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Archive for the ‘credit card debt’ Category

For those consumers with less than stellar credit, it can be difficult to receive an offer for credit. It can be a difficult “catch 22” when those looking to improve their credit score need a credit card to be able to do so. There are generally two ways for those with lower than average scores to gain access to credit and raise their overall credit scores. These include applying for either a secured credit card or a subprime credit card.  Understanding the differences between the two can help an individual decide which choice is best for them.

The subprime market has increased over the past year. Banks and lenders now have a wider target market due to the recent economic downturn. As such, there is intense completion among these credit companies to extend offers of credit to consumers. A credit score of between 620 and 660 is the usual range for an offer for subprime credit. These offers are extended by credit card companies such as Capital One and HSBC. The subprime credit cards carry a much higher APR than traditional cards and can be as much as 20%. This is an increase from 17.6%; last year’s average interest rate for subprime cards.

In addition to high interest rates, subprime cards also carry high annual fees that can exceed $39 per year. Subprime credit cards do not typically have a high credit limit and the average amount a consumer can expect to receive is between $300 and $500. After a period of six months, consumers will be able to raise their credit limit. Although these terms may not seem very appealing, for those with subpar credit a subprime card can be a useful tool for repairing credit.

Secured credit cards are another option for those with a negative or limited credit history. To receive a secured card, an applicant must place a deposit with the card issuer and in return, they will receive an extension of credit for the deposited amount. Interest rates are typically much lower than subprime credit cards and can range from 7% to 9%. With a secured card, your payment history is regularly reported to the major credit reporting bureaus allowing for an improved credit score over time.

When choosing between a subprime card and a secured card, it is best to compare the fees associated with both. Secured cards require a significant upfront deposit of a few hundred dollars. If this is not an affordable option, a subprime credit card with no upfront deposit may be a better short term match. The downside is that the higher interest rate and annual fee may cost more in the long run. Whichever option is chosen, it is important to make consistent on time payments to ensure a raised credit score and increased credit limit with more favorable terms.

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If you have fallen seriously behind on credit card debt, the credit card companies are well within their legal rights to sue. In fact, they can sue an individual after just 60 to 90 days of delinquent payments. If you have been sued for credit card debt and are unsure of the proceedings, the facts outlined here can shed some light on how the process works and what you can do to resolve the situation.

Although it is a rare occurrence, it is possible for a credit card company to sue for unpaid debt. However most companies will attempt to settle the debt for less than the amount owed or they will sell the delinquent account to a debt collection agency. A credit card company is likely to sue in the event that the debtor is avoiding payments through fraudulent actions. However a lawsuit filed by a credit card company against an individual is an expensive and time consuming endeavor and is not a typical debt recovery tactic.

When a creditor does pursue legal action, there are some protections set up for the individual. The primary one is that of the statute of limitations (SOL). This prevents any debt recovery actions from taking place in the event that the time period for recovering the debt has expired. The statute of limitation varies from state to state and is different for each type of account. An individual facing a law suit from a creditor should check the laws in their state to see if they are protected under the SOL.

In the event that an individual is not protected under the statute of limitations for their state, then the creditors can take full legal recourse against them. If the creditor decides to go ahead with the lawsuit proceedings, a judgment in their favor may make you liable for the full amount of the debt plus penalties, interest, attorney fees and court costs. This judgment may even give credit card companies the right to garnish your wages although this varies from state to state.

If you have found yourself being sued by a creditor and the statute of limitations has expired, there are action s you can take. Begin by sending out an SOL notification letter making sure to include the specific dates of when you defaulted and when the account was charged off. Enclosing a copy of your credit report with these dates highlighted can also serve as proof of SOL expiry. If your statute of limitations has not expired, at the very least you will want to respond to the court summons. Responding to the court summons will prevent your creditor from receiving a default judgment in their favor as well as give you some more time to negotiate a settlement.

Although being sued for credit card debt may seem intimidating, being aware of the process and knowing what to expect can make the procedure less stressful.  Employing the services of a legal professional can assist you in navigating the complexities of a law suit. If hiring a lawyer may prove to be too costly, it is also advisable to consider a consultation with a paralegal who may be able to offer similar advice.

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Many individuals burdened by credit card debt find themselves desperate for a way out. They are in a vulnerable position and can be easily taken advantage of. Unfortunate though it may be, debt repair scams do exist to prey on these individuals who are seeking a way out. To protect oneself from debt repair scammers, it is important to know what to look out for and what methods to utilize to protect one from fraudulent practices.

The credit and debt repair business has increased drastically in size over time. A declining economy left many people jobless and facing payments on loans that they could no longer pay. Those seeking to avoid filing for bankruptcy turned to debt settlement companies to help repair damaged credit and to assist them with loan repayments. Although there are many reputable companies available who provide this much needed services, there are also fraudulent companies who seek to solicit personal information for their own gain. These companies may advertise through junk mail, pop up ads or email solicitations.

One may wonder how it is possible to tell the fraudster from the legitimate company. Thankfully there are methods you can use to determine whether a company is legitimate. Under a law known as the Credit Repair Organizations Act, debt relief companies are mandated to perform certain actions in conjunction with an application for debt relief. These include providing customers with a copy of the “Consumer Credit File Rights under State and Federal Law” and providing a copy of the contract you will be signing. Beware of a company that does not adhere to these mandates.

An individual should also be wary of debt relief companies who request funds before services have been provided, promise to remove information from your report that is accurately reported or asks you to sign a form waiving your rights under the CROA. These are all warning signs of a potentially fraudulent company. Your debt relief agency should provide you with a contract which has certain specifics outlined in clear and understandable English. These specifics should include the name and address of the company, the date that the services will commence and the length of time, a statement informing you of your right to cancel within three days and details of the services they are providing along with associated fees.

To protect against scams and fraudulent debt repair companies, it is best to do a check of the business with the Better Business Bureau. Although companies are not required to register with the bureau, if they are registered, you will be able to view their letter grade as well as a report describing their responsiveness to customer complaints. If you have been the victim of a debt repair scam, there are actions you can take. Begin by reporting the company to your state attorney general. You can also send a letter of complaint to the Fair Trade Commission as well as the Better Business Bureau.

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Many people are unaware of the availability of credit card insurance. However this little known insurance option carries with it several benefits.

Credit card insurance can protect you in the event that an unforeseen circumstance such as illness or job loss prevents you from making your payments on time. You can obtain credit card insurance from your credit card issuer. At the time you are receiving your credit card after you have been approved, there will usually be an insert with an offer for credit card insurance. This offer will have an explanation of the terms and conditions for the insurance. Credit insurance exists for various purposes. There is credit property insurance, credit disability insurance, credit life insurance and involuntary unemployment insurance.

Credit card insurance is usually only offered by the credit card issuer and as such, the payments and terms associated with it are non-negotiable. The terms will usually be offered at a low bulk rate such as $0.75 cents for every $100 dollar balance carried on the account. This amount is charged each month depending on your balance at the time. Because this amount is set by the credit card issuer, consumers are unable to switch policies for more optimal terms. However each state does have mandates on the amount that credit card issuers can charge. This amount varies from state to state so it is important to review the terms that apply to your state before making a decision to purchase credit insurance.

Many financial experts do not traditionally recommend credit card insurance as an option for consumers. There are other types of insurance that also offer protection for your bills and credit card payments in the event of an emergency. Life insurance as well as disability insurance offers these protections while also having a variety of additional benefits. For those who do not have access to these insurance options, credit card insurance may be a reasonable alternative.  In fact, one of the benefits of credit card insurance is the relative ease of making a claim and receiving funds.

Credit card issuers cannot mandate insurance as a condition for credit approval. Under law, they are prohibited from doing this so any offers for credit that have insurance as a requirement is illegal. In addition, if you have already opted for credit card insurance, you can cancel it at any time.

Credit insurance may not be for everyone. However it is a good option if you are without any insurance at all and would like to ensure that your credit card payments are made on time. in the event of an emergency or unforeseen event this can be a great asset. In general, it is more advisable to maintain other forms of insurance which offer many more additional benefits.

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Credit card debt is overwhelming for many Americans. Learning how to manage the interest rate on personal credit cards can assist consumers in managing their debt and planning for a better financial future. The compounding interest of credit cards in addition to having several different cards at once is the main reason for credit card debt becoming such a problem. With adequate knowledge on how to manage credit card interest rates, overall debt can be sufficiently lowered to provide the consumer with a manageable credit card balance and favorable rate terms.

Sky rocketing interest rates are the primary cause of excessive consumer debt. One of the first steps to take to effectively lower the interest rate on a credit card is to contact the creditor directly. Credit card companies will not want to lose their costumers and simply contacting them to let them know you have received a better offer may be all the incentive they need to offer you a better deal. If possible make sure you are in good standing before contacting your credit card company about a lower interest rate. If you have a spotty repayment history and are often late, your creditor may not be as willing to work with you on lowering your rate. Also, it is important to have a realistic concept of how much lower your rate can get. Interest rates and fees are the primary way that credit card companies make their profit and they will not be likely to go below a certain threshold. The average interest rate is 12-15%. If your interest rate is much higher, you may have sufficient room for negotiation.

Another tactic for managing credit card interest rates is to consider a balance transfer. Most new card offers include a 0% interest rate for a certain length of time. Transferring a credit card balance to a card with this type of incentive can save you a significant amount. Most introductory offers last for about six months after which time, a traditional interest rate comes into effect. If your balance is not sizeable, you can direct all your payments towards the principal and pay off the debt in a much shorter amount of time. When choosing a card to transfer your balance to, be aware of the fine print and additional terms and conditions. Also be aware of any recurring monthly or yearly fees.

It is important to be aware of which credit cards are charging you the highest interest rates. Tackle the payments on these cards first. Making a larger payment towards the cards with the highest rates will help to eliminate compounding debt and pay down the balance much more expediently. It is vital to always pay more than the minimum amount owed on these high interest rate credit cards.

Managing credit card debt does not have to be a difficult undertaking. By staying in contact with your credit card company and requesting a lower interest rate, you may be able to significantly cut down your payments. In addition transferring to a low or no interest rate card will also go a long way towards freeing up capital to pay towards the principal. Finally by paying larger debts and higher interest rate credit cards first, you will be taking the necessary steps towards effectively managing your interest rates and lowering your payments over time.

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Having thousands of dollars in credit card debt can be mentally stressful as well as being detrimental to your overall financial health. Carrying a high balance on your credit card will lower your score over time since FICO considers a high credit balance as a negative component of your credit report.  Paying off excessive credit card debt does not have to be lengthy and drawn out process. It is possible to pay off debt quickly with some dedication and restructuring of spending habits. Knowing how to quickly pay off your debt can better assist you in regaining control of your finances.

The first way to eliminate credit card debt is to avoid paying only the minimum each month. Although many consumers are aware of this fact, it is still tempting to just slide by and pay the smallest amount each time. However, this will do nothing towards making a dent in a large credit card balance and can often times result in the consumer paying more over time. If eliminating a high credit card balance is a priority then it is essential to make the decision to pay more than the minimum required amount monthly.

In addition to paying more than the minimum, it is helpful to plan how much extra money you can put towards your credit card bills each month. If you can make double and triple payments on your credit card bill, it is possible to quickly eliminate balances that might otherwise take decades to pay off. The first step in determining how many extra funds are available to put towards credit card debt is to write out a budget and pinpoint potential money leaks. Small items such as a daily newspaper and coffee may be diverting funds you could be using to pay off credit card bills. Taking the time to look at your complete financial picture and discover hidden money can give you the much needed additional funds to help you meet your debt repayment goals.

Besides eliminating small purchases, it can also be helpful to consider consolidating your payments into one. Take the time to carefully research debt consolidation firms to find one that may be a good fit for you. You can also consider obtaining a debt consolidation loan through your local bank. The interest rate on the loan will most likely be much smaller than the sum total of individual credit card accounts. This singular payment will be much more manageable and will be easier to pay off over time.

Paying off debt quickly may seem challenging but with some dedication and focus, it can be a real possibility. Make sure to take all your purchases and money leaks into account to find hidden sources of money that can be used to pay down credit card debt. In addition, investigating options such as debt consolidation are proactive methods for eliminating debt quickly. Making the effort to reduce your debt using these strategies can help build a sound and secure financial future.

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When trying to lower credit card payments and eliminate debt, it can be helpful to turn to a professional. There are many different debt solution options to choose from and understanding the differences can help you decide which option is right for you. The five main debt solutions available include debt management, debt consolidation, debt settlement, bankruptcy filing, and a self repayment plan. Becoming familiar with what each option offers is the best way to make the right choice for handling your debt and returning your finances to a stable condition.

One option for handling debt includes working with a debt management company. A debt management company will primarily offer financial counseling and assist with budgeting and managing expenses. These professionals will help you establish a sound plan for getting back on track towards a healthy financial picture. Debt management companies can also negotiate with your creditors to help you get a lower interest rate to assist in paying off your debt more efficiently.

Debt settlement companies are another valid option for handling bills and credit. They can assist the client by negotiating down debts and interest rates. They usually charge a monthly fee and will oftentimes make payments directly to the creditors on behalf of their clients. One of the benefits of working with a debt settlement company is that all collection calls will stop and instead communication will occur via the settlement company and the creditors.

Working with a debt consolidation company to handle debt can be useful when dealing with multiple overdue accounts. These companies work by negotiating down your interest rate and payments and negotiating directly with your creditors. Instead of making multiple payments, the client makes one single payment to the debt consolidation company who subsequently pays the creditors. Debt consolidation companies usually charge a monthly fee in exchange for their services.

Bankruptcy is a solution to overwhelming debt that cannot be otherwise managed through consolidation or settlement. It is usually a last resort as it has the most long term effects on credit. Not all debt can be included in a bankruptcy filing and in addition, the bankruptcy can remain on a credit report for up to ten years.

Working with a self repayment plan is an efficient way of handling debt that may be beginning to spiral out of control. A self repayment plan can help you get back on track before the services of a professional are needed. There are many worksheets and budgeting tools available online that can assist in creating a workable self repayment plan.

These debt solutions are all viable methods of handling debt. The option you choose depends entirely on each individual’s unique situation. Someone with multiple credit accounts may benefit from utilizing the services of a debt consolidation company while an individual who is just beginning to have debt trouble may simply need to use a self repayment plan to get back on track. Taking the time to investigate each option can help in deciding the best choice for managing debt.

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Signing up for store credit cards can be very tempting especially when shopping frequently at a particular department store or retail chain. However, these popular store cards are often inferior to the traditional offers you may receive from a general credit card. It is important to be aware of the disadvantages of store credit card s before making the choice between a store card and a traditional one.

One of the major disadvantages to store cards are their exorbitant interest rates. The annual percentage rates on most store cards tend to average 20% and above while general cards usually have a lower APR of around 12-15%. If a store card is an absolute must, try to offset the high interest rate by making regular timely payments and not carrying a balance for an extended period of time.

Another major disadvantage to store cards is that having too many of them in combination with regular credit cards cad have a detrimental effect on your credit score. Too many open revolving accounts signals a big risk to lenders as the potential to default is extremely high. Try to limit yourself to one or two major store cards to outlets that you visit frequently. In addition, maintain a low credit to debt ratio by keeping your balance well below the allotted limit given by your creditor.

Another major disadvantage to store cards is that the majority of them do not offer fraud protection. With the increase in identity theft, this feature is almost mandatory for any line of credit you are considering. The absence of fraud protection can leave your credit score open to debilitating damages incurred by fraudulent purchases made on your account.

Perhaps the biggest and most understated drawback to having a store credit card is its inherent pull to cause overspending. Seeing the card in your wallet and knowing that you can have some new clothes or merchandise using only that card may cause you to go well over your budget for items you did not really need. However by simply having the store card, the propensity to use it by shopping at one particular store is increased. On the other hand, traditional credit cards offer more conservative options for spending on everyday items such as gas, groceries, and utility bills. Since these are expenses that you normally incur, using your general credit card to make these purchases does not encourage as much overspending.

In general, store credit cards can seem like a convenient option, especially if you are low on cash. Tempting introductory discounts on merchandise can make it easy to sign up at the register without a second thought. However, it is important to consider the potential pitfalls and disadvantages that come along with store credit cards. In the long run, if given the option, it is better to choose a low interest rate credit card with attractive reward points than a store card with a higher interest rate.

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When beginning a business venture, there are many expenses both foreseen and unforeseen that may arise. These expenditures are usually funded by a small business credit card chosen by the business owner. In fact, many small business owners tend to rely heavily on their company cards for most of the financial needs of their business. Choosing the right company card can assist in maintain the financial health of one’s company and assist in warding off debt. There are a few key features to look for when choosing the right company credit card.

One of the most important features to compare when choosing a company credit card is the interest rate. Attractive additional features such as frequent flier miles, discounts and other popular features may seem appealing in the short term. However in the long run, selecting a card with low interest rate terms far outweighs the other bells and whistles often used to secure new customers.

When selecting your company card, it is also important to watch the annual fees that are attached to your credit terms. This can add additional expense to your business and is one that can often be avoided by comparing offers beforehand. Many card companies will be willing to lower their annual fees when presented with competition from another card company. If you are already locked in to a credit agreement with a high annual fee, you may find it beneficial to call and let them know you have been presented with a better offer from a competing card company. Often, that is just enough motivation for your credit card company to lower your fee. Although seemingly inflexible, annual fees like most aspects of your credit card terms can be negotiated.

When choosing the right credit card for your small business, you will also want to make sure of its acceptance with certain merchants. Many locations and establishments have specifics about which types of credit cards they will accept. American Express and Discover are sometimes rejected by certain establishments. If there is a specific merchant with whom you will be doing repeated business, it is best to find out if they accept payment from the type of card which you are considering applying for.

Another basic factor to take into account when selecting a card is your potential credit limit. Make sure that you choose a card that does not offer the temptation of overspending due to a high credit limit. Small businesses must be mindful of their credit record as this can affect future ability to procure much needed loans for business needs and potential expansion. Be sure to keep the spending on your credit card under 30% of your total card balance. Overall when selecting your credit limit, try not to go too far beyond a credit line you would be able to obtain at a bank.

Keeping these pointers in mind will assist the small business owner in selecting a company credit card that is just right for their small business needs. It is important to keep in mind that your company credit card will be one of the most used sources of financing for your small business. Select your card with care and compare several offers before deciding on any one choice. Choosing a good card with optimal terms will greatly assist you in maintaining the financial health of your small business.

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Paying off credit card debt is not always an easy feat. It can be difficult to come up with the funds just to make the minimum payment each month much less trying to pay off the balance. Depending on how much credit card debt you have, it is sometimes necessary to use innovative methods to help with paying off credit card debt. With these four smart tips, you can reduce your credit card debt and regain control of your finances.

The first tip for reducing credit card debt is to plan a realistic monthly budget. When planning your budget, review your bank statements to give you an exact idea of what you are spending money on each month. This can be especially helpful if you use your debit card for the majority of your purchases. Once you have a concept of where the majority of your spending is going, it can be easier to rework your financial plan to find additional funds to put towards credit card debt repayment. A budget is an excellent place to start as it gives you a complete financial picture to work with.

The second tip for reducing credit card debt involves utilizing alternate sources of funding. If you have a whole term life insurance account, you can withdraw money that may not have to be repaid. With these additional funds, you can pay off small balances and depending on the amount of your debt, you may be able to eliminate your debt altogether. Utilizing this method can greatly reduce the pressures of ongoing monthly payments from multiple credit card accounts. The loan you receive from your life insurance policy usually has an interest rate much lower than that of commercial rates.

Although not a quick fix, taking on a part time job can provide much needed funds for reducing credit card debt. Many people shy away from this option and claim that they don’t have enough time, however just adding in a weekend job at eight hours each day for eight or nine dollars an hour can provide up to six hundred additional dollars per month. The best part about taking on a part time job is that it can relate to a hobby or interest that you find enjoyable. This additional job can be at a gym or fitness center which may offer employee discounts which will work to lower your total monthly gym bills. Using this creatively can help eliminate credit card bills very quickly and open you up to new experiences. Once the need for the part time job has passed, you may find that you enjoy the additional income and social interaction.

The last tip for reducing credit card debt is to set up a specific strategy. Many people find that paying down the cards with the lowest balances first makes the process of reducing debt seem more feasible.  Another option is to pay off the credit cards that have the highest interest rates and will end up costing more in the long run. Whichever route you take, the important thing is to find a strategy that works and to stick to it.

Paying off credit card debt can be possible by utilizing at least one of these four smart tips. The important thing is to commit to a course of action that works well with your lifestyle and financial goals. Ultimately credit card debt like all other obstacles are manageable with a little planning and dedication.

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