If you happen to find yourself drowning with an ever-increasing debt load, contacting and working with a debt settlement company can actually be a great solution. You’ve undoubtedly heard a lot of advertising and promotional for these types of services recently, but what exactly does a debt settlement company do?

Debt settlement is [...]]]> Debt Settlement

If you happen to find yourself drowning with an ever-increasing debt load, contacting and working with a debt settlement company can actually be a great solution. You’ve undoubtedly heard a lot of advertising and promotional for these types of services recently, but what exactly does a debt settlement company do?

Debt settlement is the process of negotiating with creditors to get them to forgive a big portion of your debt. The big question is: why would a credit card company do this? The simple answer is that the credit card companies have made the financial calculations and determined they are better off knowing for certain that they’ll get paid something, rather than not knowing at all if they will get paid anything at all from the person in debt.

Settlement companies work with an individual to hammer out a reasonable monthly amount that the person in debt distress can afford to pay against their amassed debt load. The individual then makes the affordable payment every month into a special-purpose account, and, as these funds accumulate, the settlement company reaches out to creditors to negotiate a full and final actual settlement amount that they will take. The debt settlement company only charges a fee after they have achieved a satisfactory settlement for you. Sounds like a pretty good deal for a person who feels their hands are tied, right?

Again, these debt settlement companies have great relationships with creditors and are negotiating on behalf of thousands of people every day and the amount of negotiated savings they can get for consumers can be significant.

While each situation is uniquely different with assorted reasons as to why the individual may be facing a burdensome debt load, it’s not uncommon for debt settlement companies to negotiate reductions of as much as 50 percent of the outstanding amount. With this type of negotiating power with credit granting institutions, they can help get their customer debt free in just a few short years.

                          

1. Budget a set amount each month

Look for ways to cut back your spending so you can free up money [...]]]> We all want to get out of debt. None of us want to be burdened with payments darkening our doorsteps. Here 6 steps you can take to get out of debt and stay out.

1. Budget a set amount each month

Look for ways to cut back your spending so you can free up money to pay off debt. Even a little bit each month will start to reduce the amount of interest you pay.

2. Get rid of high-interest debt first

Your biggest loan may not cost the most. Your mortgage may be the biggest debt you have, but it’s probably the cheapest. How do you know which debt is the most costly? Look at the interest rate you’re paying, not how much you owe. For most people, credit cards are a good place to start.

Did you know?
Cards from a department store often charge close to 30% or more in interest. If you owe $1,000, you could pay $300 in interest each year. Credit cards from a financial institution also charge high interest rates.

3. Consolidate different debts into one

If you have a number of different debts, consider a consolidation loan. This means you take out a loan or increase your mortgage to get enough money to pay off all of your other loans. It may cost you less each month than you were paying before on the individual loans, and you can put some of those savings toward paying off the consolidation loan faster.

Example:

Stacy owes $5,000 on her credit card, at 18% interest. That’s close to $100 a month, just for the interest! To lower her monthly costs, Stacy adds $5,000 to her mortgage, and uses the money she borrowed to completely pay off the credit card. Because her mortgage is at a much lower rate of interest (5%), Stacy will only pay $33 a month for her credit card debt – about a third of what she was paying before. If she saves all the money she was paying on interest before, she could pay off the extra $5,000 on her mortgage in less than seven years.
Tip:

Don’t forget about the extra debt after you consolidate it, especially if it’s blended in with your mortgage. If you had a 20-year mortgage and carried an extra $5,000 all those years, you would end up paying almost three times as much in interest on the money. Once you consolidate your debt, try to pay it back as fast as you can so that you’ll pay much less interest in total.

4. Set up an automatic savings plan

Some people have trouble finding enough money each month to reduce their debts because they spend it on something else. If this is you, see if your employer or bank can automatically take some money from your pay each month and deposit it in an account you can use to pay off debts.

5. Use cash from a life insurance policy

Some kinds of life insurance build up a cash value . If yours does, you can borrow that cash value and use it to pay down debts. You will have to pay interest on the loan, but you are really paying the interest to your own account.

Tip:

Try to pay this loan back as soon as possible since it will help increase the amount of money available to you from your life insurance policy.

6. Make an extra mortgage payment

Many mortgage lenders will allow you to pay down part of your mortgage debt each year in a lump-sum payment . Paying down your mortgage by even a small amount can dramatically reduce the overall cost of this loan over the years.

Remember: To pay off debt, you need a plan you can stick with. It’s better to start small if you have to, than never start at all.

Do you have any other tips and suggestions to get out of debt faster?

                          

1. Untapped discounts or negotiation opportunities

While haggling isn’t as [...]]]> There are hidden costs in items or things we do that we don’t even think about that could be hurting us financially without us even thinking about it. Here are a few tips you can use to save money… without having to earn more money.

1. Untapped discounts or negotiation opportunities

While haggling isn’t as common in the U.S. as it is in other countries, there are certain situations in which negotiating a price is not only acceptable, it’s expected. Buying a car is a good example. Still, some people would rather pay the listed price instead of making a lower offer.

People often qualify for discounts because they’re members of clubs like trade organizations or AAA. But they might be too embarrassed to ask about them at the register. If you’re one of these people, find a less shy friend to help you.

2. Automatically renewed memberships and subscriptions

Many people sign up for memberships and subscriptions that automatically renew each month with the best intentions. In reality, they don’t end up using them and they continue to be charged.

Review all your memberships and subscriptions and ask yourself if you’re using them. If you aren’t, it’s time to cancel them.

3. Late payments

It’s easy to forget a bill. But your bad memory or poor organization skills will cost you through late fees and higher interest rates.

Avoid late payments by paying all your bills together on a specific day each month. You can also arrange for your bank to automatically pay your bills as soon as they arrive.

4. Bank fees

Whether through overdraft penalties or automatic teller machine fees, banks charge customers in many ways. Avoiding these fees requires people to simply pay more attention.

Leave a small cushion in your bank account to prevent overdrafts. Look for banks that offer free checking and savings accounts or better yet, ones that would pay interest on your balances. And try to avoid ATM fees by anticipating your cash needs in advance so you’re not forced to turn to the closest machine if you find yourself in a rush and low on money.

5. Traffic tickets

When you’re in a rush, you’re likely to drive too fast or miss a “no parking” sign. Next thing you know, a police officer is writing you a $200 ticket or your car is being towed.

Besides the fines you’re charged, tickets can cause your car insurance rates to rise, raising your expenses long-term. Driving fast also wastes gas and raises your accident risk.

                          

Credit Report Repair: [...]]]> The vast majority of consumers don’t know much about the laws of credit, especially those that govern when and how long a creditor can sue. Following is a brief overview. Knowing your rights is one of the first steps you should take when trying to do credit report repair on your own.

Credit Report Repair: Why It’s Important to Know Your State’s Statute of Limitations

You just might find that there are some items on your credit report that you don’t have to deal with because Father Time has taken care of it. And that’s why it’s important to know your state’s statute of limitations.

Credit Report Repair: How Many Years Have Elapsed Since You Incurred Your Debt?

Every state has a limit on the amount of time a past creditor can come after you. Even though it may be hard to believe when you are in the thick of trying to repair your credit, the laws in the. U.S. are designed to give debtors a fresh start – eventually.

The statute of limitations as they apply to unsecured debt (eg, credit card debt) varies from state to state. It ranges from a low of three years in Delaware on up to 15 in Ohio. Most states have statute of limitations in the five to six year range.

Credit Report Repair & Residency: “I’ve Moved, So Which State’s Statute of Limitations Apply to Me?”

Usually, the laws in the state in which you currently reside apply to you. This is true even if you racked up the debt (ie, entered into a credit agreement) in another state.

Again, hit the web and do some research on the laws as they relate to your state. A great place to start is the website of the National Association of Consumer Advocates.

Credit Report Repair: How You Can Inadvertently Hurt Yourself by Extending the Statute of Limitations

When trying to repair their credit, many debtors – in their efforts to do the right thing and pay their debt – can actually wind up hurting themselves by extending the statute of limitations.

This usually happens when they contact a creditor — or a creditor, usually a collection agency by this time – contacts them. The debtor shoots him/herself in the foot by entering into a repayment plan with the creditor. When this is done, what it does is acknowledge the debt – and starts the statute of limitations all over again.

Note: The above is a general overview, laws vary from state to state when it comes to how/why/when a statute of limitations can be extended.

When conducting credit report repair, no one is telling you NOT to pay your debts. But, like any situation that has financial/legal consequences, you want to do what’s right for you not only today, but for years down the line.

                          

Credit Card convenience vs. Credit Card debt

We often see people pull out [...]]]> Technology spoils people’s whims. It tends to cater to every human’s caprices. It feeds on the people’s undying thirst for easy, instant, and convenient. More often than not, it also causes them a lot of trouble—financial trouble through credit card debt—that is.

Credit Card convenience vs. Credit Card debt

We often see people pull out “plastic” to pay for everything they need. Why not? When all it takes is a quick swipe of the card through a little electronic box and a signature then, everything’s okay. You go home happy, content, and almost worry-free. On the other hand, not every one of these people realize that the convenience of using credit cards can lead to a false feeling of financial security. And this realization will strike them as soon as the bills arrive.

In fact, studies show that credit card debt and personal bankruptcies have increases bank profits to the highest level in the last five years. It only shows that more and more credit card holders were unable to manage their finances that lead to credit card debt. If you are a cardholder and having some credit card debt troubles at this early stage, it’ now time to think over the possible outcomes of this minor glitch so that a more serious problem with credit card debt would cease to arise.

Credit card gives people the feeling of invincibility. And it also gives them tons of uncertainty about their financial management capability when they encounter problems with their credit card debt. Although it is true that that credit cards solve financial matters especially when it comes to safety and convenience, credit cards also creates hassle especially when the person using it doesn’t know what you he or she’s getting into.

Indeed, paying off credit card debt may take a long time especially if the person has high interest rates. But, it doesn’t mean that you can do nothing about efficient management of credit card debt. When you find yourself overwhelmed with credit card debt, don’t fall into a pit of depression. You can get through it with discipline and a change in spending patterns. Start eliminating problems with credit card debt by getting tips and techniques on how to pay off your balances easier, how to consolidate of frequently encountered problems, look for free debt consultation agencies that can help you, and try—inch by inch—to rediscover ways on how you can regain your financial freedom by reducing you credit card debt.

The power to eliminate credit card debt

People who are having problems managing their credit card debt or those who are near in bankruptcy often don’t realize that the power to eliminate their credit card debt troubles totally is in their hands. Today, more and more Americans need credit card debt help badly. The main problem is that these families are having difficult times paying high interest for credit card debt. And instead of lifting the burden of credit card debt, more people are paying much in interest every month than that of the actual expenditure.

There are actually more lawful and moral ways to zero-out thousands of dollars in credit card debts. And if you only take the time to research and know your rights and how bankruptcy laws have changed, you will discover that there are valuable facts to eliminate credit card debt. Actually, the possibility of reducing or eliminating the high interest credit card debt is now more possible when a person takes action to get his or her finances back on track.

Apart from knowing your weapon in terminating credit card debt, it is very important that you develop a sense of control and perseverance first. Since credit card debt elimination process requires organization, clarity, and commitment to your own growth, it is a must that you are ready for the responsibility and to stand free and independent.

For those people who consider having a credit card indispensable but afraid of getting one because of the possibility of credit card debt nightmare, you must remember that credit card can be a powerful tool in managing your finances but there will always be glitches when not used properly. Of course, there are countless reasons why you should and shouldn’t get one depending on your needs. Whether you decide to get one or not, managing finances it still takes a sense of good budgeting, willingness to change spending habits, and the humility to avail low interest consolidation loans when you are already burdened by too much credit card debt.

                          

1. Your credit score. To fix something, you first need to know what needs fixing. For your credit, that means getting your credit report and [...]]]> If your credit has taken a hit during this economy, don’t despair. You can do some damage control and boost your credit. Start with these steps to improve your score.

1. Your credit score. To fix something, you first need to know what needs fixing. For your credit, that means getting your credit report and score so you know what you’re working with. Get your free annual credit report at annualcreditreport.com, the only federally-approved, centralized site that will pull your report from the three credit bureaus: Equifax, TransUnion, and Experian. The catch is that you’ll have to pay to see your actual credit score. Look for any errors on your report, especially accounts that you didn’t open, or payments showing as late that weren’t, as those are the things that will adversely affect your score.

2. Your debt. Have a plan — calculate how much you can pay each month and how long it will take you to pay down your debt. Send payments twice a month instead of once. Paying off credit card balances should be at the top of your financial to-do list. But keep in mind that you shouldn’t cancel your credit cards once you’ve paid them off, even if you don’t intend on using them. Why? Because canceling your cards will knock points off your score. This seems counterintuitive, but your score is based partly on the length of your credit history and on your debt-to-available-credit ratio (more on that below).

3. Get on the phone. Late payments show up on your credit report. If you’re usually a good customer, get on the phone with your credit card company, ask for leniency and make sure they reverse any late charges. Once you hit a 700-plus score, try to negotiate a lower interest rate.

4. Debt ratio fix. Thirty percent of your score is based on how much you owe vs. available credit (your debt-to-available-credit ratio). So even if you’re paying on time every month, but using most of your available credit, your credit score still takes a hit. The fix: if you have any cards that are maxed out, pay those off first, even if you owe more on other cards.

5. Be on time. This one is obvious, but it can’t be overstated: Paying your bills on time is a big deal. Your payment history makes up 35 percent of your credit score. That includes not just credit cards but also every bill you owe: insurance, utilities, cellphones, medical bills. If you’re the forgetful type, set up auto payments for fixed amounts, and set several reminders for yourself. The best way to avoid getting caught in the late trap is to pay bills as soon as you get them, whether they be paper or paperless — that way there’ll be no scrambling right before they’re due. Pay online because posting is usually quick — sometimes within two business days.