Debt Consolidation Blog

Archive for November, 2009

Credit card debt is becoming a real concern as cards become easier to obtain. Credit card balances and arrears are escalating and people are turning to one credit card to pay off another. Understanding how to manage this debt sensibly will undeniably help anyone to prevent their finances racing out of control.

The major problem with credit cards is that they are so easy to obtain and it has become so easy for anyone to squander their hard earned cash. Because the credit card issuer charges interest on unpaid balances, it’s not surprising that they don’t what many cardholders to settle their balances in full. So you could frequently discover that your limit is raised without you asking for an increase. But who ever turns it down? This is likely to make it very difficult for shopaholics with poor financial discipline to manage their spending within their means, resulting in uncontrollable credit card debt.

To manage your credit card debt, keep a track of your balance how much “credit” you are able to spend. and how you can afford to pay back. Maintaining any amount of balance on a credit card is often much more expensive than other finance as interest rates are high. Credit card interest rates differ a great deal, so it pays to keep up to date with them and switch balances to lower rate cards whenever possible.

Nowadays, many card issuers offer 0% interest on balance transfers to new customers, so switching your balance could save you a lot of money on your credit card debt. There is catch though as the 0% interest period will eventually expire. But whilst it does exist, every cent you send the card company contributes to decreasing your credit card debt and not to the credit card company’s shareholders!

If you barely pay the required minimum payment each month, do you how long will it take you to pay off your balance? It’s staggering that most people have never calculated this. In some cases, it may never be paid off! So, pay whatever you can afford off your cards – particularly those with higher interest rates.

If you are thinking about taking out a new credit card, choose one sensibly. Look at what they offer and decide after comparing the benefits of 0% balance transfers, interest rates, and compulsory minimum payments. If you afford them, making higher than required minimum monthly payments makes sound financial sense as they compel you to settle your credit card debt much quicker than if you kept to the minimum payment.

If, like many, you forget to make a payment, talk to your bank to arrange direct debits to pay your credit cards. However be careful as it may be tempting to instruct your bank to deduct these payments every month and then overlook them. But that would not contribute to paying much off your balance. You should add to these with additional payments when you can afford to.

But above all else, review your spending habits. For most people with credit card debt, they have lost the habit of treating it as cash and they lose track of just how much they are squandering on things they can’t really afford. That’s why credit card debt is at an all time high.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

Families are turning to frugal living as a way of surviving tough economic conditions. This article seeks to dispel the myth that frugal living means a life of deprivation, tinned food, and endless nights in front of the television, just to save a few dollars here and there? If you’re prepared to discover what a frugal life really could do for you and your family, then read on and find out.

First the good news….frugal living isn’t about depriving yourself of the things you enjoy or making massive sacrifices; it’s more about being smarter, so you have sufficient cash to fulfil the life you crave – the life that you imagine you’d live if you wealthy. Countless people who’ve elected to live frugally have made the choice to live debt free or at least to significantly cut down on their debt. By simply adjusting their spending behaviours they spend less than they make and have smaller debt balances and improved peace of mind. Think about it for a moment. How many days a week do you work just to pay off debt?

Frugal people shun the need to live in the “rat race” or “keep up with the Joneses” and they perceive no logic or rationale to purchase the latest “gimmicks” or “toys” that will only collect dust in the garage after being used only once. Frugal living for them means that life becomes easier and far less complex. They recognize that by living within their income levels they have a solid platform to one day be financially secure and in control of their retirement.

Living an uncomplicated frugal life, allows more freedom and choices to be had. Frugal living is after all a choice. And by living it, there are almost certainly many more opportunities on hand than to people who spend all their time earning their livelihood but never have time to spend it.

Choosing to live a more, simple, frugal life undeniably increases quality time with people that matter the most. It offers them more time to cultivate deep, meaningful relationships with their families and friends. I know people who have opted for this way of life to allow one parent to remain at home wit their children whilst the other parent works full-time; consequently providing more quality family time together.

Leading a frugal life keeps things simple and facilitates stress-free living. Stress is a killer and in today’s consumer driven world, more and more weight is placed on “living to work”. The frugal individual recognises this and “works to live”. So, now that you appreciate the advantages of frugal living and the relatively few sacrifices required, why wouldn’t you give it a go?

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

Help With My Car Loan
The Dollar Stretcher Blog
by Gary Foreman

I recently bought a certified pre-owned vehicle at a dealership. Although I am not struggling to make my montlhy payments I would like to know what my other options are. I’m kind of having regrets buying the car. I don’t really want to pay for the car anymore. This was my first time purchasing a vehicle and the decision was based irrationally.

My loan is $28,000, 6 year, around 10% interest rate. The car is a 2007 Honda Civic Si Sedan.

My boyfriend is bugging me about adding his name to the title. He said
he would help me with the monthly payments by matching my monthly payment. By doing this we would be paying off the vehicle faster. He also says that by doing this, it would increase his credit score. Is this true? And what are some benefits to me by doing this?
Michelle

Boy, wouldn’t that be tempting? Have someone help you pay off a car that you paid too much for. But, before Michelle jumps at the offer, she might be wise to consider a few questions. Questions that could have rather severe consequences.

To begin with, Michelle was right. She paid too much for the car. Kelly Blue Book (generally considered the authority on car prices) puts the retail value of a 2007 Honda Civic Si Sedan at $20,000. Even a brand new 2009 Honda Civic EX-L has an MSRP of $24,365 and Kelly says that consumers are really paying $22,659. So, to put it bluntly, it appears that the dealer took advantage of Michelle. Thankfully, she’ll be smarter next time.

OK, so what are the questions that Michelle and her boyfriend should consider? Let’s start with the title. It’s only fair that he be added to the title. But, it’s possible that the current lien holder (i.e. the bank that loaned Michelle the money) won’t want that to happen. They made a deal with Michelle who had a good credit score – not the boyfriend who has a bad one. It’s possible that they’ll want a higher interest rate if he’s added to the title. So any attempt to add him should be checked with the bank first.

If Boyfriend is added to the title, Michelle needs to understand that there is some risk from his creditors. If he’s using this to pull up his score, it’s very likely that he has outstanding debts. And it’s also possible for those creditors to go after any of his assets (including the Civic) if he falls behind in his payments (which presumably has happened in the past otherwise he wouldn’t need to improve his score). What would Michelle do if one of his creditors put a lien on their car?

Another question they’ll need to answer is what would adding Boyfriend to the title do to the insurance rates. And, who will pay for the insurance?

With both of them owning the car, they’ll need to decide who can use it. Even if Michelle remains the primary driver, her boyfriend may want it occasionally. Who gets the car and when should be handled now, not later.

Boyfriend’s credit score should also be considered. Is this the best way to raise it. If he is added to the car loan and the payments are made on time, his score will go up. But, suppose that he borrowed $14,000 (half the car loan amount) and paid it off in a timely manner on his own. That, too, would cause his score to go up. And, it would be a much cleaner transaction.

Finally, what happens if they break up? I’m sure that they’re a very happy couple and I’m not wishing a breakup on them. But, let’s be real. Couples split up. And, if that should happen they’ll need some plan for what happens to the car and any remaining payments. Who keeps it? Is the other person entitled to any compensation for their half of the car? How much? Who makes the remaining payments? It will be much easier to come up with a plan now, when emotions are not running hot. If they do break up and don’t have a written agreement there’s a very good chance that they’ll need the court system to work out a solution.

I can’t tell Michelle and her boyfriend not to try this. There are some advantages. But, it is fraught with danger. Unless things go exactly as planned, this could be a very bad idea for them. One that has the potential to blow up their relationship and put both of them in financial peril. So Michelle should think very carefully before agreeing to this plan.
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Gary Foreman is the editor of The Dollar Stretcher.com website and various enewsletters. The Dollar Stretcher is dedicated to helping people live better on the money they already have. If you’d like more information about credit scores and how to improve your score visit The Dollar Stretcher library

(end Dollar Stretcher Blog)

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

A few days ago I read an article which advocated a reduction in costs to a minimum – to get away from consumerism as humanly possible, renouncing any optional spending and essentially make a clean sweep and start from scratch.

Many people react negatively to such an idea, which is not surprising. I’ve seen comments like “I do not know whether I should be possible to waive the pay-TV and go around to bars, restaurants, etc.., At a time”. I needed to lean frugal living and save money.

In this modern society most of us function assumes that it is not possible to waive certain forms of non-essential spending. In other words, if you give up certain luxuries life ceases to be nice, so that ultimately resemble those essential luxuries.

Of course, I do not advocate a very frugal life to take you to renounce all the things you like. My vision is somewhat different. I think there are certain routines that we consider essential, and in reality we do not enjoy as much as we think.

For example, eating out. Many people do it because they think it is faster and more convenient to eat at home. They simply drive to the restaurant, sit, beg, chat with the people accompanying them, eat, pay and then go home. Easy and uncomplicated.

But when you start to add up the time you can invest in it, the thing does not seem so funny. Let’s say you took fifteen minutes driving (and parking) to a restaurant you like. Another five or ten minutes to ask. Ten or fifteen minutes to bring you food and half an hour or more to eat. Another five or ten minutes waiting until you bring the account, pay and leave. And another fifteen minutes until you get home. That is roughly one and a half just to eat.

If I’m home, you can improvise a meal in fifteen minutes. After about twenty minutes late and eat five or ten pick. The total is about three quarters of an hour – and of course, you can take longer if you want to prepare something delicious. Even so, do not spend so much time as you have to spend to eat out.

Considering that the cost of eating out is much higher and that the level of food quality that is comparable to prepare at home, you’re paying extra for eating out.

So this is an expense that can be reduced or eliminated. Personally, instead of going out to eat out several times a week, eat out four or five times a month – and just what we do when we plan to return home late.

Did you miss? Not really. I have not given up the part that I really liked, who was eating with my family. Once I gave him a chance to the idea of not eating out constantly, I started cooking more at home – and do better. Today, I prepare a tasty meal pretty quickly, and the quality of the food is excellent. Furthermore, we finished eating at least an hour earlier than when we eat out, so we have more time to do other things.

Where rio_bifurcacion to you? Our lives are like a river. They take a course shaped by priorities and assumptions that we set ourselves. If we begin to change these assumptions, if only slightly, sometimes the water will try to return to its old course, but most often simply be adapted to the new address and you may discover that everything flows serenely in this different manner .

Here’s another example: bookstores. I loved to buy books. I was going to a bookstore at least once a week to take a look, and it was not unusual to come out of it with one or two books under his arm.

At that time it seemed the most normal thing in the world, and I liked it. I could not imagine my life without having at hand a new book to read. When my finances hit rock bottom, even he could imagine eliminating this “habit”.

I had read on many lists of financial tricks that the ideal was to replace the library by the library, but still I do not see it. I imagined the library as a boring place full of dust, and thought he would hate. So I forced myself to try just because I was willing to try anything.

Surprisingly, I left the library with two books I really wanted to read … for free!

And that’s how the river changed for me. I started to use the library all the time and gradually my visits to the library declined. Today only buy one or two books a month at most.

What was the outcome? Do not quit what I liked, which was read books. I still have on hand a bunch of new books to read. What I have given up is to spend on them a lot of money, which was a big relief.

For me, the benefits of frugal living do not go through renouncing the things I love, but to understand what is really not like to do and find ways to continue enjoying these passions spending less money. When people say things like “could not waive the pay-TV, why do you say? Are you concerned about not seeing any particular program? Or they do not want is to give up an evening with your partner huddled on the couch watching something they both enjoy?

If what you really would miss the latter, why not waive the pay-TV and try out the options offered by the Internet, or the rent? Thus, keep the experience that they really like – watch TV comfortably in your home – without the inconvenience of having to pay the bill every month.

In addition, you may find that spending money on these things that you think you should worry about (mainly because others do), but inside you would not really bother you. Eliminate those behaviors in your life. Making things that really do not like to get the approval of others only leads to unhappiness and, incidentally, an empty bank account.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

Debt consolidation is sadly becoming a way of life for many Americans.

Federal Reserve Figures released for the 3rd quarter of 2009 reveal that consumer debts (credit extended to individuals, excluding loans secured by real estate) are roughly $2.5 trillion. With a population of 308 million, that’s a staggering $8,100 per person. Or approximately $11,500 per adult!

Just over one third of this debt relates to revolving credit (typically credit cards) and the rest on “non-revolving consumer debt” (typically automobile loans, and loans for mobile homes, education, boats, trailers, vacations, etc). Average US credit card interest rates are almost 14% at the moment.

With more and more families finding themselves under financial pressure due the recession, job losses, escalating living costs, tight credit control, etc many Americans have turned to debt consolidation to ease their burden.

Debt consolidation is simply a process where several loans are combined (“consolidated”) into one, mainly to switch to a lower interest rate; fix a rate for the length of the loan, or simply to replace several payments with one single, known monthly payment.

You may be surprised by the many alternatives available when applying for a debt consolidation loan. Your bank may lend you money via an un-secured loan. Even though it’s still a loan, you can use the funds to pay back your other debts in full, replacing them with one debt that you can repay in one fixed monthly instalment, instead of making several separate payments. This should generally be suitable if you do not have an adverse credit rating, as banks are currently reviewing their exposures.

Another alternative is, if you own your own home and have sufficient equity, your bank may approve a debt consolidation loan using your property as security. This offers a few worthy benefits. Firstly, you should get a lower interest rate because they have this security if you default. Secondly, it may be possible to repay the loan over a longer period.

Arranging a debt consolidation loan shouldn’t take too long as most financial institutions now automate many parts of the process – often it’s possible to apply online.

After you receive your funds, you’ll be able to repay your credit cards and other loans, knowing that you’ve reduced how many people you owe money to. And better still, you have now consolidated your payments into one single monthly payment. If you stay disciplined and do not increase your debt, there’s no reason why you couldn’t be debt free sooner than you think.

So, if you’re sick of being in debt and struggling to make ends meet, there has never been a better time to consolidate your loans. Hunt around for the right alternative for you, but pay attention to penalties for paying off your loans early and any terms and conditions in the “small print”.

So don’t bury yourself under a pile of uncontrollable debt, consider one of the many debt consolidation options available to you.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

During the years the credit card industry has been ‘using’ people and, alas, American people accepted the situation thinking that they had little choice about this problem. Even more, the society didn’t offer further alternatives as firms starting to prefer credit over cash – some firms even require the use of credit cards and they don’t accept cash payment.

When you make a charge on your credit card the charge will triple in three years if you forget to settle it. This is because of the taxes the credit card firms have for card maintenance and the costs they take every month as bills for your card – this is how credit card firms take advantage on people.

It’s true that the American Congress has taken steps to guard the American citizens from the abuse of the credit card companies. However, no matter how the Government are trying to help, you should take care of yourself.

Taking care of your credit card debts starts with a credit analysis so you will see how the things work and will have a good overview of the situation. By taking this step you can repair the damage the credit card corporations had done to your budget by verifying into debt settlements.

Debt settlement allows you to reach the point where you will actually reduce your credit to 40% of what you owe right now. ‘Thanks’ to the recession, credit card companies are willing to accept debt settlement as a solution to recover their money.

Speaking in simple terms you are actually taking back what the credit card companies have taken away from you in a long period of time. This is the action you can take against the credit card firms that have exploited you during the past and you can get rid of the debt and recover control over your finances. For this purpose you will need a professional debt settlement company. A top professional company will be able to make you eliminate at least 50% of your debt.

If you owe more than $10,000 in unsecured debt you should at least think about getting a debt settlement. You have to know that credit card companies should be wiling to accept debt settlement due to the passage of the federal stimulus packages. So basically they are able to accept large amounts of debt settlements because anyway they are covering their losses with federal grants.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

Getting loans for urgent needs like a home or a car is very common among people all over the world. Loan borrowers don’t feel the pinch when they get the loans, as many loan lenders just provide a loan without even checking the credit balance, or bank account details. They do not even check the bad credit history of the borrower. With a few mouse clicks and very little document filing to do the loans is available in 24 hours. This quick loan facility allures the people to buy more loans.

Many people just ignore the interest rates as they are in great demand for money. So finally they get caught in an irreversible web of payments every month. How can you escape such high financial debts? Debt consolidation Florida can provide timely help by consolidating the loans into one single loan repayment option. All you have to do is to fill in an online secured form to access the credit card debt consolidation loan. The professionals will then calculate all loan amounts and submit a feasible plan for your approval.

The debt consolidation Florida experts contact all the loan lenders on your behalf and try to bring down the interest rates on the loans borrowed. After careful considerations of the loan quote submitted by the debt consolidation Florida the borrower chooses a plan which is best suited for him. You can also choose a California credit card debt consolidation plan to help solve this problem in time. The consolidated loan amounted is generally calculated after careful consideration of the borrowers financial position and the amount which he can comfortably pay every month without much hassle.

The debt consolidation Florida also provides bad credit debt consolidation. People with bad debt history can also apply and get the services of debt consolidation from the debt consolidation Florida. Almost all consolidation companies offer debt consolidation but their policies might defer. Therefore the best loan consolidator can erase all pending loans, with low interest rates and longer repayment period. Every month all the borrower needs to do is pay the loan amount to the consolidation company who in turn will payback the loan lenders on your behalf in time.

Online applications, secured form fill up and processing is done instantly within 24 hours. Consolidate your loans instantly and save yourself the constant harassment and frustration as the result of pending credit card debts and loans.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

One reason that you find yourself charged with higher and higher rates when you get a credit is the result of the political practices that Credit Companies tend to perpetuate. They make us not aware of the conditions they impose and the credit information is hardly accessible and that way you might think you can afford those rates but in reality you realize that the rates become higher and higher with time. This occurs without any previous discussion with the client. When the client is not able to pay then the Credit Companies will bother him continuously or else.

One interesting problem is that today there is plenty of information that the credit companies do not want you to have and however that does not seem irrational since they do not keep clients informed aside from what they have to pay. There is a certain fact that credit companies do not want you to know that they are opened to credit settlements due to the recession and massive increase of the delinquent accounts. In the past a debt settlement needed plenty of effort from the client and however that did not help him save much money as the cash for the provided services were already paid.

There is one good side of the recession and that is you can save some money if you get an advantageous debt settlement even with the costs. Credit card companies do not want you to know that you will get better services once applying to a debt settlement company that those that strive to settle in time all their liabilities. The reason is that the credit card companies do not want you to know that they are willing to accept debt settlements in this period of financial crisis and how far they would be able to go. This fact is known only by informed people and by pros. The credit card corporations were forced by the government to operate in a moral way by becoming free of extra charging with ridiculous costs and guaranteeing IRs and other financial facilities. The credit firms do not want you to know that it is your right to get rid of the ridiculous extra charging of your credit card today and also improve your credit history so you can apply in the future for more credit.

To find a good debt company in your area just go through a debt relief network. This network assures legitimate activity of the debt companies.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

Due to the financial crisis, many people have nowadays problems in getting out of their debts. There have been specialized credit counseling services, called Family Means, which are helping people find their way out of debt.

Attorney General Swanson says that these services advice people not to pay their mortgage in order to get the attention of credit companies. Actually, the problem is more complicated as the credit companies will come after those who owe them money and finally it will be the person that has lent money suffers the consequences.However if you had run out of all solutions there is still one-way out: bankrupt. Even so, there is still one more problem. The rules of bankrupt have changed in the last decade so it is actually no simple way out.

Debt settlement is the result of the decreasing of the amount of debt lower than the debtor would have actually accepted it. This occurs due to recession. The people who are in extreme debts search a way to get out of this situation as the calls from the credit company increase and it seems that the expenses are higher than the actual income. It is not well known fact that when you have problems completing your payments, creditors would agree to lower debts. It would be a better solution to gain little bit than not be paid at all. Until the creditors accept to modify the conditions of payment, you will have to put money down in order to pay your credits.

Anyway, there are still some solutions shown by media, which explain that you can get out of debt through a settlement and people tend to choose this solution instead of losing their fortunes. You can make it easier with the help of a company that is specialized in dealing with the creditors and that way you can sit down and relax while the non-profit organization will help you get out of your debt. Debt settlement will remain as a dark spot on your credit ratings.

Getting out of debt by a debt settlement process is nowadays popular. Even so, you need to be informed where to locate the most efficient programs in order to get the best results. To compare debt conditions the companies should be wise to visit a free debt relief network, which will indicate the most suitable companies in your area for nothing.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

I have been married 40 years, I am 59 and am a spendaholic. I have been following Dave Ramsey’s plan and trying to get my credit cards paid off. We have no money and no retirement. Is there any hope for us?
B.

Yes, there is hope for B. It might take awhile and may not be easy. But just because she didn’t overcome her spendaholic tendencies in the past doesn’t mean that it cannot be done.

Let’s tackle the problem on two levels. First, the things that she can do to get the problem under control today. Second, the longer-range things that she can do to uproot the source of the problem.

B. says that she’s using the Dave Ramsey plan for paying off her credit cards. Good for her. Dave’s plan is very workable. It’s one of two common plans for paying off debt that are very similar.

Both pay the minimum on all accounts. One pays off the smallest balance first and pays accounts off from smallest to largest. The idea is that you get re-motivated every time you close an account.

The other, ranks them in terms of interest rates. They pay off the highest rate first and works down from the highest interest rate to the lowest. This is the fastest way to pay off a group of accounts. But, you’ll need to keep yourself motivated.

Depending on how much debt she has, it may take B. awhile to pay down all the accounts. She’ll need some patience and determination. It took awhile to accumulate the debt. It will take awhile to pay it off.

At the same time that B. is reducing the debt level, it’s important that she stop her spending. She can’t get out of debt if she keeps spending. So that has to stop now.

Based on past experience, her willpower and good intentions cannot be trusted 100% of the time. So until B. can control her spending urges, she’ll need to use some physical means to assist her will power.

That means recongizing where she’s vulnerable. Is she more likely to be spending cash? Using credit cards? Ordering over the internet? Or by phone?

Whatever the vulnerability, B. will need to devise a plan to protect her when willpower is not enough. That may mean limiting the amount of cash she carries. Or freezing her credit cards in a block of ice so she has to wait before charging. Blocking certain internet sites or TV shopping channels.

Once B. has made it hard to succumb to her spendaholic urges, then it’s time to try to find what’s causing her to spend. I’m no psychologist. But I have worked with many people and their finances. Money is generally not the root of the problem. It’s most likely to be a symptom of something else. Often people spend in an attempt to make some emotional hurt feel better.

B. will want to look for a pattern to her spending. Is there a particular emotion that she’s feeling when the urge to shop is strong? Knowing what emotion goes along with her spending will allow B. to watch for the emotion and when it surfaces she can guard against spending. A little like an early warning system.

She might also want to seek outside help. Many places have Debtor’s Anonymous meetings.

Or B. could find professional psychological help. Either to help her find the source of her spending or to deal with the source once it’s found.

There’s no reason for B. to give up hope. She can make it almost physically impossible to spend. That alone will solve most of the problem. And if B. is able to identify the emotional root and deal with those issues then she can be free of her spendaholism forever!

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Gary Foreman is the editor of The Dollar Stretcher.com website and various enewsletters. The Dollar Stretcher is dedicated to helping people live better on the money they already have. If you’re struggling with debt check out The Dollar Stretcher section on controlling your debt

(end Dollar Stretcher Blog)

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.