In today's dismal economy, many people are facing the choice of paying their or saving money in a rainy day fund. When faced with unemployment and the rising cost of living, paying monthly credit card debts is becoming more of a luxury than a certainty for many consumers.
The solution to this dilemma depends on your personal situation. If you have a healthy savings account, and feel that you could weather the storm if you were to lose your job, then you are in a position to pay your debts without worry.
However, if you are living paycheck to paycheck and have uncertainty in your employment, then creating an emergency savings fund is more important that paying off your debts.
You have two choices in this situation: pay the minimum balances on your cards and stash all your extra cash in a savings accounts or stop paying your credit cards completely and consider debt negotiation.
Both choices have pros and cons. If you choose to pay the minimum amounts on your cards, your balances will not really diminish and you run the risk of incurring late and over-limit fees. However, your credit score will likely remain in tact and you will continue to have good relationships with your creditors.
If you choose to stop paying your credit cards all together and enter a debt negotiation program, your credit will be immediately and severely damaged and you run the risk of entering collections and incurring charge-offs. However, on the positive side, you can start saving all of the money that you would normally use to pay credit card debt and build a savings that you can later use to negotiate with your lenders and try to obtain substantial reductions in your pay-off amounts.
Also, keep in mind that tax debts are in a league all their own, and you should not stop paying these debts without consulting an attorney first. The IRS has the ability to gain control of all of your bank accounts and assets, so you should not stop paying them without obtaining legal counsel.
Are you considering debt negotiation? If so, leave us a comment.
Showing posts with label Credit Card Debt. Show all posts
Showing posts with label Credit Card Debt. Show all posts
Monday, March 23, 2009
Tuesday, February 24, 2009
The Recession is a Good Time to Re-Negotiate Debt
In spite of the fact that many credit card companies have been increasing interest rates and significantly reducing credit lines, the recession is proving to be a great time to re-negotiate your credit terms.
Credit card companies are desperate these days and will go to great ends to keep you as a customer. Keeping in constant and direct contact with your creditors could end up saving you a great deal of money.
The first step is to write down what you want; lower interest rates, waived late fees, and even settling card balances for less than you owe. Next, call your creditors and tell them what you want. At the end of the day, you have absolutely nothing to lose and everything to gain.
For example, Bank of America, among the biggest card issuers, stepped up efforts to waive fees and lower interest rates for distressed cardholders in 2008, spokeswoman Betty Riess said. It modified nearly 700,000 credit card loans last year. [sun-sentinel.com]
"We would evaluate any pricing decision based on the individual customer's performance with us as well as external credit risk factors," she said. "We understand that many of our customers are struggling to meet their financial obligations and our objective is to help customers who are experiencing financial hardship."
If you are struggling with credit card debt, pick up the phone and call your creditors today. Every moment you wait is another dollar you lose.
Have you re-neogiated your credit card debt recently? Leave us a comment and tell us about your experience
Credit card companies are desperate these days and will go to great ends to keep you as a customer. Keeping in constant and direct contact with your creditors could end up saving you a great deal of money.
The first step is to write down what you want; lower interest rates, waived late fees, and even settling card balances for less than you owe. Next, call your creditors and tell them what you want. At the end of the day, you have absolutely nothing to lose and everything to gain.
For example, Bank of America, among the biggest card issuers, stepped up efforts to waive fees and lower interest rates for distressed cardholders in 2008, spokeswoman Betty Riess said. It modified nearly 700,000 credit card loans last year. [sun-sentinel.com]
"We would evaluate any pricing decision based on the individual customer's performance with us as well as external credit risk factors," she said. "We understand that many of our customers are struggling to meet their financial obligations and our objective is to help customers who are experiencing financial hardship."
If you are struggling with credit card debt, pick up the phone and call your creditors today. Every moment you wait is another dollar you lose.
Have you re-neogiated your credit card debt recently? Leave us a comment and tell us about your experience
Labels:
Credit Card Debt,
debt negotiation
Sunday, February 15, 2009
Providian's High Interest Rates
Providian, which is owned by Washington Mutual, has received a flurry of complaints regarding excessive interest rates hikes. Customers cite that their rates increased dramatically shortly after WAMU acquired Providian in 2007. [my3cents.com]
A number of consumers claim that the interest rates on their Providian credit cards were increased by more than 10% despite the fact that they had not missed any payments and had overall good credit. In addition, there are a number of reports of Providian luring new customers in with low APR rates and then arbitrarily increasing those rates immediately after the customer signs up. This is quite an ironic turn of events, considering that WAMU presents itself as a bank that strives to help consumers save money by not charging excessive fees.
If you are considering a Providian credit card, read customer reviews at www.consumeraffairs.com before applying for the card.
Do you curenntly have a Providian card? What has your experience been?
A number of consumers claim that the interest rates on their Providian credit cards were increased by more than 10% despite the fact that they had not missed any payments and had overall good credit. In addition, there are a number of reports of Providian luring new customers in with low APR rates and then arbitrarily increasing those rates immediately after the customer signs up. This is quite an ironic turn of events, considering that WAMU presents itself as a bank that strives to help consumers save money by not charging excessive fees.
If you are considering a Providian credit card, read customer reviews at www.consumeraffairs.com before applying for the card.
Do you curenntly have a Providian card? What has your experience been?
Labels:
Credit Card Debt,
credit cards,
Providian
Thursday, February 12, 2009
USAA Scores High Ratings with Customers
Consumer Reports National Research Center did a study of credit card companies to determine which ones provide consumers with the best experiences. They interviewed more than 36,000 people about more than 61,000 credit cards. The winner across all of their studies was USAA Federal Savings.
USAA, which issues both the American Express and Mastercard brands, is a credit union for military, retired military personnel, and their families. The company earned a medium 95 out of a 100 possible points from consumers. USAA typically offers interest rates between 9 and 11 percent, which is significantly lower than the 17%+ interest rates charged by many of its competitors.
While the USAA card is limited to members of the military, there are a number of very good credit unions that are open to anyone. Credit unions tend to have lower interest rates and better customer relationships.
"Credit unions are run by members, so they have a vested interest in providing credit at very low rates," says George Overstreet, a University of Virginia finance professor who studies credit union operations. "And they are more focused on keeping their members happy, while banks have to worry more about keeping their investors happy." [Money @ Aol.com]
Credit unions such as 1st Advantage Credit Union and Financial Center Federal Credit Union were rated at the top of the Top 100 CU.com list.
What has your experience been with USAA?
Do you prefer working with Credit Unions or Banks?
USAA, which issues both the American Express and Mastercard brands, is a credit union for military, retired military personnel, and their families. The company earned a medium 95 out of a 100 possible points from consumers. USAA typically offers interest rates between 9 and 11 percent, which is significantly lower than the 17%+ interest rates charged by many of its competitors.
While the USAA card is limited to members of the military, there are a number of very good credit unions that are open to anyone. Credit unions tend to have lower interest rates and better customer relationships.
"Credit unions are run by members, so they have a vested interest in providing credit at very low rates," says George Overstreet, a University of Virginia finance professor who studies credit union operations. "And they are more focused on keeping their members happy, while banks have to worry more about keeping their investors happy." [Money @ Aol.com]
Credit unions such as 1st Advantage Credit Union and Financial Center Federal Credit Union were rated at the top of the Top 100 CU.com list.
What has your experience been with USAA?
Do you prefer working with Credit Unions or Banks?
Labels:
Credit Card Debt,
credit cards,
USAA
Sunday, February 8, 2009
Capital One Class Action Lawsuits
Capital One, once considered the leader in low-interest rate credit cards, is now battling several ongoing class action lawsuits for excessively increasing customers interest rates.
One high-profile case involves a man who had emergency open heart surgery. Due to his illness, Capital One received his payment one day late. Capital One subsequently increases his interest rate from about 7% to 21%.
Has Capital One recently increased your interest rates? How much has your interest rate increased?
One high-profile case involves a man who had emergency open heart surgery. Due to his illness, Capital One received his payment one day late. Capital One subsequently increases his interest rate from about 7% to 21%.
Has Capital One recently increased your interest rates? How much has your interest rate increased?
Tuesday, February 3, 2009
Being Proactive About Debt Reduction
Are you pro-active or passive about reducing your personal debt? If you fall into the latter category, here are a couple of suggestions for aggressively taking steps to debt elimination.
1. Pay off any credit cards that you can and cancel these accounts.
If you have any credit cards with small balances, get rid of them and pay off these debts as soon as possible. For example, I had a small Macy's account that was lingering for years. I made the decision last week to get rid of it once and for all and check one more debt off my list. Even though the debt was small in comparison to some of my other debts, it was a mental relief to get one more debt out of the way.
2. Contact your credit card companies and try to negotiate lower interest rates.
In today's dismal economy, you'll be surprised at how many creditors are willing to re-negotiate your credit terms.
3. Start a savings account.
Even if you can only manage $20 bucks a month, taking the proactive step to start saving your money will make you feel better and will get you in the habit of putting money aside every month. And eventually, even small amounts of money begin to accumulate into a sizable savings fund.
4. Figure out what excess expenses you can cut out of you life.
If you buy lunch every day, start taking your lunch a few days out of the week and save this money. If you live close enough to your local grocery or pharmacy, start walking instead of driving and save gas. If you find yourself at home with every light and television on, turn things off and try to reduce your energy bills. If you really start analyzing how you spend money, you'll find countless small ways to save and reduce your debt.
5. Look for coupons and bargains before you shop.
You would be amazed at how many coupon offers there are available at any given time, both online and from traditional brick and mortar retailers. Whenever I shop online, I first go to Google, type in the vendor's name and then "coupon codes" to see if there are any discounts available. I have found amazing coupons for everything from pizza to digital cameras in the past week. There are also numerous discount sites like Retailmenot.com and Couponboutique.com which feature discounts and specials on a daily basis.
1. Pay off any credit cards that you can and cancel these accounts.
If you have any credit cards with small balances, get rid of them and pay off these debts as soon as possible. For example, I had a small Macy's account that was lingering for years. I made the decision last week to get rid of it once and for all and check one more debt off my list. Even though the debt was small in comparison to some of my other debts, it was a mental relief to get one more debt out of the way.
2. Contact your credit card companies and try to negotiate lower interest rates.
In today's dismal economy, you'll be surprised at how many creditors are willing to re-negotiate your credit terms.
3. Start a savings account.
Even if you can only manage $20 bucks a month, taking the proactive step to start saving your money will make you feel better and will get you in the habit of putting money aside every month. And eventually, even small amounts of money begin to accumulate into a sizable savings fund.
4. Figure out what excess expenses you can cut out of you life.
If you buy lunch every day, start taking your lunch a few days out of the week and save this money. If you live close enough to your local grocery or pharmacy, start walking instead of driving and save gas. If you find yourself at home with every light and television on, turn things off and try to reduce your energy bills. If you really start analyzing how you spend money, you'll find countless small ways to save and reduce your debt.
5. Look for coupons and bargains before you shop.
You would be amazed at how many coupon offers there are available at any given time, both online and from traditional brick and mortar retailers. Whenever I shop online, I first go to Google, type in the vendor's name and then "coupon codes" to see if there are any discounts available. I have found amazing coupons for everything from pizza to digital cameras in the past week. There are also numerous discount sites like Retailmenot.com and Couponboutique.com which feature discounts and specials on a daily basis.
Labels:
Credit Card Debt,
debt reduction
Friday, January 30, 2009
7 Ways to Reduce Credit Card Debt
I ran across this great article on Creditcards.com, 7 bad habits to break and gain control of your credit card debt:
1. Don't keep too many cards in your wallet
The average consumer holds 9 credit cards at any given time. If you fall into this category, clean out your wallet and only bring the 1 or 2 credit or debit cards you absolutely need. By the way, if you have more than 5 credit cards, you should seriously consider debt negotiation.
2. Don't charge when you should pay cash
Avoid using credit cards for basic daily expenses, such as food, gas and other small items. If you find yourself constantly charging these types of items because you don't have the cash to by them, it's time to consider debt negotiation or bankruptcy.
3. Avoiding mail from your creditors
Don't let credit card statements pile up in a corner because you're afraid to open them and see the bad news. You should be fully aware of your debt and promptly read all credit card statements carefully.
4. Using your credit cards like they are ATMs
If you find yourself constantly getting cash advances from your credit cards, then you need to revise your budget and figure out ways to make your cash last longer. Also, every time you get cash advances from creditors, you're spending an additional 2 to 4 percent in APR, as creditors charge more interest for cash advances. If you are constantly getting credit card advances or pay-day loans because your salary does not cover all of your needs, then you should consider debt negotiation or bankruptcy.
5. Losing track of rewards points
This is a no-brainer. Rewards points are like cash. So if you are losing track of them and not spending them as they accrue, you are literally throwing money out the window. Find a way to easily check your rewards points on a monthly basis, such as setting up an online account with your credit cards so that you can regularly log in and check them.
6. Not comminucating with co-card holders
If you have a spouse or family member that you share a joint credit account with, you should be in constant communication with that person about the account. Failure to communicate can lead to disastrous mismanagement of your account.
7. Throwing away sales slips
Many people hate clutter, and immediately toss their sale reciepts after they make a purpose. Don't do this; instead, keep a folder or envelope for your receipts and organize them by year or category. That way, if you are overcharged by a vendor, you can go back and have the ability to dispute a charge.
1. Don't keep too many cards in your wallet
The average consumer holds 9 credit cards at any given time. If you fall into this category, clean out your wallet and only bring the 1 or 2 credit or debit cards you absolutely need. By the way, if you have more than 5 credit cards, you should seriously consider debt negotiation.
2. Don't charge when you should pay cash
Avoid using credit cards for basic daily expenses, such as food, gas and other small items. If you find yourself constantly charging these types of items because you don't have the cash to by them, it's time to consider debt negotiation or bankruptcy.
3. Avoiding mail from your creditors
Don't let credit card statements pile up in a corner because you're afraid to open them and see the bad news. You should be fully aware of your debt and promptly read all credit card statements carefully.
4. Using your credit cards like they are ATMs
If you find yourself constantly getting cash advances from your credit cards, then you need to revise your budget and figure out ways to make your cash last longer. Also, every time you get cash advances from creditors, you're spending an additional 2 to 4 percent in APR, as creditors charge more interest for cash advances. If you are constantly getting credit card advances or pay-day loans because your salary does not cover all of your needs, then you should consider debt negotiation or bankruptcy.
5. Losing track of rewards points
This is a no-brainer. Rewards points are like cash. So if you are losing track of them and not spending them as they accrue, you are literally throwing money out the window. Find a way to easily check your rewards points on a monthly basis, such as setting up an online account with your credit cards so that you can regularly log in and check them.
6. Not comminucating with co-card holders
If you have a spouse or family member that you share a joint credit account with, you should be in constant communication with that person about the account. Failure to communicate can lead to disastrous mismanagement of your account.
7. Throwing away sales slips
Many people hate clutter, and immediately toss their sale reciepts after they make a purpose. Don't do this; instead, keep a folder or envelope for your receipts and organize them by year or category. That way, if you are overcharged by a vendor, you can go back and have the ability to dispute a charge.
Labels:
Credit Card Debt
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