Archive for September 10th, 2007
Being in debt can feel like having a heavy weight chained to your foot, dragging you below the surface and drowning you in unpaid bills and a deteriorating credit score. Here are 5 smart moves to unchain yourself from that debt without resorting to credit counseling.
Move #1: Ask your credit card company for a lower rate: Your credit card company wants to keep your business. After all, if you carry with them a large balance at a high interest rate, you are paying them a hefty fee every month. Try calling them and asking them to reduce your rate, explaining that you have received lower-interest offers from other companies and that you are considering transferring your balances away unless they can match those lower rates. Believe me, your credit card company would rather keep some of that income than have it reduced to zero. Remember, there is no need to get nasty or threatening with them. Just be matter of fact about it and see what happens. If they refuse, go ahead and apply to other, lower-interest cards.
Move #2: Improve your credit score: A 50-point improvement in your credit score can save you $1000s per year in debt payments by making you eligible for lower interest rates. Do whatever you can to improve your credit score, including ordering your credit reports on the Internet and quickly correcting any errors you may find there.
Move #3: Pay yourself weekly: You may already have a monthly budget. If not, go ahead and prepare one. Then, divide it into 4 and make it a weekly budget. Now, pay yourself and your spouse a weekly allowance. Once your weekly allowance is gone (even if it is only Wednesday!), agree that you will halt all further purchases until the following week. This is a hard one to implement in terms of willpower. I suggest having 2-3 savings accounts and having one account for each week of the month. This is an easy way to keep track of how you are doing that week in terms of sticking to your budget.
Move #4: Keep a spending diary: Each evening, write down roughly how much you spent that day in a special spending diary or notebook. Create three columns: one for the name of the item, one for how much you spent, and one with a comment that labels the item “need” or “want.” For the wants, write a sentence or two about how that want was more important than your getting out of debt. By doing this, you will become much more self-aware about your spending habits
Move #5: Set debt pay-down milestones: Everything is easier to achieve if you have clear goals in mind. Write down only your total unsecured debt. Now, think about the next 6 to 24 months and determine a realistic time frame during which you will pay down that debt. Next, set two or three pay-down milestones during that time period and write down what your total debt balance will be by each milestone date. Then, as time passes, do periodic checks to make sure that you are on track and make adjustments accordingly.
To loosen the heavy weight of debt from your foot without resorting to credit counseling, you need to become more aware of your spending habits, improve your credit score, be smart about how you spend, and set goals for paying down that debt. You will soon be sitting pretty and debt-free.
September 10th, 2007
Well, youve probably heard it stated on several occasions: Consumer debt in the United States is spiraling out of control and families are finding endless struggles trying to stay financially afloat. Worse yet, Americans are losing their homes to foreclosure at alarming rates. So, what do you do if your credit card debt is becoming unaffordable, but you dont want to lose your home?
Fortunately, you have options, and debt settlement seems to be growing in popularity as individuals across the country are facing these struggles and looking for ways to avoid foreclosure and bankruptcy filings. While many people choose to attempt to negotiate with their creditors on their own in an effort to reach settlement agreements, which will reduce the payoff amount of their credit cards, many more choose to hire a professional debt settlement firm to represent them.
With so much information available on the Internet regarding debt settlement and debt settlement companies, where do you begin when trying to determine which debt settlement company will best represent you? Below are some guidelines youll want to consider prior to making your final choice:
There are a few factors youll want to consider regarding the fees that will be assessed by a debt settlement company. First, youll want to determine if their fee for services rendered is paid up front or will you pay only after a settlement has been reached. Its a good idea to look for those companies that do not take their fees up front to ensure that the best possible settlement is reached with your various creditors. Second, how much does the debt settlement firm youre considering charge? Some debt settlement companies charge as much as 30% of your overall debt; thats a significant amount of money. If youre diligent you can find many debt settlement firms that charge only a percentage of the amount of money you actually save, rather than charging based on your overall debt. These firms typically charge approximately 15%-25% of the amount of money you save. Finally, youll want to only agree to terms which you can afford. You see, some debt settlement companies set you up with a trust account, to which youre expected to deposit funds into each month. If youre considering this type of arrangement youll want to be certain that you can afford what youre signing up for. Also, these same companies are those who charge up front fees; again, steer clear of paying fees for services that are not yet received.
If youre considering hiring a debt settlement company please check their Better Business Bureau rating. Even if the firm youre considering isnt a BBB member, they will still have some type of record if there have been any previous complaints filed. I would suggest, however, that you talk with only those companies who are members of the Better Business Bureau to ensure that youll do business with a reputable firm.
When you talk with representatives from debt settlement companies, be sure to ask about their customer service. How many clients do they service? If its a large number, will you be certain to always speak with the same person? How many clients does that particular representative service at one time? Will you receive regular updates, and how often? If you should happen to call and leave a voicemail how long will it be before your phone call is returned? These are all important questions that need to be addressed prior to choosing a debt settlement company. If you check the Better Business Bureau reports of many firms youll clearly see that the majority of complaints are based on customer service issues.
Remember, the bottom line is your peace of mind and whats most important during your attempt to become debt-free is you, the consumer. Dont be afraid to ask the questions Ive outlined, and dont stop your search until youve found a company that you feel you can trust.
September 10th, 2007
Credit card debt is the main financial problem facing Americans today and it is one of the major factors in many divorces, credit card debt is just getting bigger and bigger and the banks couldn’t be happier they are making more and more money from your interest payments.
The trouble is credit card’s just so convenient in fact it has become impossible to carry out some purchases without using a credit card, so what can you do to help yourself if you’re worried about your credit card debt.
Here are eight tips to help you reduce or even do away with your debt.
1. If you have already built up a sizeable debt take a look at arranging a consolidation loan, this will enable you to transfer the high interest credit card debt to a lower interest consolidation loan. Then you can use the spare income to reduce the debt even quicker.
2. Establish a budget and stick to it, make sure you have allowed for all the essential items you must pay every month. Use any free cash at the end of the month to reduce your outstanding credit card debt.
3. Use a debit card rather than a credit card, that way you can really control your spending, if you have no money in your account you cannot spend it.
4. Only use a credit card for emergency purchases, arrange to have a very low credit limit so that you can automatically limit the risk of overspending.
5. Establish a plan to pay back your debt, then keep a careful record of your payments showing the declining balance of your debt, this can be a very motivational and help you in clearing your credit card.
6. If you find that you are tempted to use your credit cards when out shopping then just leave them at home, I know this sounds simple, but it also take some willpower and if you can do it you will find it really works.
7. If all else fails cut your credit cards up and go to cash I know its drastic but if nothing else works then you have just got to do it.
8. Finally the most important tip, if you are in significant credit card debt don’t be ashamed, don’t think other people won’t understand, get help and now consult a credit counsellor and sort the problem out before it becomes too large.
Credit card debt is like an open sore, the longer you leave it the worse it will get, try using the tips I’ve listed above they will help you, but remember the most important thing you can do to help yourself if you are facing this problem is to get help from recognized credit counsellor and take positive steps to reduce and remove your credit card debt.
September 10th, 2007
