The Road to Debt Freedom

Your Perfect Day

2010-04-08T09:22:00.000-07:00

Debt is something that is hard to recover from, but it is not impossible. And there are times that you need something that will motivate you to keep your eye on the target. A book I am reading talks about your perfect day. And in most cases your perfect day is going to involve money and it might also involve you being credit worthy. My perfect day is simpler than most, but many people want things like houses on the beach or vacations in exotic places.

These things will take money and debt will definitely get in your way. While there is nothing wrong with looking at the big picture and preparing to meet your goal part of the picture should include a plan for debt elimination. You can work on more than one thing at a time. Eliminating your debt and funding your perfect day fund can be going on that same time. But if you have a goal, it is easier to keep your eye focused on the prize. Reducing credit card debt and bad debt consolidation are two mthods of paying off your credit cards and getting out of debt.

Can You Be Sued For Credit Card Debt?

2009-06-18T19:29:00.000-07:00

Can you be sued or credit card debt is a question that many people are asking, as it is becoming more difficult for people to keep their bills paid. In the past, collections and credit record listing were about as far as most lenders would go with their collection activities. With the advent of financial problems being more normal, many lenders are going to more extreme measures to try to get the money owed them.

I know a person that was recently sued for a $2000 owed amount on a major credit card. Having worked in both the credit card and collection industry, this is not something that would have been done in an up economy. Procedurally, the accounts would have been sold to a third party collection agency for pennies on the dollar and they, in turn, would have harassed you to death for the money.

If you are summoned to court over debt, the lender will most likely take a judgment against you and this will stay on your credit record for 10 years. But even worse, the lender can and most likely will garnish your wages. This means your employer will be aware of the problem and some employers do not look kindly on this at all and I have even heard of some companies that will not do it at all.

These are very compelling reasons to look for an alternative method for dealing with your credit card debt. Delaying taking action only makes your financial situation more desparate. You do have debt relief options, but you have to know what they are before you can use them. Your first step is to find out what programs your lenders have that can help you. Especially now, many lenders have hardship programs that can help you get caught up and avoid the consequences of not making your payments.

However, some people need third-party assistance because they are either numerous months past due or they have overwhelming. For these individuals, a debt elimination program is required. So, can you be sue for credit card debt--yes you can.

What You Should Know About Free Credit Card Debt Relief

2009-03-15T11:38:00.001-07:00

Do you have credit card debt? Are you looking for free credit card debt relief? It seems like most people are. But you must understand that it is only going to be FREE, if you do it yourself and it can be done, but it takes a plan and a lot of discipline. And unfortunately, not everyone can become debt free without some outside help.

Consumer credit counseling agencies are a great option if you need direction in your quest for debt freedom. They are not free, but they are inexpensive if you find the right one, they will charge a small setup fee (around $50) and a monthly fee that ranges from $30-$50. Now, let's look at a real life example.

If you have $10,000 in debt that has an interest rate of 19.9% and a minimum payment of $200 and you make only the minimum payment, this debt will be paid off in 107 months. That is 1 month short of 9 years. To state it more bluntly, you will have paid back $21,400 before this debt is paid in full.

Now, if you enroll this same credit card account in a debt management program and your interest rate is reduced to 9.9% (many times this number will be lower), with the same minimum payment, you will have the account paid off in 65 months. So, with a $50 setup and $50 per month that the debt management company charges, you are paying $16,300 before you are debt free.

While credit counseling may not be free, it just saved you $4,100 and 42 months. And credit counseling will not ruin your credit the way debt settlement and bankruptcy can. If you are struggling with credit card debt, you should consider talking to a debt management company. They can give you a quote and you are not obligated to use them, but this is a good option for being debt free in five years. Free credit card debt relief is the ideal way to get out of debt, but it is not the only way.

Reverse Mortgages

2007-12-08T19:46:00.000-08:00

In recent months there is starting to be more said about reverse mortgages. These mortgages allow consumers aged 62 or older take the equity out of their home in the form of monthly payments, a lump sum payment or a home equity line of credit.

You are able to remain in your home as long as you like. The loan is settled upon death or sale of the home. People are beginning to use reverse mortgages as an option for supplementing their retirement. As with most things in life, their are good things and bad thing about reverse mortgages.

It is wise to do your research before applying for a reverse mortgage. Most lenders who offer aarp reverse mortgages also require counseling, before they allow consumers to apply for a bank reverse mortgage.

More People in Debt

2007-11-11T15:32:00.000-08:00

I think in the upcoming year you will see more people seeking debt help than in the past. In recent years, it has been relatively easy to get credit regardless of what your credit report looked like. Many people are going to be paying for this. Not only did credit card companies have relaxed requirements for issuing credit cards, the same was also present in the mortgage industry.

Now the economy and the housing market has changed and people are going to be paying for all that credit that was easily acquired. The zip code I live in has more than 400 homes in foreclosure. People are going to be seeking out credit counseling and debt settlement services to help them deal with the debt they have accumulated.

There is no easy answer to what is happening in our economy now. The sooner you address a problem the sooner you can begin to recover from. There are several debt relief options available today. What will work best for you will depend on your level of financial discipline, how much debt you have and how far behind you are on your payments.

Find Out Just How Easy Ecommerce Can Be

2007-05-22T18:49:00.000-07:00

Online stores have become popular lately as people have taken their businesses to the internet. If you are going to build an online store, you are going to need ecommerce software. Ashop Commerce is one of the leading providers of hosted shopping cart software. If you are selling online, Ashop Commerce can offer you a web-based shopping cart. Ashop commerce can offer you the following features:

Affordability
Ease
Technical and Customer Support
Optimized for Search Engines
Completely Customizable Design
Security
Free Email
Design Services
Full Fraud Alert
Web Promotion Services
Free 10 Day Trial

You will find Ashop Commerce’s site easy to navigate and comprehensive. Their site includes tutorials about their products along with a demo on how their shopping cart operates. They offer comprehensive web services and have a link that shows their featured clients and the websites that contain their shopping cart software. If you are in need of comprehensive ecommerce software, visit Ashop Commerce’s site.

Eight Steps to Building a Solid Stock Portfolio

2007-05-22T18:17:00.000-07:00

Many people these days build a stock portfolio to live off of when they retire. So, how can you structure a stock portfolio to maximize your wealth, ensure your peace of mind, give you total control of your investments, be easy to manage and give satisfaction?
Here is a recommended strategy that has worked well for many do-it-yourself investors:

1. Subscribe to a well respected investment research website dedicated to analyzing financial information for investors. They are independent from companies they list, do not receive commissions or brokerage and rely solely on investor subscriptions for income. They have to give their subscribers quality information to maintain subscriber confidence.

2. Look for the model portfolios they have developed and study the methodology they have used to create and maintain each portfolio.

3. Read the research reports supplied for each stock and study the graphs supplied for price movements and trading volumes. Get a good feel for both the long term and the short term trends of the stock.

4. Test each portfolio within a designated test period i.e., one month, one quarter, one year etc. Depending on the website, you can set up each of the model portfolios in a free portfolio manager provided on the website with unlimited stocks. Set a starting date for a test period where you "buy" stocks listed in the model portfolio at the closing price for that day. Make sure you include brokerage as it is part of the cost base for the stock. The website should either maintain up-to-date or 20 minute delayed stock prices, so a running balance can be maintained for the profit/loss for each stock over the designated period.

5. Compare each portfolio's published results with the results that you have achieved in the portfolio manager. They should agree with each other when the same stocks are compared over the same time period. Your testing should develop a level of confidence in the model portfolio.

6. Determine the best model portfolio for you to use. You can do this using the last the last three months of stock price history or perform a trial evaluation for the next three months of future prices. You can use one of the existing model portfolios or create your own from the stocks selected.

7. Subscribe to an online share broker website and begin trading.

8. Monitor stocks daily and review the performance of your actual portfolio against the model quarterly.

You should take care to evaluate the methodology used by the research website to develop the model portfolios. These portfolios are designed by research firms to provide sensible medium-term portfolios that make it easy for investors and financial planners to replicate. You need to understand the research methodology and develop a level of confidence in it rather than just blindly accepting the published results of each portfolio. You do not need to become an expert in methodologies.

Building a share portfolio that meets your investment objectives will substantially build your wealth over a period of time. You can also save money in commissions and fees, have peace of mind, total control over your investment and gain a real sense of satisfaction.

As a final word of caution...nothing is for certain in this world except for death and taxes. This also applies to the stock market. Be prepared for some ups and downs and be ready to sell stocks to cut losses. If the core of your portfolio is made up of stocks that have strong capital growth and a reasonable dividend you will do well overall. Have "at it" and good investing!

Getaway from it all with a Discount Vacation

2007-05-10T18:29:00.000-07:00

Are you thinking about taking a vacation? Do you need a one stop location to book your fun filled getaway? Before making any travel arrangements, make sure you check out Hotelreservations.com. This one stop shop for discount travel arrangements can make booking hotel reservations and renting cars a snap. Planning a vacation can sometimes become hectic and go over budget. Hotelreservations.com can help you eliminate this part of vacation planning. This site offers complete services for hotels, airplane flights, car rentals, vacation rentals and vacations packages.

Not only does Hotelreservation.com offer great discounts (up to 70 percent on some services), their site is easy to navigate and they also offer secure online ordering. You also have the option to call toll free and make your reservations over the phone, 24 hours a day, 7 days a week. For your convenience they also offer an international telephone number. Hotelreservations.com offers everything from romantic weekend getaways to cruises for large groups. This organization has brought a full service travel agency as close as your fingertips.

If you have no idea where you want to go on your vacation, Hotelreservations.com gives many great suggestions for discount vacation ideas. If you know where you would like to spend your vacation, do not make any reservations without first checking this site to see what discount reservations and vacation options are available. This site does a good job of giving a complete and comprehensive overview of the discount hotels that are available for each destination.

If you need to getaway from the ratc race or if you looking for some quality time with your family and some site seeing, HotelReservations.com can help. Start shopping today for a vacation rental, a flight out to your favorite vacation spot and a rental car for seeing the sites and taking in the local culture. Take a break and getaway from it all at a beautiful resort destination.

Beginning to Live Debt Free

2007-04-18T19:02:00.000-07:00

All of us incur debts from time to time. It is normal to purchase items on account and pay for them at a later date. The point where we run into trouble is when we overextend ourselves and owe our creditors more than we can repay. This article will explain to you how to set up a budget so you can meet your credit repayment obligations and move on to a debt free life.

Do You Have A Positive Or Negative Cash Flow?

The definition of a break-even point is when the amount of money you are paid every month covers your expenses exactly. The two numbers would be equal in this case. When you end up with more money than you have in expenses, you have a positive cash flow for that month. Otherwise, you have a negative cash flow, and you may be borrowing money to make up the difference.

You probably have a good idea of your salary, or take home pay every month. You need to add up the total of your credit obligations and compare it to your salary. Hopefully, you are bringing home more money than you have outstanding in credit card debt. If this is not your situation, you need to get professional help from a debt counselor immediately.

If you have a negative cash flow, you may also be headed for trouble financially. You should seek the advice of a personal money manager before you borrow yourself into deep debt.

For the purposes of this article, we will focus on the scenario of a positive cash flow. By making a budget you will be able to find money to start paying off your current debt. Everyone should have a budget in place. It makes your financial picture clearer to you. Then you can decide how to best allocate your money to reduce your debts.

Making Your Budget

The process of making a budget for your family is really not too hard. First, you list your revenue (your salaries, wages or any other income), and then you list your monthly expenses. You must include everything. This means groceries, gasoline, car insurance, mortgage or rent, and every other normal expense you have every month.

Then subtract your expenses from your monthly income. The balance is an amount of money that you have available to use to pay off your creditors. Although you could try to pay off your creditors with this full amount every month, you may find that you end up in a cycle of paying this amount until an emergency arises. Then you would probably borrow again to make ends meet. This would defeat your purpose.

Now you need to decide how you are going to use this money to pay off your bills every month. It is best to deposit a certain percentage in a savings account every month (for emergencies). If you do not have a "safety net" of money in reserve, it is too easy to borrow from high interest credit sources to meet your needs.

With the money you have left over after depositing a percentage every month in your savings account, you can start paying down your debts. You want to focus on repaying the bills that carry the highest interest penalty. This is usually your credit card bill. Make a plan that will pay the most money to your credit card company and still keep you current with your other creditors. This is a simple and easy to follow formula that will help you pay off your creditors faster and build a reserve fund should you need it.

You will find that money management can be fun. It's exciting to see your debts dwindle and watch your savings grow. All this takes is a good plan, and the will power to see it through.

When Should you Retire?

2007-04-12T16:17:00.000-07:00

Are you ready for retirement? How does a person know when they are ready to retire? For most people money will be the biggest determining factor. Are you going to be able to live on what you have in your retirement accounts? Are your debts paid off? Are you insured properly in case of whatever may arise? If you answer yes to these questions, you are probably financially prepared.

Now are you mentally prepared for retirement. Do you have a plan for what you want to do now that you will not be working full time. Many people opt to work part time for two reasons, one being to subsidize their income and the other being to give them something to do with part of their time.

My father retired at 57 and has worked part time off and on for ever since then(almost 20 years). Working gives him something to keep him busy for some of his time and it also gives him some spending money for when he travels. Traveling is something he does quite often and has been doing regularly since he retired.

Retirement means different things to different people. If you start early and plan wisely, retirement can be whatever you want it to be. Although you may not be able to retire as early as in past years, planning will give you time to enjoy your golden years.

Finding Tax Debt Attorneys on the Internet

2007-02-20T18:28:00.000-08:00

If you need information about tax debt attorneys, the internet can be one of your most help resources. This is probably the most informative resource you can use as it gives you access to the largest collection of knowledge available today. Be careful, however, as the internet can become quite a maze if you do not know where to look. What you need is a guide or at least something to point you in the general direction of where you should go. Here are some places in the internet you can check out:

1) Online encyclopedias– These sites are visited a lot on the internet because of the various types of information that can be gotten from them. These online encyclopedias are often used by people in search of comprehensive information regarding a certain topic or subject.

2) Listings– Many firms prefer to list their contact details in various websites in order to become accessible to more clients. Searching through these listings for tax debt attorneys can pretty much be equated to searching in the yellow pages.

3) Company sites– If you are interested in a specific firm or tax debt attorney but do not know how to contact them, you should try to find out if they have a website.

4) Web directories– People more or less begin their searches using web directories. Using this type of website, a person looking for tax debt attorneys would be able to screen results quite quickly.

These tips should at least help you get started on your search for tax debt attorneys. By following these tips, you should do just fine and you should be able to find the information you need in no time at all.

Do you have the Millionaire Mindset?

2007-02-18T17:20:00.000-08:00

How do you feel about money? Do you feel comfortable about having money or do you feel it is the root of all evil? Do you have what it take to be financially successful? Is financial success in your future?

According to financial coaches, you have to want success with a passion. You have to be willing to do the work it takes to get the desired results. In order to hit your target you have to first know what that target is and then you have to keep our focus on that target.

You have to have a detailed plan as to how you are going to get to your target. Just saying you want a stack of $100 bills is not going to get it for you. Having steps to execute is what will get you to your target and you cannot let things get in the way of executing your plan.

So do you have what it takes to get to your target? Do you really have the millionaire mindset?Financial success can be yours as long as you know how to make a plan and get to your target.

Student Loan Debt Consolidation 101

2007-02-18T15:42:00.000-08:00

Since July 1, 2006, the rate for federal student loans had been officially increased making it the highest rate over the next 6 years.

Consolidating Student Loans: Good Choice or Bad Idea?
That depends on the type of student loan you presently have. If your loan makes use of a variable interest rate, you have more to lose when you consolidate your loan. With a fixed rate, however, you’ll be able to save more money since your loan rate won't be affected by the annual changes of student loan rates.

Advantages of Consolidating Student Loans
Single Transaction –No matter how many loans and how much debt you’ve incurred, there’s only one single payment to make.

Increased Flexibility in Payment Options – Student loan consolidation is generally more lenient when it comes to payment options compared to others.

Ready Access – Unlike other loan reduction methods, debt consolidation for student loans is easily accessible anytime, anywhere, and for anyone.

Disadvantages of Consolidating Student Loans
Overall Loan Increase – Consolidating your student loan might lengthen the time you’re allowed to pay off your debt and reduced amount of monthly due, but it will increase the cost of your loan in the long run.

Tough Requirements – While it is easily acceptable, we didn’t say your application will be immediately approved. You’ve to meet several conditions before your student loan can be consolidated successfully.

Other Tips on Student Loan Debt Consolidation
If you want to consolidate your student loan, do so now. Don’t wait for interest rates to rise even further.

Know the rules. Don’t waste time allowing yourself to “learn” from mistakes.

Compare rates. Whenever money is involved, always compare rates!

Lastly, don’t go for the lowest monthly payment. If you can afford to pay more, do so. The shorter the repayment period the less money you are going to pay in the long run.

Types of Personal Loans

2007-02-16T19:17:00.000-08:00

Personal loans are easy to obtain for most individuals. Even those individuals with poor credit or who haven’t established a credit rating can generally get a bad credit personal loan. You will need to verify income, employment, and residence when you apply. Personal loans are a fast and convenient way to get the money you need for a variety of needs. The funds can be used for essentials, travel, education, or to pay other loans. The choice is yours.

There are two types of personal loans, secured and unsecured. It can be hard to decide which one is best for you. Secured loans come with a lower interest rate than unsecured loans. However to get that lower interest rate you will have to offer some type of asset to the lender in the event you are not able to repay your loan. In many cases, the one you will choose will depend on what you are eligible for. Unsecured loans are generally available to those who have a good or outstanding credit rating and a steady income. Secured loans are usually the only option for those with poor credit, no credit history, and an unsteady work history.

Secured personal loans are a great way to establish your credit. They payments are often low, but your interest may be off the charts. To offset, this use it to your advantage. Only borrow what you need. Too often applicants hear the dollar amount they are eligible for and run with it.

Know before you apply what amount you are looking for as well as what you plan to use it for. Then stick to that. Don’t let a high pressure lender talk you into taking more than you really need. If this personal loan is your opportunity to establish your credit history, then don’t blow it. Use it wisely. Make all your monthly payments on time. If possible pay the loan off sooner to show you are responsible. Doing so will make the process much easier the next time you need to apply for a loan. Secured loans can also be a second chance for those with poor credit to redeem themselves.

It is important that you don’t miss any payments with a secured loan. If you find you can’t make a payment for some reason, contact the lender immediately to work out a solution. This is very important if you have lost your source of income. Most lenders will try to resolve the issue before reporting the personal loan as being in default. Since you have secured the loan with some type of property you own, you are at risk of losing that item if you can’t repay the loan. It is in your best interest to find a solution to stay on track with the payments of a secured personal loan.

Unsecured personal loans have a higher interest rate, but you will have the peace of mind that nothing you own is tied to that loan if you default on it. However, it is still very important for you to take responsibility for the debt and pay it as outlined in your loan terms. The same rules apply here as with a secured loan. Only borrow what you need and pay it back early if possible to keep your credit score high and reduce the amount of interest you will pay on the loan.

Is Emotional Spending Stealing Your Dreams?

2007-02-13T09:38:00.000-08:00

Our emotions are one of the most powerful parts of our life. If we are experiencing an emotion that is uncomfortable, we are going to do what it takes to rid ourselves of that feeling. Not all of the things we do to calm our emotions are positive or healthy. We know we should not be handling our feelings that way, but if it makes use feel better, no matter how temporarily, we will do it. Spending money because it makes you feel good can steal your financial future.

Spending money is one thing that makes people feel good and temporarily forget about the problems at hand. Retail therapy--It seems harmless enough. It's legal, it's not physically bad for your health and it is not bad f or the environment, but what is it doing to your long term financial outlook or even your short term goals for that matter.

Shopping because you are bored or because it makes you feel better (self-esteem) will not take away the problem and in most cases it will leave you with debt that will take you much longer to repay than the purchases lasted. Society leads us to believe that he who has the most possessions wins. Not true. There is nothing wrong with possessions if you need them and you can afford them, but buying to keep up with the Joneses is not the answer either.

While most of us are not compulsive shoppers, how many of us give into that impulsive little voice that tells us we would feel much better if we just had that new purse or that cute little outfit we saw in the window the other day. The consequences of listening to that little voice can be far reaching when it concerns your finances.

Emotional spending will affect your finances over time. It may not be disastrous at first, but it will add up. The sad thing is that those feelings of instant gratification that we receive when we make that purchase are only temporary and the reason that we used to justify that purchase, still exists. The best thing you can do for yourself is to find a way to deal with your emotions that is not harmful to your health or cost you money.

There is no easy answer to emotional spending. Before you spend, try to delay it for awhile. This will give you some time to think about the decision you are about to make. Following this practice will sometimes prevent me from spending at all. If you can deal with the emotion instead of spending you will have gained a small victory. You will not gain control of your financial decisions over night, but if you handle them one decision at a time, you will make small steps towards achieving your goal. Debtors Anonymous can also be a good resource for helping people to understand why they spend money and to help them change those habits.

The Consequences of Making Late Credit Card Payments

2007-02-11T19:23:00.000-08:00

In the past several years credit card companies have become very ruthless with the terms they have set for their customers. It is very important that you read your card member agreement so that you are aware of what you are getting into and so that you know the consequences of you actions, such as; making late payments.

Making a late payment can actually cause several things to happen. First of all, you have no grace period. If the credit card company does not receive your payment on the day it is due, it will be considered late. At that point, you will be charged a late fee. How much that fee is depends on your terms. The standard fee is $35. Some companies may charge you more or less depending on your balance. I have seen them as low as $15 and as high as $50.

If you have not had a late fee in 12 months, you can probably get the credit card company to refund the late fee if you call them and ask them to credit the fee. Most companies will do this as an annual courtesy. They will not normally report you to the credit bureau until you have gone 30 days delinquent.

However, the late fee is not what I consider the greatest consequence of paying your credit card bill late. If you make a late payment, your credit card company my raise your interest rate. Some companies will not raise you rate until you have been late twice in 12 months. At the time, you will be affected by something called Universal Default and your interest rate will likely increase to 29.99%. Much as we all hate to read that small print, this is all stated in your card member agreement, making the whole thing nice and legal.

If you have an introductory rate or a balance transfer rate, you will lose that after one late payment. Your chances of getting your credit card company to reduce your interest rate, because you made a mistake are very slim. They may reinstate your original interest rate after 6 months of on time payments, but that also depends on your credit issuer’s policy.

The best thing you can do to avoid being caught in this situation is not to carry a balance. The consequences of a late payment are not very great if you pay your balance in full monthly.

However, that is not an option for everyone. If you carry a balance, you should set up a recurring automatic debit through your bank or the credit card company. Make sure it is setup to pay 3-5 days before your due date, that way if your due date fluctuates (some do), you will not be late.Credit cards can be a big convenience, but they are also a big responsibility. Knowing what your credit card company expects and what they can and cannot do is half the battle.

Should You Use A Debt Consolidation Loan or A Debt Counseling Service?

2007-02-08T18:26:00.000-08:00

When it comes to debt consolidation, you have two choices--A debt consolidation loan or the use of a consumer credit counseling service which also consolidates your debts. Credit counseling is not a loan it is more of a reorganization of your debts through a debt management company. The biggest determining factor in which of these debt options you choose depends on your current debt situation and your discipline. Let’s look at some of the benefits and disadvantages of both consolidating your debt with a loan and consolidating your debt with a credit counseling service.

Here are the pros and cons of both types of debt consolidation.Benefits of both a debt consolidation and debt counseling:
• Decrease in monthly payments One monthly payment
• Debt collection activity reduced or eliminated
• Reduction of interest rates
• Reduction or elimination of fees

Benefits of a consolidation loan:
• No negative affect on your credit rating
• Possible increase in credit rating
• The interest paid on most of these loans is tax deductible

Possible negatives of a consolidation loan:
• Because of the loan being secured with your house, you could lose it if the payments are not made
• Credit score must be high enough to qualify for a loan
• Easy to become overextended (you still have use of your credit cards)
• A consolidation loan is a reorganization of debt, not an elimination of debt

Benefits of a debt counseling agency:
• The agency will help you set up a budget
• The agency will educate you on money management principles

Possible negatives of a debt counseling agency:
• Only unsecured debt is allowed in the program
• You will not be allowed credit card use while enrolled in the program
• You must meet an unsecured debt minimum to qualify for this program
• There may be a negative impact on your credit score

Both consumer credit counseling and debt consolidation loans are excellent options for eliminating your debt. Consider the above listed benefits and draw backs and hopefully they will make it a little clearer which debt solution will work best for you. The most important benefit of getting out of debt is peace of mind. There are few things as stressful as wondering how you are going to pay your bills. The sooner you make a decision the sooner you can begin moving forward towards a life of debt freedom.

Understanding Credit Card Fees

2007-02-06T09:12:00.000-08:00

Credit cards can be a big convenience in anyone’s life. It is not necessary to carry cash anymore. You can order over the phone or on the internet just by giving the merchant the number off the card and a few days later your merchandise arrives. Quick and easy, right? It is, but credit cards can also be expensive if they are not managed properly. There are expensive consequences if you do not make your payments on time or if you charge over your credit limit.

If you make late payments or exceed your credit limit, it is going to cost you in the long run. Balance transfer fees can also hit you in the piggy bank. In recent years these fees have skyrocketed and the credit card companies are getting rich as a result of the fees that cardholders are being charged.

Until the mid-1990s, the typical penalty fee was about $10. Last year, the average late fee was $35, according to IndexCreditCards.com, and many companies charged $39. The average credit card over-limit fee was a hair more than $32. So as you can see, charging fees can be very lucrative for the credit issuer and very expensive for the card holder. It is in your best interest to make your payments on time and to stay below your credit limit.

Balance transfer fees can also be expensive. I have seen introductory offers where the fee was waived, but not very often. If you are getting an introductory interest rate that is very low or even 0%, you are probably going to be charged a 3% balance transfer fee. This fee usually tops out at $75, but I have seen some as high as $150. So make sure that before you transfer a balance that the fee will justify the savings in interest. In most cases, the interest you would have paid will exceed the balance transfer fee, as long as you pay the balance off before the introductory rate expires.

You can avoid late fees by setting up a recurring automatic payment on your credit card account. This can be done either through the online bill pay with your bank. It can usually also be done through the credit card company itself. You can choose to make your minimum payment or to pay your balance in full.

The best way to avoid over limit fees is not to go over your limit. However, if you know you are over your limit and the credit card company allowed you to go over your limit (sometimes the charge will be declined if exceeds your limit), make a payment before your statement date. If your balance is below your credit limit on your billing date, you will not usually be charged a fee.

Credit cards are big responsibilities, but with sensible management they can also be a big convenience. It is all in how you use the credit card. Use credit cards to your advantage and do not let the credit card control your life.

Shopping for a Credit Card

2007-02-03T11:20:00.000-08:00

Credit Cards—It seems like everybody has one and there are some things that you cannot do without one. You are looking to apply for your first credit card and you are wondering which card is right for you. Keep in mind that managing a credit card is a big responsibility and you if you are not fully aware of how to handle it, there is potential for problems. But with a little bit of knowledge and proper management, credit cards can be a very big convenience.

Here are some tips that will guide you through the credit card selection process:
• How do you spend your money? How do you manage your money? Did you let any of your monthly bills go so that you could get a new outfit or go out with friends for the evening? Do you have a hard time holding on to money? If this sounds like you, a credit card could potentially cause you problems. It may be a temptation and you could soon find yourself with a large balance if you are not careful. It may be best in this case, if you get a credit card that has a lower credit limit.• Why do you need a credit card? For the convenience of not having to carry cash? So that you have a record of your spending? So that you can order items online? If it is for one of these reasons and you plan on paying it off each month, APR will not be an issue for you and you will want to look for a credit card that offers you rewards for charging.
• Which credit card is right for you? If you are purchasing something you are going to pay off over time, you will want to opt for a card that has as low an interest rate as possible. You may even be able to find one that will offer you 0% for a certain amount of time. However, if you are paying the account off monthly, interest rate will be of no concern to you and you will want a credit card that offers another type of benefit for your use.
• Why should you read all that fine print? Read the card member agreement and understand what is being said in all that fine print. You do not want any surprises when you receive your credit card statement. Some things to take note of are fees. There could be annual fees, late fees, over limit fees, application fees, among others. If you have an introductory interest rate, be aware of what actions can void those rates.

Credit cards can be a blessing, but they can also be a curse. It is all in how you manage the credit card. There are many options available on the internet and there are many websites that will actually compare cards and list the benefits and pitfalls of each card. Credit cards can make your life easier if you use them properly.

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Getting Out of Debt One Day at a Time

2007-01-30T18:51:00.000-08:00

The first step to getting out of debt is finding out what you owe. When people start experiencing financial problems many times they will have a stack of unopened bills and if they have gotten as far as opening them, they have put them out of sight. After all, if you can not see something it might go away. Right?

If you truly plan on making a commitment to getting your debt under control, you are going to have to get those bills out of the drawer and open them. You can not change what you refuse to acknowledge, so it is time to find out where you stand, financially. List everything you owe and include the amount, who you owe and at what interest rate.

You need to be able to see your debt in black and white to be able to formulate a plan for getting it under control. You may want to do this on a spreadsheet so that it can be updated regularly and you can see your progress.

Realize that not all debt is the same. Some types of debt have a positive return on investment, such as; a mortgage or student loan. These things will appreciate in value where credit card debt will not, as a matter of fact credit card debt will do just the opposite. Be aware of the credit cards with interest rates that are over 10%. It is hard to justify carrying a balance on a credit card unless it is an emergency.

Once you have separated your bad debt from you good debt it is time to develop a repayment plan. There are many ways that you can choose to pay your debt back. Here are a few tips that will help you make decisions about your debt repayment plan.

Pick one credit card (it may be the one with the highest interest rate or the one with the lowest balance) and pay as much as you can each month, while paying the minimum on your other consumer accounts. Once you have paid that card off, select another credit card and repeat the process.
If you have credit cards with available credit that have lower interest rates than other credit cards you have, transfer as much of the money as you can to the lower interest rate cards.
Call your credit card companies and ask to have your interest rate lowered. This can save you hundreds and maybe even thousands of dollars depending on how much you owe and what your interest rates are.
Look for ways you can earn extra money to pay towards your debt. Do you have things you can sell online? Do you have a hobby that can make you extra money? Do you have a part time business you can run out of your home? Even an extra $100 a week will go a long way towards paying your debt down.
If you have savings or investments, consider using them to pay your debt. They are probably not earning you what your debt is costing you. Once you get your debt paid off you can start saving again.
If it is going to take you more than five years to pay your debt off, you may want to consider bankruptcy. A bankruptcy will stay on credit record for 10 years, but it will give you a chance to start moving forward again. In some cases, it may be impossible to repay everything that you owe.

Debt has a way of keeping you from moving forward in your life. Coming to terms with your debt is a difficult process, but if you deal with your debt one day at a time and have a plan, you will soon begin to see light at the end of the tunnel. Getting started is the hardest part and the longer you wait the more difficult it becomes. It you have debt get started today developing a repayment plan.

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Tips for Selecting a Debt Settlement Company

2007-01-24T20:11:00.000-08:00

With consumer debt at an all time high, increasing numbers of people are looking for a way to financial freedom. As a result, the popularity of the debt settlement company is growing at a steady pace. A company that negotiates your outstanding unsecured debt balances, offers one of the quickest ways to financial freedom. These companies, sometimes referred to as debt negotiation companies have arbitrators that negotiate directly with your creditors to have your unsecured credit balances reduced.

Consumer credit card balances are usually reduced from 35-65 percent, allowing you to save a substantial amount of money and pay off your outstanding balances quickly. Companies that negotiate your debt usually require at least $10,000 or more in unsecured credit card balances before they will take you on as a client. There are some things you should consider before you choose a company to help you settle your outstanding credit balances.

What kind of certifications and accreditations do they have? The company you choose should be a member of the Better Business Bureau and have no unresolved complaints. Your debt negotiation company should also be a member of the Chamber of Commerce and their negotiators should be certified by the International Association of Professional Debt Arbitrators.

It is also good to know if your debt negotiation company has any alternatives available, in case debt settlement is not going to work for your financial situation. There are financial agencies that can assist you or recommend legal help for using the bankruptcy process. Although debt settlement is your best alternative to bankruptcy, it will not work for everybody.

You will want to research your organization's pricing structure to make sure it fits your budget. Getting involved in something that you can not deal with financially is only going to make your life worse and will not help you get out of debt. It is also a good idea to shop around and see how the agency you are thinking about using compares to other settlement companies.

Be wary of any company promising to settle your debts with no negative impact to your credit report. Any time an outstanding balance is settled for less than what is owed, it will have a negative impact on your credit. However, a settlement will not impact your credit to the extent that filing bankruptcy will.

Debt settlement can be your way to financial freedom. Knowing the facts about debt negotiation will help you make an informed decision about your credit and the choices you have available. The best time to get started is now.

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Who Wants to Be a Millionaire?

2007-01-22T08:01:00.000-08:00

Have you ever wonder what how ordinary people become financially secure and even become millionaires? There are more people in the world that are millionaires than most people realize. These millionaires do not where signs and most of them you would never guess they have achieved financial independence, because you cannot tell by the lifestyles that they live.

Being a millionaire is not what it used to be. It now takes $1.85 million to buy what a million dollars would have gotten you in 1986 and $7.44 million to match that million in 1956. In spite of all that, a million dollars is still a great deal of money to most people. So how does an everyday working person accumulate a million dollars? Follow these simple steps and you will be well on your way to amassing a million dollars.

Desire-You have to want it and you have to want it bad enough to make a plan that will get you where you want to be. Most things in life do not happen by accident and that includes being financially secure. You do not have to become obsessed with money and let it control your life, but you do need a list of long-term goals and some short-term goals that help you reach the long-term ones.

Start early-This is not to say that if you are in your 40s or 50s that you should give up because you haven’t started planning for your future. It is never too late to start anything, but the sooner you begin a task the sooner you will reach your goal. Stay focused on your goals and reaching them. Make compromises in your life to allow you to save money. Also make changes in your plan as you life changes, such as; marriage, birth, purchasing a home, etc…

Live within your means-Nothing will set back faster, financially than credit card debt. If it is not a necessity or a dire emergency, it should not be charged on a credit card unless you pay your balance in full every month. Credit cards are for convenience purposes and not a means of buying what you cannot afford.

Investment plan-set up automatic investment plans, whether they are 401K, IRAs or any other type of long-term savings plans and contribute to them regularly. It is best to set these up as automatic deductions. People do not tend to miss money they never had in their hand. Stick with whatever plan you decide on, no matter what happens with the economy. Things tend to balance out over time.

Manage your debt wisely-You are probably not going to be able to exist without some debt. Most people cannot buy a home with out a loan. However, high interest debt will make it much more difficult to reach that millionaire status.

Invest in your future-Put your future in front of having things. Look for ways that will help you increase your income. Most of the millionaires in this country have multiple streams of income. If it takes education to increase your income, go for it. It will be worth it in the end. If you have a hobby that you can make extra money from or turn into a business, this is another way of investing in your future. There are many other ways of increasing your income of you just give it some thought.

You do not have to be an extraordinary person to become millionaire. You just need to plan for and want it bad enough to follow through with that plan. If you have not already thought about your financial future, there is not time like the present. Get started today achieving where you want to be tomorrow.

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Becoming Debt Free

2006-08-29T19:49:00.000-07:00

The first step in becoming debt free is to take responsibility for your debt. However, owing money does not mean you should have to sacrifice your pride or self-esteem. You must have a strong desire to be free of debt and must be able to visualize yourself with manageable debt. Remember, your finances did not become unmanageable in one day. In some cases, it probably took years. You are going to get out of debt the same way--One dollar and one day at a time.

Once you have accepted the idea that you have some problems with credit card debt, it is time to take an inventory of that debt. It is not uncommon for people with mounting bills to just stop opening their mail. Make a thorough list of all of your obligations.

Establish some long-term financial goals and break these long-term goals into several smaller objectives. Then, take each objective and set monthly, weekly and even daily goals that will help you achieve debt freedom. A daily goal can be something as simple as not using your credit cards or packing your lunch instead of spending money to eat out. Make your goals reasonable and attainable. Meeting these financial milestones will give you confidence and make you feel more in control of your debts.

To be successful at debt elimination, your needs must come first and your wants will come when you have gained financial control. Attaining debt freedom will be difficult if your credit cards are still available. The sooner you make your credit cards unavailable, the sooner you will experience debt relief. Consumer credit is the most habit forming type of credit and the most difficult type of credit to give up. Immediately destroy all credit card offers and get comfortable using the word "no". Do not carry your check book. Give yourself a weekly cash allowance. Overdraft protection is not a good idea either, as it is a line of credit with a high interest rate that is very easy to abuse.

Marjorie Salada is the owner of debtmanagement1.com, a website that contains information on debt consolidation, debt settlement, debt counseling and how to manage credit card debt.

Student Loans and College Debt

2006-08-29T19:48:00.000-07:00

Student loans are available for the student that needs them in order to get a degree, but there are some ways you can limit the amount of money you will need to borrow for a college education.

Apply to several different types of schools. Just because you start out at a certain school does not mean you have to graduate from that school. See what type of financial aid each school is willing to offer you to get you as a student. You may find a smaller private school that is willing to offer more financial aid to have you as a student.

You may also choose to start out at a less expensive, community college for the first two years. Then you can take your less expensive credits and transfer to the school from which you wish to earn your degree. Now, you have a degree from your dream school, but because you started out somewhere else, you have saved yourself several thousands of dollars.

You may still have student loans to pay back, but you will have a lot less of them.

Get more information on direct student loans, alternative student loans and student loan consolidation.

Some Facts about Debt Settlement

2006-08-26T19:32:00.001-07:00

Credit is nice to have, but it is not everything. Years ago it didn’t even exist and people managed to get by. Debt, however, can ruin your life. The sooner you can get rid of it the faster you will have your life back.

Debt settlement or debt negotiation is the process of negotiating with your unsecured creditors to have the total balance of your credit card accounts reduced. Following this process is going to get you out of debt quicker than most other debt repayment options.

Debt settlement will be a negative mark on your credit report, but it will not stay on your credit report as long as a bankruptcy. It is not out of the ordinary for a company to settle for one third to one half of the original balance. Make sure you get your debt arrangements in writing and that you get a release of debt after you have made your payments.

Negotiating your settlements may take several months and some of it depends on your timing. When I worked in the collection industry, we were more likely to give a better settlement towards the end of the month.

Be sure you communicate openly with your creditors. If a creditor believes that your only other alternative is bankruptcy, they are sometimes more likely to want to settle with you. One thing about settling your debts is that you have to be prepared to pay relatively quickly after a settlement agreement has been reached.

Settling your debts can help you regain control of your finances. If you are in over your head and have stopped making your payments this might be a debt option you can use to become debt free. Many people find they can be out of debt in three years or less if they are willing to negotiate with their creditors.

Marjorie Salada is the owner of debtmanagement1.com, a website that contains information on debt consolidation, debt settlement, debt counseling and how to manage credit card debt.

Dealing with Credit Card Balance Transfers that have Gone Bad

2006-08-26T19:32:00.000-07:00

Have you done credit card balance transfers that didn’t work out the way you expected? Did you transfer a balance to a low interest credit card and then start charging again on the card that you just paid off? If this has happened to you, you are not alone.

You do have some options for paying off these credit card balances. But first and most importantly you need to stop charging on your credit cards and if that means cutting them up or freezing them, then you need to do it. It is going to be hard to pay off your credit card balances while you are adding to them.

As long as you are making you payments on time and your interest rates are low, you should stick with your current plan, because that is your best option. You should look for a way to increase your income or decrease your expenses so that you are able to pay more than the minimum. Paying more than the minimum will decrease the amount of interest you will be paying over the life of the repayment period.

However, if your credit card company raises your interest rate above 12% you might want to check into consumer credit counseling to see if they can save you money. Keep in mind that consumer credit counseling will have an effect on your credit. It will not devastate your credit, but it may lower your credit score somewhat. If you are making your payments on time, but feel you will not be able to maintain much longer, debt counseling is a good debt option for you.

If you are several months behind on your payments, debt settlement is probably going to be your best option. Debt settlement involves either you or a debt negotiation company negotiating a reduced balance that your credit card companies are willing to accept. You must be aware that this option will negatively affect your credit, but if you have not made your payment for several months your credit has already been negatively affected. This is a good alternative to bankruptcy and will not affect you credit as much as bankruptcy.

If you have gotten in financial trouble over credit card balance transfers, there is hope, but it is going to take some discipline and some changes in your lifestyle to be able to regain control over your credit card balances.

Marjorie Salada is the owner of debtmanagement1.com, a website that contains information on debt consolidation, debt settlement, debt counseling and how to manage credit card debt.

The Problem with Credit Card Balance Transfers

2006-08-23T18:12:00.000-07:00

We receive them in the mail every day. They are those pesky envelopes that are offering us 0 % interest for the next 12 months. On the surface, not only does it sound like a good deal, but it is also very tempting.

But let’s consider a few things. If you are carrying a credit card balance, unless you had an unusual emergency, you are probably not all that disciplined with your finances. So, what happens when you transfer your balance to that shiny new card you just got? Now have an old card that has no balance on it at all or in other words it has lots of available credit.

What are you going to do with all that available credit? Statistics show that most people use it. Now not only do have a balance at 0% interest, but now you have a balance on the card that you transferred from.

Bottom line is if you have a balance on both cards, you didn’t gain any ground by transferring it to another card, because now you have 2 cards each with a balance. If you are going to transfer to a card with a lower rate make sure you are the one with the advantage and not the credit card companies.

Marjorie Salada is the owner of debtmanagement1.com, a website that contains information on debt consolidation, debt settlement, debt counseling and how to manage credit card debt.

Should You Pay Off Your Debt With a Home Equity Line of Credit?

2006-08-22T18:26:00.000-07:00

Home equity lines of credit are based on the equity in your home and it is just that, a line of credit. If you have equity built up in your home this line of credit is a good thing to have. The interest rate on home equity lines of credit are based on the feds funds rate. In other words the interest rate on a home equity loan will rise when the Federal Reserve raises the prime rate.

Just because you have this line of credit does not mean that you have to have anything on it. I know people that have them for emergencies and may not use them for many years, but if something does happen, it is as simple as writing a check to have some extra money and the interest rate is far lower than that of a credit card and the interest is also tax deductible.

Short term borrowers make good candidates for home equity loans because they can get a good rate due to the short term on the loan. This is an excellent option for consolidating your debts if you can pay them off in five years or less. Once you have paid off the loan, the account can be kept open for that day that you might need it.

You can also get a home equity loan that has a longer term, but your interest rate will be higher than most fixed rate mortgages. Although, this rate will probably still be lower that what you are paying on most credit cards. So if you are looking for a way out of debt and are fairly disciplined with your money, a home equity line of credit is a smart way to go as long as you can pay it off in five years or less.

Marjorie Salada is the owner of debtmanagement1.com, a website that contains information on debt consolidation, debt settlement, debt counseling and how to manage credit card debt.

Debt Statistics

2006-08-21T18:27:00.000-07:00

Here are a few debt statistics I put together from the cardweb.com website. Just a little food for thought.

There are 1.3 billion plastic cards in use in the United States. When I say plastic cards, I mean credit cards, debit cards and store credit cards. The average American household has 13 of these cards.
In 1999, in purchases alone, Americans added 1.1 trillion dollars to their credit cards.
Credit cardholders that carry a balance, average about $5,800 in debt. If they make only the minimum payment, they will be paying on those cards for 30 years and will pay an extra $15,000 in interest.
In the first quarter of 2000 more than 300,000 people filed bankruptcy. This is according to the American Bankruptcy Institute.
We tend to purchase 112% higher when we use our credit cards than when we are using cash.
Over 40% of Americans spend more than they earn and 96% of all American will retire dependent on either the government, their family or charity.

Some of these statistics are real eye-openers and they give you something to think about.

Would you like more information on debt? Visit debtmanagement1.com, a website that contains information on debt consolidation, debt settlement, debt counseling and how to manage credit card debt.

The Key to Achieving Financial Goals

2006-08-19T20:39:00.000-07:00

I believe one of the biggest keys to achieving financial goals is putting them in writing. It is easier to know where you want to go if you can see where you are. So, start by putting your financial goals down in black and white. If you have a partner, they also need to be involved in this process. It will not work if only one of you does it.

Follow these four steps to see where you and where you want to be financially:

Take a financial inventory. List what you own and what debt you have. Balance your checkbook and get a copy of your credit report. Evaluate your spending and saving patterns. Examine your feelings and thoughts about money and finally list your financial goals.
If you have a partner, discuss everything you have written down in the previous step with them. Be open minded and nonjudgmental. Commit to taking the time track your spending and to develop a financial plan.
Be willing to be flexible and compromise on issues that you and your partner may not agree on. Come to decision that will work for both parties.
Be disciplined about following the agreed upon financial plan. If the plan needs adjusting, make those decisions together.

Following these steps will not only make your financial future stronger, it will strengthen you relationship.

Marjorie Salada is the owner of debtmanagement1.com, a website that contains information on debt consolidation, debt settlement, debt counseling and how to manage credit card debt.

College Students and Credit Cards

2006-08-18T17:01:00.000-07:00

The best thing you can do for your child as you send them off to college is to educate them about credit and debt. We try to give our kids all the tools they will need to live a prosperous and healthy life, but I believe many teenagers go out into the world not fully understanding how credit and debt works.

Credit card companies do not make it easy or I guess I should say they make it too easy. Credit card companies can be found just about anywhere giving away free gifts in exchange for a completed credit card application. The stores like to give the ten percent discount in exchange for your completed credit card application.

With the incentives that these companies offer, these applications are very tempting to a person that is just starting to make their own decisions. Having worked in the collection industry, I have seen many young people with charged off credit card accounts. It just never occurred to them that when they put down that piece of plastic and walked out of the store with those $200 jeans that 30 days later somebody would want money from them.

It is important that your child understands that with credit comes responsibility and they need to know how that works. Do your child a favor and educate them on how credit and debt works. They are going to be faced with a lot more temptation than we were and they deserve a fighting chance. They deserve to graduate college and go into the world with out an overwhelming amount of credit card debt. Many of them will have student loans to pay off. The last thing they need is to be paying for jeans they bought four years ago.

Marjorie Salada is the owner of debtmanagement1.com, a website that contains information on debt consolidation, debt settlement, debt counseling and how to manage credit card debt.

Make the Decision to Become Debt Free

2006-08-17T18:57:00.000-07:00

If you have mountains of consumer debt, now is the time to make the decision to get your finances under control. Prolonging making changes in your financial situation will only narrow your options. So the sooner you get to it the more choices you will have.

If you do not know where to start, get some help. Getting help can take a lot of weight off your shoulders. If you are overwhelmed, getting help is best. When you are overwhelmed, knowing which direction to turn is sometimes difficult. A debt counselor can get you pointed in the right direction.

A debt counselor can help you setup a budget, arrange a repayment plan for you and deal with your creditors. If you need help understanding why you spend money the way you do, they can help you with that or refer you to someone who specializes in the psychological issues that sometimes accompany our spending habits.

If you have a debt problem, make the decision to get started reducing that debt now. Do what it takes to achieve your goals and have the future that you want.

Marjorie Salada is the owner of debtmanagement1.com, a website that contains information on debt consolidation, debt settlement, debt counseling and how to manage credit card debt.

How Long Does Bad Debt Stay on Your Credit Report?

2006-08-16T20:27:00.000-07:00

Have you ever wondered how long certain types of debt stay on your credit report? Believe it or not, some debt items can haunt you for a long time. This is why it so important to get debt help early. It is also important to make your creditors aware of your financial difficulties and some of these negative credit items can be avoided.

Here are a few negative credit listings and how long you can expect to see them on your credit report.

*Personal bankruptcy drops off ten years from your filing date.

*If you filed Chapter 13 and repaid some debts, you can ask the credit bureau to remove the listing after 7 years from the filing date. Most will honor your request.

*Tax liens will drop off seven years after they are paid. If you don’t pay it you are stuck with it.

*Charge-offs, collections and late payments can stay up to seven years, but no longer.

* Once student loans that are in default are brought current and twelve consecutive on time payments are made, the previous history can be removed.

So for the most part you are going to be stuck with your negative credit for at least seven years and some of it will be there longer. This is why it so important to protect your credit while it is under control. It is much easier to maintain it while it is good than it is to get it back after it has been destroyed.

Debt Consolidation Loan Advantages and Disadvantages

2006-08-15T19:10:00.000-07:00

With consumer debt at an all time high and interest rates being as low as they have been in several decades, debt consolidation loans have been a hot commodity for the past couple of years. There are some important things to consider when you take out a debt consolidation loan.

If you are getting a debt consolidation loan to consolidate consumer debt, you want to think about how you ended up with that debt in the first place. This is very important, because once you consolidate your debts, you are going to have a lot of available credit on your credit cards. If you found those credit cards irresistible before, you are probably going to feel the same way again.

Some of the benefits of consolidating your debts:

*One monthly payment as opposed to several credit card payments
*A lower interest rate
*The monthly payment is usually lower than the combined credit card payments
*Your payments are tax deductible

These are some things you may wish to consider before taking out a debt consolidation loan:

*Debt consolidation loans have a term of at least five years and can be as long as thirty years
*Most debt consolidation loans are secured with your home. If you fail to make your payments, there is a possibility your home could be foreclosed on.
*The available credit, on your credit cards can be very tempting and you could very easily find yourself in debt again if you are not careful.

A debt consolidation loan can be just what you need to get things back on track. Make sure your debt consolidation loan is with a reliable company and that you are disciplined about using your credit cards in the future.

The "No Excuses" Way to Get Out of Debt

2006-08-14T16:48:00.000-07:00

The cable television station A&E, has recently began airing a show at 5:30 EST, called Big Spender. If you need a real wake up call, to get your debt in line and stop spending, you need to watch this show.

This show is hosted by best selling author and motivational speaker, Larry Winget. At the beginning of each show he profiles someone that has major debt and they are usually spending twice what they are making monthly. He usually approaches them just as they are about to make a purchase and invites them to take a look at the life as their family a friends view their financial future.

Larry takes a no-excuses, no nonsense approach to getting them back on track. He usually takes them through their closet just to show them how much they have (most of it still has tags on it) and then he presents them with a budget they have to follow, followed by the "no-excuses" contract they have to sign.

This budget usually includes cutting up their credit cards, selling some of their excess, eliminating eating out, cutting out personal spending and tracking their daily spending. The ones that I thought would do well at following the plan, didn't do well and the ones I thought would do horrible didn't usually do to bad.

If you need help with your debt, watch Big Spender. At the very least, you will be able to see what Larry is recommending to people that have serious debt problems. If anybody should know how to get out of debt, he should. He went bankrupt and is know a millionaire.

Marjorie Salada is the owner of debtmanagement1.com, a website that contains information on debt consolidation, debt settlement, debt counseling and how to manage credit card debt.

Credit Card Debt and Living Within Your Means

2006-08-10T20:03:00.000-07:00

Credit cards can be a blessing or a curse. It all depends on how you use them. They are great when you have an emergency or an unexpected expense. However, if you buy every new style of shoes that comes out or eat out 4 or 5 times a week, you are likely to find yourself with mounting balances on those credit cards.

Credit card debt is on the rise in this country and reaching an all time high. Credit card companies are making it very easy to get credit. You can have all your credit cards maxed out, but as long as you make that minimum monthly payment on time, these companies will be willing to extend you more credit.

But who is benefiting by you having all this credit? Do the credit card companies have your best interests in mind by giving you all this credit? The credit card companies have everything to gain, especially your interest payments. As long as you are making your minimum payment, these credit card companies are happy. They are making a substantial amount off of their cardholders in interest payments.

Having spent time working in the credit card industry, it is very obvious that if you make only minimum payments you are going to be in debt a long time. I have seen people who had minimum payments due of $200 and $195 of that payment went to pay there interest charges.

Credit card companies have designed their payment system to keep you in debt. It is up to you to make the necessary changes to get yourself out of debt. It was said that at the beginning of 2006, minimum credit card payments would increase from 2% to 4% of the balance. In most cases, I have not really seen where that has happened.

Bottom line is you are going to have to make some decisions if you wish to have a debt free future. You are robbing yourself of your dreams, if you spend many years making the credit card companies richer. Credit cards have their place. You just have to figure out where it is.

If you have an excessive amount of credit card debt, now is the time to make a debt management plan that will help you become debt free within a reasonable amount of time (5 years or less). If you do not know where to start, there are many non-profit debt counseling agencies that can help you get started. Credit cards can work for you, but if they are used for the wrong reasons, they can be burden to you for a long time.

Need more information on getting out of debt? Check out Debt Management 1.

Debt Help--How Do I Know When I Need It?

2006-08-08T04:00:00.000-07:00

Have you ever wondered if your credit card debt was out of control to the point where you could use some professional debt help? Answering yes to any of the following questions may be an indication that you could benefit from participation in a debt management program.

Is your income decreasing while your credit card balances are rising?
Do you have more than 2 major credit cards?
Are all of your consumer credit accounts at or near their credit limits?
Is your total unsecured debt unknown and you are scared to find out how much it is?
Are you using your retirement accounts or your savings accounts to pay your bills?
Are you working a second job to make your charge account payments?
Are you receiving collection calls or letters?

Do you see a pattern here? The sooner you admit to the problem the sooner you will be on the road to recovery. The best time to get help is before your finances become completely uncontrollable. A consumer credit counselor will work with you to develop a repayment plan that will take 2-4 years to complete. Your credit counselor will also help you set up a budget. Once you have these two financial steps in place you will be well on your way down the road to financial freedom.

Looking for more information on debt management, debt settlement, debt counseling, debt consolidation or managing your credit card debt? Check out debtmanagement1.com.

College Student Loan Consolidation

2006-07-03T07:55:00.000-07:00

Time is of the essence when it comes to college student loan consolidation. Effective July 1, 2006 the federal student loan program will experience a 1.84% interest rate increase, making it one of the largest increases in the program’s history.

With the announcement of the student loan interest rate increase being less than 30 days old, students are hurrying to get the best school loan consolidation deals available. There are several companies who are in the business of consolidating student loans for recent college graduates.

Due to the student loan interest rate increase being so significant, the Department of Education is allowing student loans to be consolidated while the student is still in school, although the final decision is up to the lender. Current students will find the in-school interest rate as low as 2.5%, but is more likely to be around 4.5%. After July 1, the in-school interest rate could exceed 7%.

Although the student will be giving up their 6 month grace period, they will not be responsible for making payments on the consolidated school loan until after they graduate. Even though, there will be no six month grace period the student still benefits by saving hundreds and maybe even thousands of dollars in interest payments on their consolidated student loans.

Likewise, if you will be taking out a student loan you will also see an increase in student loan interest rates. After July 1, 2006 Stafford loans will increase to 6.8% and PLUS loans will go to 8.5%. The interest rates on both of these types of student loans are fixed interest rates.

These are some of the benefits to consolidating your student loans:

Potential savings of hundreds of dollars interest payments over the loan period by locking in a low, fixed interest rate
The convenience of making one monthly payment to one lender
Lower payments due to the loans being consolidated and the repayment period being extended
Most lender will lower your interest rate after 36 months of on-time payments
No prepayment penalties
Interest paid on student loans, in most cases, is tax deductible
Overall benefit to your credit rating, due to have one loan with one lender, instead of several loans

Even if you are not able to make the July, 1 2006 deadline, it is still to your benefit to consolidate your student loans. For me, the convenience of having only one monthly payment made college student loan consolidation worth it.

Do Your Emotions Influence Your Spending?

2006-06-10T17:58:00.000-07:00

Without hesitation, I will personally answer this question with an emphatic "YES." For me, if I have had a bad day, buying that really cute pair of shoes can only make it better. That is, until the credit card bill comes. It I had a great day, eating out can only make it that much better. These are some of the thoughts and feelings I deal with on a regular basis and something tells me, I am not the only one that goes through these same emotions.

Retail therapy--It seems harmless enough. It's legal, it’s not bad for your health and it is not bad f or the environment, but what is it doing to your long term financial outlook or even your short term for that matter.

Shopping because you are bored or because it makes you feel better (self-esteem) will not take away the problem and in most cases it will leave you with debt that will take you much longer to repay than the purchases lasted. Society leads us to believe that he who has the most possessions wins. Not true. There is nothing wrong with possessions if you need them and you can afford them, but buying to keep up with the Joneses is not the answer either.

While most of us are not compulsive shoppers, how many of us give into that impulsive little voice that tells us we would feel much better if we just had that new purse or that cute little outfit we saw in the window the other day. The consequences of listening to that little voice can be far reaching when it concerns your finances.

Emotional spending will affect your finances over time. It may not be disastrous at first, but it will add up. The sad thing is that those feelings of instant gratification that we receive when we make that purchase are only temporary and the reason that we used to justify that purchase, still exists.
There is no easy answer to emotional spending. Before you spend, try to delay it for awhile. This will give you some time to think about the decision you are about to make. Following this practice will sometimes prevent me from spending at all. If you can deal with the emotion instead of spending you will have gained a small victory. You will not gain control of your financial decisions over night, but if you handle them one decision at a time, you will make small steps towards achieving your goal.

A Debt Reduction Program That Can Work For You

2006-05-27T09:39:00.000-07:00

Do you find yourself going to bed at night thinking about your debt? Do you find thinking and dealing with your finances overwhelming? Is your relationship suffering because of money? If you answered yes to any of these questions you may be in need of a good debt reduction program. Debt reduction programs will not eliminate your debt overnight, but this one will help you know where you stand, help you find out how you got there and get you back on your feet and on the road to debt freedom.

The first step in the process is to list your bills. When people start experiencing financial difficulties, they often go into a state of denial. They a lot of times will stop opening their bills. People experiencing financial problems, ususally do not know exactly how much they owe and if they do, they are in most cases hiding it from their spouses'.
Begin by listing all of your bills. Include the balances, minimum payments and interest rates.

The next step is to find out where your money is going. A lot of us do not realize how much money we spend each day on small things and don't even give it a second thought. Do you buy bottled water, soda out of a machine, cigarettes? How much do you spend on eating out each week? In order to pay your bills down, you are going to have to find extra money. This can be accomplished by tracking your spending for a month. If you can find an extra $10 a day, this will give you an extra $3600 a year for paying your bills. You will probably find this step very enlightening.

The third step is to optimize the use of your credit cards. Call your credit card companies and ask them to lower your interest rate. You can also transfer your balances to a credit card with a lower interest rate. There are several credit card companies that will offer an introductory interest for a year and sometimes longer. This can save you hundreds and sometimes thousands of dollars. Try to pay two times the minimum payment, if possible. If you are carrying more than $5000 in credit card debt, this will drop your repayment period from thirty years to less than 3 years.

The step that will get you out of debt the fastest is the final one and that is to stop spending. Do not carry your credit cards with you and start paying cash. Decline credit line increases. Make only one visit to the ATM weekly and most importantly, make your credit card payments on time. Late fees and overlimit fees can become very expensive and they will also lead to your interest rates being increased.

Do not put off getting started on the path to debt freedom. The sooner you change the way you handle your finances, the sooner you will be able to sleep better at night and see the stress in your life decrease.

Debt Settlement--How it Can Help You

2006-05-12T04:42:00.000-07:00

Debt Settlement--How it Can Help You

Debt settlement can be a way out for people that have considerable debt ($10,000 or more). If your payments are several months past due or your debt has been written off, debt settlement is an excellent alternative to bankruptcy. Debt settlement, sometimes referred to as debt negotiation, can have you out of debt in less than two years.

Here are a few facts about debt settlement:

Debt settlement is not a debt consolidation loan or a Consumer Credit Counseling Service.

Debt settlement reduces your current outsanding balances, sometimes by more than 50%.

Debt professionals negotiate payoff amounts with your creditors and you no longer have contact with your creditors.

Most debt can be settled in less than 36 months, with average debt taking 18-24 months with a lower payoff than any other debt alternative.

With the change in the bankruptcy laws, debt settlement is your best bet for quick debt relief and there will be no bankruptcy listed on your credit report.

4 Signs That You Might be in Denial About Your Debt

2006-05-03T12:58:00.000-07:00

Someone once told me the word denial stands for "don't even know I am lying." I see it as refusing to acknowledge the existence of a problem. Money is a major area of denial in today's society. We do a lot of spending while we are looking the other direction.

In most cases of overspending, the money is being spent to a fill a void in that person's life. Money gives people the feeling of power and control. Spending money helps people temporarily forget about things that they are trying not to think about. In most cases, incurring debt brings a whole new set of problems.

The following are some signs that you may have a problem with financial denial. The statements were taken from the article, "In Denial Over Money? Yes You Are”, by MP Dunleavey.

You encounter the same financial pitfalls on a regular basis and you can't figure out why (always short of cash, repeated late payments, etc.).
You find yourself spending money when you had made the decision not to (charging another pair of shoes, eating out when you had made the decision to cook at home, etc.).
You find yourself stuck and you can't figure out how to get ahead (unable to reduce your debt, or the minute you do, you're right back in it again).
You find yourself using stupid rationales to explain your compulsive spending.

If you see yourself in some of the behaviors listed above, you may want to think about getting some debt counseling. These counselors are experiences at helping people with debt problems. They can develop a debt management plan that will help you get your debts paid off and they will also teach the principles of staying debt free.

5 Reasons Why You Are In Debt

2006-04-26T19:49:00.000-07:00

Have you ever wondered how you accumulated so much debt? Here are the biggest reasons Americans are finding themselves in debt today. If you are in debt, the sooner you decide which scenario fits your financial situation you will be that much closer to doing something to change it.

Getting divorced is a big reason people find themselves in debt. The divorce rate in America exceeds 50% and many people don't learn after the first time and repeat the process. There are a lot of legal fees involved in divorce. You may also have to give up some of your assets and might get stuck with expenses that you weren't accustomed to paying.

When your expenses stay the same or increase and your income does not keep up with your expenses you will see your debt begin to grow. It usually takes people a while to realize they are in this situation and as a result it takes them a while to make adjustments in their lifestyle to keep their spending in line with their income. The sooner the adjustments are made the less financial damage will be done.

Unemployment is another reason for financial hardship. Even if you collect unemployment, it is usually a percentage of what you were making while you were employed. People are rarely prepared financially to have their income reduced substantially or stopped completely. In most cases if you are unemployed your debt will mount very quickly.

Bad management of your money is another financial pitfall. Without keeping track of how you spend your money you may be spending large sums of money on unnecessary things and not even be aware of it. If your finances need help, start by listing all your monthly expenses so you have an idea how much you are paying out. You will also need to keep a log of ALL the money you spend each month. Once you can see where the money is going, it will be easier to see where you are able to make cuts in your spending.

Addiction will definitely cause your finances to go down hill. Whether it is gambling, alcohol, drugs or even shopping it is money that could be spent on necessities. I have seen people do drastic things to get money to indulge their addiction and it will put a strain on your finances and could land you in jail. There are many programs available today that can help you learn how to deal with the emotions that you are trying to suppress while you are practicing your addiction of choice.

There are other reasons that you may find yourself in debt. These are just five the may be the cause of your financial hardship. Before you can change your financial situation, you have to identify what is causing it. Once you have identified the problem, it will become much easier to formulate a plan to solve your financial crisis.

Where Can You Find Extra Money?

2006-04-17T12:50:00.000-07:00

The secrect to paying your debts down quicker is going to be in finding extra money. You can do this by having extra money coming in or by having less money going out. This article deals primary with having less money going out. Before you can have less money going out, you have to know where your money is going.

I suggest developing a tracking system. There are journals made especially for this purpose, but since we are trying to save money, something as simple as a pocket size notebook will work.

Record every penny that you spend and where you spend it. This will make it easy to spot spending trends. How much money do you spend on eating out and other types of entertainment? This is a good place to start. How much money will you be able to save by packing your lunch once or twice a week or by cooking at home one or two evenings a week? Most people are shocked by the amount of money they spend on entertainment.

Some other places you might want to look for extra money are your cable bill and your cell phone bill. It seems like everyone has these luxuries. Can you do without either one of these items? If not, look at the extras that you are paying for. Could you do with less cable boxes or a smaller, less expensive cable package? If you have to have a cell phone, do you need a land line or can you do without the land line? Can you reduce the cost of your cell phone package? Text messaging and photo services can get to be very expensive.

Insurance is another place to look to save money. Raising your deductibles can save money. If you are fortunate enough to own a car that is paid for, you may want to carry just liablility insurance on your car, depending on its value.

Buying things at garage sales and thrift stores will also save you money. Shopping for good deals can be a lot of fun. You may even be able to find items that may have a higher resale value on internet auction sites. That brings me to all that unwanted junk that you have in your garage or attic. That can also bring you extra money through auction sites or garage sales.

The final tip I have for saving money is to buy generic or store brands. Most of these items contain the same ingredients as the name brand and have a lower price. I have been doing this and in most cases have not noticed a difference in quality, but it has saved me a lot of money.

These are just a few of the ways you can find extra money in your budget. With a little bit of effort, I am sure you can find others. Challenge yourself to find ways to save money and you will notice your debt decreasing and your finances becoming more under control.

Steps For Eliminating Your Debts

2006-04-10T12:18:00.000-07:00

Eliminating your debts is not extremely difficult if you are willing to formulate a plan and stick to it. The first step is the easiest. Stop creating more debt. If this means cutting up your credit cards, do it. Do not close them. This will lower your FICO score.

The second step is to list all of your debts. Include the balance, interest rate and minimum payment. The second half of this step is to rank your debts in the order they will be paid off if you make only the minimum payment. For instance, if you have an account that will be paid off in 6 months, 22 months, 18 months and 9 months, The 6 month account should be at the top of the list and the 22 month account at the bottom of the list.

Some people say you should pay the account with the highest interest rate off first, which is an acceptable method of ranking your bills, but the newest way of paying them is to eliminate the one with the shortest pay back time first and keep moving down the list. There are two reasons for this. The first one is that people tend to stay motivated as they see progress. The sooner you are able to cross the bills off the list, the faster you will see progress. The second reason is that the fewer number of bills you have the less likely you are to accidently overlook one or pay one late.

The next step in the process is to figure out where you can come up with an extra 10% of your gross income to put towards paying your debts. This money can come from reducing your expenses, increasing your income or both. A lot of people think there is nowhere to cut their expense, but if you look you will find it. Both cable and cell phones are not considered necessities. Your answer may be as simple as working extra hours each week or getting a part time job. There are more options than you think when it comes to finding extra money.

This extra 10% will go towards paying off your first bill, while you make minimum payments on all the rest. When the first bill is paid off, the money you were paying towards it will go towards the second bill on the list. This will be in addition to the minimum payment you are already paying on the second bill. You will follow this plan until all of your debts are paid. Consumer debts can usually be paid off in 3-5 years.

Once you have paid all the debts, it is time to take the money and look in to a plan for your future. This is the part of the plan that is going to get you to fianancial freedom.

How Much Did Those New Shoes Really Cost You?

2006-04-04T18:59:00.000-07:00

Experts say that before you buy something you should look at the cost in terms of how many hours of labor it is going to cost you. This is a unique way of looking at how you are spending your money and may even make you think twice about spending it. Let's take a look at what a purchase is really going to cost.

Caluculate your annual salary and then multiply it by .7. The figure you arrive at will be a relatively accurate number for what you are making after you have paid Uncle Sam. Let's say you make $40,000, a year. By the time you pay the government you will be left with $28,000.
Think about all the expenses associated with working. This list will probably include gas, food and clothing at the very least. These expenses can vary greatly, but let's say you spending $40 on gas, $40 on lunch and $30 on clothes, per week. This will make your annual expenses $5,720. Now you are looking at an annual income of $22,280.

Divide this figure by the number of hours worked in a year, which is roughly 2,000 and you arrive at your actual hourly wage. In this example it is $11.14. This is what you are truly ending up with for every hour you give your employer.

Now, let's talk about those shoes. For the sake of this example, let's say the shoes cost $50. You will have to trade about 4.5 hours of your life with your employer to be able to buy those shoes and they may still be worth it to you, but you may decide that the pair that you own will do just fine.

Now, let's look at what you could have had if you would have invested the $50 for 20 years. You will arrive at that figure by multiplying by 6.7. The answer is $335. This may not seem like a lot, but if you think about everything you have purchsed that you don't use or did not need and everything that you could have purchased for less, I guarantee this will add up to a lot of retirement money. If you purchased these item with credit cards and are paying interest you can also add that to the bottom line.

You may want to think twice before making that purchase. There is nothing wrong with buying things, but you may want to think about what it is really costing you before you make that purchase.

How Do You Define Financial Freedom?

2006-03-27T10:28:00.000-08:00

Financial freedom is defined as having significantly more money coming in each month than you having going out. Your definition of significant may very greatly from someone elses. Financial freedom can be obtained more quickly by increasing your income, decreasing your expenses or increasing your income and decreasing your expenses.

If financial freedom is important to you, it will be necessary to develope the habits it will take to manage your money and to increase your wealth. This will require learning to take care of the money that you already have and once you can do that it will be necessary to prepare for the responsibility of more money.

The following upcoming steps will show you how to analyze and track both your income and your expenses. This will help you build wealth and get you started on the road to debt freedom.

What Misconceptions do You Have About Money?

2006-03-24T09:17:00.000-08:00

Many of us are under the impression that finanacial well-being is defined by how much money
we earn or by how much money we have. In reality financial well-being has more to do with
how well you manage the money you have and how well you sleep at night. It is more about
what the money represents than the money itself. To most people money represents security.

In an inflationary economy, using credit to purchase things under the assumption that money
will be worth less tomorrow than it is today is an unwise practice. Credit card debt should
be avoided at all cost. Balances not paid in full monthly will be assessed a finance charge,
more than negating any time-value-of money savings.

Some people belive that once you are in debt it is impossible to become wealthy. This is not
true. With some planning and lifestyle changes, like most other things in life, you can rise
above your debt and become wealthy.

Financial success is mostly the result of following processes and having a plan. It is not
the result of who you know, what you know or how lucky you are.

If you are having problems paying your credit card balances in full each month, it is time
to consider cutting up the cards. Do not use your credit cards to finance your standard of
living. You will get more satisfaction from being debt free than you will having things.

Having a home equity line of credit is not a good thing, unless it is absolutely necessary.
This is usually a large line of credit with a low interest rate and can be very tempting to
someone trying to get their finances under control. Getting past these money misconceptions
is a valuable step in achieving debt freedom.

Steps to Changing Your Outlook on Money

2006-03-21T09:28:00.000-08:00

In order to change the way you handle and feel about money, you will have to change the way
you think about money. The things our mind tells us can be very powerful. You must first
identify the thoughts that are holding you back and change them to thoughts that will help
you move forward in your quest for debt freedom. You will have to change your negative
thoughts about your finances to positive thoughts. This will help you believe you deserve to
be debt free.

You will also have to make some physical changes that will help reinforce your new way of
thinking. You will have to follow some steps that will help you find out where you are
financially. Once you know where you are, you will find it much easier to develope a plan to
get you where you want to be.

You will need to support your self emotionally and look forward to a positive learning
experience. The more time you can spend thinking positively, the more enjoyable and
satisfying your journey to debt freedom will become.

Effectively communicating with your subconscious to change the negative thoughts and
reinforce the positive thoughts will have a big effect on how successful you are at
achieving debt freedom. It is going to require time and effort.

Most people believe their life would be much better if they had more money coming in. In
reality in most cases if they had more money coming in, they would have more money going
out. Your income is only have of the picture. What you are able to keep after paying your
bills is the other half.

How do Your Beliefs Affect Your Ability to Achieve Financial Freedom?

2006-03-20T04:30:00.000-08:00

The first step to reaching financial freedom is believing you deserve it and that you are capable
of achieving it. More great ideas and good intentions are forfeited because people believe
they do not deserve them and they will never succeed at meeting those goals. Changing your
beliefs and attitude about money and how to achieve debt freedom will be one of the most
important steps in getting to debt freedom.

A positive attitude about your life will make it far easier to reach your goals than having
to overcome negative thoughts you have about your life and your finances. Believing you can
be debt free is the first step to achieving debt freedom.

It is essential that your thoughts, behaviors and feelings are consistent with your goals.
This sense of harmony will help you achieve your financial goals.

Your determination and dedication will also be an important factor in achieving debt
freedom. You have to have the willingness to consistently practice the steps to produce the
results you are looking to achieve. You must regularly commit time to reaching your financial
goals.

You must be willing to take responsibilty for your finances. This is the only way you are
going to be able to keep your wealth. You must tend to it and nurture it. It is said that
wealth flows in the direction of those that know how to take care of it.

It has also been noted that if all the money in the world was evenly distributed among all
the people that live here, within 10 years it would be right back where it is now. People
who don't take responsibility for their wealth will lose it and those that nurture it will
increase it. Start thinking about being wealthy and I will be back in a few days.

How Ready Are You for the Future?

2006-03-14T04:08:00.000-08:00

Will you be ready for retirement? According to the U.S. Social Security Administration most of us will not be ready. They surveyed 100 Americans and here are the results.

1.5 percent are wealthy can do whatever the want whenever they want

5.5 percent are secure and can do mostly what they want with some planning

4 percent have no savings and have to keep working to support themselves

89 percent on depend friends, relatives and charities for survival

How prepared are you for an emergency and how do you compare with everyone else in the world? Below are some facts about how Americans rank among other global countries when it comes to savings.

Japanese save 21.4 percent of their income

Canadians save 14.4 percent of their income

Germans save 13.8 percent of their income

The British save 11.5 percent of their income

Americans save 2.9 percent of their income

These five steps will help you achieve debt freedom.

Assessing your financial situation. This includes recording how much you earn, spend and owe. To get to debt freedom you have to know where you are starting from.

Plans for the future. Have a vision for the future and be able to write it down, so that you can see on paper, how you want your financial situation to appear in the future. Achieving a goal depends greatly on your ability to visualize that goal. The clearer your goal, the more likely you are to achieve it.

Have specific goals. You will need to set short, medium and long range goals. Having a timeline will make it easier to see where you have been and where you are going. Short-term goals and long-term aspirations are both important when it comes to achieving debt freedom.
Simple effective tools. A simple step-by-step process for creating and tracking your wealth building is necessary.

Willingness. Once you have provided this, the rest will come fairly easily. To achieve debt freedom, you will need to take consistent action and be willing to take the steps required to reach your goal.

The will be more detail on these steps in future articles.

Money Games

2006-03-06T16:12:00.000-08:00

In the process of doing research for this blog and for my website, I have done a lot of reading. My latest book was titled "Beat the Emotional Games That Sabotage Your Finances." It was written by Thomas C. Manheim. Manheim talks about the fifteen Money Games people play and the reasons he believes people handle their money the way they do. I found this book to be very interesting reading.

If you are a saver and are wondering what makes you that way or if you try to hide your finances from you spouse this book will give you some incite into why you feel confortable with those habits. It can also help you changes those actions if you so desire.

Manheim says America must be one of the most money conscious countries on earth. This statement is followed by these facts:

Ninety percent of divorces are said to be related to financial problems (source: Adrian Furnham and Michael Argyle, The Psychology of Money).

One in 100 households per year will declare personal bankruptcy (The New York Times).

Nearly 70 percent of consumers live from paycheck to paycheck (The Wall Street Journal).

The average household owes more than $8,000 in credit card balances (Nataline Jenkins, et al., You Paid How Much for That?).

More than 62 percent of Americans retire on an annual incomes below $10,000 (U.S. Census Bureau).

About 55 percent of all Americans "always or sometimes worry about their money" (USA Today).

These facts may make you think twice before you go out and buy another pair of shoes or eat out at that new trendy restaurant.

Things You Need to Know About Your Credit Cards

2006-02-16T17:17:00.000-08:00

You know that little trifold piece of paper that comes in the envelope when you receive a new credit card, the one that it takes a magnifying glass to see the print, the one that most of us choose not to read. That little piece of paper could contain information that could save you a lot of money.

Credit card companies have begun the practice of reviewing your credit report on a regular basis. They are looking for late payments with other creditors or a high debt-to-income ratio. If they find either of these, they may raise your interest rate. The reason they will give for the increase is that if you paid someone else late you are at risk of paying them late or going over your limit.

Credit card payments not only have a due date, some credit card companies have a specific time on that date that the payment is due. Credit card companies do not allow a grace period. Making a late payment will subject you to a late fee that could be as high as $50. If you make two late payments in any twelve month period, you will probably see an interest rate increase also.

Beware of "fixed" interest rates. They are fixed until the prime interest rate goes up. Your interest rate can be raised at anytime as long as you are given a 15 day notice in writing.
Decreasing grace periods is another problem. Typically, a grace period used to be 30 days. Now, many of them are 25 days and some are as little as 21 days.

If you have applied for a credit card with an introductory rate, check the card member agreement to make sure that you have received what you have applied for. Credit card companies have been known to pre-approve you for a credit card with an advertized set of terms and then send you a credit card that has a different set of terms.

The credit card agreement that comes in the mail with your credit card can be very boring and tedious reading, but it will be worth it in the end because it will likely save you money.

The Effects of Debt on a Marriage

2006-02-08T04:33:00.000-08:00

In today's society about 50% of all marriage fail. If you ask people why they argue with their significant other, most of them will tell your the disagreement had something to do with money. The fights and tension are blamed on many things, but in most cases there is an eroding bank account and mounting debt involved.

If your having problems in your life and feeling down, there is no better "pick me up" than a spending spree and it's even better if you are not paying cash. However, this feeling of euphoria is going to be very short lived. Not far behind will be the feelings of guilt and those will last longer than the euphoria did.

Many marriages consist of a "spender" and a "saver" and this is where the problem arises. The spender spends, angering the saver because they are usually charging non necessary items. The saver will do the best they can to keep the spender from spending, causing tension and discord to build within the marriage, often times leading to disasterous results.

The constant fingerpointing and belittling will poison the marriage. With this kind of behaviour involved it hinders getting to the root of the problem. Due to resentment and the length of time the arguing has gone on, some couples will never be able to get to the source of the problem--which is, why they have the spending and saving habits that they have.

In a lot of relationships, the debt is the elephant in the room that nobody wants to acknowledge. The first step is acknowledging a problem exists. You can not fix what you refuse to admit exists. Unfortunately, most of our spending habits were instilled in us while we were growing up. You have had most of these attitudes for a long time and it will take some time to change them. A marriage counselor or Debtors Anonymous are excellent places to begin the process of sorting through the excess baggage that comes along with your debt.

An overspender should not be shopping alone and they should completely avoid stores where they normally would overspend. Take someone with you that will help keep the spending under control (Debtor's Anonymous can help with this). This person should not be your spouse.

If you follow these simple steps, you will see both your marriage and your financial situation change. Don't forget to budget some fun into your life. This is very important and fun doesn't have to always cost money. You will find the feeling of having your spending "under control" more powerful than the feeling of euphoria you used to experience after a good shopping spree.

New Legislation Doubles Minimum Credit Card Payments

2006-01-29T16:23:00.000-08:00

Have you gotten your credit card statement for January yet? If you haven't, you may be in for quite a shock. Minimum monthly credit card payments are scheduled to go from 2% of your outstanding balance to 4% of your outstanding balance. In other words your payment is going to double.

This will not affect people who aggressively pay down their credit card balances. However, if you are one of the many Americans that can afford to pay only the minimum on your credit card balances, you are going to be faced with some tough choices.This payment increase is designed to get people out of debt by paying more towards their principle. By paying a minimum payment of only 2%, you are barely paying your finance charges. A $1,000 debt will become a 22-year burden that will accumulate thousands in interest.

Here are a few suggestions that will help you come up with some extra money. Only you can decide if it will be enough to cover the extra payment amount. If it will not, it is time to find a reliable credit counselor and ask for some help.

1. The average US taxpaper receives an income tax return of $2,400. You can adjust your withholdings so that you can receive an extra $200 a month instead of letting the government make interest on it all year long before returning it to you at the end of the year.

2. Stop using your credit cards. You will be that much farther ahead if your balance is not on the rise. If you are using your credit cards to pay bills or buy grocreries, it is time to schedlue an appointment with a credit counselor.

3. Cut back on your spending. Most of us have many things in our lives that we pay for that are not necessities. How many times a week do you eat out? There are several things that we have in our lives today that were not even in existence 50 years ago and people did just fine without them. Do you really need cable TV, high speed internet service or a cell phone. These might be some things that you can do without or maybe just cut back on until you get a better handle on your credit card balances.

This increase in credit card payments will cause peopele to take a good hard look at their finances and hopefully they will take corrective action before they are faced with having to make some unwanted choices. The sooner you evaluate your debt the more options you will have available to you.

Tips for Rebuilding Your Credit After Bankruptcy

2006-01-19T04:54:00.000-08:00

This may sound strange, but the best way to reestablish your credit is by taking out new credit. In order for you to get a car loan or a mortgage you are going to have to become creditworthy again. Hopefully, you will have learned from the bankruptcy experience and it will now be easier make intelligent decisions about your financial future. By following these steps you could see your credit score rise quickly in a short period of time.

Make sure all of your accounts show charged off on your credit report or have been included in your bankruptcy. You should have zero balances for a Chapter 7. These accounts will remain on your credit record for seven years and the banktuptcy for 10 years. It's a good idea to to contact your creditors and ask them to stop reporting them to the credit bureaus. They dont't have to do it for you, but there is no harm in trying. Getting even one or two of them removed will help your credit score.

The next action item for you is to get new credit cards. Credit issuers probably will not be beating your door down to give you a credit card, but you can get a secured credit card. This is a credit card that is "secured" with a deposit, with the credit issuer, in an amount that will be equal to your credit limit. These types of cards usually have an annual fee and a higher than normal interest rate. The key to reestablishing your credit is to make your monthly payment on time.

Another method of reestablishing your credit is to have a friend or relative add you to their credit card account as an authorized user. You will not be responsible for the bill and it will be at the cardholders discretion whether you will be allowed to have a card. Your bankruptcy will not affect the account holders credit, but you will benefit immediately by their credit history. Keep in mind if the account holder experiences financial difficulty and it is reflected on their credit report it will also show up on yours.

Filing bankruptcy is not a death sentence. With a little bit of effort and patience you will soon have your credit reestablished and will be on your way to secure financial future.

What You Should Know Before You Take a Credit Card Cash Advance

2006-01-08T18:06:00.000-08:00

Running a little short of cash this week? Then you remember that you can go to the ATM and get cash with your credit card, but do you know just how much that cash is really going to cost you in the end?

1. Cash advances usually have a transaction fee that can be between 2 and 4 percent of the total amount advanced.

2. There is no grace period with cash advances. The interest meter begins ticking the moment that cash hits your hand.

3. The interest rate on cash advances is normally about 10 percent higher than the interest rate on purchases. I have never seen a cash advance interest rate that is less than 20 percent and most of them are higher than that.

4. Almost all credit card companies will apply your payment to the transaction with the lowest interest rate first. This means that your cash advance will be the last transaction to be paid off.

These costs are no secret. Your credit card issuer is required by law to disclose them.
Remember that little tri-fold piece of paper that comes with your credit card. The one that most of us don't bother to read. Well, that is card member agreement and that is where the above facts can be found.

The best advice I can give about a cash advance is to put it on a card with no balance and to pay it off as soon as possible. Before you take out a cash advance, you need to give it a second thought and decide if it is really necessary. If you are using cash advances to pay bills or buy necessities, it is time to make an appointment with a debt counselor.

Credit Card Offers and College Students

2006-01-05T15:55:00.000-08:00

Major credit card companies are very active on college campuses these days, but are they helping you or jeopardizing your financial future? Having spent several years in the collection industry, it has become apparent to me that college students are the fastest growing group of Americans to become debt ridden. There are a great number of high school students that also have credit cards. By law, anyone under 18 must have a co-signer, but you would be amazed at the amount of parents that did not know their minor child had a credit card.

The biggest problem for young people with credit cards is lack of knowledge when it comes to how credit works. They are often not aware that if they only make the minimum payment they will be making payments for a long time and will be paying a great deal of interest. They also need to understand that their payment must be received by the due date or they will be charged a late fee. Today some of these fees can be in excess of $50, causing their balance to get out of control very quickly. Many of today’s credit cards also have hidden fees. It is essential that a cardholder understand what is written in their card member agreement.

Parents should start children out with a checking account. Adding a debit card is the next step. Once they have that under control, a credit card with a reasonable limit is next. Make sure your child understands how interest works how and how easy it is to get in over your head if you overspend. If you have a $1000 balance at 18% interest and you make a $36 a month payment, it will take you about 9 years to pay the balance in full. If a college student charges this during his freshman year, he will have that balance paid off 5 years after he graduates.

The best thing you can do for your child when it comes to their financial future is to educate them about money and to set a good example. They are most likely to do what they have seen done.

How Are the New Bankruptcy Laws Going to Affect You?

2006-01-03T15:40:00.000-08:00

As of October 17, people filing bankruptcy are going to see some significant changes in the laws. The Bankruptcy Abuse Prevention and Consumer Protection Act will make it much more difficult for people to have all their debts cancelled by filing Chapter 7. This will probably affect the hit middle-class people the hardest. In most cases you will not be able to get out from under everything, but you will have to file Chapter 13 and reorganize your debts and pay your creditors back. The repayment period has been increased from 3 to 5 years.

I believe this is a good move on the part of the government. After spending several years in the collection and credit card industry, I believe the bankruptcy laws were being taken advantage of in many cases. The ones I feel will suffer the most is people with substantial medical bills and the victims of the past year's hurricanes.

You will only qualify for Chapter 7 if your median income is lower than the average income for your state. The amount you will repay under a Chapter 13 will be no less than the amount they would have received under a Chapter 7 including the return of the underlying assets.
IRAs up to $1 million dollars are exempt and rollover IRAs are completely exempt. One the biggest changes for retirement plans is being able to repay them under the new law. If you think you can shelter income by buying a large vacation home, you better have lived in it for 40 months before you file or you will have a limit of $125,000.

Another thing that is going to change when a person goes to file bankruptcy is the cost. Costs for filing are expected to increase by as much as 50 percent due to the strict verification of the client's personal information.

One last thing, before you can file you will be required to complete credit counseling. In the past, bankruptcy used to be straightforward. Now the process will require more time and money to complete.

Are you a Shopaholic?

2005-12-22T06:49:00.000-08:00

Just because you can meet all your financial obligations, does this mean that you don’t have a problem? Not necessarily. If spending money makes you feel good or lifts your spirits, you may want to look deeper into why you like to spend money.

How do you know when you have a problem with shopping? Do you lie about your purchases or hide them? These are few of the typical signs of an over spender.

Do you buy 100 pieces of an item just because it is on sale? Never mind the fact that you won’t be able to use that many pieces in a lifetime. For most people it is not the items that have significance. It is the quest or thrill of finding a bargain. It may also be the high they feel at the moment of purchase. Going into debt is an afterthought for this kind of shopper.

Whatever a person’s drug of choice is, it is only a temporary substitute for what they are missing in life. Your drug, whatever it may be, will never fill the void causing you have negative emotions. These emotions will usually cause you to repeat your addictive behavior. Debtors Anonymous is the best treatment for this type of behavior. There is a 12-step program for people whose spending has gotten out of control. The members of this fellowship will teach others how to deal with deep seated feelings that have caused destructive behavior. You will also learn how to deal with these feeling without ending up at Walmart.

Just because you can pay all your bills does not mean you are not a compulsive shopper. If you are using shopping to relieve other stresses in your life or find yourself buying 10 pairs of shoes in one shopping trip just to feel better you might want to take a closer look at the root of the situation.

Here are some ways you can start to deal with your compulsive spending. If you find yourself with an excessive amount of debt or if your spending is causing family problems you should start with a visit to a Debtors Anonymous meeting or a debt counselor.

Before you can fix any kind of problem you first have to admit it exists. If your credit cards are maxed out or you can’t get your closet doors closed you probably have a problem. Admitting that you have a problem is the first step.

Analyze your spending habits. Are you a binge spender? This is someone that may not spend constantly, but when they do spend they make it worth their while. Or you may spend consistently going from one credit card to another. Or does your spending consist of buying certain types of items, such as: clothes or computer equipment. Once you determine the type of spender you are you will be one step closer to the solution.

Try to determine what need or emotion your shopping is fulfilling. Are you lonely or angry? You might be trying to relieve stress or get back at someone. You are getting something out of over spending or you wouldn’t be doing it. Determining what feeling is being met will get you closer to dealing with your compulsive spending.

Analyze the amount of time you are putting into this compulsion. This is time that you could be spending on something less destructive. Most addictions take a great deal of time from your family. Try to substitute this behavior with a more positive behavior.

If you follow these simple steps you should be well on your way to changing your behavior. Debtors Anonymous will help you examine why you spend and help you to deal with your emotions. If you have the willingness to change the help is available.

Keeping Your Holiday Debt in Check

2005-12-18T06:13:00.000-08:00

How would you like to avoid the credit card statement shock this January? With some careful planning and some forethought you can do just that. Major credit card companies report a significant rise in credit card purchases between Thanksgiving and Christmas. Here are several steps you can take to keep your spending in check and to pay what holiday debt you have in a timely manner.

Make a list and stick to it. List all the people you are going to buy gifts for and decide how much you can afford to spend for the season. Assign each name a dollar amount and do not deviate from you plan. If you are able to stick to your plan, you will have an anxiety-free January.
Lock up your credit cards. Most of the items you charge can either be paid for in cash or done without. I did not have credit cards for twenty years and did not feel like I was missing out on anything without them. Giving your credit cards a break will help you get your financial situation under control.

Pay as much toward your balance as you can. Credit card companies like people who pay only the minimum. It keeps you in debt longer and as a result you will be paying your creditors more in interest than some one who pays as much as they can towards their balance. If you have $5000 balance and pay only the minimum it will take over 8 years to pay your balance in full. If you pay double the minimum, you can have your balance paid off in about two and a half years.
Buy only what is necessary. Ask yourself if this purchase is really something that you need or are you buying it because it is on sale. If you charge it and don’t pay it off in full when you receive the bill, you are not getting a deal. If it is not an emergency, it should be paid for in cash.

Find extra money. If you are having problems making ends meet, you might consider getting a second job. Another way to increase you income temporarily, would be to sell household items. Ebay can be very lucrative when it comes to subsidizing your income. If you have two cars, you may want to consider getting rid of one of them to add to your net worth.

If you have your credit card spending under control and carry only minimal balances you may want to consider applying for a 0% or low interest rate credit card. Another option is to open a home equity line of credit for emergencies. The interest rates on this type of loan are also very low and it is also tax deductible.

Know when to ask for help. If you feel yourself sinking deeper into debt, don’t be afraid or ashamed to seek help. The sooner you admit things are out of control, the sooner you will be able to develop a plan to get your finances back on track. There are many reliable agencies that will be able to help you develop a debt management plan for repayment of outstanding debts. There is also education available that will educate you on getting out of debt and help you understand how you got there in the first place.

With a little bit of planning and forethought most of us should not be surprised each month when we receive our credit card statements. If you are, it might be time get some help or at the very least make some lifestyle changes.

The Secret to Avoiding Credit Card Debt

2005-12-15T16:58:00.000-08:00

Credit cards are almost a necessity in the 21st century. They are great for emergencies, help you establish credit and are great convenience in today's fast paced lifestyle. They can also be the source of great financial hardship if not used wisely and properly. That available line of credit can be very tempting, especially when you only have to pay a fraction of the balance monthly. Compound this with a high interest rate and the potential for financial distress becomes very real. Here are some ways to keep your credit card balances under control.

Think of credit cards as cash. If you carry a balance and only make the minimum payment, you will be making payment for a very long time. Credit cards that are used like loans will keep you in debt for a very long time. However, if you use them like cash and pay them off in full monthly, they can be very handy. They will save you from having to carry a large quantity of cash and there are many rewards that can be had through the use of credit cards.

Make your payment by the due date. Credit cards do not have a grace period. Your due date is your due date and if the credit card company does not have your payment in their hands by then, you will be accessed a late fee. Some late fees may be as high as $50.
Keep the number of credit cards you have to a minimum. If you use the cards wisely, one or two should do it.

Avoid purchasing the services offered by credit card companies. They are often unnecessary and expensive.

Review your statement monthly for accuracy. You would be surprised at how many things get billed to you credit card without your knowledge. It is your responsibility to report inaccuracies in to your credit card company.

Never take a cash advance out on a credit card. In most cases, you will be charged a transaction fee. The interest rates on a cash advance will be at a minimum of 20%. Lastly, there is no grace period with cash advances. Interest begins accruing the moment the cash is put in your hand.
If you follow these simple rules, use common sense and live within your means, your credit cards can offer you many rewards and can be a great convenience in your life.

The New Generation - Drowning in Debt?

2005-12-10T15:10:00.000-08:00

According to the Christian Science Monitor, today's generation of young people could be the most indebted Americans in this country's history. Americans are brought up today to believe that a college degree is a necessary element to get ahead in life. Due to the sharp rise in tuition costs most students will need loans to complete their education. The majority of new graduates will start their careers with a large amount of debt due to these student loans.

With grants being more scarce than ever before, a student will have to borrow money to pay their tuition. In most cases, the typical student will graduate owing more than $20,000 in loans and many graduates will begin their careers with temporary jobs leaving them without health insurance. If they are unfortunate enough to have health issues during this period, medical expense will be added to their mound of growing debt.

Almost all students will be tempted with introductory credit card offers. The credit card companies make it very easy. They show up on campus and all you have to do is fill out the application and the free gift is yours. These credit issuers don't seem to care if you are employed or not. After all, you are going to school, so you must be getting money from somewhere. These usually have a low introductory rate for a short period of time. Once that rate expires, your rate will probably increase to over 50%. If you make a late payment, you may see your interest rate rise to as much as 30%.

The unstable job market is also a contributing factor in the debt of young Americans. An unemployment check does not usually go very far when it comes to covering monthly expenses. This leaves many people paying for necessities with credit cards. Debt becomes out of control very quickly when you have to use credit cards to pay for groceries and other monthly expenses.

Many young people are not used to having to live on budget. Coming off the boom years of the 1990s, students are not used to clipping coupons or cooking and eating at home. This is a generation of people that spend impulsively. These habits can be changed with some planning and forethought.

Before you can make a plan to become debt free, you need to know in detail what you owe. Start by getting a copy of credit report from all 3 credit bureaus. Transunion, Experian and Equifax, the 3 credit bureaus, all offer a free credit report annually. These reports will help you organize your debts so you can formulate a repayment plan. If you need help, there are many non-profit credit counseling agencies that will help you with budgets and repayment plans for your debt. If your debt is seriously past due or "charged off," a debt settlement company is your best option. They will negotiate getting your balances reduced.

There are several different debt options available to help you get your debt paid off. The biggest mistake that most people make is waiting too long to face their debt and ask for help.

Credit Cards--Instant Gratification With a Lengthy Recovery

2005-12-08T16:20:00.000-08:00

The best way to describe credit cards is "addicting". They bring quick enjoyment that can turn into years of grief. Credit cards make it easy for a person to live beyond their means. They are also the cause of stress and depression when the monthly statement comes in the mail.

This country’s credit card debt is in excess of $735 billion, or almost $7,000 per household. Approximately 40% of revolving credit card users pay their bills in full monthly. Per capita, monthly credit card balances of those unfortunate households carrying balances is close to $12,000. If you pay $240 per month, it will take 8 years to pay the balance in full. If you pay the minimum payment, it will take even longer due to the minimum payment decreasing as the balance decreases.

Credit card companies extend you credit with the intention that you will carry a balance. They make their money, through you paying interest and fees. If you pay your balance in full monthly, you are borrowing their money interest free for 25 days.

Literally every industry in today's society accepts credit cards. If you have a credit card you can buy a Big Mac. Businesses are making it more convenient to use a credit card than ever before. Billions of credit card offers are mailed out annually and it is hard to checkout a t a retail store without being offered something in exchange for applying for a credit card with their store.

Debt will be part of your life until you learn how to deal with the temptation of instant gratification. Before you will see your debt decrease, you will have to put yourself on a "cash only" diet and then you will have to begin aggressively paying your credit cards down. To accomplish this, it will take changing the way you think about credit and its many pitfalls, but it can be accomplished by making some lifestyle changes.

Debt Collection--Tips for Dealing with Old Credit Card Debt

2005-12-07T19:18:00.000-08:00

The business of debt collection has become very lucrative and the collection of "old" debt is on the rise. It would be wise to know your rights when it comes to getting collection calls for old debt especially debt that is excess of seven years and no longer appears on your credit record.

1. Be aware of the statute of limitations in the state you live and in the state the debt was incurred if they are different. If it has expired, the collection agency will have limited legal options.

2. You may want to ignore the call. If the statute of limitations has expired they have very little recourse and you have a lot to lose by negotiating repayment. Repayment could cause it to be relisted on your credit report again.

3. Write them a letter and send it certified mail. Do not admit to the debt. Once they have received the letter the law prohibits them from contacting you again.

4. Know what your rights are. A copy of the Fair debt Collection Practices Act or a copy of "Money Troubles" by Leonard will familiarize you with what your legal right are.

5. Watch your credit report. If you see something on your credit report that is incorrect, you can dispute it with the credit bureau. If the reporting agency or creditor can not prove that the information is correct, it will be removed.

6. If the statute of limitations is still current, you may want to try to work out a settlement with the agency. Negotiate with them and see what you can get worked out.

Collections has become a very profitable business. Knowledge is power. You will best be able to handle your debts if you know what your rights are and where you stand.