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Sunday, May 19, 2013
4 Tips To Help You Reduce Debt
4 Tips To Help You Reduce Debt
If you want to reduce the debt that you are dealing with in your life, there are various ways that you can do this task. While it may not be easy to cut your debt, it will be worth the effort in the long run. Here are four ways that you can apply to reducing your debt. Using these methods could also lead to wiping your slate clean of all your debts.
#1 Use Cash Only
One way that you can drastically reduce debt that you have is by using cash to pay for your purchases. If you continue to use your credit cards all the time, you will only build up more and more debt. As the debt piles up, you begin to lose control, and find yourself behind on your monthly payments.
Instead of reaching for your credit card, start buying only what you can afford with the cash you have. Often, this will mean making do with less. But a small sacrifice can prevent financial disaster in the future.
Tip#2 Get Rid of High Interest Credit Cards
If you want to reduce debt that you already have, you need to get rid of those high interest credit cards that you are carrying. Many times, you are barely paying off the interest each month with your payments. But if you get a card with lower interest rate, more of that monthly payment will pay off the original amount you owe. If you need to have a credit card for emergencies, make sure the card is a low interest one so you will not have to pay much interest costs.
Tip#3 Do Not Avoid Your Creditors
Fear may tempt you to avoid bill collectors and credit cards companies who call wanting payment. But you can benefit from talking to them. Often, if you talk to your lenders, you can let them know you are doing your best to pay your bills, but with much difficulty.
The lender may then propose a settlement that could provide some relief from your debts. This could mean offering a lower interest rate or having you skip one or more payments. Creditors like to know that you are working to pay your bills, so take the initiative and talk to them personally.
Tip#4 Decide on a Budget
Another way that you can reduce debts is to come up with a reasonable budget and stick to it every month. This will help you to live within your means so you are not always spending more money each month than you make. Make sure to budget in payments for your bills as well. And if there is any extra money, you may want to pay more on loans or credit cards that have high interest rates.
Families need to work together to reduce debts that you have built up. Usually, there is a way that everyone can help. Whether it is by watching the grocery spending or cutting down on what you spend on movies and entertainment each month. If you want to reduce your debt, it will take work and perhaps even sacrifice. But in the long run, it will be worth it to see your debt come down with each passing month. If you work at it, you will be debt free.
Friday, May 17, 2013
Smart Ways To Deal With Credit Card Debt
Smart Ways To Deal With Credit Card Debt
You already know a lot about credit cards. You've heard that consumer debt in this country-particularly credit-card debt-is at an all-time high, while our savings rate is lower than ever before. You realize that the boom in online shopping, with its absolute dependence on credit cards, is further fueling their use. You are well aware that running a balance on your plastic-and paying the unconscionable interest rates that come with it-is one of our most basic and widespread financial blunders. And you suspect that the sheer volume of direct-mail credit-card solicitations with low teaser rates must be devastating the forests of northern Idaho.
Still, credit cards are a fact of 21st century life, and it only makes sense to understand how to use them wisely. While it's probably impractical to keep all plastic out of your wallet, it is prudent to limit the number of cards you have, and, of course, to pay all balances in full every month. Indeed, having only a traditional American Express card, which doesn't allow you to carry a balance, can be an excellent way to impose fiscal discipline on you and your family-although, as the Visa ads point out, not everyone accepts American Express. For the rest of us, who do occasionally dabble in credit-card debt, here are a few ways to keep your habit under control.
1. Take advantage of frequent-flier programs tied to credit cards, but keep in mind that interest payments on a high balance can quickly turn "free" flights into outrageously expensive ones. At a dollar per mile, running up a debt of 25,000 may get you a plane ticket, but it will also saddle you with $4,500 in yearly interest payments, assuming an 18% annual rate.
2. Look very closely at credit-card offers before you bite. Obviously, most of those 2.99% and 3.99% rates will be in effect for only a few months. But there may be other catches as well. Making a late payment, even if it arrives only a day after it was due, may immediately trigger a permanent rate hike. Also, low initial rates sometimes apply only to transferred balances, and you could get charged a fee for making the transfer. Check, too, to see whether there is an annual fee, or charges for exceeding your credit limit or even for closing an account.
3. Avoid amazing grace-period tricks. What you're looking for is a provision that says you'll never be charged interest as long as you pay your bill in full by the due date. But some cards have no grace period, calculating interest from the moment you make a purchase, while others give you only a limited time after making a charge before interest is imposed. That period of 20 days or so may end before your payment is due.
4. Don't forget to cancel cards you no longer use. If you don't, they'll show up on credit reports, and that could be a problem, particularly if you're applying for a home mortgage. Your would-be lender may be reluctant to make a loan to someone who has a cumulative credit-card limit of $50,000, $100,000, or even more.
Simple Steps To Get Out Of Debt - And Stay Out
Simple Steps To Get Out Of Debt - And Stay Out
Step One: Plan for the Unexpected Big Time Bill
The first step arises from debt from a one-time large expense - something that is too large to be paid for with your monthly paycheck, or by saving for a few months.
Many of these debts are investments in either an asset that will appreciate over time, or a income stream that will be greater over time. The most common example is the purchase of a home. Very few people are able to save enough money to purchase their home outright, or pay for their entire home out of a few paychecks. We use a mortgage to pay for the home after-the-fact, and to enjoy home ownership in the meanwhile. Another example is investment in education. Many people cannot afford to pay for college tuition outright - so we take out loans, planning that our future income stream will enable us to be able to afford to pay for the education after-the-fact.
The more insidious type of one-time large expense is the expense that is not an investment. The emergency, unexpected, unplanned-for bill - extreme medical bills, disability, failure of a business, a lawsuit judgment, or long-time unemployment. These bills can put a family under - forcing them to either sell assets, move out of their home, or declare bankruptcy, because they will never be able to pay off the debt with their income.
One way to combat this danger is to set aside three to six months of your living expenses in a special savings account - an Emergency Fund -- to be used for the emergency, unexpected expense. This money is sacred, only for a family emergency. The Emergency Fund will save your family from potential tragedy and help you create a secure future.
Action Step #1: Open a special savings account to be your Emergency Fund. Set aside money each paycheck or month to fund this account.
Step Two: Think Out of the Budget Box
Instead of worrying about budgets, this step is the flip side of cash flow problems - income.
We know when we have a debt problem. We may stop opening bills, stop answering the phone. We may even try to create budgets, reduce our expenses, cancel cable, live at the basic minimum, to try to stop the bleeding.
But sometimes, overspending is not the problem. It is underearning.
You may just not earn enough to afford to live your life. I'm not talking about living an extravagant lifestyle, or even a "nice" lifestyle - but the basic necessities of life - housing, automobile, phone, insurance, groceries, gas, clothing - may add up to too much, given your income. This is especially common in expensive places to live, like the Silicon Valley.
The first step in dealing with this problem is to stop feeling guilty. You are not a bad person, who spends irresponsibly. You are someone who needs to acknowledge that you need, want, and deserve more income.
Instead of being frozen in guilt, start to take action on creating more income. You may not need to do something radical - you may just need to ramp up what you are already doing, or look for hidden treasure already in your life.
Put together a proposal for your boss, to describe how the company would be better if you got a raise. Create a new information product to generate passive income for your business. Search your basement for items you can auction on e-bay. Teach a class on scrapbooking, or changing the oil in your car. Have a garage sale to generate some quick cash, and reduce the clutter in your life.
Whatever you do, the important idea is to start today.
Action Step #2: Brainstorm 5 ways you will earn more income now - such as - ask for a raise, look for a new job, start a small business, sell a new product, auction old items on e-bay, rent out a room, teach a skill, or have a garage sale.
Step Three: Planning for the Big Stuff
This step is about the debts that sneak up on us. You may be able to pay for your bills and regular expenses each month -- but what happens if the car breaks down? The property tax bill arrives? Your quarterly's are due? Christmas? Baby announcement? Wedding invite? The family or high school reunion? The big family vacation you all deserve?
Are you able to pay for those non-monthly expenses out of your paycheck or your small business profits? Or, do those items go on a credit card?
Automobile repair, gifts, taxes, and travel are all examples of expenses that are non-monthly, but are expected. We know they are coming, but not necessarily when, or how much. These expenses should not be going on a credit card - you should save for them ahead of time, so you do not pay a bank 10-20+% a year for the privilege of paying for your expenses after-the-fact.
Go through your bills, receipts, and cards for the last year, or the last few years, and figure out how much you spend on each of these categories each year, on average. If you don't have those records, make a realistic estimate. Divide that annual amount by 12. That's how much you should set aside each month for your irregular expenses.
Action Step #3: Open a special savings account for at least one non-regular expense: either auto repairs, taxes, travel, or gifts. Save a fixed amount each month in that savings account, so when bills are due, you already have the money!
Step Four: Plug The Holes
Step four is about how to prevent your family from going into debt, by planning for your expenses ahead of time. This step we come to the most insidious problem, and the most difficult to conquer - overspending.
Do you know where your money goes each month? How much are all of your bills? How much are you spending on Dining Out? Drinks Out? Gas? Target & Costco? Clothes? Personal care (i.e., massage, pedicures)? Recreation - movies, golf, Netflix? Toys (both for the kids, and for yourselves)? Do you really know?
Do you spend your money in accordance to your values and priorities? Is there one, or more areas, where you are spending money not because you particularly need, or even enjoy, that product or service - but because you are not paying attention, or because you are compensating for another problem in your life by habitually spending money in that area?
Commonly, we see this in clothes, toys for kids, recreation, high-tech gadgets, and dining out - easy for relatively small expenditures, made each day or week, to add up to hundreds, if not thousands, of dollars each month. Spending without thinking will derail you from ever being able to achieve your most important life goals. Especially if you are spending more than your income, month after month.
Instead of being frozen in guilt, do something about it. Look over your habits for the last few months, and pick the most obvious problem area, where you "go" when you are stressed, bored, or unhappy. Do you buy CDs? Shop online? Get a new pair of shoes? Start in one category, and create good habits and rules for yourself in that area - then carry those personal rules over to the rest of your expenses.
Action Step #4: Create a Cash-Only account for your problem category. Withdraw your budgeted monthly amount in cash on the first day of the month, and place the cash in an envelope - when the envelope is empty, you're done!
Step One: Plan for the Unexpected Big Time Bill
The first step arises from debt from a one-time large expense - something that is too large to be paid for with your monthly paycheck, or by saving for a few months.
Many of these debts are investments in either an asset that will appreciate over time, or a income stream that will be greater over time. The most common example is the purchase of a home. Very few people are able to save enough money to purchase their home outright, or pay for their entire home out of a few paychecks. We use a mortgage to pay for the home after-the-fact, and to enjoy home ownership in the meanwhile. Another example is investment in education. Many people cannot afford to pay for college tuition outright - so we take out loans, planning that our future income stream will enable us to be able to afford to pay for the education after-the-fact.
The more insidious type of one-time large expense is the expense that is not an investment. The emergency, unexpected, unplanned-for bill - extreme medical bills, disability, failure of a business, a lawsuit judgment, or long-time unemployment. These bills can put a family under - forcing them to either sell assets, move out of their home, or declare bankruptcy, because they will never be able to pay off the debt with their income.
One way to combat this danger is to set aside three to six months of your living expenses in a special savings account - an Emergency Fund -- to be used for the emergency, unexpected expense. This money is sacred, only for a family emergency. The Emergency Fund will save your family from potential tragedy and help you create a secure future.
Action Step #1: Open a special savings account to be your Emergency Fund. Set aside money each paycheck or month to fund this account.
Step Two: Think Out of the Budget Box
Instead of worrying about budgets, this step is the flip side of cash flow problems - income.
We know when we have a debt problem. We may stop opening bills, stop answering the phone. We may even try to create budgets, reduce our expenses, cancel cable, live at the basic minimum, to try to stop the bleeding.
But sometimes, overspending is not the problem. It is underearning.
You may just not earn enough to afford to live your life. I'm not talking about living an extravagant lifestyle, or even a "nice" lifestyle - but the basic necessities of life - housing, automobile, phone, insurance, groceries, gas, clothing - may add up to too much, given your income. This is especially common in expensive places to live, like the Silicon Valley.
The first step in dealing with this problem is to stop feeling guilty. You are not a bad person, who spends irresponsibly. You are someone who needs to acknowledge that you need, want, and deserve more income.
Instead of being frozen in guilt, start to take action on creating more income. You may not need to do something radical - you may just need to ramp up what you are already doing, or look for hidden treasure already in your life.
Put together a proposal for your boss, to describe how the company would be better if you got a raise. Create a new information product to generate passive income for your business. Search your basement for items you can auction on e-bay. Teach a class on scrapbooking, or changing the oil in your car. Have a garage sale to generate some quick cash, and reduce the clutter in your life.
Whatever you do, the important idea is to start today.
Action Step #2: Brainstorm 5 ways you will earn more income now - such as - ask for a raise, look for a new job, start a small business, sell a new product, auction old items on e-bay, rent out a room, teach a skill, or have a garage sale.
Step Three: Planning for the Big Stuff
This step is about the debts that sneak up on us. You may be able to pay for your bills and regular expenses each month -- but what happens if the car breaks down? The property tax bill arrives? Your quarterly's are due? Christmas? Baby announcement? Wedding invite? The family or high school reunion? The big family vacation you all deserve?
Are you able to pay for those non-monthly expenses out of your paycheck or your small business profits? Or, do those items go on a credit card?
Automobile repair, gifts, taxes, and travel are all examples of expenses that are non-monthly, but are expected. We know they are coming, but not necessarily when, or how much. These expenses should not be going on a credit card - you should save for them ahead of time, so you do not pay a bank 10-20+% a year for the privilege of paying for your expenses after-the-fact.
Go through your bills, receipts, and cards for the last year, or the last few years, and figure out how much you spend on each of these categories each year, on average. If you don't have those records, make a realistic estimate. Divide that annual amount by 12. That's how much you should set aside each month for your irregular expenses.
Action Step #3: Open a special savings account for at least one non-regular expense: either auto repairs, taxes, travel, or gifts. Save a fixed amount each month in that savings account, so when bills are due, you already have the money!
Step Four: Plug The Holes
Step four is about how to prevent your family from going into debt, by planning for your expenses ahead of time. This step we come to the most insidious problem, and the most difficult to conquer - overspending.
Do you know where your money goes each month? How much are all of your bills? How much are you spending on Dining Out? Drinks Out? Gas? Target & Costco? Clothes? Personal care (i.e., massage, pedicures)? Recreation - movies, golf, Netflix? Toys (both for the kids, and for yourselves)? Do you really know?
Do you spend your money in accordance to your values and priorities? Is there one, or more areas, where you are spending money not because you particularly need, or even enjoy, that product or service - but because you are not paying attention, or because you are compensating for another problem in your life by habitually spending money in that area?
Commonly, we see this in clothes, toys for kids, recreation, high-tech gadgets, and dining out - easy for relatively small expenditures, made each day or week, to add up to hundreds, if not thousands, of dollars each month. Spending without thinking will derail you from ever being able to achieve your most important life goals. Especially if you are spending more than your income, month after month.
Instead of being frozen in guilt, do something about it. Look over your habits for the last few months, and pick the most obvious problem area, where you "go" when you are stressed, bored, or unhappy. Do you buy CDs? Shop online? Get a new pair of shoes? Start in one category, and create good habits and rules for yourself in that area - then carry those personal rules over to the rest of your expenses.
Action Step #4: Create a Cash-Only account for your problem category. Withdraw your budgeted monthly amount in cash on the first day of the month, and place the cash in an envelope - when the envelope is empty, you're done!
4 Principles to Follow to Avoid Credit Card Debt During the Holiday Seasons
4 Principles to Follow to Avoid Credit Card Debt During the Holiday Seasons
The holiday season has arrived. It is time to celebrate, make merry, and have fun. Travel plans have been made, lists of gifts for family and friends have been drawn up, and arrangements for parties are in full gear. It is indeed the season to be jolly, but also the season when spending runs wild.
Business people usually cash in on the holiday seasons to maximize their sales and profits. It will be high season for them. They will stock up, price up and smile all the way to the bank. They know that people will be less restrained in their suspending than at any other time. It possible that you may be among the many who have suffered post-holiday season financial stress, and want to make sure it does not happen again. Your success in this will be determined by how well you control three critical factors: your increased rate of spending, the manner in which you finance that spending, and the heavy financial demands that follow in the subsequent month.
Financing Using Plastic
With holidays like Christmas or the New Year seeming to come round too quickly, people often find they have not saved up enough for their celebrations. Moreover, budgeting is an alien concept during this and spending can spiral out of control. To cover the inevitable shortfall in resources, the credit card is an obvious attraction. There are advantages to using the card to finance your expenditure:
i) It gives you free access to about a month’s credit.
ii) It gives you the temporary ability to spend beyond your current means.
iii) It allows you to track your expenditure.
iv) You do not have to carry lots of cash around with you.
Use of credit card, how ever, does carry with it significant dangers if it is not carefully controlled. Research indicates that spending could increase by up to 35% when using a credit card compared with using cash. Here are some key principles to help you guard against running into credit card debt trouble.
1. Spending Plan
If your spending is going to exceed your income for the festive month, consider cutting intended festive expenses, or other expenses, to stay within your income. I am assuming you have drawn up your spending plan for that period. That’s where a credit card comes to the rescue. Though not readily apparent, the use of your credit card can create distortions in the management of your finances. Unless you are monitoring your spending in both cash and credit, there is a danger that you will be uncertain whether or not you are living within your means. It would therefore be unwise to begin using a credit card if you are not in control of your finances, that means using a spending plan.
2. Debt to Income Ratio
Do not forget that use of your credit card adds to your indebtness. In managing your financial affairs, one of the key indicators to watch is your debt-income ratio. This is monthly debt repayment as a percentage of your monthly after-tax income, and raises a red flag when you tinker with too much debt. A ratio of over 20% is becoming unhealthy. If you already have credit card debt that is overdue, do not add to it.
3. Bridging Finance
Use of a credit card is ideally a means of short- term financing of your operations. That means settling any debt incurred using your card within days. Paying the minimum balance will not do. If you are not confident that you can pay it off in full, you wound do yourself a huge favor by not using a credit card. Should you decide to go ahead and use a card, you need to be prepared for extra costs in interest and penalties associated with extended credit. This adds to your expenses, and you need to be ready to be ready to reduce other regular expense to accommodate this, otherwise you run the risk of creating ongoing hard-core debt
4. Net Worth
Credit card debt incurred during the festive season is usually for consumer spending- paying for your holiday, buying gifts, entertainment, traveling expenses, etc and creates what is known as consumer debt. This kind of debt adds to your liabilities, but contributes nothing to your assets. Your net worth is reduced to the extent of consumer debt incurred. Shrinking net worth is not good for your financial health. So do have yourself a happy holiday. But as you go about it, finance it in a way that gives you the comfort that you won't be debt-laden the following month.
The holiday season has arrived. It is time to celebrate, make merry, and have fun. Travel plans have been made, lists of gifts for family and friends have been drawn up, and arrangements for parties are in full gear. It is indeed the season to be jolly, but also the season when spending runs wild.
Business people usually cash in on the holiday seasons to maximize their sales and profits. It will be high season for them. They will stock up, price up and smile all the way to the bank. They know that people will be less restrained in their suspending than at any other time. It possible that you may be among the many who have suffered post-holiday season financial stress, and want to make sure it does not happen again. Your success in this will be determined by how well you control three critical factors: your increased rate of spending, the manner in which you finance that spending, and the heavy financial demands that follow in the subsequent month.
Financing Using Plastic
With holidays like Christmas or the New Year seeming to come round too quickly, people often find they have not saved up enough for their celebrations. Moreover, budgeting is an alien concept during this and spending can spiral out of control. To cover the inevitable shortfall in resources, the credit card is an obvious attraction. There are advantages to using the card to finance your expenditure:
i) It gives you free access to about a month’s credit.
ii) It gives you the temporary ability to spend beyond your current means.
iii) It allows you to track your expenditure.
iv) You do not have to carry lots of cash around with you.
Use of credit card, how ever, does carry with it significant dangers if it is not carefully controlled. Research indicates that spending could increase by up to 35% when using a credit card compared with using cash. Here are some key principles to help you guard against running into credit card debt trouble.
1. Spending Plan
If your spending is going to exceed your income for the festive month, consider cutting intended festive expenses, or other expenses, to stay within your income. I am assuming you have drawn up your spending plan for that period. That’s where a credit card comes to the rescue. Though not readily apparent, the use of your credit card can create distortions in the management of your finances. Unless you are monitoring your spending in both cash and credit, there is a danger that you will be uncertain whether or not you are living within your means. It would therefore be unwise to begin using a credit card if you are not in control of your finances, that means using a spending plan.
2. Debt to Income Ratio
Do not forget that use of your credit card adds to your indebtness. In managing your financial affairs, one of the key indicators to watch is your debt-income ratio. This is monthly debt repayment as a percentage of your monthly after-tax income, and raises a red flag when you tinker with too much debt. A ratio of over 20% is becoming unhealthy. If you already have credit card debt that is overdue, do not add to it.
3. Bridging Finance
Use of a credit card is ideally a means of short- term financing of your operations. That means settling any debt incurred using your card within days. Paying the minimum balance will not do. If you are not confident that you can pay it off in full, you wound do yourself a huge favor by not using a credit card. Should you decide to go ahead and use a card, you need to be prepared for extra costs in interest and penalties associated with extended credit. This adds to your expenses, and you need to be ready to be ready to reduce other regular expense to accommodate this, otherwise you run the risk of creating ongoing hard-core debt
4. Net Worth
Credit card debt incurred during the festive season is usually for consumer spending- paying for your holiday, buying gifts, entertainment, traveling expenses, etc and creates what is known as consumer debt. This kind of debt adds to your liabilities, but contributes nothing to your assets. Your net worth is reduced to the extent of consumer debt incurred. Shrinking net worth is not good for your financial health. So do have yourself a happy holiday. But as you go about it, finance it in a way that gives you the comfort that you won't be debt-laden the following month.
Thursday, May 16, 2013
4 Keys To Freeing Yourself From Debt
4 Keys To Freeing Yourself From Debt
Debt is a way of life for many Americans. We owe money on our homes, our cars, our possessions (from furniture to clothes), and our education. Many Americans are so mired in debt they aren't even sure just how much they owe and to whom -- even worse they sometimes don't even remember just what caused their debt.
Some debt is good for you. For example, what you owe on your home can provide a nice way to balance out your income tax. A little debt is not a bad thing either as making regular payments to various creditors helps build your credit rating which makes it easier for you to obtain loans at good rates. However the truth is that most Americans have more than a little debt -- and many owe far too much money and are already, or soon will be, in financial trouble as a result.
Finding yourself owing a lot of money is not the end of the road and you can stop your cycle of debt by taking four positive steps to break the cycle.
First, attack your high-cost debts. This likely includes credit cards where you may be paying high minimum payments and high interest rates. Pay off the balances on credit cards carrying the highest interest rates first. Continue making your minimum payments for lower-interest cards but concentrate on paying off the highest interest. When the high-cost cards are paid off then work to eliminate the balances on your other cards.
Second, reach out to your creditors. If you are going to be late or have difficulty paying your minimum payments then contact the credit card company. Even if you can make all your payments in a timely fashion there are two benefits you can reap from contacting the card issuer. First, you may be able to negotiate lower rates or more favorable terms. Second, they might be able to recommend alternatives that can minimize damage to your credit rating.
Third, consolidate your debts as much as possible. You can accomplish this a number of ways. One possibility is simply transferring balances from one credit card to another with a lower rate, but be aware of transfer fees before choosing this option. Another possibility, if you own your own home, is to take out a home-equity loan or line of credit which should have a lower interest rate than most credit cards can offer as well as offering tax deductions. Finally, you can also consider a secured loan offering the value in another form of property, your vehicle for example.
Fourth, don't sacrifice your retirement savings. Obviously paying off your debt should be a high financial priority but cutting what you save for retirement to do so may not be the wisest course -- especially if that becomes a long term habit or if you are losing out on your employer's matching funds as a result. Perhaps you may be able to borrow against (or from) your retirement funds at a lower interest rate which will allow you to continue to save for retirement while also getting out from under your debt.
While owing money may well be the American way it can also be a tremendous burden to bear. You can shed the weight of your load or at least trim it down to a more manageable level by taking these four steps.
Debt is a way of life for many Americans. We owe money on our homes, our cars, our possessions (from furniture to clothes), and our education. Many Americans are so mired in debt they aren't even sure just how much they owe and to whom -- even worse they sometimes don't even remember just what caused their debt.
Some debt is good for you. For example, what you owe on your home can provide a nice way to balance out your income tax. A little debt is not a bad thing either as making regular payments to various creditors helps build your credit rating which makes it easier for you to obtain loans at good rates. However the truth is that most Americans have more than a little debt -- and many owe far too much money and are already, or soon will be, in financial trouble as a result.
Finding yourself owing a lot of money is not the end of the road and you can stop your cycle of debt by taking four positive steps to break the cycle.
First, attack your high-cost debts. This likely includes credit cards where you may be paying high minimum payments and high interest rates. Pay off the balances on credit cards carrying the highest interest rates first. Continue making your minimum payments for lower-interest cards but concentrate on paying off the highest interest. When the high-cost cards are paid off then work to eliminate the balances on your other cards.
Second, reach out to your creditors. If you are going to be late or have difficulty paying your minimum payments then contact the credit card company. Even if you can make all your payments in a timely fashion there are two benefits you can reap from contacting the card issuer. First, you may be able to negotiate lower rates or more favorable terms. Second, they might be able to recommend alternatives that can minimize damage to your credit rating.
Third, consolidate your debts as much as possible. You can accomplish this a number of ways. One possibility is simply transferring balances from one credit card to another with a lower rate, but be aware of transfer fees before choosing this option. Another possibility, if you own your own home, is to take out a home-equity loan or line of credit which should have a lower interest rate than most credit cards can offer as well as offering tax deductions. Finally, you can also consider a secured loan offering the value in another form of property, your vehicle for example.
Fourth, don't sacrifice your retirement savings. Obviously paying off your debt should be a high financial priority but cutting what you save for retirement to do so may not be the wisest course -- especially if that becomes a long term habit or if you are losing out on your employer's matching funds as a result. Perhaps you may be able to borrow against (or from) your retirement funds at a lower interest rate which will allow you to continue to save for retirement while also getting out from under your debt.
While owing money may well be the American way it can also be a tremendous burden to bear. You can shed the weight of your load or at least trim it down to a more manageable level by taking these four steps.
Your Finance Fitness Center……….Debt Consolidation Finance
Your Finance Fitness Center……….Debt Consolidation Finance
Debt consolidation finance is specifically designed to overcome the problem of managing finances. Debt consolidation finance being the part of the debt management program helps to eliminate the debt problem by consolidating them.
Before going for a debt consolidation finance the person should preferabily consult the credit advisor. The credit advisor will evaluate his financial status and his problem of debts. After a thorough study on your status he will recommend you whether the debt consolidation finance suits you or not. If he gives you a positive answer that debt consolidation finances is the best solution for your problem. Then the person should avail it for coping up with his debts. Otherwise he should find another way to deal with his debts.
Consulting credit advice doesn’t mean that the person should totally rely on credit advisor. He himself should also evaluate his position and understand his problem. And ask himself whether the debt consolidation finances will suit him.
Debt consolidation finance helps the person to keep the positon of finances healthier, that is well managed. It is a sort of fitness center for finances of a person.
It also tries to guide the person regarding each and every aspect of money management.
Generally the lending company providing the debt consolidation finances, also provide the counselling on debt management. Just through a single convient monthly payment, the lender pay out to your creditors on your behalf. Lender also negotitate with the creditor for possible reduction in amount of debt. This reduction basically lies in:
•Finance charges
•Late fees
•Monthly interest payment
•Other miscellaneous cost
Since the reduction in the outgoing of money will let the person to save more money for his needs of the future.
Debt consolidation finances can be secured or unsecured. In secured, the person has to keep the collateral with the lender. Collateral is one of the reasons, which makes the debt consolidation financing cheaper, and also enables the person to pay lower rate of interest as compared to the unsecured debt consolidation finances. On the other side, in unsecured debt consolidation finances the person is not required to keep any sort of collateral. But, in return of that the person pays high rate of interest as compared to the secured loan.
The person should keep in his mind that going for secured debt consolidation finances can keep his collateraral at risk, if he has any doubt on his repayment ability. In this case, he should preferably go for unsecured debt consolidation finances. But this doesn’t mean that in unsecured finances, he is safe. A legal action can be taken by the lender in order to realise the payment.
Eventually, before reaching to certain decision regarding your finances evalute every aspect of loan and your financial status.
Debt consolidation finance is specifically designed to overcome the problem of managing finances. Debt consolidation finance being the part of the debt management program helps to eliminate the debt problem by consolidating them.
Before going for a debt consolidation finance the person should preferabily consult the credit advisor. The credit advisor will evaluate his financial status and his problem of debts. After a thorough study on your status he will recommend you whether the debt consolidation finance suits you or not. If he gives you a positive answer that debt consolidation finances is the best solution for your problem. Then the person should avail it for coping up with his debts. Otherwise he should find another way to deal with his debts.
Consulting credit advice doesn’t mean that the person should totally rely on credit advisor. He himself should also evaluate his position and understand his problem. And ask himself whether the debt consolidation finances will suit him.
Debt consolidation finance helps the person to keep the positon of finances healthier, that is well managed. It is a sort of fitness center for finances of a person.
It also tries to guide the person regarding each and every aspect of money management.
Generally the lending company providing the debt consolidation finances, also provide the counselling on debt management. Just through a single convient monthly payment, the lender pay out to your creditors on your behalf. Lender also negotitate with the creditor for possible reduction in amount of debt. This reduction basically lies in:
•Finance charges
•Late fees
•Monthly interest payment
•Other miscellaneous cost
Since the reduction in the outgoing of money will let the person to save more money for his needs of the future.
Debt consolidation finances can be secured or unsecured. In secured, the person has to keep the collateral with the lender. Collateral is one of the reasons, which makes the debt consolidation financing cheaper, and also enables the person to pay lower rate of interest as compared to the unsecured debt consolidation finances. On the other side, in unsecured debt consolidation finances the person is not required to keep any sort of collateral. But, in return of that the person pays high rate of interest as compared to the secured loan.
The person should keep in his mind that going for secured debt consolidation finances can keep his collateraral at risk, if he has any doubt on his repayment ability. In this case, he should preferably go for unsecured debt consolidation finances. But this doesn’t mean that in unsecured finances, he is safe. A legal action can be taken by the lender in order to realise the payment.
Eventually, before reaching to certain decision regarding your finances evalute every aspect of loan and your financial status.
Your Secret Weapon Against Credit Card Debt
Your Secret Weapon Against Credit Card Debt
The television advertisements and dozens of junk mail advertisements you get all make big promises. They are real good at selling the idea that they can get you out of credit card debt with some phenomenal program or secret weapon that you can find only by coming to them. When you think about it, these people are pretty despicable. They are seeking to make money by preying on people who already are deep in debt. The want to victimize the victims and in many societies, they put people in jail for that.
Anyway, you and I both know that most of those slick marketing productions that pitch getting you out of credit card debt through some sophisticated and costly program are a bunch of hot air. But there is a secret weapon right under your nose that if you can set off its amazing power, it can get you out of credit card debt and keep you there.
This secret weapon is pretty amazing and you know we aren’t trying to market anything to you because this secret weapon doesn’t cost anything, doesn’t require you send off for anything and you can find it right in your own home and put it to work immediately at no cost to you. But it is also a secret weapon that is not “sexy” and it will not make you go “OOO” and “AHH” by impressing you with its slick design.
The secret weapon is a budget. See, we told you it wasn’t a sexy solution. But when you analyze why you have the credit card debt in the first place, putting a rock solid budget in place is the foundation of a long term solution to your problem. The marketers can give you all kinds of fancy analysis and discussion on the cause of credit card debt in your life that will put the blame on everything from the foreign exchange rate to immigration to global warming. But it doesn’t do you a bit of good to point fingers about the problem. The only thing that will do you good is to give you the tools and weapons to fix it.
There is just no getting around it, you are in trouble with your credit because you are living above your means. In other words, you are spending more than you make. This isn’t to throw a lot of blame and guilt around. There are a lot of situations that can cause you to live above your means. You could lose your job or have an emergency in the family that can cause you financial worries. But when the money going out is the more money than is coming in, you have a problem that will drive up your credit card debt.
To write a budget, you simply sit down and take inventory of those two factors. You inventory how much money you have coming in. Then you inventory how much money you have to pay out. This step alone is a huge step forward toward getting your debt problem under control. A computer spreadsheet like Microsoft Excel is excellent for this kind of family budget planning and analysis because you can move things around and let the computer do the math for you.
Don’t make excuses about this. If you don’t know how much a certain kind of spending costs you, dig out your receipts for the last few months and get a feel for it. But once you know your income and your bills, you can tell if there is a gap. Then you can make plans to close that gap either by getting more income or by cutting out some bills or both.
It won’t be easy and it won’t be fun. But if you get on a budget and stay there, you have the basic foundation for a solid family financial plan and you can move forward from there. You may go on to use some other tools to bring your credit card debt under control such as credit card consolidation or balance transfers. But don’t do a thing before you find that secret weapon and make it start working for you. And that secret weapon is a realizing and reliable family budget.
Young Folk With Debt Issues
Young Folk With Debt Issues
We really are being bombarded by loans that are simplifying our lives. The boom in the personal finance markets have brought about a major attitude change. The advice that our grandparents gave us about never lending or borrowing seems out of date in the world of today. With instant satisfaction becoming the buzz word, can people really wait till they collect the dough to afford something? We all seem to be in such a hurry. And there is always the fear that we might not be able to avail of such amazing prices again. "There's no time like the present" seems to have become the motto for the people of today, especially the youth.
Is this a good thing or a bad thing? Well, there are both advantages and disadvantages to this entirely new mindset. When it comes to the youth of the world, loans help them acquire some basic necessities that would be difficult to acquire otherwise. However, a lot of young people are unaware of how to become financially responsible. It is not that they are spendthrifts; it is just that they lack adequate knowledge of financial matters. Thus, a lot of young people do not use their money wisely. Studies have shown that many young people are deep in credit card debt.
This problem generally begins even while one is studying. With credit card companies becoming extremely keen to make offers for younger people, credit card debt begins early. Moreover, students generally secure education loans to see to their higher education expenses. These problems get exacerbated once the student enters the workforce. Now, the person concerned has to deal not just with the monthly installments on the education loan, but also with various household expenses. The financial strain can be immense on people who have little experience in coping with matters pertaining to one's finances.
As a result, many young people choose to find ways to reduce their debt. Switching loans is often a smart choice if one wishes to eliminate the current burden of debt that one has. Before going in for a loan switch, however, the borrower should hunt for the lowest interest rates in the market and calculate additional expenses like arrangement fees and early repayment penalties. Many young people also choose to make use of a business cash advance to help pay for the credit that they run up. One may feel iffy about taking a loan to repay another, but this is always better than defaulting on one's loan.
Defaulters generally have a tough time in repairing their bad credit scores. Getting loans becomes a problem if one is a defaulter. Lenders are less likely to trust you with a loan if you have not paid up a past loan. However, these days, there are scores of adverse credit loans which cater to the needs of people who have adverse credit scores. All this is thanks to the immense boom that the personal finance markets have been experiencing. Life has certainly become easier for young people who are spending sleepless nights thinking about their indebtedness. Borrowers who are struggling with debt can easily secure debt help these days.
We really are being bombarded by loans that are simplifying our lives. The boom in the personal finance markets have brought about a major attitude change. The advice that our grandparents gave us about never lending or borrowing seems out of date in the world of today. With instant satisfaction becoming the buzz word, can people really wait till they collect the dough to afford something? We all seem to be in such a hurry. And there is always the fear that we might not be able to avail of such amazing prices again. "There's no time like the present" seems to have become the motto for the people of today, especially the youth.
Is this a good thing or a bad thing? Well, there are both advantages and disadvantages to this entirely new mindset. When it comes to the youth of the world, loans help them acquire some basic necessities that would be difficult to acquire otherwise. However, a lot of young people are unaware of how to become financially responsible. It is not that they are spendthrifts; it is just that they lack adequate knowledge of financial matters. Thus, a lot of young people do not use their money wisely. Studies have shown that many young people are deep in credit card debt.
This problem generally begins even while one is studying. With credit card companies becoming extremely keen to make offers for younger people, credit card debt begins early. Moreover, students generally secure education loans to see to their higher education expenses. These problems get exacerbated once the student enters the workforce. Now, the person concerned has to deal not just with the monthly installments on the education loan, but also with various household expenses. The financial strain can be immense on people who have little experience in coping with matters pertaining to one's finances.
As a result, many young people choose to find ways to reduce their debt. Switching loans is often a smart choice if one wishes to eliminate the current burden of debt that one has. Before going in for a loan switch, however, the borrower should hunt for the lowest interest rates in the market and calculate additional expenses like arrangement fees and early repayment penalties. Many young people also choose to make use of a business cash advance to help pay for the credit that they run up. One may feel iffy about taking a loan to repay another, but this is always better than defaulting on one's loan.
Defaulters generally have a tough time in repairing their bad credit scores. Getting loans becomes a problem if one is a defaulter. Lenders are less likely to trust you with a loan if you have not paid up a past loan. However, these days, there are scores of adverse credit loans which cater to the needs of people who have adverse credit scores. All this is thanks to the immense boom that the personal finance markets have been experiencing. Life has certainly become easier for young people who are spending sleepless nights thinking about their indebtedness. Borrowers who are struggling with debt can easily secure debt help these days.
Wednesday, May 15, 2013
3 Types Of Debt Help Available Online - Consolidation Loans, Debt Management And Debt Settlement
3 Types Of Debt Help Available Online - Consolidation Loans, Debt Management And Debt Settlement
When it comes to consolidating debt, the internet offers three very good options. When you want to choose between a consolidation loan, debt management, or debt settlement, it is important to have an understanding of each one so you can choose the option that is best for your needs. Many people confuse these three services, but each one brings unique aspects to the job of helping consumers pay off their debts.
A consolidation loan takes all of your high interest credit card debts and turns them into one low interest loan. Often you have to be a home owner to qualify for this type of loan. The idea behind a consolidation loan is that with a lower interest rate, you will actually be able to afford to pay on the principle and that will help you to eventually get yourself out of debt.
Debt management companies work with consumers to help them learn to get control of their finances. The companies teach individuals how to make a budget and stick to it and often help them make a schedule to follow for paying off their debts. Most debt management companies are non profit and exist solely to help consumers get on track. These companies don’t offer loans or negotiations and seldom work with creditors. Instead they work with you so you will have the tools to secure your financial future.
Debt settlement companies actually go to your creditors on your behalf. The work hard to negotiate with credit card companies to reduce what you actually owe. They can often lower interest rates, have penalties and late payment fees removed, and even get credit card companies to lower the balance of what you owe. Many of them will set up a system where you pay them one amount each month and then they in turn make payments to your credit card companies.
When it comes to consolidating debt, the internet offers three very good options. When you want to choose between a consolidation loan, debt management, or debt settlement, it is important to have an understanding of each one so you can choose the option that is best for your needs. Many people confuse these three services, but each one brings unique aspects to the job of helping consumers pay off their debts.
Debt Consolidation Loan
Debt Management
Debt Settlement
3 Debt Solutions You Could Try
3 Debt Solutions You Could Try
Credit is so easy to gain nowadays – it's not wonder why so many people are in unmanageable debt. If you are slow in making payments or often miss payments, you are not alone. Before you file for bankruptcy, you should consider the following options.
Debt Consolidation Loan
One solution is to get a debt consolidation loan. Simply put, you will find a lender who will loan you the entire amount of your debts. You pay off your creditors and make one monthly payment on your consolidation loan. The purpose of doing this is to avoid having to pay many different creditors.
If you find a consolidation loan with a lower interest rate than the current rates that you are paying, you will save money in the long run.
Some individuals get consolidation loans in the form of home equity line of credit or a personal loan from the bank. Again, as long as the interest rate is lower, you will save from having to pay for finance charges. If you are having a hard time getting an unsecured loan, you might want to opt for a secured loan. A secured loan is backed up by collateral, usually your home or other personal possessions.
Credit Counseling
Another solution to debt problems is to contact a credit counseling agency. A qualified agent will review your current financial state and take the steps necessary to help you get your debt under control. They will most likely contact your current creditors to negotiate repayment terms in the form of a lower interest rate or reduced monthly payment. To find a good credit counseling agency, conduct a search online or browse your local phone book. Remember to check the agency for legitimacy by asking questions about fees and accreditation.
A credit counselor will also sit with you to discuss your financial future. They will teach you basic personal finance management skills and will help you create a budget you can live with. Sometimes, they may ask you to cut up your credit cards so you can avoid future debts.
Debt Management Programs
You can usually enlist in a debt management program through a credit counseling agency, or find one for yourself. In such a program, an agent will review your financial situation and ask you a few questions to make sure you qualify. They will likely negotiate repayment terms with your creditors to lighten your obligations. They will then add up the total amount of debt and figure out a monthly payment for all your bills combined. You simply send the agency a payment and they will make sure that your creditors are paid the right amount.
Again, you should do your research to find a good debt management program. Find a not-for-profit agency that has been accredited or recommended by trusted associations. Enlisting the help of a less-than-legitimate firm can get you in further financial trouble because some agencies will hold your payment longer than necessary so your money can gain interest for their own profit.
Tuesday, May 14, 2013
0% APR Credit Cards: A Tool To Eliminate Debt
0% APR Credit Cards: A Tool To Eliminate Debt
It is interesting to note that what started off as a marketing gimmick has now become an almost permanent part of the credit card industry in America and today 0% APR credit cards can in fact play a significant role in helping a person reduce or get out of debt.
What Is A 0% APR Credit Card?
APR is the annual interest rate known in industry jargon as the Annual Percentage Rate. It is a reflection of the cost of credit. In the old days everybody paid a standard APR based on bank rates. It was usually about 18 per cent. The use of low APR came with the emergence of the monoline bank. These were banks that only issued credit cards and did not take any deposits or issue conventional loans. For their business model to work well large numbers were important for these breed of pioneering bankers and credit cards issuers so low APR teaser rates were successfully used to lure as many new card users as possible.
The gimmick seemed to have worked so well that today it is difficult to find a credit card company that does not offer some type of incentive APR during the first 6 months or one year. The more popular credit cards offer 0% APR for the first year.
Usefulness Of A 0% APR Credit Card In Reducing Debt
A 0% APR credit card can be extremely useful for somebody who wants to reduce their large credit card debt. For instance if you have a credit card debt that remains at about $10,000 and the APR is 20% then you will end up paying a whooping $2,000 in interest payments alone. With a 0% APR credit card the $2,000 could all go towards reducing that crippling debt. It is therefore clear that 0% APR credit cards can offer much needed financial breathing room for somebody in a serious credit card debt situation.
Consolidation Or Transfer Necessary To Benefit From 0% APR Credit Cards
Transferring a credit card debt or credit card debt consolidation are all-important first steps that will need to be taken before a person in deep credit card debt can enjoy the benefits of a 0% APR credit card. The objective here would be to have all the person’s outstanding debt payable to one credit card company and at a 0% APR rate.
The importance of 0% APR credit cards in helping an individual or business to get out of credit card debt cannot be understated.
Although many potential card users place a lot of importance in being able to obtain a 0% APR credit card, the truth of the matter is that it is only attractive and beneficial to two groups of people. Firstly persons able to settle their credit card balances on a month to month basis to whom the 0% APR rate means that their cost of maintaining a credit card is very minimal. Secondly those in debt also benefit because the 0% APR credit card greatly assists them in their efforts to reduce their debt.
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| 0% APR Credit Cards |
It is interesting to note that what started off as a marketing gimmick has now become an almost permanent part of the credit card industry in America and today 0% APR credit cards can in fact play a significant role in helping a person reduce or get out of debt.
What Is A 0% APR Credit Card?
APR is the annual interest rate known in industry jargon as the Annual Percentage Rate. It is a reflection of the cost of credit. In the old days everybody paid a standard APR based on bank rates. It was usually about 18 per cent. The use of low APR came with the emergence of the monoline bank. These were banks that only issued credit cards and did not take any deposits or issue conventional loans. For their business model to work well large numbers were important for these breed of pioneering bankers and credit cards issuers so low APR teaser rates were successfully used to lure as many new card users as possible.
The gimmick seemed to have worked so well that today it is difficult to find a credit card company that does not offer some type of incentive APR during the first 6 months or one year. The more popular credit cards offer 0% APR for the first year.
Usefulness Of A 0% APR Credit Card In Reducing Debt
A 0% APR credit card can be extremely useful for somebody who wants to reduce their large credit card debt. For instance if you have a credit card debt that remains at about $10,000 and the APR is 20% then you will end up paying a whooping $2,000 in interest payments alone. With a 0% APR credit card the $2,000 could all go towards reducing that crippling debt. It is therefore clear that 0% APR credit cards can offer much needed financial breathing room for somebody in a serious credit card debt situation.
Consolidation Or Transfer Necessary To Benefit From 0% APR Credit Cards
Transferring a credit card debt or credit card debt consolidation are all-important first steps that will need to be taken before a person in deep credit card debt can enjoy the benefits of a 0% APR credit card. The objective here would be to have all the person’s outstanding debt payable to one credit card company and at a 0% APR rate.
The importance of 0% APR credit cards in helping an individual or business to get out of credit card debt cannot be understated.
Although many potential card users place a lot of importance in being able to obtain a 0% APR credit card, the truth of the matter is that it is only attractive and beneficial to two groups of people. Firstly persons able to settle their credit card balances on a month to month basis to whom the 0% APR rate means that their cost of maintaining a credit card is very minimal. Secondly those in debt also benefit because the 0% APR credit card greatly assists them in their efforts to reduce their debt.
Using Personal Loans For Credit Card Debt
Using Personal Loans For Credit Card Debt
Credit card debt is widespread amongst the average American household and seeking ways of consolidating debt usually means utilizing the equity in ones home or seeking a personal loan to service the credit card payments. Using the equity in your home to apply for an equity home loan and directing the funds towards debt management is an excellent method for getting your house in order in regards to your finances.
A personal loan without collateral may sound inviting but rest assured any financial institution or broker is going to want a higher return for the added risk. Using the equity in ones home has become a popular form of liquidity to finance and consolidate existing credit card debt, however not without its risks. Be sure you read the fine print & beware of the risks of defaulting on any repayments when using the equity in your home for a equity home loan as you could end up losing your family home to your creditors should you fail to meet the repayments!!!
Consolidating debt for some means digging into their 401K for immediate relief to the detriment of their future well being. Immediate relief from credit card debt and the high fees and interest associated with such debts is a huge incentive for some to look for the 401K alternative. The compromise to such action is that you are forgoing future savings and security for immediate relief, but if the timing is right and you are confident of repaying the loan it certainly is a viable proposition. It is a very appealing short term debt solution which has its benefits as well as draw backs.
It is always wise to stack the advantages against the disadvantages in anything dealing with your finances and when formulating a wise debt management strategy. Any unforeseen event which can disrupt your repayment schedule could mean penalties due in the form of tax installments or the fulfillment of the principal on the borrowed loan.
Tax perks when saving with a 401K account are reduced when borrowing off your retirement, as you are reimbursing the account with after-tax dollars.
Be sure to negotiate a better interest rate on any repayments with any loan whether it be a personal or a home equity loan. The higher the interest rates, the higher the repayments, the less disposable income that is left for savings or other pleasures of life so ensure you manage your credit card debts first as they carry the highest interest rates of any form of credit.
The rate you are able to negotiate your interest will be fixed for the duration of your personal loan and you will be required to make monthly installments to service the loan which will be at a rate much lower than any credit card debt you are carrying. Undisciplined habits of making late and overdue credit card payments tends to incur extremely high fees and even higher interest rates which can become a major problem to most budgets.
A savings account allows you the luxury of redirecting resources to areas of debt which have the potential to erode ones worth very quickly if left unchecked!!! When you compare the interest rate you earn on a savings account and the cost of credit card debt it makes little sense not redirecting funds from you savings account towards servicing debts elsewhere??? Be smart and service your credit card debt before setting up any high yield savings account, you will be thankful you did in the long run.
"A Sucker Born Every Minute": Avoid These Debt Consolidation Scams
"A Sucker Born Every Minute": Avoid These Debt Consolidation Scams
The web communications revolution has provided many unprecedented opportunities for commerce – and unfortunately, quite a few opportunities for swindlers to prey on the gullible. This is just as true for debt consolidation as for anything else. Here are some debt consolidation scams to stay away from:
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| Avoid Debt Consolidation Scam |
1. Consolidate Your Debts Using Free Government Grants
Yeah, right. The woods are thick with companies that offer information about “free government grants”. Haven’t you heard? Uncle Sam is giving away money like candy (which explains our high taxes!). And you can use this money any way you like – for example, to consolidate your debts. It’s true that the government gives loads of grant money, but I have yet to hear of a Citizen Lifestyle Enhancement Fund. It’s not easy to qualify for government grants, you have to spend the money for a particular purpose, and using it to consolidate your bills might just win you a free bonus – a five-year vacation at the Club Fed.
2. “Free Debt Consolidation Services”
Why are these guys doing it for free? How are they making money? Do be aware, though, that cheap debt consolidation services are not always a rip-off, although it would be a good idea to take a second look at anything that sounds too good to be true.
3. “No Repayment Necessary”
I don’t quite know quite why I included this one, except for entertainment value – if you can read then you’re probably too smart to fall for it. Anyway, here goes: Did you know that banking laws prohibit the charging of interest, and that the Supreme Court has backed this up with several decisions? You can borrow money, fail to pay it back, and then retain a smooth attorney to get you out of paying it back – after all, they had no legal right to lend you the money. Would you like to know how? Well, for the low, low price of $69.95…
If you fall for this one then I’ve got some swampland in Florida I’d like to sell you sight unseen. Oh, and by the way, even if banking law DID prohibit the charging of interest, you’d still have to pay back the principal.
Most debt consolidation swindles are see-through because they aim to take advantage of somebody in financial and emotional distress. As P.T. Barnum said, “There’s a sucker born every minute”.
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