Adding up the Real Costs of Bad Credit Debt

Posted by cmsadmin & filed under Credit Card Debt Consolidation Information.

The American people are drowning in credit debt, possessing a record $957.2 billion in credit card debt at the end of 2007, according to the Federal Reserve. Consumer debt of $11,000 to $12,000 an average household is unheard of. The scary part of the statistic is that the figures are diluted by households that don’t hold any debt. Households that carry over their debt monthly have an average $17,000 in unsecured debt.

Currently, one out of every five households is either late on their payments or has exceeded their credit limit at least once. But these statistics can never reflect the real cost of credit card debt.

Opportunity cost

When people have bad debt they mainly see the tangible costs of the debt, what they see printed on their statements every month. But people don’t examine the intangible cost of debt, opportunity cost. What does that mean? Opportunity costs as they relate to debt are, the opportunities you are forgoing due to debt. The opportunities you forgo are the intangible costs associated with your consumer debt.

The money that goes towards paying off and financing your debt could be used for several things:

Saving Building you wealth through investing Saving for your children’s college tuition Paying for a vacation Down payment for a house Emergency fund Saving for retirement

As you can see the above lists some important lost opportunity costs of maintaining debt.

Costs of Bad Credit Scores

The credit score is key to maintaining financial independence. Good credit scores and credit reports provide great currency for getting preferential treatment in areas of finance, employment, and many others. If you are seeking employment, your credit score can be of huge of influence of you being hired or not.

Employers do perform credit checks to determine if you are a responsible person; a good credit score reflects that. By extrapolating from your FICO score, employers can formulate certain judgments about you that can affect your employment.

Additionally, your credit history affects other aspects of your life. Your financial picture can be improved or reduced depending on your credit report and credit score. A good credit score can save you thousands of dollars in interest rates on your mortgage loan, car loan, business loan, personal loan, or credit card.

It is important to understand long-term consequences of bad credit debt in your life, it is the only way to keep a balanced approach towards credit use, use it with care. Don’t let the high interest credit cards take over and give away your financial independence to credit card companies.

No Credit Check Payday Loans Increase in Demand

Posted by cmsadmin & filed under Payday Loan & Personal Loan Information.

If you need urgent cash to meet an emergency and you have exhausted all other avenues, no credit check payday loans might be an option. There are no major obstacles involved in getting a cash advance, especially since no credit check is required. This is of enormous convenience to consumers as they can access no credit check personal loans within 24 hours.

Usually, getting the smallest loan amount from a bank or a credit union involves days or weeks worth of approval, if at all. Additionally, these financial institutions don’t offer short-term personal loans. This means that consumers have the choice of alternative financial lending in the form of payday loans.

Payday advances have cornered the personal loan industry, payday lenders creating an industry that didn’t exist previously. The unique aspect of these loans is that they require no credit check. Meanwhile, traditional loans require extensive credit and background checks.

The only things that a payday lender requires during the application process are:

Driver’s license Consistent employment and stream of income Be of 18 years of age Be a U.S. citizen or permanent resident Have a valid social security number Have direct deposit set up in a checking account

Once these requirements are met and your payday loan is approved, you can borrow anywhere from $100 to $1500. The most popular amount payday consumers borrow is $500. The loans are approved for two weeks, until your next payday.

Fast cash loan lenders make it so simple for you to repay your loan, there is nothing extra to do on your part. The cash advance lender automatically withdraws the amount owed from your checking account on your next payday.

Still, all this is possible without going through the tedious process of credit checks. Herein, no credit check bad credit loans offer consumers a distinctive lending choice; nothing comparable is available from other loan lenders. The popularity of fast cash personal loans has expanded across the national landscapes, to Canada, across the Atlantic to the U.K., and Ireland.

It is little wonder that annual international payday loan volumes are in the billions of dollars. Millions of consumers access payday loans from the payday center or through the internet. Online payday loans, faxless cash advances, or no fax personal loans make up a significant portion of all payday loan volume.

Get Smart about Credit Cards and Credit Card Companies

Posted by cmsadmin & filed under Credit Card Debt Consolidation Information.

Credit card debt and credit card use has been on the rise in recent years. After so many years, consumers are still at a disadvantage when dealing with card companies, mainly due to laws favoring the companies. Most consumers aren’t aware of their rights, as well as the tricks to deal with the creditors. Discover a few tricks of the trade to steer clear of paying excess credit card fees and make the card companies work for you.

Pay off your Credit Cards

It is advisable to pay off the entire credit debt at the end of the month. This is the best strategy to have one up on the credit card cartel. The first 30 day is an interest rate free grace period which allows you to use their money without paying them anything.

Paying off your cards entirely can save thousands in future continued interest rate payments. Actually, when you pay off your balance you gain the upper hand on card companies because you get a free ride, a 0% short-term personal loan.

This is not a good deal for the card issuer; they are in business for profit. The creditors want consumers to carry their balances month-to-month because they make money on the interest and fees. Credit card issuers dislike “free riders” or “leeches,”” people who pay their balances in full regularly. For issuers, their best customers are the ones who carry over balances while paying on time.

Close the Revolving Door

Revolving credit debt is avoidable. The “revolvers” on average pay high amounts of accumulated interest and fees. Essentially, the revolvers subsidize the activities of the free riders; the free riders pay nothing in fees and interest.

Approximately, 60 percent of credit card users carry over their balances. Carrying a balance is of long-term detriment to you and a boon for card issuers. The high interest rates and their compounding effects work against you.

Avoid Minimum Payments

Don’t fall into the trap of the minimum payments laid out by credit card companies. They are not trying to accommodate your finances but in reality exposing you to financial insecurity, a debt trap. Depending on the credit balance it can take years to pay off your debt.

If you make minimum payments, you will be saddled with double digit interest rates. Basically you are paying down interest not the original balance. Don’t Sign the Check

Avoid signing the blank checks sent to you in the mail. These checks don’t offer a grace period and your high interest starts the minute the checks are used. Just shred the checks as soon as you receive them.

Get the Free Ride

By using these tips, you can keep you finances straight, if not, you might need the help of debt consolidation, credit counseling, or credit consolidation services. Get smart and save bundles of money by following the above tips.

Credit Card Use and Credit Card Debt Keep Rising

Posted by cmsadmin & filed under Credit Card Debt Consolidation Information.

The credit card is an omnipresent financial tool used to support mass consumerism. Consumers in good times or bad use credit cards to make purchases. In the current economy, Americans are placing more purchases on their credit and debit cards which could lead to a steep price to pay in the future.

More and more Americans are racking up credit card debt as they use these instruments to make daily purchases. This alarming trend is a boon for credit card companies who issue the cards; they are flush with profits. However, consumer action could portend problems for them and the card companies in the future.

Short-term credit actions could become long-term problems for the anemic economy and the financially precarious banks that underwrite the risky debt. The US consumer has had their disposable income eradicated as they have to spend more on higher prices for gas and food.

Food and gas are not optional luxury items but necessities. Even budget minded Americans aren’t able to properly save and allocate financial resources. Many Americans can’t perform a proper monthly budget, as gas and food prices keep escalating month to month. They are extending their budgets using credit.

Credit concerns have reached even the Federal Reserve, who is implementing new guidelines for credit companies. Recently, the Fed has been concerned about delinquencies hitting 4.86 percent and revolving credit debt rising by 7.9 percent to $957.2 billion in the first quarter of this year.

Unfortunately, as high-interest debt keeps accumulating, Americans will continue to slide deeper into debt. More debt consolidation, credit consolidation, debt counselors, and credit counseling services will be needed. These services are already aggressively sought out by consumers today; this will only increase over time.

Significant risk exists for people who are putting too much debt on credit cards thus further endangering their financial security. However, if the security of underwriting credit card debt is jeopardized, the economy will decline even further.

Currently, there is a credit crunch to which many financial institutions have already succumbed. Faced with rising foreclosures, loan delinquencies, and credit card debt, banks and other financial institutions have seen their profits evaporate; some are no longer in business.

Herein, financial institutional credit lenders across industries have limited their lending in order to lessen exposure to more risk. The credit crisis is a time bomb in the making, a crisis more severe than acknowledged by the government and the experts.

Get Payday Loans and Fast Cash in the Nick of Time

Posted by cmsadmin & filed under Payday Loan & Personal Loan Information.

Can a payday loan be a life saver? For millions of Americans it has been a veritable lifesaver. Fast cash advances offer immediate financial solutions for many. Payday advances are short-term personal loans lent to borrowers to help them meet their immediate needs. Over the last 10 years these short-term personal loans have grown to immense popularity. These loans have thousands of locations across the country, rivaling traditional financial institutions like banks and credit unions.

Credit unions and banks don’t offer short-term fast cash personal loans, thus payday loans have filled the void. Presently, cash loan lenders manage billions of dollars in annual loan volume. Fast cash loan centers are omnipresent in the nation; they inhabit almost every corner of the national landscape.

The payday loan center provides loans up to $1500, although $500 cash advance loans are the most popular. Traditional institutions have been unable to compete with payday loan lenders in this area. Thus, the payday industry has flourished in the area of fast cash loans.

Majority of payday consumers use the loans in financial emergencies such as, overdraft protection fees, overdue bills, late bill payment penalties, medical emergencies, or other short-term obligations. Many people are uncomfortable with approaching their families and friends for a personal loan financing for consumers. As payday store locations have expanded from coast to coast, so have payday online services.

Online payday advances, no fax personal loans, faxless fast cash are available on the internet with ease. More and more consumers are using the World Wide Web to access personal loans, bad credit loans, and other forms of payday loans.

Consumers discover that getting online fast cash is far easier than going to the payday loan center. You are able to get fast cash online from the luxury of your work or home. Internet payday loans won’t require you to wait in lines to get your cash fast.

When applying for a payday loan online, no credit check is performed; even consumers with bad credit can get cash fast. There is no paperwork to be filled out and faxed; everything is done over the internet. And the best part is that you can get approval within 24 hours. Getting fast cash has never been easier.

Discover Tax Relief and Get Rid of Tax Debt

Posted by cmsadmin & filed under Tax & Bankruptcy Law Information.

The most troubling form of debt out there for the public is tax debt, especially debt owed to the IRS. Unlike credit card debt and bad credit debt, IRS tax debt can be an ordeal to deal with. In most cases, the fear isn’t the debt itself, but the wrath of the IRS if it doesn’t receive its tax payment. However, there is professional help available that can guide you in dealing with the Internal Revenue Service.

A tax attorney, an enrolled agent, or a professional tax service can help you in finding a solution to your tax problems. One of the areas to consider in your fight against IRS debt is the Offer in Compromise and whether or not you qualify. This is one of the most overlooked avenues to tax debt solutions because most taxpayers are not aware of such a program.

Only an IRS tax debt solution specialist with proven ability to navigate the IRS waters can successfully help you get a tax settlement. The main area of help they can provide you with is the ability to negotiate with the IRS on your behalf. The Offer in Compromise is one such arena in which professional tax guidance can help you reduce your tax debt by 85 to 90 percent.

Most people are not versed in tax laws. Herein, a tax expert can help you understand the qualifications and benefits of an Offer in Compromise. If your economic status qualifies you for an Offer in Compromise, then you should pursue it, even though the results are not guaranteed.

Tax experts are helpful in the majority of IRS debt cases. By choosing an adequate tax service for IRS tax debt relief you may find resolution to your tax problems faster than attempting to do it yourself. A tax service professional can work with the IRS directly in ways you’re unable to.

Of course there are fees for tax services, but if it can help you avoid paying thousands of dollars in debt, it is worth it. Ideally, you want to work with a person experienced in dealing with the IRS and tax debt. These professionals are familiar with tax laws that govern your circumstances and how best to extricate you out of the tax debt web.

No tax situation is hopeless, there is always hope. The most important aspect of dealing with the IRS is to get sagacious advice, keep a positive outlook, and maintain a confident composure. Irrespective of the final outcome, get professional tax debt advice and see what you can achieve.  

Time to Understand your Consumer Credit Report

Posted by cmsadmin & filed under General Debt & Loan Consolidation Information.

Since the first charge card was launched in 1949 by Diner’s Club. Fifty nine years later, people have become consummate consumers; making more than $2 trillion in transactions each year. Increasingly, Americans are using credit cards more than cash. As credit card use has increased, so have the complexities of these credit instruments. Herein, it is important to monitor and understand your credit report.Many consumers are aware of the existence of credit reports but have rarely read it.  People are more familiar with the meaning of terms such as, credit score and credit history.  Your credit history is reflected in your credit report and it is this information that is used by credit bureaus to determine your credit score.   The most common score is known as the FICO score, developed by the Fair Isaac & Co.  This credit score reflects your personal creditworthiness and the likelihood of you paying your bills. FICO scores have a range, starting from a low of 300 (maximum risk) points to a high of 850 points (lowest risk). Your credit score is a critical factor in approving or declining credit, auto loans, home loans, and other loan applications.  Additionally, whenever a credit check is performed, your credit score is accessed.  A credit check is used not only by creditors/lenders but other entities including potential employers.  Thus, it becomes even more important to understand your credit report.  Credit Report ContentA credit report can be accessed through three main credit bureaus: Equifax, Experian, and Trans Union.  These credit reporting agencies have to provide you with a credit report once every 12 months.  Americans by law, can access their credit report annually, for free.  It is simple and easy to obtain your credit score, which is crucial to your financial success.  Any old inaccurate information on your credit report can create issues with prospective employers, creditors, loan qualifications, and more. There are two main ways to access your credit report:

You can call (877) 322-8228.You can log onto to get a free report.Once you have obtained your credit report, it is time to evaluate it.  Let’s review the most common credit report, the Equifax report and its sections:1st section: Contains personal data, such as previous and current addresses, history, and social security number.  2nd  section: Offers a summary of your credit history. It comprises of a number of accounts (both open and closed) held by you, various types of accounts (revolving, mortgage, installment, or etc.), number of accounts that are past due, number of credit checks in the last 12 months, and number of accounts in good standing. 3 rd  section: Includes detailed account information such as name, account types, date opened, account numbers, account balance, and account status on record.  It contains a detailed account of your payment history, date of last activity and the credit issuer’s contact information. Additionally, includes a summary of past-due accounts and negative credit history. If you find information that is inaccurate, you can challenge it.  Under federal guidelines, the credit reporting agency must respond by 30 days of your appeal. If your appeal is successful, the inaccurate information will be removed from your credit report.4th section: Reflects credit inquiries into your credit history. The credit agencies classify inquiries as “hard” or “soft”. Hard inquiries occur when you authorize a company to access your credit report.  Excessive hard inquiries can negatively impact your credit score. Soft inquiries are created by your existing creditors checking on your credit status, credit card companies appraising your credit record to see if extending an unsolicited offer is viable and you checking your own credit history. 5th section: Contains particulars about delinquent or collection accounts. 6th section: Includes information about wage garnishments, liens, or other judgments that appear against you in county, state, or federal court records.7th section: Details how to dispute any of the information on your credit report. You should check your credit report once every twelve months.  This is the only way to stay vigilant about your credit history and protecting your identity.  Prevention is the best method to avoiding future issues like credit card debt and bad credit repair. 

How to Build Up Your Credit Score

Posted by cmsadmin & filed under General Debt & Loan Consolidation Information.

A credit score is the quantifiable end result of an assessment of your credit history and credit report using a complicated formula to forecast risk for creditors and lenders. Lenders use credit scores to makes decisions on the interest rates on your credit instruments or loans, issuance of loans or credit cards, and increasing credit limits on current accounts.

Additionally, insurance companies employ credit scores to aid them in issuance of new insurance policies, deciding the policy’s premium rate, and further renewal of any existing policies. Your potential employer may use your credit history to help them make a hiring decision.

Since, credit scores affect almost every component of people’s lives, it is good practice to improve or maintain personal credit scores. Even people with good credit are pushing the envelope to improve their scores.

Generally, the credit score is known as the FICO score. The FICO range is between 300 and 850. Just over a year ago, a score from 680 to 720 would have qualified you to get the best interest rates on loans; the bar has now been raised to above 720. A score above 720 is considered excellent with the median FICO score in the U.S. being 723.

The fundamental steps in building and maintaining a good credit score are easy; the difficult part is maintaining fiscal discipline. Here are some important steps you can take in the credit score game:

Pay your bills on time, avoid late payments. Don’t max out your available credit. Don’t cancel old cards, simply stop using them. Note your credit card limit Review your credit report and dispute any errors with the three credit bureaus: Experian, Equifax, and TransUnion.

Some strategies to improve your credit rating can backfire, such as applying for a new credit card, hoping to raise your available credit, in turn hoping to boost your FICO score. There are many consumers that reach a point in their financial life that they seek outside help like, credit counseling, debt consolidation, credit repair and credit consolidation services. You want to avoid getting to the stage where you will need the help of these services; the only way to do it is to imbibe fiscal discipline and pay off your debts.

Get Help Lowering Credit Card Fees

Posted by cmsadmin & filed under Credit Card Debt Consolidation Information.

Credit card debt has been growing in the nation by leaps and bounds. Over the years consumer credit debt has been growing at record levels to reach into the billions of dollars. The average household credit debt is approximately $9,000, and is still growing. Unlike in the past, credit card companies have been charging excessive fees and penalties, and interest rates to consumers. Congress has been slow to reform the credit card industry, as it has been lobbied hard by credit card companies who have vested interests in the status quo. But don’t despair, here are a few things you can do to protect yourself against credit card fees and penalties.

1: Don’t sign up cards with universal default

Universal default (UD) is a financial industry term used for a creditor that changes credit terms from the standard terms to the default terms (i.e. rates and terms provided to those who have missed loan payments) when that creditor is informed that their client has defaulted with another creditor, even though the client has not defaulted with the first creditor.

The UD phenomenon has its roots in financial services deregulation that occurred in the mid-1990s. Today, roughly half of the traditional banks that issue credit cards have universal default language in their account contracts. The controversial practice of UD by credit card companies allows them to raise card interest rates as high as 35 percent, for example, if you make a late car payment to another creditor/lender.

Recently, Citigroup voluntarily abandoned the universal default practice. Sometimes you can’t discover which credit card companies have universal default clauses in their contracts. However, with some research you can find out if your card company includes such clauses.

You can review the “default pricing” section of your credit card contract and see if your card issuer has a universal default policy.

2: Avoid double-billing

This has become another insidious tool used by credit companies to exploit their customers. Double billing is the practice used by credit issuers to calculate interest on their customer’s average daily balance over two months. For example, you have a $100 credit card balance, and you pay $50 by the due date. During the next billing cycle, your interest would be based on the entire $100 instead of only the carried over $50 balance. Even respectable card companies like American Express have been accused of shady double billing practices. Consumers most vulnerable to this practice are customers who carry a balance on their cards.

In order to tackle double billing, make sure you examine your previous and current statement to see if you are being charged double. One clue is to look for the phrase “average daily balance” on your card agreement.

Recently, Chase announced that it would stop double billing its customers.

3: Work around late fees

Congress has only questioned the ethics of dubious late fees and penalties without really doing something about it. Yet, these exorbitant late fee and penalties continue unabated. You can end these fees by setting up automatic bill pay or even advance bill payment. In this manner you can avoid paying excessive fees. However, if you get caught up in an unending cycle of credit debt you might then require credit counseling, debt consolidation services, and/or credit repair.

Without proper federal oversight credit card companies have had a picnic on the backs of their customers. It is time to fight back, Congress won’t do it. So with proper vigilance and more pro active actions you can avoid exorbitant fees and penalties.

Top Five Ways to Get Out of Debt Fast

Posted by cmsadmin & filed under General Debt & Loan Consolidation Information.

The consumer debt situation has grown unabated for close to two and half decades. The average credit card debt in America is $9,000 and the overall debt is even higher. The majority of the consumer debt is made up of credit card debt. The debt situation is getting worse every day but the debt is not insurmountable. The debt situation can be controlled and reversed if you put into place fiscal discipline and strict debt restructuring.

Here are five steps you can take to manage debt, irrespective of how insurmountable it may seem:

1. Evaluate your debt

Before starting out on your quest to wipe out your debt, find out how much you owe and any accompanying interest rates, fees, and penalties. It is important that you write down all of your outstanding balances and the interest rates of each credit card and loan. This exercise builds the foundation for your debt management strategy. Unless you know what you owe, how can you start paying it off?

2. Differentiate good debt from bad debt.

Not all debt is the same. Your mortgage home loan or student loans are examples of good debt because you borrowed to help build your future wealth. Also, with good debt the assets you purchase will long outlast the debt. For it is, your university education paves the way for you to earn money for your entire working lifetime.

On the other side of the same coin is bad debt. Bad debt usually has one common theme, huge interest rates which are a premium in borrowing. Unlike good debt, bad debt looses value over time. Generally, credit debt tops the list of bad debts which is then followed up by auto loans.

3. Hold down the fort

Stop using your credit cards. Unless you stop using your credit cards and stop adding to the existing debt, you can’t chip away at your debt successfully. If you do need to use your card, keep one card in your wallet for emergencies only. Except for your emergency card, place the rest of your cards in a closet or cut them up. Whatever you do, don’t cancel your cards, doing so can negatively affect your credit score and credit report.

4. Negotiate with your creditors

Call your creditor and negotiate with them lower interest rates. If you have a good credit history, creditors are more likely to negotiate with you. If it doesn’t work out then try doing a balance transfer to a 0% or a lower interest rate card. It is wise to do the balance transfer only if you can pay off the entire debt during the introductory period. Always pay down your highest interest rate cards first.

If you are unable to do a balance transfer then seek out debt consolidation, credit counseling, or debt counseling services.

5. Manage your debt

It is imperative that you become financially disciplined if you are ever to get out debt. Getting out of debt serves a short-term purpose only. You can only be financially independent and fiscally responsible in the future by controlling your debt. Start cash flow and budget worksheets. By tracking your monthly worksheets see where your money is going and how much you have left over at the end of the month. The cash you have left over at the end of the month can go towards expunging your debt.

You might be surprised to see what your expenses are every month. Remember, by doing regular budgeting and being financially disciplined you can manage your debt.