, your identity safe and your credit score remains stable.

Life After Bankruptcy

2010-04-08T13:05:00.000-05:00

More and more people have found it impossible the past few years to keep up with their mortgage, car payments and credit card bills. I've received countless e-mails about how to prioritize these bills when you can't make ends meet.

Indeed, in 2008 and 2009, there were a total of 2.5 million personal bankruptcy filings, according to the American Bankruptcy Institute. In the 2006 and 2007, there were 1.4 million. Despite the economic recovery, defaults continue. Filings in February were up 14% over February 2009.

If you were driven to bankruptcy or are considering it, you know you're not alone. But you're probably also wondering how to dig yourself out. How do you wipe the slate clean and start rebuilding your credit?

THE IMPACT
Filing for bankruptcy is not, despite widespread belief, a one-way ticket to financial purgatory, said Kevin Chern, a bankruptcy lawyer and president of Total Attorneys, a legal support firm.

"Creditors and banks try to create a lot of misconceptions to scare people away from filing and tell them their credit will be ruined forever. But you have to take a more pragmatic view," he said.

By the time most people file for bankruptcy, their credit is already trashed, they have a high debt-to-income ratio - a key indicator lenders look at - and they've likely defaulted on more than a few accounts.
"After bankruptcy, you have a significantly better debt-to-income ratio and no outstanding debt. You may actually look like a better risk," Chern said.

That's not to say it's best to file if you can avoid it, but your ability to borrow most won't likely be gone for good. Most people will start receiving credit card solicitations 18 to 24 months after coming out of bankruptcy.

YOUR CREDIT REPORT
You need to know where you stand and dispute any inaccurate information. You can get a free report from annualcreditreport.com; you're entitled to one from each of the three main credit bureaus per year, so you should pull one every four months. You can also get a free score from creditkarma.com.

"You want to make sure that, after bankruptcy, the debts have been taken off," said Steve Elias, a bankruptcy attorney and author of "How to File for Chapter 7 Bankruptcy."

Your credit report shouldn't say that you're 90 days late on your Visa account; it should just say bankruptcy. The credit bureaus allow you to dispute information online, and you should hear back within 30 to 45 days.

NEW LIFESTYLE
Often, the circumstances that set us back financially are beyond our control, like layoffs, medical bills or emergency home repairs. Yet too many people were living beyond their means for years and floating the excess on credit. It's important to pinpoint mistakes so you don't fall back into the red. Realize that, when you buy a home, you need to budget for the mortgage plus home maintenance, insurance, taxes and more. With a car loan comes repairs, insurance, etc.

This is a good time to downsize if you're still overextended, but it's also a good time to build an emergency fund so you're prepared for events beyond your control. Six to nine months worth of living expenses stashed away is ideal. You can rely on that cash - not a credit card - to get you through hard times.

How To Find A Legit Credit Repair Company

2010-04-06T11:46:00.000-05:00

Low credit scores are nothing less than a curse and can make you pay big price for it. You might have landed with low scores for multiple reasons like bankruptcy, late payments, ignoring bills and paying minimum bailouts. However, these woes can be taken care of and eliminated by taking help of some best credit repair companies.

Credit repair is a unique idea that allows you to repair your scores and bring them up to standard levels so that you don't face problems while availing loans. Needless to say the problems you can face like high interest rates, big penalties and harassments by the creditors due to bad shaped ratings. Here are some tips for finding leaders in this business:

Though you may find a lot of options and companies in the crowd promising you huge benefits. You will be amazed to know that not many are at the top of the list. Few have successfully proved to be the best credit repair companies and you can easily find them by following few smart steps.
Your first step should be towards exploring the market and you should find all the companies in your region. You can use the search engines to help you find the best companies, keep in mind not to ignore those on the 2nd and 3rd page of search results.
Now, you should ignore those who promise to repair your credit scores instantly. Remember that repairing scores can take at least 2-3 months, so don't believe on their promises and quotes.
Refer to the community websites and start collecting information regarding these companies. Talk to experienced people and find their comments on them. Note these comments and analyze accordingly to start eliminating those on the bottom of the list.
Talk to experts in relief networks and ask for their comments and tips. Talking to such experts can really help you in the filtering process and you can be confident of your search.
Start comparing these companies and find out which one of the lot has been the most successful in repairing scores.

Once you end up with a small list, now you should start reading their process of work and make sure that you understand it. Don't conclude with best credit repair companies without reading the working conditions properly.

If you owe more than $10,000 in unsecured debt, you can be Debt Free in as little as 12-36 months. Consumers on average can expect to eliminate up to 60% of their unsecured debt with the help of a legitimate debt settlement company. Due to the recession an overwhelming amount of people in debt, creditors are having no choice but to agree to debt settlement deals.

What Is A Merchant Cash Advance?

2010-04-05T17:03:00.000-05:00

If you own a small business in the retail and/or service oriented sectors, you should know what a business cash advance is. Being enlightened on the business cash advance can lift a heavy burden off your chest, as it could significantly improve your business.

Money is very important to a small business owner. Small business owners need money to get their businesses off the ground and to maintain their businesses and most small business owners hope to eventually turn a profit and make money. Therefore, it should spark your interest when I inform you that a business cash advance is money for your business. Fortunately, the business cash advance differs from the bank loan in certain ways.

For example, often when it comes to bank loans, you know the money’s out there, but the numerous, hard-to-meet requirements and lengthy processes make it almost impossible to get. The business cash advance, however, is not hard to get.

Most providers only set forth a few simple requirements; the merchant must process a minimum of $3,500 in monthly credit card sales, the merchant must have owned his/her business for at least six months and the merchant must have at least one year remaining on the business lease. After applying and being approved in as little as 48 hours, merchants usually receive their money in about seven business days. At this time, the merchant is free to use the funds however he/she chooses, making it possible for a merchant to maintain his/her business, expand his/her business or just have some extra cash on hand for business expenses.

Understanding the mechanics of a business cash advance is very important, because as mentioned earlier, the business cash advance differs from a bank loan in various ways. Unlike bank loan borrowers, merchants who choose to take advantage of the business cash advance do not have to make fixed monthly payments. Instead, business cash advance repayments are automatically deducted whenever customers make credit card purchases.

When customers make these purchases, a small percentage of the sale goes toward repaying the advance. This unique method allows payments to go with the flow of business and it allows small business owners to continue business as usual without worrying about making monthly payments, late fees, penalties, etc. , because there are no penalties for early or late repayment.

The business cash advance is one of the best business funding options for merchants.
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Could Your Wages Be Garnished?

2010-04-02T20:54:00.000-05:00

Two stories in the New York Times caught my eye. They don’t reference each other, but they would appear to be related. From today:

Pay Garnishments Rise As Debtors Fall Behind
and, from yesterday:
Steep Increase in March in Personal Bankruptcies

In his story on bankruptcies, Duff Wilson notes that, despite the tightened bankruptcy law passed in 2005, filings are up, especially for the Chapter 7 process, which requires filers to give up their homes if they own one:

“Fewer people are trying to save their homes,” Katherine M. Porter, a University of Iowa law professor and bankruptcy expert, said in an interview by phone on Thursday. “They realize their payments are not affordable, and bankruptcy judges do not have the power to adjust the mortgages to make them more affordable.”

But not everybody can afford to go bankrupt, as the average cost of filing adds up to $2000. So for someone like Leann Weaver, featured by John Collins Rudolph in his story on garnishment, who couldn’t pay off a credit card bill of $2,470, it’s unlikely that she could put together bankruptcy fees. When the bank holding her debt sued her, she didn’t appear in court. Now they’re taking one-fourth of her wages.

These kind of stories become particularly horrifying when they involve subprime lenders. From the Times:
The case of Sidney Jones shows how punishing the system can be. In January 2001, Mr. Jones, 45, a maintenance worker from California Crossroads, Va., took out a $4,097 personal loan from Beneficial Virginia, a subprime lender now owned by HSBC, the big bank.

He fell behind, and Beneficial sued. Mr. Jones did not appear in court. “I just thought they were going to take what I owed,” he said.

By default, Beneficial won a judgment of $4,750, plus $900 in lawyers’ fees, with the debt accruing interest at 27.55 percent until paid in full. The bank started garnishing his wages in March 2003.

Over the next six years, the bank deducted more than $10,000 from Mr. Jones’s paychecks, but he made little headway on his debt. According to a court order secured by Beneficial’s lawyers last spring, he still owed the company $3,965, a sum nearly equal to the original loan amount.
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The Next Wave Of Inflation Is On The Way

2010-04-01T11:02:00.000-05:00

The next wave of inflation is on the way - Mar. 31, 2010

Inflation is a rise in prices of basic goods and services over a given period of time. In the United States, the government generally tracks inflation using the Consumer Price Index, or CPI.

Besides measuring inflation, CPI is also used to set income rates for more than 80 million people on entitlement programs. 48 million people on social security, 22 million food stamp recipients, and 4 million civil service retirees, have benefits tied to the CPI.

When inflation increases, so do their benefits. These payments are among the largest non-defense obligations in the federal budget. Not surprisingly, then, the government tends to understate inflation and has changed the way the CPI is calculated nine times since 1996.

Exciting First Ever Credit Repair Industry Live Bootcamp Will Make History by Being the First Event of its Kind - Credit Repair Articles

2010-04-01T00:35:00.000-05:00

Exciting First Ever Credit Repair Industry Live Bootcamp Will Make History by Being the First Event of its Kind - Credit Repair Articles

For years the credit repair industry has been plagued with unscrupulous individuals and shady dealings.

"The time has come for change in this industry" says Michael Citron, co-founder ofhttp://www.DisputeSuite.com. In a recent discussion with Citron, he stated his true belief is that the credit repair industry is not riddled with stigmas because of "ill intention, it is ILL-EXECUTION"… Citron later explained that there is no formal schooling, standardized credit repair training, or testing to enter this lucrative industry. In most states, there is no formal licensing required. This will often lead to improper expectations of the new business owner. As Citron explained, the new owner often comes from a similar background, usually real estate related fields, where they may have touched the surface of reviewing credit- but usually don't have the in depth knowledge and skill needed to properly operate a successful credit repair business.

Start Fixing YOur Credit NOW

2010-03-31T12:04:00.000-05:00

One of the worst things that a person can go through financially is facing the fact that they are in too much debt.

This could be because you are overextended on your mortgage and perhaps have refinanced to many times and cannot afford the bill. Another possibility is that you're charged so much money on your credit cards that you cannot make the monthly minimum. Here are two quick and easy steps that you can take in order to rectify the situation.

The First Step Is Getting a Credit Report

Once you have obtained your credit report from one of the three top agencies, you need to look it over to find any discrepancies in regard to the amount that you are set to go. When you start the credit repair process, if you can show any proof that there is inaccurate information that is represented in these reports, you have a way of freeing yourself from a certain amount of this debt.

If you keep decent records such as monthly statements from your bank account or canceled checks that you have sent to pay bills, you can use this information to fight unwanted debt that is listed on your report. This is a bit of manual labor but in the end you will save yourself thousands of dollars. The problem is that many of us have so many problems with our finances that we cannot do this on our own. If this is the case for you, it is time to seek professional help.

The Second Step Is Getting a Debt and Credit Specialist

People that work in this field on a regular everyday basis are the best allies that you can have when you are facing financial ruin. This is because you have all of the forms that are necessary and have the information that you will need in order to begin the repair process quickly and easily.

You can literally save yourself years of work in regard to sending cease and desist letters, talking to creditors on the phone, and all of the other things that come with trying to get yourself out of your negative financial and credit situation.

Once the negotiation process is complete, you will be able to look at your financial situation and hold your head up high because you no longer have a negative rating and have the ability to purchase the things that you have always wanted without worry of rejection.

Debit Card Fraud

2010-03-30T11:23:00.000-05:00

Debit card fraud occurs when a criminal gains access to your debit card number and, in some cases, PIN, to make unauthorized purchases and/or withdraw cash from your account. There are many different methods of obtaining your information, from unscrupulous employees to hackers gaining access to your data from a retailer's unsecure computer.

When your debit card is used fraudulently, the money is missing from your account instantly. Payments you've scheduled or checks you've mailed may bounce; you may not be able to afford necessities, and it can take awhile for the fraud to be cleared up and the money restored to your account.

How to Detect Debit Card Fraud
Fortunately, it doesn't take any special skills to detect debit card fraud. The easiest way to spot problems early is to sign up for online banking, if you haven't already. Check your balance and recent transactions daily. The sooner you detect fraud, the easier it will be to limit its impact on your finances and your life. If you see unfamiliar transactions, call the bank right away. If you're the forgetful type, start hanging on to the receipts from your debit card transactions so you can compare these against your online transactions.

If you don't want to bank online, you can keep tabs on your recent transactions via phone banking. In the very least, you should review your monthly bank statement as soon as you receive them, and check your account balance whenever you visit an ATM or bank teller. However, it can take much longer to detect fraud using these methods.

9 Easy Ways to Protect Yourself
While you may not have any control over hackers and other thieves, there are many things you can control that will help you avoid becoming a victim.
• Get banking alerts. In addition to checking your balance and recent transactions online daily, you can sign up for banking alerts. Your bank will then contact you by email or text message when certain activity occurs on your account, such as a withdrawal exceeding an amount you specify or a change of address.
• Go paperless. Signing up for paperless bank statements will eliminate the possibility of having bank account information stolen from your mailbox. Shredding existing bank statements and debit card receipts using a diamond-cut shredder when you're done with them will greatly reduce the possibility of having bank account information stolen from your trash.
• Don't make purchases with your debit card. Use a credit card instead, because it offers greater protection against fraud. If you do make debit card purchases, don't use your PIN - tell the cashier to select the credit option. The money for your purchase will still be withdrawn from your account right away, but you won't expose yourself to PIN theft.
• Stick to bank ATMs. They tend to have better security (video cameras) than ATMs at convenience stores, restaurants and other places.
• Destroy old debit cards. Some shredders will take care of this for you.
• Don't keep all your money in one place. If your checking account is compromised, you want to be able to access cash from another source to pay for necessities and meet your financial obligations.
• Beware of phishing scams. When checking your email or doing business online, make sure you know who you're interacting with.
• Protect your computer. Use firewall, anti-virus and anti-spyware software on your computer, and keep it updated regularly.
• Use a secured network. Don't do financial transactions online, when using your computer in a public place and/or over an unsecured network.

What to Do If It Happens to You
If you learn that your debit card information has been compromised, contact your bank immediately to limit the damage the thief can do, and limit your financial responsibility for the fraud. Make contact immediately by phone, and follow up with a detailed letter stating the full name of the bank employee you spoke with, details of the fraudulent transactions, and any ideas you have about how your account may have been compromised.

Ask your bank to waive any NSF fees that may be incurred because of the fraud, and to restore the fraudulently withdrawn funds to your account. Hopefully, you won't have any trouble resolving the issue directly with your bank, but if you do, you can contact a legitimate consumer advocacy group such as Privacy Rights Clearinghouse. There are also government organizations to contact if your bank isn't cooperating. The agency to contact depends on the type of bank you use.
• The Federal Reserve Board of Governors handles complaints for state-chartered Federal Reserve System banks, bank holding companies and branches of foreign banks.
• The FDIC deals with state-chartered, non-FRS banks.
• The National Credit Union Association handles federally chartered credit unions.
• The Office of the Comptroller of the Currency (OCC) oversees national banks.
• The Office of Thrift Supervision keeps an eye on federal savings and loans and federal savings banks.
• The Federal Trade Commission handles everything else.
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Debt Relief Now!

2010-03-29T14:53:00.001-05:00

Is your debt spiraling out of control?

Have you been harassed by creditors at all hours?

Are you avoiding the problem because you don't know what to do?

You are not alone. Many Americans just like you have fallen into the trap of easy credit and wound up in over their heads. Many simply bury their head in the sand and hope the problem goes away. But it never does. Creditors will come after everything you own.

As a result, 95% of all bankruptcies are due to outstanding credit card debt.

Eliminate Credit Card Debt. Sign-up and Get Started Today
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Breaking The Code - How To Read Your Credit Report

2010-03-27T10:46:00.000-05:00

When was the last time you read your credit report? Did it leave you a little confused? Your credit card credit report contains robust information, but it is not friendly to the average consumer. While many people focus on their FICO score since it has the greatest bearing on their ability to secure credit, developing the ability to understand your credit rating inside out will help you be your own advocate and financial custodian for the rest of your life.

Let's start with the basics: the components of your report. It is important to connect with what matters and why. What is contained within your credit card credit report? The answers to four important questions:

1) how responsibly have you handled credit in the past?
2) How much are you indebted to financial institutions?
3) How frequently have you requested credit?
4) How much of your current credit is in use?

The logic is simple: if you have been irresponsible, or are already highly indebted, your FICO score will be low. This relative score indicates to someone considering lending you money how risky it would be to lend to someone who has been as responsible (or irresponsible) as you.

Next: dealing with errors. Companies make mistakes, and the most important reason to understand your credit report is to make sure it is an accurate reflection of truth. Perhaps an unauthorized party inquired about your credit. Perhaps somebody intruded upon your identity and opened a credit account that was not yours. Disputes may be sent directly to the reporting agencies but should also be taken up with the institutions supplying the agencies with their data. The worse your credit, the higher you will pay for any kind of financing, so mistakes made that are not in your faro translates to money out of your pocket.

The unavoidable: dealing with realities. If you made some bad decisions in the past, even if you are more responsible now, your credit card credit report may show a history that is less than stellar. Unfortunately, smudges on your records will remain on your report for a full seven years, and the only thing that will get you back to a high score is time.

Actions: what to do to make your score better and what not to do to make it worse. Ironically, lack of credit is also seen as unfavorable. Somebody who has never used credit is viewed as risky because it is unknown as to whether the borrower will have good habits around paying the money back. In order to strengthen your credit card credit report if you have never borrowed, establish your credit by starting small with a simple credit card, charging a few items each month, and promptly paying them back. In terms of not making your credit worse if it is already low, avoid applying for new credit cards. Potential lenders will view you as cash poor and desperate for funds if you keep trying to secure new lines.

Fix Your Credit?

2010-03-26T11:23:00.000-05:00

There are several ways to fix credit scores when they aren't so perfect. In today's economy, prices are rising although employment is dropping. Because of this, people all over the United States are unable to keep up with bills and debt collections. While bills pile high, credit scores drop incredibly.

What many do not realize that a simple utility bill that is late can be reported to a credit bureau. These, along with medical bills, credit cards, government student loans, and car payments can damage a score incredibly. Defaults on student loans can damage the score bad enough that it can prevent one from being able to purchase a home, car, or other form of personal property.

Medical Bills
Face it. Medical bills happen. Whether unexpectedly in an emergency room visit, or expected with monthly visits, they can add up to tremendous amounts. When sent to collections, the bills are reported to the credit bureaus.

Fixing credit here is simple: make arrangements to make bill payments within the means of the household income. When creditors speak to people, often the question is asked, "How much will you be able to pay?" Some of these also set that amount so that is seen when the next payment is made. Understand that there is a budget for what is made in the home, and that an allotment can be made to suffice small payments.

But you must realize, paying lower tan the minimum payments n a credit card bill will STILL send your account to collections as a default. Furthermore, you are under NO OBLIGATION to negotiate with anyone other than your credit card company. Once it belongs to a collection agency, you have no legal contract with them to pay off the debt. You are obligated to the original creditor NOT the collection agency

Credit Cards
Credit cards used to be the next best thing. They paid for Christmas presents, unexpected motor repairs, and many other happenings when the cash simply wasn't at hand. It provided a great excuse for consumers to live beyond their mens.

However, interest rates on credit cards have skyrocketed and the banks once again gt greedy, creating payments that are unreasonable for the average citizen. Fixed credit cards require deposits to be made before they can be used. The balance is pre-set by the deposit, making overdrafts impossible. The payments by deposits are reported to the bureau as "on time" and help to repair credit.

Your credit score and report is simply an illusion. They are in no way to b considered accurate. Every credit report that I have seen over the last 15 years has contained errors of some sort.

Every damn one of them. I bet yours does too. Unfortunately, a consumer must spend time, energy and valuable resources to stay ahead of these errors. It is my firm belief that these reports are worthless and should e banned or the industry should be heavily fined for each inaccurate entry on a consumers credit report.

Cash Advace Rescues Small Business

2010-03-25T10:34:00.000-05:00

Inflation and a bad economy are leaving small and mid-sized businesses with lesser money to cushion themselves against unforeseen eventualities. New equipment, supplies and repairs can take on scary proportions when you’re business is already stinting to meet every day cash flow needs. Cash advance businesses step forward as entities who loan money on interest to small business for their specific needs. The small business cash advance is available within 72 hours and can be used by the small business to deal with any type of need with no questions asked.

There is no dearth of cash advance businesses, but you should compare a few business cash advance companies to get the best deal. A search on the internet will flood you with offers. Here are a few pointers on what a cash advance business should offer:

No credit checks

A good number of the people who apply for cash advance loans don’t have good credit histories. Look for cash advance businesses that do not conduct credit checks. The downside to the cash advance arrangement is a high interest rate but since the merchant advance is loaned for a short period, it does not appear too taxing. The high interest rate is the lender’s cushion against bad debts.

High advance amounts

If you are unable to meet your financial need without help, you’re obviously short by more than a few hundred dollars. Look for cash advance businesses who can lend at least $10,000 conveniently. The amount you can borrow is directly proprtional to your average monthly credit card processing for the last 6 to 12 months. To be eligible for a businss cash advance you need to be in business for atleast 1 year and $5,000+ in average monthly credit card sales.

Minimum paperwork

When you need cash immediately, getting embroiled in lengthy paperwork is the last straw. Look for cash advance businesses who need minimal paperwork. Proof of your duration in business and the average credit card sales volume for the last 12 months should suffice as guarantees of your capability to repay the cash advance. Your small business needs help quickly, and extensive documentation can bog you down.

Quick transfer of cash

If you are ready to borrow cash at the high interest levied by business cash advance company, your business need must be urgent. The cash advance business should approve your advance quickly and transfer the money to your bank account within 72 hours. Time is crucial in these transactions as you cannot afford to wait for more than a day to remedy whatever situation you’re facing.

Revenu Based Payments

A small business owner agrees to remit a percentage of the credit card sales receipts to the business cash advance company by signing a contract. The credit card processing company executes on the contract agreement by deducting the percentage from every future credit card transaction and sending it the business cash advance merchants bank account automatically. This ensures that the business cash advance company receives timely payments, while the small business owner is free of tracking payment due dates, signing monthly checks and other paperwork.

Cash advance loans are a reliable support in times of dire need. However, you should avoid depending on them too often as the interest rates can be quite high for a term as low as one year. Cash Advance for small business can also include an initial fee apart from the interest. References are especially important in this business as you don’t want to be stuck with a cash advance business who is hardheaded or a cheat.

Rebuilding Your Credit

2010-03-24T11:35:00.000-05:00

Fixing your past financial problems will of course help you on your path to improving your credit score, but another important part of the process is rebuilding your history. Because both of these types of credit improvement options are mentioned together when talking about improving your rating a lot of people don't realize there are two parts of the process that both need attention.

Repair is things you're probably somewhat familiar with. This involves getting a copy of your report and looking it over for mistakes. This is both trying to fix your past problems and fixing things companies have mistakenly reported.

For instance, if you have a high balance on any of your cards or loans paying this down will improve your score. If you have one old late payment with a company that you have since been in good standing with you could write to the company and point out that since you've been a loyal customer you would appreciate if they removed that mark from your report.

In terms of mistakes on your report you want to call and have companies fix things if something you have paid in full says you still owe, or if they have marked your limit on your cards as lower than it should be. The amount of credit available to you versus the amount you have used is an important factor in determining your rating.

Rebuilding also begins with getting a copy of that report. Do you have a good history with loans, but no (or bad) history with cards? You want to build up a healthy history with both of these types of credit use. If you have a low score and can't get a loan or a card, consider getting a secured card from your bank, or look into secured loans.

For a great rating you want to both fix your past credit, and build up healthy use for the future.

Dump Your Debt

2010-03-23T21:47:00.000-05:00

It looked like people were paying off credit cards after the recession hit. But the truth is credit card debt dropped in 2009 because banks were forced to write off a record number of loans consumers failed to pay; some $83 billion.

The average household has nine credit cards and as most of us know, interest rates on those cards have skyrocketed.

In response to new credit card laws, many issuers raised fees and interest rates, making it even more difficult for many people to make a dent in their outstanding balances.

“Their credit limits are reduced, payments are up, and interest rates are up. I know it's putting a lot of people in jeopardy," said Kay Ashburn from Consumer Credit Counseling.

Karlie McNally has been there. She learned the hard way about getting in over her head with credit cards.

“Starting out in college with credit cards and using them all the time, it takes a long time to get it paid off,” McNally said.

Today, new credit card rules make it difficult for anyone under 21 to get a credit card. But the experience taught McNally an important lesson.

“Budget your money. Know what you have so you're not spending more than you actually make.”

Nearly 30 percent of credit card holders say they're having trouble paying off their balances. But credit counselors say there are steps you can take to get your debt under control.

“If they are struggling to pay, the first thing they need to do is stop charging," Ashburn said.

Don't be afraid to call your credit card company to explain your situation and ask for a lower interest rate.

“Maybe you've lost a job, or had your income reduced. Be honest with them. The first step is to contact the creditor. Most are willing to work with you if you are willing to work with them," Ashburn said.

Ashburn says then it's time list your credit cards from the smallest balance to the largest.

“Then they start on a program making minimum payments to everybody, but add at least $25 a month to the first creditor. Once that balance is paid, take that money and add it to the money you are paying the second creditor until that one is paid off. It's scaling down debt,” Ashburn said.

Ashburn says you either need to reduce your expenses or increase your income, maybe even through a second job. Even then, it may take a while to make a dent in the debt.

“It may take 4 to 5 years for that to happen, depending on the debt. But that debt didn't accumulate in a year either,” Ashburn said.

It's also tempting to transfer your debt to an introductory "zero" percent or other low interest rate offer for a balance transfer. But credit card companies are offering that a lot less these days. And you need to remember that word "introductory"

“There is a catch. If you don't have the whole balance paid off at the end of the transfer period then you're charged interest from day one on the whole balance,” Ashburn said.

And there's a lot of mixed advice out there on whether you should save, or pay off your debt first. Ashburn says do both.

“The problem with paying down debt and not having savings is, the very next time a crisis or something comes up, you have to start charging again,” Ashburn said.

Ultimately staying out of credit card debt means a committed change in spending habits.

"It's not easy, but you've got yourself in a bad bind and it's not easy to change behaviors,” Ashburn said.

For many people with big credit card balances, it comes down to following this mom's advice.

"If you don't have the money, don't put it on your credit card,"

Know The Rules Befoe You Play The Game

2010-03-22T12:47:00.001-05:00

University of Richmond junior Kerrissa Richards feels blessed. She attends school courtesy of a scholarship that pays 100 percent of her tuition.

Her parents and a grant cover the rest of her expenses. So the 20-year-old biology major, who lives on campus and earns money by tutoring, teaching piano, baby-sitting and assisting at UR's Jepson School of Leadership part time, has money to spend, save, tithe and have fun -- and she'll graduate with zero college debt.

Virginia Commonwealth University junior Tiffany Bartlett, also 20, feels stressed. She's living from paycheck to paycheck, trying to make ends meet as she works her way through college as a Spanish education major.
Her mother pays her tuition, and she nannies a young child through an agency to pay a little rent at home and cover her cell phone, car insurance, gas and other expenses, which add up to about $350 to $400 a month.
She does not have a credit card but is strongly considering getting one if she can find a good rate. She definitely needs a second job because things are difficult and she's just barely getting by.

As young college students, Richards and Bartlett are financial neophytes in the world, inexperienced at managing money through any economic crisis, much less a recession that slumped a nation.
But, according to a new study, Bartlett more typically represents how college students nationwide are faring amid economic hardship and uncertainty.

The "Arizona Pathways to Life Success in University Students" (APLUS) study, funded by the National Endowment for Financial Education in Denver, found in its newest sampling of students during the height of the economic crisis in February-April 2009 that:

•The economic crisis has financially hurt the families of students.
•It has hurt students' financial lives and lowered their feelings of financial well-being and confidence managing money.
•There has been a startling upswing in credit-card and education-related debt.
•Students are pursuing risky economic strategies to cope financially.

The study, undertaken in 2008 to track students from their freshman to senior years, said student credit-card debt rose 60 percent and education loan debt soared 85 percent in 2009 over spring 2008.
Those alarming percentages must be put into perspective, though. The average debt balances on which they are based were small at that point in their college career. "The fact that it's spiking up so early is the concern," said Ted Beck, president and CEO of the National Endowment for Financial Education.

Beck said the increased student debt is likely tied to the economy's negative impact on their families, which they rely on for financial support and advice. Obviously, tuition costs are up, he said. "But the opportunities to finance it are constrained."

Job losses and cutbacks in employment hours have eroded family income, he said, and students are having a more difficult time finding part-time jobs and internships.

VCU senior Hien Ta, a 21-year-old biomedical engineering student whose home is in Sterling but who lives on campus in Richmond, said his parents have experienced pay cuts but "fortunately both still have jobs."
He has had to cut out only a few extra things, such as buying computer games and eating out a lot.
"I've had a relatively easy time" financially, he said. He works part time at MCV doing data entry. His parents pay for his schooling and have set aside a savings account for his use. But "I haven't had to touch my savings," he said.

University of Richmond Associate Dean Daniel Fabian said, "A lot of students do have a job, but it's still hard to find them."

To cope with financial pressures, many students in the APLUS study have resorted to dropping classes, taking a leave of absence from school, postponing personal health care and using one credit card to pay off another.

"The increase in risky behavior is a trend that we're very concerned about," Beck said. "The cutting back in classes is the biggest one."

Experts say students who have good basic training in personal finance are better equipped to survive in college.

"Many college kids hit the campuses with little or no training in personal finance," said Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling.
"Studies have traditionally shown that these same young adults who enter college debt-free end up graduating with significant debt in the form of credit-card debt and/or student loans," she said.
"Further, we've had universities tell us that they've had academically sound students drop out of school in order to go to work to satisfy their debt obligations," she said.
Debt is not such an issue for Bartlett and VCU sophomore Ben Bunyan, although Bartlett has $5,000 worth of outstanding student loans, and Bunyan, an economics and business management major, has "a small educational loan."

Bunyan, a sophomore, said he got good financial training at home.
"I think my parents did a good job teaching me about credit cards and debt when I was in high school," he said. "That's really helping me out. I'm actually having a pretty easy time."
Some of the local students, though, including VCU biomedical engineering major Allison de Groot, a 21-year-old senior, worry about graduate school debt.

"I'm about to go to medical school, and that's where I'm going to be hit with debt," she said. "Med school is going to cost me $150,000. How do you pay off $150,000?"

UR's Fabian said many students are "very concerned" about loan debt, the economy and finding a job. "They're just nervous," he said.

Fabian teaches financial fitness at UR's Richmond College, including how to understand credit and debit cards and how much money students can expect to earn after college.
"I just tell them the realistic picture," he said.

VCU academic adviser Shajuana Payne said incoming students there take a comprehensive introductory course that includes financial literacy.

Also, in partnership with the Virginia Credit Union, VCU conducts an annual financial success summit -- daylong money-management workshops open to all students, faculty and staff.

Professor John McFarland of VCU's Department of Finance, Insurance and Real Estate said he teaches money topics mostly to juniors and seniors, including the advantage of using cash versus credit, and how to analyze the full cost of buying such things as vehicles.

His mission is to "create responsible consumers and show them how to make decisions in a different way than they're used to and have been seeing their parents do," he said.

Cherry Hedges, the Virginia Credit Union's financial education director, noted that freshmen are coming into college a little more financially savvy these days. Still, they need a lot more financial training, including about budgeting and the ramifications of going into debt.

The bottom line is, the advisers say, a solid financial education and good money-management skills can help them throughout their lifetime.

10 Places NOT to Use Your Debit Card

2010-03-21T13:46:00.001-05:00

by Dana Dratch

Debit cards have different protections and uses. Sometimes they're not the best choice.

Sometimes reaching for your wallet is like a multiple choice test: How do you really want to pay?

While credit cards and debit cards may look almost identical, not all plastic is the same.

"It's important that consumers understand the difference between a debit card and a credit card," says John Breyault, director of the Fraud Center for the National Consumers League, a Washington, D.C.-based advocacy group. "There's a difference in how the transactions are processed and the protections offered to consumers when they use them."

While debit cards and credit cards each have advantages, each is also better suited to certain situations. And since a debit card is a direct line to your bank account, there are places where it can be wise to avoid handing it over -- if for no other reason than complete peace of mind.

Here are 10 places and situations where it can pay to leave that debit card in your wallet:

1. Online
"You don't use a debit card online," says Susan Tiffany, director of consumer periodicals for the Credit Union National Association. Since the debit card links directly to a checking account, "you have potential vulnerability there," she says.

Her reasoning: If you have problems with a purchase or the card number gets hijacked, a debit card is "vulnerable because it happens to be linked to an account," says Linda Foley, founder of the Identity Theft Resource Center. She also includes phone orders in this category.

The Federal Reserve's Regulation E (commonly dubbed Reg E), covers debit card transfers. It sets a consumer's liability for fraudulent purchases at $50, provided they notify the bank within two days of discovering that their card or card number has been stolen.

Most banks have additional voluntary policies that set their own customers' liability with debit cards at $0, says Nessa Feddis, vice president and senior counsel for the American Bankers Association.
But the protections don't relieve consumers of hassle: The prospect of trying to get money put back into their bank account, and the problems that a lower-than-expected balance can cause in terms of fees and refused checks or payments, make some online shoppers reach first for credit cards.

2. Big-Ticket Items
With a big ticket item, a credit card is safer, says Chi Chi Wu, staff attorney with the National Consumer Law Center. A credit card offers dispute rights if something goes wrong with the merchandise or the purchase, she says.

"With a debit card, you have fewer protections," she says.
In addition, some cards will also offer extended warrantees. And in some situations, such as buying electronics or renting a car, some credit cards also offer additional property insurance to cover the item.
Two caveats, says Wu. Don't carry a balance. Otherwise, you also risk paying some high-ticket interest. And "avoid store cards with deferred interest," Wu advises.

3. Deposit Required
When Peter Garuccio recently rented some home improvement equipment at a big-box store, it required a sizable deposit. "This is where you want to use a credit card instead of a debit," says Garuccio, spokesman for the national trade group American Bankers Association.
That way, the store has its security deposit, and you still have access to all of the money in your bank account. With any luck, you'll never actually have to part with a dollar.

4. Restaurants
"To me, it's dangerous," says Gary Foreman, editor of the frugality minded Web site The Dollar Stretcher. "You have so many people around."

Foreman bases his conclusions on what he hears from readers. "Anecdotally, the cases that I'm hearing of credit or debit information being stolen, as often as not, it's in a restaurant," he says.
The danger: Restaurants are one of the few places where you have to let cards leave your sight when you use them. But others think that avoiding such situations is not workable.
The "conventional advice of 'don't let the card out of your sight' -- that's just not practical," says Tiffany.
The other problem with using a debit card at restaurants: Some establishments will approve the card for more than your purchase amount because, presumably, you intend to leave a tip. So the amount of money frozen for the transaction could be quite a bit more than the amount of your tab. And it could be a few days before you get the cash back in your account.

5. You're a New Customer
Online or in the real world, if you're a first-time customer in a store, skip the debit card the first couple of times you buy, says Breyault.
That way, you get a feel for how the business is run, how you're treated and the quality of the merchandise before you hand over a card that links to your checking account.

6. Buy Now, Take Delivery Later
Buying now but taking delivery days or weeks from now? A credit card offers dispute rights that a debit card typically does not.

"It may be an outfit you're familiar with and trust, but something might go wrong," says Breyault, "and you need protection."

But be aware that some cards will limit the protection to a specific time period, says Feddis. So settle any problems as soon as possible.

7. Recurring Payments
We've all heard the urban legend about the gym that won't stop billing an ex-member's credit card. Now imagine the charges aren't going onto your card, but instead coming right out of your bank account.
Another reason not to use the debit card for recurring charges: your own memory and math skills. Forget to deduct that automatic bill payment from your checkbook one month, and you could either face fees or embarrassment (depending on whether you've opted to allow overdrafting or not). So if you don't keep a cash buffer in your account, "to protect yourself from over-limit fees, you may want to think about using a credit card" for recurring payments, says Breyault.

8. Future Travel
Book your travel with a check card, and "they debit it immediately," says Foley. So if you're buying travel that you won't use for six months or making a reservation for a few weeks from now, you'll be out the money immediately.

Another factor that bothers Foley: Hotels aren't immune to hackers and data breaches, and several name-brand establishments have suffered the problem recently. Do you want your debit card information "to sit in a system for four months, waiting for you to arrive?" she asks. "I would not."

9. Gas Stations and Hotels
This one depends on the individual business. Some gas stations and hotels will place holds to cover customers who may leave without settling the entire bill. That means that even though you only bought $10 in gas, you could have a temporary bank hold for $50 to $100, says Tiffany.

Ditto hotels, where there are sometimes holds or deposits in the hundreds to make sure you don't run up a long distance bill, empty the mini bar or trash the room. The practice is almost unnoticeable if you're using credit, but can be problematic if you're using a debit card and have just enough in the account to cover what you need.

At hotels, ask about deposits and holds before you present your card, says Feddis. At the pump, select the pin-number option, she says, which should debit only the amount you've actually spent.

10. Checkouts or ATMs That Look 'Off'
Criminals are getting better with skimmers and planting them in places you'd never suspect -- like ATM machines on bank property, says Foley.

So take a good look at the machine or card reader the next time you use an ATM or self-check lane, she advises. Does the machine fit together well or does something look off, different or like it doesn't quite belong? Says Foley, "Make sure it doesn't look like it's been tampered with."
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6 Steps To Getting Out Of Debt

2010-03-20T22:43:00.000-05:00

ENDING CREDIT CARD / LOAN PAYMENTS

By making a choice to become independent from modern day slavery and choosing to stop paying credit cards and unsecured loans you will have: more money for crucial things such as food, water, housing expense, gold, silver, safety supplies, etc.

2.CREDITOR SELLS YOUR ACCOUNT

After the Creditor has not been paid for about 6 months your account/s will likely be “written off” or “sold” to a third party, a Collection Agency. The original creditor can’t prove the validity of the debt if they cannot present the Original Instrument with your Original Signature or a certified authenticated copy of original (not a typical photocopy), they cannot present this since they securitize and sell the instruments for more profits.

COLLECTION STAGE

After the account is purchased by a collector they will claim you owe them money. This is false, because they cannot prove they ever signed a contract with you nor that they have the legal right to collect money that they never lent.

We stop the harassing collection calls and challenge the collectors right to collect your money. Many times the debt is nullified or canceled at this point

PROPERTY & BANK ACCOUNT PROTECTION

We set up legal protection for your home and bank account, which will block any collectors or creditors who win a judgment in court against you from: claiming the equity in your property or freezing your bank account. All of this is 100% legal and will make you virtually invisible to the creditors and collectors and make a courts ruling powerless.

The property you own would be protected by a Lien which is placed on your home through a company you are a member of; your company will receive the lien on your home upon sale or refinance, blocking other creditors / collectors from taking claim on your profits.

We protect your bank account by setting up a “holding company” and protecting your money using a business account without any IRS consequences.

WAGES

If you earn wages through a payroll, we can show how the Consumer Credit Protection Act protects you.

CREDIT RESTORATION

Our advanced credit restoration program will get your credit back in shape within 6-12 months. Yes you will have to sacrifice your good credit for a short period if you stop paying your debts. Consider it a very reasonable exchange; Bad credit for a little while in exchange for keeping your money.

In Summary:

Your debts will not have to be repaid.
You will be protected from the consequences.
Your credit will be restored.
Your money will be saved.

The Economy is crashing, think about yourself and real people who need you, not the banking system which cares not for your troubles neither now, nor in the coming hard times.
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The Average American and Credit Card Debt -WARNING - May Shock You

2010-03-19T13:56:00.000-05:00

By Janet Peterson on March 18, 2010, 6:01 am Posted in Economy News

We’re not really surprised or shocked to know by now that our entire nation is in debt due to the recession we’re living in. A large portion of this debt is credit card related and the numbers are bleak and disturbing to hear. Statistics on the average American family is that they owe $8,000 or more in credit card debt. So what is the Latest Release: The average credit card debt may shock you when you know the truth?

Statistics are not really always accurate; they are usually tricky and not quite realistic.

How about some statistics from a truly reliable source, like the Federal Reserve? These are the folks that conduct Survey of Consumer Finances. They do this with real numbers comparatively to real people. They conduct their survey every three years and of course they supplement their findings yearly and adjust for inflation. Shockingly, they come up with more accurate statistics. There is a large amount of credit card debt on average and that is how the statistics are derived—with averages. Here are some numbers: Only 46% of Americans have credit card debt. There is something like 20% of Americans that don’t have credit card debt at all because they don’t even have credit cards.

Interesting to many average folks is the Latest Release: The average credit card debt may shock you because it’s not a dark as it is being made to sound. The numbers are too high for comfort, but credit card debt has actually dropped in America for 2010.
The average balance is $7300 for the 46% of the Americans that actually have credit card debt. This is simply because there are a small number of cardholders with enormous balances that are factored in. The fact is that for 2010, the most accurate figure for most average Americans in credit card debt is about $3000 per household. Isn’t that average a real shock to you?

What Is Credit Repair?

2010-03-17T11:05:00.003-05:00

Right now as the economy rebounds from a tough decade, especially a very tough four years, we are trying to figure out ways to not only just survive anymore, but to start improving our lives. The hardest part will be in the financial world. While everyone seemed to be struggling pay check to pay check and looking for more work, we saw an increase in gas prices, groceries, cell phones, electric, even water. While we were out of work, companies raised prices, it doesn't seem fair but that's what happened.

As we try to rebuild and fix things, one thing we may over look to fix is our credit. Right now in the wake of foreclosures, major credit card debt, repossessions and other financial hardships, credit repair is becoming one of the more popular industries around. As people learn more about how important a good score can be, they also realize how many things are not available, or are available at a higher price if you have a bad score. A good score can help you avoid debt, and it can also help you get out of debt if need be.

Many companies that can repair your score specialize in specific problems, or reasons why your score was hurt. Some specialize in auto loan defaults, others specialize in foreclosures, and some even specialize in identity theft. There are some credit repair companies that can fix your score no matter what the problem was or is, those are the companies you want to look into. Which ever company you choose to go with, make sure they help or completely handle the process for you. Many of these quick-buck artists keep trying to convince you they handle the work load, when really they just tell you what to do and take your money, and that's not what you signed up for in the first place.

Don’t let anyone fool you into thinking you need to hire a professional to repair your credit. The truth is, there is nothing a credit repair company can do to improve your credit that you can’t do for yourself. So, save yourself some money and the hassle of finding a reputable company and repair your credit yourself.

CLICK HERE FOR PERFECT CREDIT

The Truth About Your Credit Reprt

2010-03-16T11:36:00.000-05:00

A credit report is a basic requirement for any financial organization.

Generally, it will be granted by the credit bureau once after a request is sent by the financial organizations. Every financial company must be acquainted with the credit record status of the borrower, since it gives a complete report of the borrower's trustworthiness.

Borrowers should have the full credit records, and it will be provided by the credit bureau to financial organizations. Creditors get the credit information from the credit bureau, and it inheres on business, firms, individuals and public entities. The information is not based on investments and income of a single person rather it will be based on credit report and other related facts.

How could you find that the results given by the credit bureau are good or fraudulent credit? At the time of viewing the credit record, it directs you to verify your accounts, inquiries and addresses. When you get the credit report, foresee the inquiry which is present in the titled section known as "Request viewed by others" from creditors. If you are not able to find that credit grantor access in your report, it unswervingly informs as a fraudulent activity. Finally, you need to verify the address appeared in yours.

Unfortunately almost EVERY credit report contains errors and false information. I find it appalling that the bureaus recognize this and CHARGE the consumer to monitor this known fraudulent activity. The credit reporting system has been abused and is in need of major reform.

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2010-03-15T16:02:00.006-05:00

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How To Cure Problematic Debt

2010-03-15T00:32:00.000-05:00

Most of us do not have a clear idea of the actual implications of declared bankruptcy. Simply standing in front of the court and declaring bankruptcy is not the end of the story. In fact, it is just a minor point. First, you will have to get in touch with the bankruptcy attorney to find out whether you qualify for bankruptcy. Surprised? What is the opinion that bankruptcy is your right? Well, the court will decide whether you qualify for chapter seven or chapter thirteen bankruptcy. You may get relief but the nature of relief something that is not within your control.

Secondly, the process of elimination of debt will not begin anytime soon. The law will take its own course and all the assets will be valued and accessed and sold off. Then the lenders will be invited to inform the court of your liabilities. Any dispute that you will have to be sort out. If your lender counters your arguments, then there will be along protracted problem where both the parties fight on the actual amount owed. Until this dispute is solved, all other loans shall be kept pending. Needless to say, your life will be dominated by the bankruptcy proceedings. There are instances where the proceedings have been completed very quickly. However, you never know whether that will be the case with you or not.

Once you have completed all this process that is when you realize that the problems are just beginning. You will have to suffer a huge hit on your credit history. Further, you will find it difficult to get back to your ordinary standard financial life. Credit card issuers always last to receive the payment as far as bankruptcy is concerned. Hence, you will find that you of course to make use of a debit cards all the time. Booking holiday tickets on the World Wide Web will become difficult if the vacation agency or the hotel insists on credit cards. Again, these are small points but all this will have a significant impact on how comfortable you lead your life.

If you go in for a debt settlement, you will enjoy all the benefits of debt relief and you will enjoy debt reduction without any of the problems associated with the bankruptcy. A debt will come down by more than half, you will have opportunity of repairing your credit score by repaying the balance and everything will be completely private. As far as outside world is concerned, you would be a successful individual with no financial problems.

Are You Tired Of Being Harassed By Debt Collectors?

2010-03-12T09:41:00.002-06:00

AAA Debt’s “Knowledge Shield” Program offer a phone box to clients for a one time fee of $19.95 for the entire length they are on a Debt Program. The phone box stops creditor harassment at the push of a button, bringing peace to stressed out clients.

AAA Debt Relief “Knowledge Shield”
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To The Banking Industry: Look What Greed GetsYou

2010-03-11T09:43:00.001-06:00

Consumers are increasingly walking way from credit card debt.

Credit-card debt has been falling for 16 straight months but credit-card issuers are writing off as much as 90% of that reported drop.

People are just NOT paying their credit card debt.

U.S. banks charged off a record $83.3 billion in credit-card losses last year. That makes up the bulk of the $93.2 billion drop in outstanding credit-card debt that was reported by the Federal Reserve for 2009.

I hate to say I told you so but...............................

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Consumers Cry Foul

2010-03-10T09:51:00.001-06:00

Mounting credit card debt has been a source of distress for millions of credit card consumers in the U.S. As of March 2009, the consumer credit card debt totaled $950 billion, propelling Congress to enact credit card reforms.

But many consumers are still not satisfied with these protection measures.

“Suddenly my credit card company increased my purchase rate from 11.99 percent to 29.99 percent, they just increased it without even notifying me,” said Heema Pemaraju, a credit card holder in Chicago.

Unfortunately, these terms are located in the contract that no one ever reads and just throws away thigy people sign and AGREE TO.

READ MORE HERE

Bottom line words of wisdom NOT to be taken lightly here is KNOW THE RULES BEFORE YOU PLAY THE GAME!!!

Time To Make A Financial Stand

2010-03-09T11:55:00.003-06:00

Right now as the economy rebounds from a tough decade, especially a very tough eight years, we are trying to figure out ways to not only just survive anymore, but to start improving our lives.

The hardest part will be in the financial world. While everyone seemed to be struggling pay check to pay check and looking for more work, we saw an increase in gas prices, groceries, cell phones, electric, even water. While we were out of work, companies raised prices, it doesn't seem fair but that's what happened.

As we try to rebuild and fix things, one thing we may over look to fix is our credit.

Right now in the wake of foreclosures, major credit card debt, repossessions and other financial hardships, credit repair is becoming one of the more popular industries around. As people learn more about how important a good score can be, they also realize how many things are not available, or are available at a higher price if you have a bad score. A good score can help you avoid debt, and it can also help you get out of debt if need be.

Many companies that can repair your score specialize in specific problems, or reasons why your score was hurt. Some specialize in auto loan defaults, others specialize in foreclosures, and some even specialize in identity theft. There are some credit repair companies that can fix your score no matter what the problem was or is, those are the companies you want to look into. Which ever company you choose to go with, make sure they help or completely handle the process for you. Many of these quick-buck artists keep trying to convince you they handle the work load, when really they just tell you what to do and take your money, and that's not what you signed up for in the first place.

Its time that we fight back!

Finding The Error Of Your Ways

2010-03-06T10:41:00.000-06:00

Before you can can start repairing your credit, you should first understand the importance of exactly what a bad credit score can do to your life.

A bad credit score may materialize for a variety of causes. Possibly you had been in a unfavorable location in your life and suffered troubles and were unable to make your monthly payments. Perhaps you had problems and needed to file for personal bankruptcy.

Perhaps you got in over your head monetarily which occurs to a lot of us contrary to popular belief. Nevertheless, in order to take advantage of free credit improvement, you initially have to know very well what is on your credit file.

You ought to receive your statement within a maximum of two weeks. Here is where the free credit repair should begin. When you acquire your reports, research them very carefully. It has ben my experience that every single credit report (that I have looked at for clients) contains a variety of errors.

When you write the credit bureaus in an attempt to seek free credit improvement,remember it is THEIR responsibility to show proof tha the debt exists and they MUST provide this proof in a timely manner (30 days) If hereafter considering the claim, they uncover that there's an error, it will likely be immediately withdrawn from your credit file.

This is one of many different types of good examples utilized generally to gain free credit improvement. The beginning steps are most times overlooked since the stress has increased to such a level that individuals don't really understand where to begin.

Despite the fact that record maintaining has gotten better with computer systems, numerous occasions many people have had bad ratings on their credit ratings because of errors. Should you discover these errors, which may include things that you simply didn't buy or charge, such as in the cases of identity theft or charge cards which have been paid off but are identified as unpaid or past due you need to take immediate action to repair these mistakes right away.

Merchant Cash Advance Buyers Guide

2010-03-04T09:31:00.000-06:00

A business cash advance is an alternative option to traditional loans for business owners. Alternative options like merchant cash advance "factoring" are viable methods of financing your business operations if you need cash quickly and don't have the time to wait for a loan approval, or if you are unable to obtain a traditional loan.

The application process is fairly quick- usually only a couple of days, and a business can usually obtain a large infusion of cash within a week of being approved. Payments against the balance of the advance are taken automatically from the "borrowers" daily credit card revenue, and begin immediately upon disbursement of the cash payment.

In a cash advance transaction, a business "sells" a portion of future revenues in exchange for cash. These advances have been compared to "payday loans," where a cash payment is given in exchange for a post-dated check. Business cash advances oftentimes provide flexibility and relaxed approval standards to business executives and owners. Although they are more expensive and require faster repayment than traditional loans, merchant cash advance is becoming more and more popular with business owners.

These sales transactions provide an easier option to manage cash flow in times of need and provide the alternative financing options businesses seek.

If you are considering alternative finance options for your business, it is important to become familiar with the terminology used by the providers of these services. The following is a list of important concepts and terms common

Business Cash Advance:
Sometimes called a merchant cash advance or a business cash advance loan, this is a financial transaction where a business "sells" a portion of future sales in exchange for a large cash payment. Payment amounts, repayment terms, and repayment amounts vary depending on the agreement reached with the advance provider.

Cash Advance Provider:
A business that purchases the future sales of another business in exchange for a cash payment. The provider can be a large bank or a small business that specializes in this type of financial product.

Factoring Service Provider:
A business that purchases accounts receivable loans from other businesses.

Factoring Fee:
The percentage that a factoring company charges for collecting on a purchased invoice.

Advance Amount:
The amount of money given to a business up front in exchange for a percentage of future revenues.

Factor Rate: Sometimes called "provider fee," this rate varies depending on credit card transaction history, business revenue amounts, and the risk the provider feels it will bear in advancing the payment.

Daily Retrieval Rate:
The amount a provider collects from daily credit card revenue.
Safe Retrieval %:The daily retrieval rate is based on this percentage, which is the portion of daily sales that are "safe" to use for daily repayment. This percentage varies depending on the volume of credit card sales and the advance amount.

Certain businesses can benefit greatly from obtaining a merchant cash advance or using a factoring service. The type of financing you should seek depends on your industry and business practices.

You should consider seeking a cash advance if your business:

Needs an immediate cash infusion, but is unable to obtain conventional financing at a favorable rate. Cash advances are typically easier to qualify for and quicker to obtain than traditional business loans.

Is seeking flexible repayment terms. Terms in a cash advance agreement are generally more flexible and open to renegotiation than those of a traditional loan, and are typically paid back quickly.

Is currently unable to take on additional credit obligations. A business cash advance is not a loan, so it will not be reflected on your credit report.

Has a steady volume of monthly credit card sales, with sales projected to remain stable or increase. Most providers require that a business must maintain steady sales to avoid "default" on the agreement.

Will not be severely burdened by repayment of the advance. Since repayments are a percentage of sales rather than a fixed amount per month, payments will increase as sales volume increases.

Does not own equipment or property to use as collateral for a traditional loan. Cash advances do not require collateral to "secure" a debt.

Cash advances are used by all types of business. A reputable provider of small business cash advances or merchant cash advances should be able to assess your needs more specifically.

You should consider using a Factoring Service if your business:

Has large amounts in accounts receivable but needs an immediate cash infusion. A factoring service will purchase these accounts for cash at a discounted rate.

Has customers that are consistently late in payments. When you sell these accounts, the responsibility to collect is placed on the factoring service.

Deals with credit-worthy customers. Fees will be lower if the accounts are not at risk for non-payment.

Most factoring services allow a business to sell only specific invoices or customer accounts, so you will be able to maintain control of a portion of your receivables.
Another important consideration in using a factoring service is your relationship with your customers.

Since the factoring service provider will take over all collection functions of the sold accounts, customers will make payments directly to the factor. Consider the impacts that this arrangement might have on customer relationships- you may inadvertently dissuade repeat purchases from formerly loyal customers.

Since repayment of a business cash advance is based on your business' future sales, the business cash advance provider bears the bulk of the risk in the transaction and requires a fee for doing this. In order for the provider to make sure that they maintain cash flow, they have certain criteria in order for a business to qualify for a cash advance loan.

Generally, providers require that a business meet most of the following qualifications:

The business should maintain a certain amount in monthly credit card transactions (most providers require at least $3000)

The business is not working with another merchant cash advancer provider

The business does not have any existing liens on business-owned property

The business must provide financial information and proof of past sales

While the requirements for a merchant cash advance are not as stringent as those for a bank loan, some providers may require additional, specific qualifications. For example, some only offer cash advances to businesses that have been operating for at least a year, or that have at least a year remaining on an existing property lease. Some providers also require a plan outlining how the advance will be spent. Similar to investors, you need to show the provider that you have a plan in place.

Remember, the provider only recoups its costs if your business is able to remain functioning and profitable, so it needs to evaluate whether or not buying your future sales will pay off. Your business doesn't need to have stellar credit, but you do need to show that it is financially sound: a steady revenue stream, a proven history of reliable sales, and reasonable operating costs.

The more information you have that shows the provider that your business is a good bet, the likelier you are to get favorable rates and repayment terms.

To find out more about how a merchant cash advance can help your business and to see how much you qualify for, call Dave Capra "The Debtonator" at 630-666-0443 or visit MY WEBSITE to apply.

Understanding Your Credit Report

2010-03-03T18:25:00.000-06:00

So you have been advised that the first step to solving your debt problems is to get a copy of your report and examine the status of your debts. After requesting a copy of your report from a legitimate credit bureau, you're still left in a state of confusion. You really don't know what to make out of the numbers and details in your credit report. There are a couple of terms in your report that you don't understand?

So what do you do?

For some consumers taking a look at their credit report for the first time, all these information can be confusing. In this article, we'll talk about the basic elements of a credit report and what each of these details reveal about you.

Personal Information
This is the first part of your credit report that includes all personal information about you- your name, address, phone number, Social Security number, driver's license number, spouse, employer, and other applicable data. Most consumers just skim through this part of their credit report. But although this particular section contains only basic identification that you already know, you still want to make sure that all of them are correct. Take note that misspellings, missing digits, and wrong details are common errors found in a credit report. So take your time and read each detail carefully.

Credit History
This is the most important part of your credit report. Here is where all your activities that concern credit are recorded. The different types of credit you have, your record of payments, your credit line, debts, past due bills, transfers, charge offs, etc. This section includes the first and oldest account you opened, the accounts that you've closed, and inactive accounts in your name.

Are you a good borrower?

Do you pay your debts on time or are you often late in submitting your payments?

Do you maximize the use of your credit line?

For people who have been a victim of fraud or identity theft, checking this section is recommended and try to see any signs of unauthorized charges made using your name. Yes, all information listed here directly affects your credit score. Actually, a person's credit worthiness will be largely based upon the details of his/her credit history.

Public records
If your debt problems are really serious, chances are this section would contain some notes. Tax liens, judgments, foreclosures, bankruptcies- any of these will be place under the public records section of your credit report. Thus, you'll want to keep this particular section of your report clean and free from any remarks
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Inquiries
Lastly, your credit report will have a section reserved for inquiries made by lenders or insurers whom you've applied credit with. This section will be filled with inquiries if you are the type of person who often send credit card applications to various banks just to get the freebies offered. A record of too many inquiries puts you in a bad light. Lenders would immediately get the impression that you're submitting applications all at once in the hope to get approved by even one creditor.

Your "Ultimate" Guideto Perfect Credit

2010-03-02T11:50:00.000-06:00

You live with the nightmare of bad credit everyday and it seems like you are never going to wake up! A spouse dies or walks out -- just when you need them most. You lose a job you were counting on. Illness strikes you or your family. Anything can happen!

And let's face it, most jobs do NOT pay enough to make ends meet either. So when the money starts to run out, your credit usually isn't that far behind.

With good credit, almost anything you want can be yours. In my book: "The Ultimate Guide to Perfect Credit" you will learn how to take care of everything you need to obtain Perfect Credit.

Status Of The Merchat Cash Advance

2010-03-01T10:12:00.001-06:00

Merchant Cash Advances weren't around in 1942, but business bank loans were. According to today's Wall Street Journal article, Lending Falls at Epic Pace, US banks posted last year their sharpest decline in lending since 1942. Does anyone see a merchant cash advance opportunity for all those businesses in 2010?
Many merchant cash advance providers are indicating there is less demand for the product the last few months compared to this time period last year and the year before. There are several factors that can be responsible for this including many merchant cash advance providers were funding deals in the past that they would not fund today (and paid a very hefty price for doing so, namely going out of business). I think one of the key reasons which I have pointed out in the past is there also has to be an increase in business owner confidence for there to be an increase in demand for the merchant cash advance product.

The NY Times had an interesting article yesterday, entitled Businesses Reduced Inventories in December which further validates my theory, that if business owners don't have confidence in the economy, they are going to market / advertise less, hire less and stock lower inventories.

The article indicates, "The weakness in inventory rebuilding in December was an indication that businesses, still struggling to emerge from the deepest recession in decades, are not yet confident enough in rising sales to begin rebuilding stockpiles on a sustained basis."

So if you own a company that NEEDS FUNDING IMMEDIATELY - CLICK HERE for one of the better MCA programs available. Approval is GUARANTEED!

Does Debt Settlement Hurt My Credit Score?

2010-02-28T11:02:00.000-06:00

People ask me this all the time and my response is to ask how bad their credit score currently is. Let's face it, if you are actively seeking debt relief assistance, chances are that your credit score isn't all that great to begin with and should be the least of your current worries.

When you attempt to settle your debt, you're likely to take a hit on your credit score. That's because, by the time you start settling your dues, you may have had a number of late payments recorded on your credit report. Moreover, if you're on a debt settlement program, you must have stopped payments to creditors for several months. Not paying your creditors for months tarnishes your credit and reduces it by several points. But you can repair credit after a settlement and make yourself eligible for further loans and credit.

How do I repair credit with debt settlement?

Just follow the 9 simple steps if you'd like to improve your credit score after a settlement.

1. Check the status of accounts on your credit report:
Once you settle the dues, your credit report should reflect the accounts as "Satisfied" or "Settled" instead of being reported as unpaid and delinquent. Otherwise, your credit won't be able to rebound.

2. Negotiate account status with creditors:
You can reduce the credit effects of settlement by negotiating a Pay for delete agreement with your creditors. On doing so, the creditor will remove all information about the account from your report, after you've settled and paid back the dues on that account. You can also request your creditors to update your account status as "Paid in full" or "Paid as agreed". This can be helpful in bringing your credit back in order.

3. Apply for a gas/department store card:
It's easy to qualify for a gas/department store card even though you may have settled your dues. You can request your credit lines to be raised once you're able to repair credit with settlement.

4. Keep some credit accounts open:
It's better to not close more than 1 or 2 accounts in every 6 months time. Closing several accounts all at a time will raise your credit utilization ratio (credit used/credit available) thereby affecting your credit score in a negative way. Therefore, you need to select the ones you'd like to close without affecting your score. While doing so, keep at least 1 or 2 oldest accounts open along with a few others. That's because length of credit history is an important factor responsible for a good credit score.

5. Open a savings account:
Try to put down a certain amount of cash every month into a savings account. Having done this, you'll minimize chances of late payments on your bills and save your credit from getting hit.

You can utilize the savings account by taking out a loan with the account deposit as your collateral. You can also use the account funds as a security for a secured credit card. The credit line of the secured card equals 50-100% of the funds deposited in your savings account.

6. Get a secured credit card:
It is easy to get a secured card even though you may lack a good credit history. While you may use the card to purchase items, try to make the minimum payment by the due date.

7. Repay dues you haven't settled:
To repair credit with debt settlement, start paying off those bills which you haven't settled till now. For instance, if you have dues on your rent or mortgage, student loans and auto loans, try making regular payments and avoid being delinquent on any of these accounts.

8. Avoid using payday loans:
It's better to not take out payday loans as because once you miss a payment, you're likely to face interest charges resulting in high APR. In case you can't pay the charges by the due date, the payday lender will again charge high interest, which could lead you into trouble with your payments. Thus, you may end up in debt again.

9. Join a credit union:
If possible, get membership of a credit union. On doing so, it'll be easier for you to qualify for loans and credit, and making on-time payments on such accounts will help boost your credit score.

Although settlement hurts your credit in the short term, it IS an effective way of eliminating your debt problems. So, if you're in financial hardship and you're unable to make monthly payments, you may settle your debts and then go for a credit repair so as to raise your credit score and increase your creditworthiness.

Be diligent. Be patient. You didn't get into this debt mess overnight and it will take some time and effort to recover.

What IS Debt Settlement?

2010-02-27T10:43:00.001-06:00

Debt settlement companies offer a settlement program wherein they negotiate with your creditors/CA in order to settle the debt for less than what you owe. The companies charge an upfront fee for their services. Given below is an example of how debt settlement or credit card debt settlement works.

How credit card debt settlement works - An example

Let's say Jesse owes a total debt of $100,000 on 5 credit cards. She is finding it difficult to keep up with the minimum payments. She has earlier consulted a credit counseling agency but the monthly payments they negotiated with her creditors were too high for her to pay. Jesse doesn't want to file bankruptcy as she does not want to involve the court. So, finally Jesse ends up working with a credit card debt settlement company XYZ. Here are the 4 steps on how Jesse could settle credit cards and pay off her dues.

Stop payment to creditors: The representative at the credit card debt settlement company asks Jesse to stop paying her creditors and deposit a certain amount monthly into a savings account (i.e. a trust account that XYZ creates for Jesse).
No more handling of collection calls: While Jesse starts falling behind on her payments, she may receive collection calls, which are effectively handled by the representative. Jesse doesn't have to handle such harassing calls on her own.
Negotiation starts soon after: As Jesse accumulates good amount of dollars into the trust account, the representative at the credit card debt settlement company starts negotiating with her creditors one by one.
Debt is reduced by 40-60%: Finding that Jesse won't be able to pay enough, her creditors agree to accept a reduced amount, say around 40-60% of her outstanding bills.

While Jess pays off one debt, she waits for better offers from other creditors. She makes sure that any extra money coming in would be used to pay off her bills. Finally, after a period of 2 years, Jesse is able to settle credit cards debt with all her creditors.

Whether it's a credit card debt settlement program or one which includes other dues, you should stop paying your creditors initially. Instead, send in those payments to the debt settlement company. Otherwise, you cannot gather enough funds to settle credit cards dues and other bills.

Once you have enough funds deposited into the trust account, online debt settlement companies (or credit card debt settlement companies) negotiate with your creditors/CA and attempt to stop all collection efforts.

Debts you can settle

Credit card debt settlement is quite common. Other than unsecured credit cards, medical bills, gas/store cards, personal loans etc can also be settled. But tax debts, alimony, child support, mortgages, car loans and federally insured student loans are excluded from a debt settlement program.

How much to pay for settlement

Debt settlement companies charge 25-35% of the debt balance that is forgiven under the program. The fees are based on:

How much you owe in total
Number of debt accounts you have
How much you'll save by settlement

How long it takes to settle debts

It usually takes 2-4 years to complete a credit card settlement program or settle personal loans, medical bills and other dues. The period of completion depends upon your total debt amount.

Creditors may not sue after settlement

Once you negotiate debt settlements with your creditors/CAs, they may not come after you for the balance. It is illegal in many states such as Arkansas, Texas, Georgia, Michigan, Washington etc. However, in other states such as Alabama, Delaware etc, the creditor retains his right to sue you under certain conditions.

How to choose best debt settlement companies

In order to find out the best debt settlement

usa

companies, you need to check out the following details:

Company profile: You need to check the profile and service background of debt settlement companies and then choose the one that suits you.
Company accreditations: These include the certifications that the debt settlement companies have obtained so far. For instance, you may check their BBB reports and find out what they say about debt settlement online (or credit card settlement) companies. There are other accreditations such as being a member of the TASC ("http://www.tascsite.org/index.php"), IAPDA ("http://www.iapda.org/") certification etc.
Program fees and costs: You need to find out what fees are charged by debt settlement companies. Compare the fees and then choose the best debt settlement usa companies you can deal with.
Client testimonials: Look out for testimonials and feedback given by debtors on the services of the debt settlement usa companies. You can also ask your friends and associates about reputable debt settlement companies they have dealt with.

Pros and cons of debt settlement (or credit card debt settlement)

Whether you go for credit card debt settlement program or settlement on personal loans, payday loans etc, here are the pros and cons that you should be aware of.

Pros:

Avoid bankruptcy: With debt settlements, you can reduce your debt burden and pay off bills comfortably. You can negotiate with the creditors or collection agency (CA) and settle your debts for as much as you can afford to pay. Thus, you don't need to file Chapter 7 bankruptcy. There are chances of losing your home or car in bankruptcy wherein your assets are sold off to pay your creditors.
Single payment: Instead of paying multiple bills each month, you'll have to make a single monthly payment to the debt settlement company. The monthly payments are accumulated in a trust account in order to be paid off to your creditors/CA after negotiation. So, you can avoid the stress of paying debts at different rates and dealing with several creditors at a time.
Avoid unfair collection practices: You can avoid unfair collection practices and harassment by debt collectors if you negotiate a debt settlement.
Eliminate extra charges: The settlement company can try and eliminate late payment fees, if any. Any over-the-limit fees on credit cards can also be minimized or eliminated through debt settlements.
Avoid lawsuit & other legal actions: Creditors or the CA can file a lawsuit, get a judgment order and garnish your wages or place lien on your property. You may be able to avoid such legal actions if you're in a debt settlement program.

Cons:

Credit score drops: In a debt settlement program, you're asked to stop paying your creditors till you gather funds for making a lump sum payment to settle your dues. Moreover, you may settle your bills only after your accounts are charged off. Due to late payment or charge-offs, your credit score takes a hit.
You may owe taxes: Once you go for credit card settlement or settle other debts, creditors will forgive a percentage of what you owe. As such, the IRS will require you to pay taxes on this forgiven debt which is known as cancellation-of-debt (COD) income.
Account status on credit report: Unless negotiated with creditors or CA, the account status on your credit report will be updated as "Settled" which creates a negative impact on your score as compared to a "Paid in full" status.

Debt settlement program provides an easy way out of debt. However, your credit score is likely to go down when you stop paying creditors and save money for debt settlement (or credit card debt settlement). But you can repair your score by using a secured credit card, or a gas/store card. Such cards are easily available even if you have a poor credit history. Besides, you need to pay off other bills on time while you settle credit cards and other dues using debt settlement services.

Just in case you don't want to take help from online debt settlement

usa

companies, you can obtain the sep-by-step procedures and sample settlement letters in my book (shameless plug) Your Ultimate Guide to Perfect Credit.

AVAILABLE HERE

How To Eliminate Your Debt

2010-02-26T11:21:00.000-06:00

Credit card debt is one of the unfortunate parts of life that many of us have to bear and suffer once in a while. But remember, as with all other unfortunate necessities in life: "this, too, shall pass." Having outgoing payments required of you over a prolong period of time can put stress on your finances, free time, well-being and all other aspects of your livelihood. This is enough to deal with, so the inevitable added stress that can come from continual harassment from your credit card provider is never welcome; it can be a low point for many of us.

But that doesn't necessarily mean that you need to worry and feel the pressure that we all experience from debt like this. Arguably, keeping a clear head and taking on your debt with stoicism and patience can improve your entire experience and change how quickly you get out of this situation. Perhaps you could read about stress-relieving techniques, or any other personal item which can help you relax, because it's certainly not worth the hassle that the credit card companies can put on you by constantly telephoning and mailing.
Most importantly of all, keep set in your sights the alternative ways of getting rid of your debt; the ways that your constantly-calling collectors will never tell you: using debt settlement.

This is a method whereby you can strike off up to 60% of your debt using negotiation with the credit card company. Don't leave this up to yourself, though; pay a visit to a reputable debt relief company, and if your debt is over $10,000, they will be able to reduce your debt to an amount you'd have originally thought unimaginable. So don't let the stress and hassle bother you; go to an Accredited Business-bearing debt relief company today and get your debt, and your stress, out of your life.

Bankruptcy is certainly not your best way to deal with debts. Debt relief and debt settlement can certainly make a difference, and eliminate a strong percentage of your debt and in the meantime you will avoid the consequences of having to file for bankruptcy. Make sure you are always informed in regards to the best solution for you, and eliminate as much debt as you can.

When FREE Is NOT FREE

2010-02-25T08:43:00.001-06:00

The Federal Trade Commission announced Tuesday new disclosure rules for Web sites that advertise free credit reports but then quietly bill customers for "credit monitoring services." The new rule, crafted to enforce a law Congress passed in 2009, requires sites like FreeCreditReport.com to display a large yellow banner on their home pages directing consumers to a site where they can obtain an annual free credit report -- with no strings attached.

Though the trade commission has often regulated deceptive advertising on television and product packaging, the credit report disclosure rule marks the first time Congress has directly regulated advertising on the Internet. It is the result of bipartisan legislation overwhelmingly passed by both houses and signed by President Obama last year.

The Credit CARD Act also requires a disclosure message to appear in both the visual and audio portions of advertisements in other media, which means the singing pirates, singing bikers, and singing rockers on TV will have to add a few more lines to their ditties about the dangers of credit ignorance.

A 2003 amendment to the Fair Credit Reporting Act required all three national credit reporting agencies, Experian, Equifax, and TransUnion, to provide consumers one copy of their credit report per year. The three companies set up a jointly operated site -- AnnualCreditReport.com -- to comply with the law. But all three also operate independent sites that require users to hand over their credit card information and agree to a monthly service charge before giving them their bill-paying history.

FreeCreditReport.com, for example, owned by Experian, asks users for their Social Security number and credit card information to process their credit report. Tiny gray text on the right side of the screen explains that, in addition to requesting a credit report, you are signing up for a "free 7-day trial" of Experian's credit monitoring service. If you do not call and cancel the service within the 7-day period, you receive a $14.95 monthly charge on your credit card.

FreeCreditReport.com will be allowed to continue operating in its current form, but the required disclosure message will inform users that they are not on the site for their federally mandated annual credit report and provide a link to the correct site.

In more than 1,000 responses the commission received in response to a proposal for the rule, individual consumers, particularly those who had unwittingly paid various sums for unwanted services, overwhelmingly supported the regulation. Some citizens even recommended that the word "free" be banned from credit report advertisements. The Senate Permanent Subcommittee on Investigations, chaired by Sen. Carl Levin co-sponsor of the 2009 legislation, worked on the rule released by the FTC on Tuesday.

Surviving 2010

2010-02-24T20:22:00.000-06:00

Credit card companies have long seduced customers with “buy now, pay later,” hoping they would pay at least a minimum amount month after month but never pay off their debts. Now, though, with the economy slowing and houses no longer easy sources of cash, a growing number of consumers cannot pay even the minimums.

Credit card companies had an increase in the percent of charge-offs that they wrote in January, rising to 11.5 percent, but number of delinquencies that are one to three months behind declined to 5.96 percent.
The amount of debt that is delinquent — in which minimum payments are late but the accounts are still open — also appears to be on the rise.

The Federal Reserve found that 4.34 percent of the credit card portfolios of the 100 largest banks that issue cards was delinquent in the third quarter of last year, up from 4.07 percent in the previous quarter. Charge-offs — accounts closed for nonpayment — also grew in that period, and banks expect charge-offs to keep rising in 2010.

The new credit card law that takes effect in 2010 will bring about changes for issuers and cardholders. Issuers will be bound by restrictions on rate hikes and fees and increased disclosure requirements.

Borrowers will need to know the key provisions in the law and the loopholes.

People are compelled to use Credit Card excessively due to the recession. And the enormous needs of people that can not be supported by their income is the main reason for this situation. Any way if you are already a debtor to Credit Card companies, now it is not the time repent on what has happened. Your focus should be on Eliminating Debt.

If you decide to repay the debt by yourself, you will have to sacrifice your unnecessary expenses for the sake of yourself. Then you have to discuss with your credit card company, and come to an agreement to extend the period of negotiating the Debt.You can plan your budget and spare a considerable amount to settle your debt.

If you do not find it possible, you have another option. That is admitting that you are bankrupted. This is called the bankruptcy law which the Credit Card Company accept the fact that you are unable in repaying the Debt. Then they reduce the amount but at the same time you have to bow to few severe conditions which deprive you from any loan approximately for 10 years. Actually this method is not advisable to negotiate the debt.

The best option is to seek help from a Debt Settlement firm which can aid you to Eliminate your Credit Card Debt In 2010. This is the most proven and acceptable method for eliminating your unsecured debt. Debt settlement companies have the ability to discuss with the creditors and negotiate the amount for you.

Even though you have to pay for them, you will find that you will wind up paying around half of what you originally owed and will be debt free in less than 3 years.

CLICK HRE FOR OVER 300 PAGES OF THE MOST VITAL INFORMATION YOU NEED

Where's MY Bailout?

2010-02-24T02:49:00.001-06:00

With all the billions being spent to bail out banks, the auto industry and homeowners, what is being done to help small business?

Although most of the media attention has been on the $105 billion invested in large banks, the Treasury's TARP program has also invested $92 billion to strengthen community banks across the country. These banks are supposed to use the funds to help small businesses in their local area, but rarely does the merchant qualify and it could very well take months before you have the much needed funds, or the bank is not following the Federal guidelines set forth as a requirement for receiving funds.

Either way, the traditional bank loan is not the answer for the business trying to survive.

The sad part is that these same small business owners, through their taxes, helped fund the bailout of the same banks that they can’t get a loan at. Not to mention their paying for the bailout of the automakers and Wall Street.

Be honest, doesn’t it sting a little when you hear of these astronomical bonuses being pad out to the recipients of your tax dollars that failed at their jobs?

So for the small business to survive, business owners must think outside the box and ponder what alternatives there are to traditional bank loans. There are programs available for business owners who can't secure traditional business loans because of bad credit. If you don't have the time to wait for a traditional bank loan, there is a program. If most your business is done by Invoice or credit card sales, there is a program.

If you own a business, there is a program that can help you.

There are a few new programs available to business owners that can't find funding through traditional avenues. The first program is a Merchant Cash Advance and is based on your credit card receivables. Generally, you can expect an advance of 125% of your monthly credit card receipts.. For example, you do $10,000 a month in credit card sales, your advance amount could be up to $12,500. The payback terms vary from six months to one year. You will receive the cash in around 7 business days.

You will more than likely have to switch your credit card processors, but most companies will meet or beat your current processing fees. Since this program is based on your previous sales there is no collateral necessary, and bad credit is not an issue. The amount available with this program is $5,000 to $300,000 per location.

Could a program like this help your business?

You betcha. Funds can be utilized for any reason what-so-ever and just can be the bailout that you were looking for.

CLICK HERE FOR FURTHER INFORMATION

Be sure to check out my latest book jam packed with over 300 pages of vital information you need to know about credit, credit cards, debt management, debt relief solutions and MUCH, MUCH more WITH THE 2010 ECONOMIC SURVIVAL GUIDE INCLUDED!!!

Removing Judgements From Your Credit Report

2010-02-23T11:02:00.000-06:00

When you see that your credit report has judgment on it, don't despair. There are two steps that you can adopt to have the judgment removed as soon as possible and improve your credit score.

Definition of Judgment
But first, definitions are in order. A credit report judgment is simply a court order directing the individual to repay a debt. This is probably the most negative item that can appear in your credit report save for a filing of bankruptcy and conviction for a felony. Thus, you can expect your credit score to take a nosedive precisely because you are now considered a high credit risk.

Also, any mortgage lender will not provide for a new loan on your house until and unless your judgment is deleted from your credit report. And of course, you may have to pay the judgment amount before you can avail of the mortgage.

Removal of Judgment
Or is that true in all instances? Fortunately, no if and when you know how. You can actually have the judgment removed from your credit report even without paying for the amount so ordered to be paid. There are two scenarios that makes such a happy turn of events - at least, for you - possible.

First, you must look into the process by which whoever it is that filed that judgment against you employed to secure said court order. If and when you find that the law was not followed in any way, you can ask the courts to have the judgment lifted off your credit report. As the law on credit report judgments can be on the complicated side, it is often best to hire a lawyer with expertise in this regard.

Second, even when the lawsuit was properly filed by the plaintiff against your favor, you can always have the judgment lifted due to technicalities. There are many instances of said technicalities but the most common are the following:

You did not show up for the court date.
You were unable to respond to the court summons with proper paperwork on hand within the allotted time.

These instances of technicalities are only applicable if and when you can present sufficient justification for your inability to appear during the court date or respond to the court summons. The judge must agree with your justifications, of course.

Again, you may need a lawyer as the steps in this scenario involves court documents specifically a Motion and Declaration to Vacate Judgment and an Order to Show Cause, both of which are filled with legalese. If you so much as overlook one thing on these documents, your appeal for removal of judgment on a technicality will likewise be dismissed on a technicality. With the proper paperwork, the original plaintiff can then be served with court summons.

Two scenarios will happen. First, you can settle the matter out of court especially when the plaintiff is willing to do so, thanks to their violations of the Fair Debt Collection Practices Act. Second, you can go to court and still win under certain circumstances such as the plaintiff not showing up and/or unable to show proof against your request for dismissal.

And that is how you have judgment removed from your credit report! Just be sure to secure the necessary court documents to present to the credit bureaus to expedite the process.

Writing A Debt Settlement Letter

2010-02-22T10:59:00.000-06:00

Business writing is usually a simple task for people from corporate sector.

However, writing a credit card debt settlement letter can be very challenging because it doesn't guarantee a successful settlement. Let's take a look at the main function of this letter. It acts as a formal proposal from the debtors to request for debt reduction from their creditors. If the creditors are willing to accept this payment arrangement, then the debtors can get rid of their outstanding balances without filing bankruptcy.

Let me show you how to produce a perfect letter.

First thing first, get the structure of the letter right. Basically divide the content of the letter into 5 paragraphs.
For the first paragraph, you are required to include all your personal details and your debt details in it. Make sure that your full name, your correspondence, your account number, your total debt amount and the interest rate are stated clearly.

When it comes to the second paragraph, you are advised to be honest and straightforward. Explain to your creditors in brief about your current financial situation. Inform them the difficulties you are facing. For instance, if you are being retrenched and currently jobless, you can prove the letter from your ex-employer to your creditors. This is to convince them that you have lost your ability to pay back the debt in full.

Now, here comes the most important part. You are required to make formal request to your creditors. You need to state your proposed settlement amount clearly. Make sure the amount you state is an affordable amount. You can request your creditors to waive all the late charges and annual fee. At the same time, you can request for interest reduction. Then, you should state clearly the specific date which you can make payment if consent is given by the creditors. Tell them that you will send a pay check to them.

In your next paragraph, you are reminded to set some conditions in order to protect yourself from financial risk. You need to inform your creditors that you will only make payment if they agree to remove all the negative entries on your credit file. They need to report your debt as "paid in full". This is important because it will affect your credit rating.

In your last paragraph, before you end your letter, you are reminded to "express your gratitude" to your creditors for paying kind attention to you. It is important to appreciate their kind assistance.
Writing a perfect debt settlement letter is not hard if you use the right technique.

A sound letter will enable you to settle your debt successfully.

A New Day In Credit Card Spending Happens This Coming Monday

2010-02-21T11:45:00.000-06:00

New consumer-friendly rules taking effect Monday will mean colossal changes for the 180 million people nationwide who have credit cards -- and even millions who don't.

If you pay with plastic:

· No longer will banks arbitrarily be able to change the interest rate on your balance.

· No longer can they confuse you by changing the date your monthly payment is due.

· No longer can they cut your credit limit, allow you to go over it, then charge a penalty.

Around the Web

What you need to know about the new credit card rules (Federal Reserve)

New credit card rules are tough love (Sheryl Harris)

And the list goes on. But even the half of the population that doesn't carry credit debt could feel the impact of the changes. To make up the money the new rules will cost them, banks are expected to impose new fees on credit cards, and even on checking accounts and debit cards.

The credit card changes are so extensive that it seems difficult to believe they're all happening at the same time. Any one of them would be a big deal. Congress approved the overhaul last spring.
The reform is the biggest to hit the industry since the credit card was invented 60 years ago, said Kenneth Clayton, senior vice president and general counsel at the American Bankers Association. "It's the opening of a new age."
Here's a look at some of the changes that take effect Monday:

· Interest rates can't be raised on existing balances.

In the past, the interest rate on your balance could be changed pretty much at the blink of an eye. On a $9,000 balance, the $75 a month you paid in finance charges at 10 percent jumped to $217 a month if your rate was raised to 29 percent.
There was nothing you could do about it except pay off the card or transfer the balance. Now, rates can't be raised on existing balances unless you're more than two months behind on payments or you had a teaser rate that expired. However, if your rate is tied to an index rate, such as prime rate, then your rate can increase by the same number of points the index rises.
Consumer advocate Adam Levin, chairman of Credit.com, believes this could be the most important change. There was just something inherently wrong with getting people to borrow money, then changing the terms, said Levin, former director of the New Jersey division of consumer affairs. "This is one of the things that made people the craziest."

· Due dates must be the same every month.

Keeping track of credit card payment due dates was often like watching a racquetball game -- the dates could jump from the 20th to the 12th to the 16th and back again.
Now, the due date must be the same every month -- the 10th, the 15th or whatever. If that date falls on a weekend or a holiday, then the next business day is the due date.

· Payments are on time if received by 5 p.m. on the due date.

Many companies imposed late fees for payments not posted by 10 a.m. or even 7 a.m. No more.

· Firms can't charge overlimit fees without your permission.

Going over your credit limit isn't a good thing. But it's painful when going over the limit by $1 costs $39, or when one mistake costs more than $100, as multiple fees add up. That can't happen anymore.
Unless you ask your credit card company to allow you to go over your limit, transactions that exceed the limit may be denied. You won't be charged a fee. If you do go over your limit, you'll be charged a penalty fee only once per cycle, not once for every purchase over your limit.

· No more two-cycle billing.

Many companies have charged interest based on a customer's average daily balance over the past two months, not just the average balance from the most recent month. That means you were essentially paying interest twice on some purchases. Now, interest will be figured only on your last month's average daily balance.

· Minimum payment disclosures.

Consumers' credit card statements must contain information on how long it will take to pay off their bill if they make only the minimum payment, and how much it will cost long-term.

· No marketing to college kids.

Companies won't be allowed to promote credit cards on college campuses or to send pre-screened card approval letters to anyone under 21.
Even if young adults hear about credit cards through other sources, they won't be able to open an account unless they can document they have income to repay the debt. Otherwise, they'll need a cosigner.
Of course, all of these changes will cost the industry dearly in interest charges and fees. Just how much is a matter of speculation, said Clayton of the American Bankers Association in a conference call.
Seventy percent of credit card companies' revenue comes from interest charges, 20 percent from merchant fees and 10 percent from consumer fees. Penalty fees alone -- such as overlimit or late-payment fees -- yielded $15 billion to $20 billion last year, the federal government says.
All of this means credit card companies will have to change their business models, primarily by taking less risk and by finding other ways to get revenue.
Consumers have already seen cards canceled and credit limits lowered. Now they will find it more difficult to get new accounts, too, said Nessa Feddis, vice president and senior counsel at the American Bankers Association, in a conference call.
Those who do have cards -- people with bad and good credit alike -- can expect to pay higher rates on new transactions, since banks won't be able to raise rates on existing balances. Credit card issuers also are slicing rewards and launching new fees.
Annual fees have returned, and some banks such as Citibank are charging fees if you don't use your card enough. And you'll see increases in fees still allowed, such as for balance transfers, Seaton of Consumer Credit Counseling predicts.
Look for people without credit cards to feel the effects, too, said Jean Ann Fox, director of financial services for the Consumer Federation of America. She expects some banks to impose checking account overdraft fees by not posting deposits until after all withdrawals have been subtracted each day. And she predicts a surge in banks' pushing cash advances on checking accounts, with interest rates exceeding 100 percent.
Levin of Credit.com noted that credit card companies can still make some changes to accounts with 45 days' notice. To sneak those changes past consumers, some companies have been experimenting with making envelopes look as much like junk mail as possible, he said -- so watch your mailbox closely.
"You have to remember, these companies aren't making these changes because they wanted to," he said. "They've been dragged kicking and screaming, and they're not really happy about it."

Some other changes

Here's what else credit card companies must do, or can't do, under the new law:

· Must give you 45 days' notice before changing your rate on future purchases, changing your fees or making other major changes.

· Can't charge fees for payments made by phone or online, unless it's a last-minute payment with expedited handling to avoid a late fee.

· Must allow you to opt out of account changes and pay off existing balances within five years.

· Must apply payments first to the highest-rate balances.

· Can't issue cards with upfront fees exceeding 25 percent of available credit.

· Can't raise your rate if you fall behind on payments to another creditor.

· Can't increase your rate on new purchases for the first year of opening a card.

· Must mail statements 21 days before due date.

Other changes:

· Companies that offer free credit reports must disclose that they're not the official free credit report available by federal law and must direct people to annualcreditreport.com

· Regulators will study issues such as credit profiling of cardholders based on the stores where they shop.

New Law - Same Old Song And Dance

2010-02-19T11:41:00.000-06:00

President Obama recently signed into law a major new credit card reform bill which, among other things, limits the ability of banks to crank up interest rates, imposes restrictions on over-limit fees, mandates a minimum 21 days to make payment, and provides more transparency regarding payment terms and deadlines.

All good.

Some of these reforms are gonna cost the banks a fortune. For example,if you miss a payment, the banks can still boost your rates, but under the new law, if you make six consecutive minimum monthly payments on time, your rate automatically reverts to the previous lower level.

This represents a huge loss of future revenue, which must be recaptured, or heads will roll. Here's how they'll do it:

1. The return of annual fees;
2. Fewer rewards for using your card;
3. Reduced card availability and little or none for low-income consumers; and,
4. The issuance of adjustable rate cards.

Each of these is indeed a revenue booster, but the last one is a particularly neat trick. Let's look at it:
The issuance of adjustable rate cards sounds benign enough: It enables consumers to benefit from interest rate declines, and banks to keep pace with rate increases.

But keeping abreast of fluctuations in short term interest rates is not the real motive of the lending industry here.

Surprised?

In the future, consumer plastic will be issued with adjustable rates only. Why? Because the new law's restrictions on unconscionable interest rate hikes apply ONLY to fixed rate credit cards.
See a loophole here? The banks sure do. They paid for it.

So here's how it will work under the new law:

Your new card will have an adjustable rate. Then, let's say interest rates go down. Well sure, you'll benefit. But if you're late a payment on any of your accounts......

Whammo! You're at 30% on every one of your adjustable rate cards.

Sound familiar?

Thank the universal default provision. Never mind all the reforms. Universal default has the survival instincts of a cockroach, and it's still alive and well. The only difference: now the banks have to give you forty-five days notice before they jack you up.

Todays Soapbox - Your Credit Report

2010-02-18T17:32:00.000-06:00

The value of diligently tracking your credit score is often underestimated. Failure to know what is on your credit rating can keep you from qualifying for loans and in far too many cases will cause you to pay higher interest rates.

The trick to raising your credit score is no secret, but it does take diligence and hard work. But is it REALLY worth the effort?

The use of a personal credit report and score has been grossly overused and often for things it was never intended to be used for. I wil not go ito the legallity or moral questins this raises - not YET anyway - but I WILL tell you of my plans to challenge this practice for the simple reaso that every credit report I have ever looked at SINCE 1990 has errors contained n them.

EVERY SINGLE ONE!

This is devastating people financially and in these turbulent economic times, it is the last thing people need when attempting to recover.

A couple of questions come to mind here:

1) Why is a persons credit report being checked when appling for a job?
Even the most menial of employment opportunities, credit reports are being used in replacement of traditional background checks.

2) Why do the credit reporting bureaus intentionally providing false and misleading information in their credit reports?

And the one hat baffles me the most:

3) Why should a consumer have to spend time and money to correct and monitor these errors?

It just seems like another way to crew the consumer out of their hard earned money ad keep them held in the bondage of financial slavery.

Your Ultimate Guide to Perfect Credit

2010-02-17T20:52:00.001-06:00

Do you need help eliminating the bad credit on your credit card or other debt?

You must read my latest book “The Ultimate Guide to Perfect Credit” now!

Don't let your debt overwhelm you. How to get out of debt FAST without bankruptcy or Debt Consolidation!

Step by step program for becoming debt free.

Learn what credit and debt truly are.

Options for debt relief.

The TRUTH about credit repair.

The little known consumer friendly Credit Reporting Agency.

Decoding your credit report.

Disputing information strategies.

Resource Guide

The Letter Library

Are you trying to resolve issues with creditors, debt collectors, credit reporting agencies, credit bureaus and other debt and credit related agencies?

How to Increase Your Credit Score Fast!

How to Obtain Major Bank Credit Cards

The 2010 Economic Survival Guide

The strategies that will make you master your finances, your credit and your debt!

If you are swimming in debt.

If you’re currently suffering from the pain and frustration associated with bad credit, or no credit at all, The Ultimate Guide to Perfect Credit will tell you EVERYTHING that a consumer needs to know about credit, credit cards, debt education, getting out of debt and staying that way.

The Ultimate Guide to Perfect Credit is a MUST read!

Merchant Cash Advance

2009-07-06T13:53:00.003-05:00

The most successful businesses seek outside financial help to facilitate their growth endeavors. Many companies will opt for a business loan. Business loans are a great aid, but can cause a heavy strain on the business. The company will have to consider the strain of day-to-day cash requirements.

Your business can exercise other options. Merchant cash advances relinquish immediate cash into the hands of thriving businesses in need. Business cash advances are used as a financial tool for businesses looking to expand, purchase equipment, move locations, etc.

Advances ranging in the hundreds of thousands range can be obtained based on your sales volumes and future credit card sales. There are many positive outcomes in receiving merchant cash advances, but be aware of possible difficulties.

The following is a list of issues and solutions to be aware of in relation to merchant cash advances:

- Closing costs can be pricy. Make it a priority to seek a merchant cash advance that requires no closing costs.

- Attempt to avoid initial, up-front fees. Seek out a merchant cash advance provider that can wave initial fees.

- Your company may be asked to provide collateral to counter the merchant cash advance. It is suggested to seek services where collateral is not a requirement.

- Some merchant cash advance providers will make financial statements a necessity. It may be preferred that statements only be required when seeking a large cash advance.

- It is a viable anticipation that a service will want you to payoff the merchant cash advance via fixed payments. One of the advantages of a merchant cash advance is that a non-fixed payment method is usually an option. In case of a slow period of your business producing revenue, ask for a non-fixed method.

- Along with the last issue, merchant cash advance providers may ask for your company to pay back the money over a fixed term. It is suggested to inquire if it is possible to engage in a no fixed term agreement.

- A merchant cash advance is a great strategy to employ for young businesses. Some providers require a company to be in business several years in order to receive an advance. If you are a young business, look for services that require only one year to qualify for an advance.

- Obviously, you want your business to have a great credit score. Some merchant cash advance services require a score of at least 680. That is a great score, but sometimes not very realistic. If your business has a lower score, look for providers that require a score above 500.

- Depending on how the money will be used, you may be in need of a large amount. Some merchant cash advance providers will provide a maximum of $50,000. Your business may require more money. Look for service providers that can deliver up to $300,000.

- Along with financial statements, some merchant cash advance services will want to see the last twenty-four months of credit card sales. To make it easier on your business, search for services that will only require records of sales from the most recent six-months where your company has accumulated at least $5,000 in sales.

Employment And Your Credit Report

2009-06-09T09:09:00.002-05:00

LA Times: Trapped: It's hard to get a job if your credit is bad

Trapped: It's hard to get a job if your credit is bad

If you're unemployed, falling behind on bills can make it tougher to find work
By Tiffany Hsu June 7, 2009

Dan Denton is stuck in a vicious cycle: He's behind on his bills after losing his job. But lousy credit is spoiling his chances of finding new employment. Recruiters from a St. Louis-based investment company recently rescinded an offer after looking at his credit history, which has been mauled by overdue card payments and an impending foreclosure on his Inland Empire house.

He and his wife, Dana, filed for bankruptcy protection this month to try to hang on to their home."Of course your credit's going to look bad when you've been unemployed for months," said Denton, 60, a former fundraiser for the Crystal Cathedral in Garden Grove. "But what relevance does that have on your performance?"

The credit report is becoming the latest hurdle for unemployed workers in a dismal U.S. job market. Up to half of employers use credit screening to weed out potentially troublesome hires, though estimates vary, and the practice is on the rise.Money woes could signal disorder in an individual's personal life that could translate into slipshod work habits, some staffing experts said.

Companies lose billions annually to employee theft. A sterling credit history, they said, points to a worker who is more likely to be disciplined, trustworthy and reliable. But some experts said that there's no clear link between credit history and job performance and that the reports don't paint a complete picture, omitting details about divorces, medical bills or even identity theft.

Nancy Novak said that when prospective employers check her credit history, they see a mountain of debts and late payments, including $30,000 in credit card bills. What's not evident, she said, is that she accumulated most of it in a failed effort to keep her small business afloat. ......(more)

The complete piece is at: http://www.latimes.com/business/la-fi-cove...

7 Things NOT To Do

2008-12-26T18:10:00.004-06:00

Most children are not trained in how to handle credit by their families other than with vague platitudes like 'pay your bills on time' and 'live below your means.'

Practical knowledge about interest rates, revolving credit and credit scores was often not taught or even understood well by most parents. Instead, we grow up being taught to be consumers, watching our parents struggle with the same concepts we now struggle with. Most people discover these mistakes by making them.

So here is a list of seven common credit mistakes most often made:

7. Closing your paid off credit card accounts
Paid off credit cards are like gold to your credit score. Resist the urge to cut up the plastic and close the account. The unused 'credit available' on that card will contribute to your credit worthiness. Put the cards in a block of ice in your freezer if you need help not using them and keep the accounts open.

6. Lowering your credit limits
Many people have fallen into this dilemma, thinking they are making themselves look more responsible by keeping the range of what they can actually borrow within their ability to pay. This will lower your 'credit available' ratio and lower your overall credit score. Whatever you can show as 'available' should stay available. Meaning, don't use it and don't get rid of it.

5. Applying for multiple cards
Maybe you thought you would juggle credit cards to take advantage of the 0% interest debt transfer. You get these offers in the mail and think, 'Wow, I can transfer my debt off that high interest card to this one and not pay interest for X number of months.' But are you looking for a 1-time way to make headway on paying off your debt? Or are you looking for a way to juggle your debt? Applying for multiple credit cards will lower your credit worthiness, and raise your interest rate. You will pay more in the long run.

4. Using your home equity for living expenses
If you are taking out equity to pay off credit cards and then running them up again, you are in a losing cycle that will eventually leave you with nothing but debt. First, if you can not afford your living expenses, you need to cut somewhere; or earn more to get in balance. If you are using home equity it should be for something that ads value to your home like a new kitchen, roof or bathroom; or to your earning ability, like a college degree. Otherwise you are literally spending the home right out from under yourself.

3. Missing payments
When you don't pay an account for 30 days, 60 days, 90 days, it gets reported as a missed payment to the credit agencies. These can severely lower your credit score and stay on your record for seven years. Get on a schedule and pay the bills on time. Pay automatically online if you can, but check to be sure the payments went through.

2. Not checking your credit reports for errors
Creditors make errors and can falsely report a negative item on your credit that really belongs to someone else. Additionally, identity theft is on the rise and you never know who may be using and ruining your credit. One of the best ways to protect yourself from this is to check your credit report regularly and look for any errors or open accounts you didn't authorize. Dispute the errors and notify authorities if your identity has been stolen!

1. Disputing charges and not paying the creditor
Never stop paying and ignore the creditor no matter now small the amount owed. Your credit score will drop 100 points if you do this. Instead, request an investigation and go through the dispute process. Keep written proof and go to small claims court if you have to but don't fail to pay. This is death to your credit score.

Living Life WITHOUT Credit Can Be Done

2008-12-14T09:20:00.002-06:00

And believe it or not, you can be happy.

In a world where credit is painted as the life blood of our society how does one survive without it? Surely our parents didn't have a pocket full of the buy now and pay later little plastic cards to enslave them with a life of debt and now that your credit lines are being reduced or even closed how is one supposed to react? There are no easy answers, especially since we now seem so addicted to the, but there are some suggestions.

There is no doubt the first adjustment you have to make is your mind set. If you are living on this "buy now pay later" system you may very well be heading for financial difficulties. Why not prepare ahead of time before it gets to bad.

I won't bore you with all the budget talk, that comes later in a different article, (you know full well that yoou need one) but you will have to know what condition your assets and liabilities are in and the sooner the better. Why not do it now? Stop procrastinating and take a few minutes - face your fears - and DO IT RIGHT NOW!

Use a debit card for purchases, it has the visa features and it's a good way to convert from credit to cash.

Allocate a fixed amount each week for expenses and slowly try to adjust your lifestyle to that budget. There's that filthy "B" word again.

Take the time to really consider the ramifications that can occur if you don't change and what you might lose. It is human nature to pull away from things that may be painful, so think of how painful bankruptcy or any other debt management program could be.

With a negative savings rate the past (at least) two years and the soft job market many families are not prepared for a cash system. The day of reckoning for the housing market is definitely here, credit cards and other installment debt is right around the corner.

The quicker you can change to cash the better. It is never too late and the best thing to do in these cases is to get all the information you can. This will prepare you when it comes time to make choices and making the right choice will be critical.

Financial problems creates emotional times and thinking clearly is a difficult task when this occurs. In America, the divorce rate is over 50%. Can you believe it? Out of the divorcing couples asked, they cite financial difficulties as the number source of their problems and a major cause of their divorce.

Hmmmmmmmmmmmmmmmmmmmm......................

Some FACT'S

2008-12-12T10:44:00.002-06:00

FACT: It is more difficult now than it was six months to a year ago to qualify for new credit in the form of a credit card.

FACT: It is also way more difficult to obtain a home mortgage or a home equity loan. The days of a 0 percent down payment and a low FICO score qualifying for a home mortgage are gone. That ship has left the dock.

The credit cycle has been tightening for quite some time and the recent activity on Wall Street and the uncertain terms of the bank's bailout has increased it to close their issuing new credit lines.

They have become miserly and scrooge-like in their lending, which doesn't really make sense since THAT is their business.

If you really feel you need access to additional credit with a credit card, I would recommend that you review your finances carefully and ensure that you are protected as much as possible from any negative consequences of this current credit cycle.

Here are some things to consider:

Credit card agreements can be changed by the card issuer for many different reasons. Be aware that many issuers may decide to lower credit limits in an effort to minimize their exposure. What this means for a cardholder is that you will have less access to available credit and your credit score may decrease due to an increase in your credit used versus credit available ratio.

A possible decrease in available credit means you are more vulnerable if you rely on credit for emergencies. If you have not started an emergency savings account, now would be a great time to start. The goal is to have three to six months of living expenses available for unexpected expenses.

If you are using credit to extend your income, stop immediately. Your credit supply may soon run dry and adding to a debt load right now could be disastrous. Create a spending plan and bring your expenses in line with your income. If you need help doing so, contact a reputable credit counseling agency that can review your finances and assist you with creating a workable spending plan.

My advice to anyone would be to tighten your belt and weather the storm. I hope you will refrain from obtaining any new credit cards for the time being.

The Pursuit Of Happiness

2008-12-11T11:21:00.001-06:00

It’s so American that it’s in our Declaration of Independence, where it’s listed alongside life and liberty as an inalienable right.

But how successful have we been in that pursuit? And now that the global finance system is imploding, how likely is it that we’ll be happy in the coming months and years?

Since roughly the 1970s, Americans have been buying things madly, whether we could afford them or not. We were promised that a bigger car, a more trendy purse, or a flat-screen television would bring us happiness, and we’ve been acting accordingly. We were promised that an ever-growing economy would make us all rich. But while our gross domestic product increased more or less steadily from the 1970s until the onset of the current financial crisis, most of us did not see a rise in our standard of living or our wellbeing. Wages stagnated, while the costs of basic needs -- like homes, medical care, food, and energy -- climbed rapidly. Those in the top 20 percent increased their net worth by 80 percent over the last 25 years, while the bottom 40 percent actually lost ground.

Few families today can make it on a single wage-earner’s income, and a health problem or a job loss can send a middle-class family into poverty or even homelessness.

Yet we continue to buy the products that are supposed to make us happy, driving many of us deeply into debt. Families are carrying an average credit card debt of $5,100, with interest rates that often make payoff nearly impossible. In recent years, home equity reached record lows as people borrowed against the value of their homes. In 2004, the most recent year for which Federal Reserve figures are available, debt secured by real property exceeded $290,000 per household, almost three times what it was only 15 years before.

All this debt makes life more precarious. It also increases our dependence on long work hours, which -- if we can find work at all -- combines with long commutes to eat up the time we might otherwise have for things that research shows actually would make us happy.

It’s easy to fall into the trap of believing that having more stuff will lead to happiness, because there’s an element of truth in the advertiser’s promise. We do need a certain amount of food to live, after all. Shelter is good. We need clothes, tools -- a bit beyond the bare necessities can be nice. And having stuff has always been a way to show that you are successful and entitled to respect. But after the novelty of a new outfit or laptop wears off, we’re left with a hole in our wallets and an empty feeling, which -- advertisers tell us -- we should fill by shopping for yet more new and improved stuff.

Following this advice may keep the corporate economy humming, but has it made us happy?

This Is War

2008-12-10T09:02:00.002-06:00

In this economy, we don't need the big financial institutions looking to our credit cards to make up for their losses. But right now, the credit card companies hold all the "cards," and they can hike interest rates on our balances or charge us higher fees for no reason whatsoever.

The Senate may vote on a bill that will rein in these abuses. The House has already passed its bill, so real reform is within reach. I just sent my Senators an email in support of this bill. Would you take a moment to do the same?

Among other things, the bill would prohibit credit card companies from arbitrarily hiking interest rates on your card balances, and stop 'bait and switch' clauses that let them charge fees and change interest rates for any reason whatsoever.

The bill will help level the playing field for consumers and help ensure that a deal is a deal when it comes to your credit card company. The more consumers the Senate hears from, the better chance we have at putting Main Street (and the side streets), not just Wall Street, first.

http://www.debtsmart.com/cgi-pl/go/081210_en.cgi?32&22031

5 Steps To Successful Budgeting - Your Key To Financial Success In An Uncertain Economy

2008-12-09T11:09:00.002-06:00

1. Teamwork
Unless you're Single, then your spouse should be on board with the budget. You both need to have a clear understanding of what the monthly expenses are, where the money flow is headed (to the bills, to your favorite restaurant or bar every Friday night!), as well as who is responsible for physically paying the bills, (writing the checks, clicking the online bill pay, etc).

2. Put it in Writing
Sit down together and make two columns on plain piece of paper. In one column, list all of your expenses, don't forget things like pet care, daycare, even magazine subscriptions. In the other column list all sources of income.

3. Understand Your Income
This sounds relatively easy, but in my experience many folks just don't know what their income truly is. If you get paid on a weekly basis, grab your check stubs, take a look at how many deductions are being withdrawn weekly, insurance expenses, 401K (find out if your work is matching your 401K!) This is an avenue of free money that you could be missing out on. Sometimes, viewing your expenses vs your income in a percentage point of view makes a difference in your spending habits.

For example, If you make $2,000 a month and you want a new truck with payments of $500 a month than 25% of your income is going to your vehicle- and that's not including insurance, excise or personal property taxes, title & registration fees.If you are self-employed and your income is a bit dodgy, figure out how much income you average per month and use that as your guideline for your budget.

4. Prioritize
This is a serious Must-Do. Once you have written down all of your expenses on paper- get a clean sheet of paper and rewrite them in order of Priority. If your house is your biggest priority, put your mortgage at the top. Use a program, such as Quicken, to track your expenses but be sure to print out a copy of your budget once it's completed, tack it up in a place where you AND your spouse can take a look at it everyday. No, this isn't to worry you and make you wonder where you're going to get enough money to pay the bills, this is to remind you of what your expenses are, where your money Needs to go and what your goals are.

5. List your Goals
Most couples don't plan to fail, but many fail to plan. If you haven't discussed with your significant other what your goals are and you are not both in agreement of those goals, you will not reach them. On the bottom of your Budget, Write your Goals down. If your goal is to have your house paid off and be entirely debt free, write it on there. If your goal is to Retire at age 55, put it down on paper.

If you follow these key points, you will be well on your way to creating a successful family budget.

Motivational Monday's

2008-11-28T09:41:00.004-06:00

My internet radio show has been getting some great ratings so I have decided to do a half hour show every Monday to set the tone for the following days during the week. Audio from success coaches like Tony Robbins, Brian Tracy and an army of others will be played, featured, discussed

Getting your head right will make a huge in difference in how your little hunk of the world will be. Do you want to focus on solutions or the problems? A positive mental attitude is contagious, so if you really want to change the world, start with your own.

I hope everyone had a great Thanksgiving and I ask that, as we find ourselves in the middle of the holiday season, the groundwork we lay today will be the foundation of our future. The time for change is now.

So listen in this Monday and every Monday afterwards to The Debtonator Radio Show's Motivational Monday!

Monday mornings at 9AM CST
www.blogtalkradio.com/thedebtonator

The Decline Of The Small Business

2008-11-22T08:55:00.000-06:00

Surviving The American Dream

2008-11-17T13:03:00.009-06:00

“We have an unchallenged, open, panoramic opportunity on a global scale to demonstrate the finest aspects of what we know in this country: peace, freedom, democracy, human rights, benevolent sharing, love, the easing of human suffering. Is that going to be our priority or not” - Jimmy Carter

It has always been a fact that the majority of small businesses that open their doors find themselves closing them shortly thereafter. This is attributed to many different variables and is even more truthful in today’s struggling economy. So a savvy business owner needs more than ever to develop a survival instinct and associate themselves with other successful business survivalists.

So in the spirit of entrepreneurism, let us embrace the old adage of find a need and fill it by becoming an expert on how to survive in business during the hard times that we currently find ourselves in.

As a small business owner, we must be able to compete with the big box mega marts and not just maximize the profits and money we bring in, but we must minimize the money going out, money that is spent everyday that is the cost of operating our business. If something is not done now, the American dream of owning our own business and making a living from it might not exist.

It’s a sad and scary trend that we, as American business owners, are experiencing.
But before we can come up with a solution, we must first determine what the small to medium sized business needs to stay competitive, maximizing profits and minimizing expenditures.
First and foremost, today’s business owner needs to stay educated and informed on available resources available to help them achieve their business goals. What a person learned yesterday might not be the best strategy for the business practice of today. A source of up-to-date information on what’s going on in the business world today is an invaluable tool that will be utilized time and time again.

Next, the small business owner should concentrate on bringing a steady flow of customers or clients through their doors. This is done through marketing techniques that are unique and makes your business stand out from your competition. Keeping a steady cash flow of money coming into your company is crucial to your success.

At the same time however, minimizing and controlling the flow of money leaving your business is equally, if not more important. This can be accomplished through taking advantage of discounts by association with other, like-minded, business owners.

The bottom line here is if you, as a small business owner, doesn’t start thinking outside the box, you will wind up like 90% of the new businesses started during these turbulent economic times and find yourselves looking for jobs a McDonalds.

America's Best Companies is a small business organization dedicated to providing the tools, resources, guidance and information small business owners need to start their business, stay in business, and grow their business while maintaining a competitive edge in the marketplace and is presented by Dave Capra “The Debtonator.” For more information call 630-433-0303

Make Money In Real Estate Today!

2008-10-20T15:49:00.001-05:00

"In the middle of every difficulty lies opportunity"
- Albert Einstein

Is real estate investing a dead end street in these tough economic times or is there a pot of gold at the end of the rainbow?

Banks are in the money business. The are doomed to failure if they do not lend money and, yes, they are becoming more choosy these days but if you are thinking about becoming a real estate investor or borrower with a good track record, your options today are better than any other time in the last several decades.

More and more deeply discounted cash flow properties are becoming available and while some may be paralyzed with fear to take advantage of them, the smart and savvy real estate investor stands to become a millionaire.

So how do you put yourself in this position?

It's fairly simple. You partner up with people who have that kind of track record of success to make it happen. People who have done it all before and have spent years successfully doing what you’re trying to do. People that are in the position you want to one day be in.

You can do the same thing they have done - no matter how old you are, no matter your level of experience, your credit or your cash situation. And when you do, you'll be part of a team that has the financial wherewithal to act and get the financing to close deals in this opportunity laden real estate market.

Here are some rules to follow in finding and connecting with the right partner/investor:
Determine the type of deals you want to do. Do you want to fix and flip or would you rather buy and hold properties? Are you looking to make a quick buck or are you more concerned with a long-term investment?

Educate yourself by going to the right meetings for your type of property. Go to real estate investor groups for residential. Go to industry meetings or groups like your local Building Owners and Managers Association if you're interested in larger commercial deals. Surround yourself with and become the type of investor that you desire.

Network with professionals (i.e. bankers, mortgage brokers, real estate lawyers, and title agents) They know who are closing the deals in today's difficult market. A good word from them may help start a very profitable mutual relationship.

Get your name out there and brand yourself as a real estate investment professional. Look for buyers of your properties even if you don’t have the properties yet. This will attract lenders as well as sellers of property available.

Build up your bank of private lenders by developing the right strategic partnership with an experienced investor. Build a relationship that will help you become part of a qualified buying team during one of the best buyer's markets in decades.

Profitable real estate opportunities are in abundance even in today's market. Once you discover how to find the best real estate deals in the best markets, you can make an absolute fortune for yourself, your family and your investors.

Could you use an extra $500 before the holidays?
How about $1,000?
$5,000?
Contact Dave Capra "The Debtonator" for details!
(630) 433-0303

2008-09-18T10:54:00.000-05:00

There is a steady upward trend that more people are now using debit cards to make their purchase than ever before. Another indication is that many of the banks are providing their customers with a check card that is branded by a card association. They are also looking to provide them with ones that are backed by a debit network, which will provide customers with more flexibility with regard to payment options.

A debit card does not work the same way as a credit card with regard to payment. When a debit card is used for any purchase, the full amount of money spent is deducted from the bank account of the cardholder immediately. In some cases, the deduction may occur within a few days after the transaction is completed.

Debit cards are being processed using the chip and pin service. This is being used in many countries today and is strongly encouraged by many banks as a method of reducing cloned card fraud. In fact, in some countries, no longer will a customer be able to make a purchase without the use of a PIN. The Point of Sale terminal in use is also unable to read the chip on the debit card if a PIN is not entered prior to usage. In this respect, it is actually safer to use a debit card than credit card for your purchases.

There are many reasons today why so many merchants are looking for reliable companies which can provide them with secure debit card processing. In fact, there are plenty of companies offering this type of service at reasonable cost now. There are plenty of benefits to be had from using a secure debit card and below are just a few of them.

1. They will monitor and track any fraudulent transactions in order to minimize any potential losses to your business.
2. They provide assistance to resolve any disputed transactions.
3. Reputable and reliable debit card issuers will provide you with details of their fees and agreement terms.
4. They provide a business with clear and simple monthly statements of all debit card processing transactions made. These statements will be sorted by date or card type to enable a business owner to review them online.
5. They will provide chargeback and retrieval activity so that you can have a complete history of all your business past and current financial activities.
6. They provide concise information regarding deposits including both summaries and details, which will contain the date, debit and credit numbers as well as the amounts paid.

In summary, a debit card will enable the cardholder to make purchase in the same way as a credit card but the cost of purchase is charged directly to the holder's bank account. It provides the same convenience of a credit card without the risk of accumulating credit card debt.

2008-09-12T14:10:00.000-05:00

There are plenty of ways to get a credit card, even if you have declared bankruptcy. While your credit score might be low, you can take some simple steps to get a credit card.

First of all, decide what kind of credit card you would like to have. An unsecured card is more difficult to acquire than a secured credit card. Once you have decided what kind of card you are seeking, I would first try to get a second job for a few hours a week to boost your take home pay. Credit card companies want to know your debt to income ratio before they will issue a credit card to you. The higher the take home pay, the more free cash you have, and the less likely you are to default in the eyes of an underwriter.

If you find that your extra take home pay is not enough, then you can open a savings or checking account at a bank. Take as much extra money as you can spare from each paycheck and put it into the account and let it accumulate. Next, ask the bank what the minimum deposit required would be to open a Certificate of Deposit. If it is low enough, say $250 or $500, move your cash from your bank account to the CD.

Next, ask the bank if you can have a loan in the amount of the CD and pledge the CD as collateral for the loan. Your bank won't refuse this; they have the CD if you default. Begin paying on the loan and pay ahead of schedule; pay off the loan early. Now, ask your bank for another loan of $500, but without the CD as collateral.

If they will not grant the loan, you can call a credit card company at this point and ask for an unsecured credit card. If they still won't give you credit, you can take the money out of the bank account and send it to open a secured credit card. Secured credit cards will want to see that you can send some money to open the credit card before they put any of their credit in.

As you make timely payments on the secured credit card, you are issued more and more credit. You can either keep the credit card at this point and gradually up the limit to your liking, or you can call for an unsecured credit card showing that you have made timely payments on your secured credit card.

Reading, Writing and Credit Card Ripoff's

2008-09-09T12:16:00.000-05:00

It's that time of year when the credit card companies are tabling on campus, offering "not-really-free-if-you-think-about-it" food and gifts to students who will impulsively sign up for a credit card without really thinking about it.

Kara Spak of the Chicago Sun-Times has a story Helping students avoid debt, which also discusses state legislative efforts to ban "freebies" on campus.

Zombie Debt

2008-09-08T13:47:00.001-05:00

If you've ever watched Night of the Living Dead, then you know about zombies.

They're impossible to kill and continue to haunt you despite your best efforts to stop them. Shooting them doesn't work, tearing off their limbs doesn't work, blowing them up doesn't work. Zombie debt is sort of like that.Zombie debt refers to old debt purchased by debt collectors hoping to intimidate consumers into paying the debt. If you're contacted by a collection agency about an old debt, don't give in immediately. You have several tools you can use to fight back.

Debt Validation
The Fair Debt Collection Practices Act, FDCPA, gives you the right to verify debts from debt collectors. Within 35 days of being contacted by a debt collector, you can send a letter requesting the collector validate your debt. This validation needs to include some documents from the original creditor proving you owe the debt, the amount you owe is valid, and the agency is allowed to collect the debt from you. Your request for validation must be made in writing and should be sent via certified mail with return receipt requested.

Statute of Limitations
The statute of limitations on debt is the maximum time the debt collector can use the courts to collect a debt from you. Even though the statute of limitations has expired, the collector may still call you or may even file suit against you in court. To stop calls, send a cease and desist letter to the collector. If the collector files suit against you, attend the hearing prepared with evidence that the statute of limitations on the debt has indeed expired.

Cease and Desist
You have the right to request the collector to stop contacting you. By sending a written cease and desist letter to the debt collector you can have the collector stop communicating with you about the debt altogether, regardless of the legitimacy of the debt. Such a letter should be sent via certified mail with return receipt requested. If the collector violates this request, you can take legal action.

Credit Report Dispute
If you’ve requested validation of the debt and the debt is still in the 30 day validation period or the collector has failed to respond to the request altogether, the collector cannot legally add the debt to your credit report. In either of these cases, you can have the account deleted from your credit by submitting a credit report dispute. The case for the dispute is stronger if you include a copy of your debt validation letter along with the certified and return receipt requests.

Dirty Tricks Used By Credit Card Companies

2008-09-04T13:11:00.000-05:00

Credit card companies have imposed 'astonishing' interest rate rises as families head for their holidays.

It's a very dirty card to play, but the big companies know that with the state of the economy at the moment many British families will be funding some, if not most if their holiday with a credit card.

Brits are expected to spend £22billion on credit cards during this summer. With 13.8million customers regularly failing to pay off their balances each month, the rate increases will bring a cash bonanza for the card companies.

Not only have credit cards increased the APR but there are extra charges for using your credit and debit cards abroad along with withdrawing cash from an ATM.

Despite the fact that the Bank of England has dropped the base rate to 5%, some credit cards have hiked the APR to a staggering 34.9%. That's effectively double the original amount some customers were expecting to pay. Customers with outstanding balances may well find this unmanageable.

With APR's not being shown on statements, just the monthly rate which can be confusing in its self, customers may not be unaware of the amount they are now being charged.

Research by the UK's largest online comparison site, shows that 31 per cent of cardholders have had their APR raised in the past year. Egg, Capital One, Lloyds-TSB and Barclaycard have all raised rates.

The biggest shock will come to those coming off an introductory 0% deal and expecting to pay 15.9% you may now find that you will actually be paying an outrages 27.9%

My advice when wanting to find out what credit cards are available, do your homework. Use comparison sites to see what is on offer and to weigh up whether 0% credit cards, interest free credit cards, cash back cards or others are best for you.

Credit Life After Foreclosure

2008-09-03T13:35:00.000-05:00

Credit after foreclosure can be reinstated sooner than you might think.

Once your property is foreclosed on, you will not only lose your home but have to face serious damage to your credit.

You can quickly achieve credit after foreclosure if you will re-examine your finances and make you prioritize your financial obligations. You must examine your spending habits and put yourself on a strict budget.

For example, start with necessary fixed expenses such as a home mortgage, and work down from the list to less important expenses in your household that can be eliminated. Once you deal with the problem of expenses head on and re-organize then you will know precisely how much money is coming into your household and how much is leaving your household.

Repair Credit after Foreclosure Steps:
How do you repair credit after a foreclosure? The first step should be to call every credit card company and try to get either a secured credit card or a prepaid credit card where you would have to put in a deposit. These credit cards are at higher interest rates in the beginning but you wouldn't care about that since your objective should be to re-establish credit quickly without carrying any long term balances.

The second step is a simple and very important, one which most people overlook; make sure you pay any outstanding debt balance before, not on or after, the due date.
The third step, if you can afford it, pay an extra mortgage annually, or pay off credit cards or other debts completely before one month. This shows creditors that you are gaining financial strength and are a good credit candidate.

The foreclosure process on anyone or family can be frightening, but there are things you can do to re-establish your credit back quickly

If You Use A Credit Card

2008-08-29T12:49:00.000-05:00

The reason why people obtain a credit card is for the convenience of making instant payment when making any type purchase.

When you buy something on credit, the credit card firm is loaning you the money until you pay them back. You have the option to pay either the minimum balance or the complete balance. You may only deposit a little part; you will have to continue to pay an interest rate on that balance. The key rule is to pay off the balance every month; this is the finest way to take advantage of your credit card.

Credit cards offer many additional benefits and card issuers only add these extra due to the competitive market place. They benefit you by charging you less to have a credit card. This maybe cards with no annual fee, a low APR or 0% APR for a certain amount of time. Even though it is not as good as cash back or rewards, a vast majority of savings can be made.

Nearly every credit card company has its reward programs. Programs which reward a point or more for a certain amount you spend. Rewards then can be used for travel, takeaways, cards, gas, electricity and other purchases. The more you spend the more points you receive.

There a number of cards that give you a certain cash back percentage on all purchases such as 1% or 2%. Some cards give a higher percentage on certain goods or services.

Just remember, none of these bonuses will help you if you do not use your credit responsibly, in simple terms pay back what is owed or forget obtaining a credit card.

Be A Deadbeat

2008-08-28T16:29:00.000-05:00

Merriam-Webster dictionary defines a deadbeat as someone "one who persistently fails to pay personal debts or expenses." So by definition, you'd think a credit card deadbeat was someone who didn't pay their credit card bills each month, whose accounts end up getting sent to collections or charged-off or both. Not so in the credit card industry.

The credit card industry, infamous for making up their own rules, says that a credit card deadbeat is someone who doesn't pay their credit card bills on time each month. That definition is nothing the complete opposite of the one from Merriam-Webster. So who which are you going to trust? Here's why you don't want to listen to what the credit card industry says.

Why the Credit Card Industry Uses "Deadbeat?"
Credit card companies make a large portion of their money from interest and fees paid by cardholders. You only get charged interest when you let your balance revolve - you carry it from one month to the next getting assessed a finance charge each time. Credit card companies love these cardholders because people who pay interest help increase the credit card companies' profits.

When you pay your balance in full each month, the credit card company doesn't make any money off you. If it weren't for merchant fees paid by the stores where you use your card, your credit card would be a waste of 16-digits. You're not a profitable cardholder, so, to the credit industry, you are a deadbeat.

Why You Want to Be a Deadbeat
The reason you don't want to be a credit card deadbeat is simple - because not being a deadbeat is costly. Being a deadbeat allows you to escape potentially expensive finance charges on your credit card balance.

Let's say you have a credit card balance of $5,000. Rather than pay the balance in full each month, you send $200 payments. If you don't charge anything else on the credit card and continue making $200 payments to the account, you will pay $855 in interest by the time you pay off the balance in two and a half years. That's 17% of the original balance. If you'd continued making charges on the credit card rather than pay off the balance, your interest charges would be a lot higher.

Paying your balance in full is a much more responsible way of managing your credit. Not only do you not worry about interest charges, you keep your credit utilization low, boosting your credit score - the number many creditors and lenders use to approve your applications.

Forget about what the credit card industry says about credit card deadbeats. It's more important to save money than to empty your pockets for the multi-billion dollar credit card industry.

Escalting Payments

2008-08-27T10:00:00.000-05:00

Most everyone is aware that credit scores generally determine whether an application for credit will be approved or denied. Credit decisions are made on car loans, credit cards, mortgages and most other forms of credit based on an applicants credit score. But, the affect of your credit score is not limited to what happens on the corner of approval or denial. If you are sent down the road of approval, your credit score will also determine the tolls you'll pay.

On November 20, 2007 Fannie Mae and Freddie Mac announced loan price increases for borrowers with credit scores below 680 on loans with loan-to-values above 70%. Simply put that means that if you don't have a 30% down payment and your credit score is below 680 you are going to pay higher closing costs and/or higher rates on your home mortgage.

Unfortunately, higher mortgage rates are just one of the ways your credit score can affect the prices you pay. When it comes to credit card debt an average borrower can easily pay twice as much or more interest as someone with an exceptionally high score. Understandably, borrowers whose credit scores identify them as low risk are offered the lowest interest rates available.
What other bills are you paying that are affected by your credit score?

Recent studies have shown that 92% of the largest automobile insurers use credit data in underwriting new business. It has been estimated that a consumer with bad credit is going to pay 20 to 50% more in auto premiums than a person who has good credit.

An Insurance Credit Score is also used to determine whether or not you will get homeowner's insurance and how much you will pay for it! This is based on the belief that the lower your score, the higher the chance that you will file a claim, inflate a claim or commit fraud.

Clearly anyone whose credit report doesn't identify them as a perfect credit risk is a target to pay more for all the most expensive things in their life. How much would an average family save if they could cut their mortgage and credit card payments as well as their auto and homeowner's insurance by 20-50% or more? Is it fair that the people who may afford it least have to pay more?

That is something open to debate, BUT...

It's also been determined that 79% of credit reports contained errors of some kind. Twenty-five percent of credit reports contained serious errors that could result in the denial of credit.
In other words, many people are paying the toll because the information on their credit report is grossly inaccurate. If you don't know what's on your credit report, how to analyze the information or how to raise your credit scores you may be woefully overpaying for some of the biggest items in your families budget. Be proactive, make sure your score is as high as it can be and realize the savings you deserve.

Credit Cards For Students

2008-08-25T10:17:00.000-05:00

If you had started assisting to a college, or will be assisting soon, surely you have already evaluated all financial aids that could be helpful to your new, and a little more complicated, economical situation.

We have all been there, I can tell you now that it is possible to go through college, finance your education and left with any or just a small debt, and also with a good credit record.

A good credit history is, after your education of course, the best thing you can get while you are still a student. Doing this you will open the door to credit. If a house, a car, a boat or a long trip around the world are some of the things you will want to have in your future, your credit score will be the magic wand that will help you to convert these desires into real things.

The better your score, the higher the credit you will have access to, so do not miss any chance to improve it. Even if you have already made any mistakes and you have a not so good credit record, it is possible to revert that situation by doing some wise moves and student credit cards are a fast and accessible tool.

What Credit Card Suits You Best?
There are three kinds of credit cards. They can be prepaid, secured or unsecured. Even when student cards are meant for students, they work the same as normal credit cards, so these groups apply as well for both, normal and student credit cards.

With prepaid credit cards you buy a credit card with a predetermined amount of money that will be available to use for a limited period. This amount will be your card's limit. After you use it, you can either charge money again to the card and continue with using it or just wait to the card's due date, and then it will be canceled.

These credit cards can be used anywhere a credit card is accepted, but you will not be able to buy within monthly installments with these kinds of credit cards, your purchases will have to be done in one payment.

Secured credit cards require you to deposit a certain amount of money into an account. This amount works as your credit limit and also as a secure for the financial company, just in case you do not accomplish with the payments.

Both, prepaid and secured credit cards are a good option to enter in the financial world if you never had a credit card, or if you do not feel sure enough with doing payments and managing credit.

An unsecured credit card is a common credit card product, in which the financial company sets an amount of money as your credit limit, and you just have to make sure to accomplish the monthly payments.

Make Use, But Do Not Abuse!
As a student, you will have the possibility to access any of these cards, since student credit cards have less requirements than regular credit cards and financial companies know that young people are both a good market and loyal customers. Most of people keep their first credit card for many years.

So, if you are one of those people who feel tempted to complete every form that is presented to you, try to refrain from doing it. Keep your credit cards' number as low as possible, one or two will be perfect to finance your education expenses and to stay out of the possible debt that will surely come with more credit cards in your hands.

Go Ahead And Start Your Credit Record
Once you have decided which kind of credit card is better for you, use them wisely. Remember that the fact that you have a high amount of available credit, does not mean that you actually own that money. You will have to pay back every cent of that credit limit that you use.

Always be careful with your expenses and try to accomplish with your credit card's payments. Secured and unsecured credit cards will impact directly in your credit score. On the other hand, prepaid cards do not have any importance to your credit records.

Little White Lies

2008-08-18T13:40:00.000-05:00

"You don't look a day over 29."

"The check's in the mail."

"It was the dog."

We all occasionally stretch the truth, but did you know your financial provider tells fibs, too?

No need to rat anyone out just yet -- some of those little white lies may actually be boosting your credit score. Let's see whether any are hiding in your credit file.

Sins of omission
Many lenders fail to fully report to the credit bureaus. They may leave out payment information or even the existence of an account.

That's not necessarily an oversight you want to fix. If you've been a little lackadaisical about paying your bills on time, count your blessings and vow to pay all future bills on time, just in case the lender decides to kiss and tell.

If, on the other hand, your payment history with a particular lender is stellar, you might want to pipe up about invisible accounts and missing payment data. The lack of information can make you look lame to lenders. If most of your accounts have no payment reporting information and you're a stickler about on-time payments, a potential creditor can't tell whether you're a good or a bad bet.

If your credit file is thin, call your nonreporting lenders and ask them to communicate more information about your account, if possible. And remember, just because information doesn't appear on one of your credit reports, that doesn't mean that it's not included on another. Reporting companies aren't required to share information with all three major credit bureaus (Equifax, Experian, or TransUnion) -- or any of them, for that matter.

Hibernating accounts
Remember that Discover card you opened to get those airline miles you needed for your Hawaii trip back in 1999? After you earned your miles and stopped using the card, your lender may have forgotten about you, dear customer, as well.

When you shove a card in your sock drawer and stop using it, it may go into a deep sleep in your credit file. With no payment information to report (and when you stop using a card, there's not much to say), your bank will simply stop reporting anything to the credit bureaus. (The time frame varies from lender to lender, but it can happen in as little as three months.)

For those who have trouble keeping track of multiple bills and paying them on time, an account in hibernation may help keep your record clean, since after several months a late-payment ding will have less of an affect on your score. Still, remember that hibernation does not mean "disappearance." Unused accounts are still listed as open lines of credit on your report until you or your lender formally cancels the card. (After that it will be reported as "closed.")

Don't assume that all's well on an old, unused account. Check up on it occasionally -- make sure you don't owe some annual fee, or that the card isn't being used fraudulently and the bills sent elsewhere. If you truly doubt that you'll ever use the card and it's not one of your oldest accounts, consider closing it. But beware of canceling credit cards willy-nilly. Doing so may actually hurt your credit score. (See our advice on which credit cards you should cancel and which you should keep.)

Covert credit limits
A surprising number of lenders simply do not report consumer credit limits. Keeping this information out of your file is not necessarily an innocent oversight. Without that key piece of data, competitors are less likely to poach clients with preapproved offers.

Capital One caused a stir when its credit-limit reporting tactics became public knowledge: Instead of reporting customers' credit limits, it reported the highest balance carried, which gave the appearance that customers were much closer to maxing out their cards (a no-no for a stellar credit score) than they really were. (FICO scores no longer use this piece of Capital One data when computing consumer credit scores.)

You may want your credit card company to keep mum about how much it trusts you to spend, particularly if the spending limits on your cards are really low. Potential lenders see low limits as an indication that you haven't earned a lot of leeway and that banks don't want to give you too much slack in the leash, since they'll be left with greater losses if you ran off without paying your bills.

If you want your lender to report your limits, and it's not Capital One, call and ask. Sometimes, it's company policy not to report, but at least you can try.

Innocent oversights
Finally, let's all give thanks to the banks that occasionally turn a blind eye or -- intentionally or not -- say something that's maybe not exactly true. For example, did a lender forget to report a late payment or two? Is some business claiming you've been its stellar customer for longer than you actually have been? Has a past creditor forgotten to mention to the credit bureaus that you're no longer doing business with one another? Such mistakes can actually improve your credit standing by overstating how good of a borrower you are. Start composing a heartfelt thank-you note to MasterCard when you get a sec.

You can keep mum and pretend you didn't see any of your lenders' errors -- just smile and nod. But don't be surprised when a company finally sets your record straight. After all, little white lies can't get you out of every pickle.

When The Credit Card Bubble Pops

2008-08-17T13:08:00.001-05:00

Let me try a few words out on you: "Charge It," "Swipe It" and "Priceless."

You know exactly what I am talking about. We all have credit and debit cards. We all use them, and many of us keep our lives going because of them.
That is, until the bill becomes due.

The sad truth is that we are all complicit in our own economic servitude even if, at bottom, it's not our fault because we live in a consumption society, and don't feel we could live without them.

While many eyes are focusing on the housing meltdown and its hugely negative effect on an economy clearly moving into recession, few are paying attention to the next bubble expected to burst: credit cards. You would never know it by watching those slick VISA card ads on the Olympic TV broadcasts.

Combined with the subprime losses, such a credit card nightmare has the potential, experts say, of bringing down the entire financial system and global economy.

You and your credit card have become key players in the highly unstable financial crunch. Mortgage lender cupidity and bank credit card greed wedded to financial institution deregulation supported by both political parties, have been made manifestly worse by Bush administration support-the-rich policies. It has brought us to a brink not seen since just before the Great Depression.

While campaigning in Edinburg, Texas, in February, Barack Obama met with students at the University of Texas-Pan American. "Just be careful about those credit cards, all right? Don't eat out as much," he said. After the foreclosure crisis, he warned, "the credit cards are next in line."
The coupling of home equity debt and credit card debt has gone hand in glove for years. The homeowners at risk can no longer use their homes as ATM machines, thanks to their prior re-financings and equity loans, often used in the past to pay off their credit cards. Indeed, homeowners cashed out $1.2 trillion from their home equity from 2002 to 2007 to pay down credit card debts and to cover other costs of living, according to the public policy research organization Demos.

To compound the problem, fewer people are paying their credit card bills on time. And, to flip the old paradigm, more are using high-interest credit card cash to pay at least part of their mortgages instead of the other way around.

Younger people are being crushed by this debt burden as college students and new consumers. Emma Johnson of MSN Money reports that "Generation Y" is broke.

"The democratization of credit has really generated a competitive spending culture, and plastic has allowed for material goods not had in the previous generation," says Bob Manning, author of Credit Card Nation. "Most of us grew up in a home with just one or two bathrooms for the whole family, he points out; today, new homes usually have at least one bathroom per bedroom."That change has happened so fast," Manning says.

"This generation feels that somehow or another they're going to figure out some technological advancement that's going to get them out of their financial troubles and outsmart the market," says Manning, who served as adviser to the documentary In Debt We Trust. The documentary paints a picture of national financial crisis stemming from the personal-debt burden. (See InDebtWeTrust.com)

Happily, this issue is finally being addressed by Congress and the Federal Reserve Bank. When asked for comments, the public overloaded the Fed's website as the New York Times commented:

When the Federal Reserve asked for comments on its proposed rules on abusive credit card practices, an astonishing 56,000 poured in. Most were from outraged consumers. They told of interest rates skyrocketing when they paid an unrelated bill late. They complained of unwarranted late fees and pushed-up due dates. One Pennsylvania customer fumed: "I'm fed up with credit card company tricks that drive us deeper in debt."

This anguished deluge should send a clear message to leaders in Washington. The Federal Reserve should swiftly adopt its proposed rules against unfair or deceptive credit card practices. But the real burden to curb these abuses falls on Congress.

This discontent is being organized to press Congress to act by groups like the Consumer Federation of America and the Center for Responsible Lending. And Congress is listening:

WASHINGTON (Reuters) - Legislation aimed at curbing credit card billing practices that surprise borrowers with unexpected interest rate increases and fees was approved on Thursday by a U.S. House of Representatives committee.

The bill approved by Financial Services Committee mirrors Federal Reserve proposals that would effectively end double-cycle billing -- in which card companies reach back to prior billing cycles to help calculate the interest charged in the current cycle.

These reforms are a start but much more needs to be done because it's not just billing practices that is at issue -- it's high interest changes, deceptive marketing, and arbitrary rules. On top of that, there are other loans that need scrutiny including payday lenders and student loans. And of course our own addiction to shop until we drop.

Some Truths About Credit Card Debt

2008-08-13T09:25:00.000-05:00

Conventional wisdom is that were all hooked and struggling. The reality is, in
fact, quite different and less frightening.

By Liz Pulliam Weston

Youve probably heard that the average American carries more than $8,000 in credit card debt.

Its a figure frequently cited by politicians, journalists and pundits as a sure sign of impending economic collapse. They argue that consumers, already struggling under this massive burden of debt, soon will have to stop spending like drunken sailors. The economic recovery, therefore, is doomed!

The surprising thing about this statistic isnt that its so widely known. Rather, its that the statistic paints a picture thats just plain wrong.

In reality, most Americans owe nothing to credit card companies.

Most households that carry balances owe $2,000 or less.

Only about 1 in 20 American households owes $8,000 or more on credit cards.
These figures are from the Federal Reserves 2001 Survey of Consumer Finances, one of the most comprehensive assessments of what Americans own and owe. (The survey is updated every three years; a summary of 2004's results will be published in early 2006.)

Averages dont tell the tale
Most of the people citing the $8,000 figure credit it to CardWeb.com, a service that tracks credit card trends.Find a loan that's
right for you at the
Loan Center

CardWeb, however, doesnt contend that the average American owes more than $8,000 on cards. Their statistics show that the average debt per American household with at least one credit card was $8,940 in 2002, the last year for which figures are available.

To get that number, CardWeb simply divided the total outstanding credit card debt at the end of 2002 -- $750.9 billion -- by the 84 million American households that it says have at least one credit card. (CardWeb uses a slightly different definition of household than the Fed does. And the company contends that 80% of households, rather than the Feds 76.2%, have at least one credit card.)

Now, by CardWebs measure and definition, the average debt in households with at least one credit card is growing.

If you know anything about statistics, however, you know that averages dont really tell the tale.

Consider what would happen if you and 17 of your friends and family were in a room with Bill Gates and Warren Buffett. The average net worth of a person in that room would be north of $4 billion. The fact that everybody elses personal net worth was just $100,000, or $1 million, or even $10 million, wouldnt affect the average that much because the big boys are sooooo much wealthier than you.

Take heart: Were actually frugal
In much the same way, a relatively small population with huge credit card balances can skew the average to make it look like the typical American is carrying a much bigger debt load than he or she actually is. Consider:

23.8% of American households have no credit cards at all -- no bank cards, no retail cards, nothing.

Another 31.2% of the households the Fed surveyed paid off their most recent credit card bills in full.

So together, the households that owed nothing on credit cards equaled 55% of the total.
Heres some better news: Paying off balances actually became more common between 1998 and 2001. The proportion of households that had bank cards (Visa, MasterCard, etc.) who reported that they regularly paid off their balances in full rose 1.5 percentage points to 55.3%.

We dont carry that much debt
Of the households that did carry a balance, the median amount owed was $1,900. That means half of the households with a balance owed more, and half owed less. (Medians are less subject to the skewing phenomenon that plagues averages; thats why economists tend to favor them.)

Bill Whitt at the VIP Forum, a Washington D.C. research firm, helped me dig even deeper. By analyzing the credit card debts of all the households the Fed surveyed, Whitt discovered:

Only 29% of households owe $1,000 or more on their cards.

21% owe $2,000 or more.

6% owe $8,000 or more.

4% owe $10,500 or more.

1% owe $21,400 or more.
The Fed statistics pretty much gibe with what Fair Isaac, the creator of the FICO credit score, discovered when it reviewed millions of credit reports.

There are a few differences between the universe the Fed examined and the one looked at by Fair Isaac. For one thing, credit reports are individual -- theres no such thing as a household or even a joint credit report. Also, you have to have and use credit to have a credit report. Finally, credit reports dont typically distinguish between balances you pay off and those you carry each month.

But again, Fair Isaacs statistics show a world in which most people are light to moderate users of credit:

About 48% of credit card holders owed less than $1,000

About 10% of card holders had total card balances in excess of $10,000.

More than half of all people with credit cards use less than 30% of their total credit card limit.

Just over 1 in 8 people use 80% or more of their credit card limit.

Theres still plenty of trouble out there
Does this mean all the hand-wringing over consumer debt is so much noise? Hardly. Although most Americans seem to be avoiding the credit card trap, there are still plenty of people on the financial edge:

More than a third -- 36% -- of those who owe more than $10,000 on their cards have household incomes under $50,000, according to the VIP Forum analysis.

13% who owe that much have household incomes under $30,000.

The percentage of disposable income used to pay debts is still near record highs.

The median value of total outstanding debt owed by households rose 9.6% between 1998 and 2001.

Bankruptcies set another record in 2003, with 1.6 million personal filings, the American Bankruptcy Institute reports.
All of that is more than enough evidence to suggest that a large number of people are overdosing on debt. The average American, though, seems to be doing just fine.

Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money.

FICO 08

2008-08-11T13:48:00.000-05:00

There is a much needed change in the way your FICO score will be calculated by Fair Isaac Corp., which calculates credit report scores for millions of Americans.

Fair Isaac claims its new credit scoring formula will be able to signal more accurately borrowers who are likely to default or get behind on payments. The new formula, called FICO 08, will be less stringent on consumers who rarely have late payments, but will more strict on consumers who are repeatedly late. Lenders expect this new scoring system to reduce defaults by consumers from 5% to 15%

A consumers FICO score, is a tool estimated to be utilized by a significantly large portion of the banking industry. Banks and financial institutions use them to analyze if a consumer is worthy of receiving lines of credit, home loans, auto loans, opening a checking account, insurance, mobile phone, getting hired, turning on utilities and more.

The new FICO 08 will not look or feel new to either consumers or creditors. The scores will still range from 300 to 850. The new system will continue to look at the same determining factors, including payment histories, large or small debts, length of credit histories, quantity of credit inquiries, and the credit type, to determine consumers scores.

The difference in the new FICO 08 system is it will work harder to separate the creditors who are a good risk from the creditors who looks like a bad risk. It targets those borrowers with sub-prime credit; people who are just starting to get credit; and consumers who are inquiring for new credit.

A benefit is that consumers who are categorized as less likely to default on loans or "low risk" will receive better scoring using the new FICO system, and people who have had past or recent credit problems will score lower than today's system. The consumers who are in the center with less-risky profiles will begin to see better offers from lenders.

Normally, most credit scoring formulas categorized people with sub-prime credit into one large bowl. According to Fair Isaac's new model, a borrower who is behind on payments on one account along with having other credit accounts in good standing will receive a higher score than before. On the other hand, an individual's score could drop significantly more if they have numerous delinquent accounts.

Despite the new scoring model, people will still have to confirm the information in their credit reports to be accurate, error-free. If there's inaccuracies, or unauthorized use, you may be a victim of the ever rising problem called identity theft. To combat identity theft, there is a new company called LifeLock that backs their product with a $1 million dollar guarantee that your identity will not be stolen under their watch. Their boss is even so bold as to give out their social security number without any fear. For normal check-up on your credit, you can contact the credit bureaus directly, Experian,TransUnion, and Equifax., to request a credit report copy. If there are any errors, misinformation, or ID theft be sure to contact the credit bureaus or the financial creditors.

FICO 08 is also targeting the growing half-truth business of permitting consumers to raise their credit scores by becoming an authorized user on another person's good credit account. Recently, and even discussed on popular radio personal finance shows, credit repair companies are selling people with bad credit a chance to boost their scores by becoming authorized users on accounts held by strangers with better credit. The new FICO 08 will not award higher scores on credit card accounts for authorized users. In addition, it hurts the primary user who opened the account. This even applies to a child or a spouse. Now, you must stand on your own to raise your credit score which can certainly be done if you follow the principles.

Frank Collins is knowledegable in the area of Mortgage Loans and Improving Credit Scores.

Article Source: http://EzineArticles.com/?expert=Frank_Collins

Card Tricks

2008-03-29T13:29:00.000-05:00

Americans are struggling with a very rocky economy while they are also holding almost $1 trillion in credit card debt. In most cases, those cards provide a little flexibility with the monthly bills. But an increasing number of people are defaulting because of the “tricks and traps” — soaring interest rates and hidden fees — in the credit card business.

Before more Americans get in so deep that they cannot dig out, Washington needs to change the way these companies do business to ensure that consumers are treated fairly.

The stories about deceptive practices are harrowing. At a recent news briefing in Washington, a Chicago man told about what happened when he charged a $12,000 home repair bill in 2000 on a card with an introductory interest rate of 4.25 percent. Despite his steady, on-time payments, the rate is now nearly 25 percent. And despite paying at least $15,360, he said that he had only paid off about $800 of his original debt.

The Federal Reserve is focused mainly on making it easier for consumers to understand credit card contracts — some go as high as 30 pages of nearly unreadable fine print. Clarity, however, is not enough. One bank contract stated baldly: “We reserve the right to change the terms at any time for any reason.”

Congress needs to address numerous unfair practices, including interest rates that skyrocket for no apparent reason and due dates that suddenly shift — forward — so that an unwary consumer pays late. Late fees are a big profit center in some banks. Some raise interest rates when consumers get close to their credit limits. In other cases, a late payment on one company’s card raises the rates on other cards in your wallet.

Americans deserve better. Senator Carl Levin, Democrat of Michigan, has been pushing hard for more consumer protections. Representative Carolyn Maloney, Democrat of New York, has put together an excellent first step with a cardholder’s bill of rights. It would require such reasonable changes as a ban on collection of interest on amounts already paid. It would require that cardholders get timely notices of changes in their rates and be able to cancel their cards if the rates suddenly skyrocket — and pay off the balances at the old rates.