Do You Need Help with Debt?
Many Americans are struggling under the burden of debt. But how can you tell if you are in over your head with credit card debt and other bills? Look for the following warning signs to determine if you are in deep trouble.
- You never have enough money to pay your monthly bills and frequently turn to credit cards or a home equity line of credit (HELOC) to get by. Read the rest of this entry »
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Credit Card Debt and Minimum Payments
Have you looked at your credit card statement recently? The new credit card law (CARD Act) that took effect this week requires banks to show you how long it would take to pay off a balance by making only minimum payments.
Help with Debt Reduction
Most banks are putting a warning about minimum payments in monthly statements. The information can help with debt reduction because it tells how much you need to pay each month to erase credit card debt faster than if you stick with minimum payments.
Pay Less Interest
For instance, if you have credit card debt of $3,900 with 15% interest and make only the minimum payment of $75, it would take 22 years and 8 months to pay it off. You would pay the principal plus $5,643 in interest. By increasing your monthly payment to $133.53 a month you’d pay off your entire credit card debt in three years and would pay $906.62 in interest.
Use the debt calculator at CNN Money to play with the numbers to see how much you need to pay each month to wipe out your credit card debt faster.
Debt Management Plan
Anything you can put toward credit card debt beyond the minimum payment can help. Just keep in mind that if you continue using your credit card it’s going to take longer to pay off the balance. Put together a debt management plan that sets up your monthly payments, but consider debt counseling if you’re having trouble sticking with it.
(No Ratings Yet) Loading ...Obama Wants to Slash Debt. Do You?
President Obama wants to reduce the national debt. He signed an executive order to create an 18-member commission to slash $14.3 trillion in government debt and the $1.6 trillion federal deficit.
The panel will be comprised of Republicans and Democrats who are tasked with making recommendations to balance the budget by 2015, according to the New York Times. It’s too early to say how this initiative will work, but getting a plan of action to cut the national debt makes a whole lot of sense. Read the rest of this entry »
(No Ratings Yet) Loading ...Debt Consolidation Using Prosper Loans
More people are turning to peer-to-peer (P2P) lending sites to borrow money for debt consolidation. During November, 54% of loans at Prosper were for debt consolidation, according to a release from the P2P lending marketplace.
“This is the second month in a row where the majority of borrowers on Prosper are seeking to knock out their credit card debt at better rates and terms,” said Chris Larsen, chief executive officer and co-founder of Prosper. “Debt consolidation has always been the number one use case on Prosper with business loans being the second most popular.” Read the rest of this entry »
(1 votes, average: 5 out of 5) Loading ...4 Tips to Avoid Holiday Credit Card Debt
For someone struggling with credit card debt, Black Friday can be a scary prospect. Everywhere you look retailers and other businesses are urging you to shop ’til you drop.
People who are looking for credit debt relief should definitely avoid using plastic if they venture anywhere near a store the day after Thanksgiving and throughout the holiday season. Here are four tips to avoid the debt trap.
- Stay home. Really. Find some games to play with the kids, do chores, or rent movies (for free at the library of course). Just do whatever you can to avoid going anywhere near a retail establishment. Yes, there are bargains to be found on Black Friday, but it’s not like there won’t be other discounts throughout the holiday shopping season.
- Use layaway plans. Your may have done this when you were a kid. Though they disappeared for awhile, many retailers have resurrected layaway plans that allow you to choose the items you want and pay for them over several weeks. Use cash instead of a credit card to pay for the goods to avoid taking on debt.
- Use a debt calculator. Do this before heading out to shop to see where you stand. Crunching the numbers to get a clear picture of how much you currently owe and how long it may take to pay it off may be just the thing to keep you out of the mall.
- Make an appointment with a debt counseling firm. A qualified debt counselor can help you work on some of the underlying issues that may push you to spend. Credit counseling also involves working on a budget that fits your current income so you won’t rely on credit cards.
Be smart this holiday season. Don’t feel obligated to make a lot of purchases you really can’t afford.
(No Ratings Yet) Loading ...Rising Credit Card Delinquencies May Aid Your Debt Settlement Efforts
Credit card companies are starting to feel the squeeze. Some of the country’s largest credit card issuers are suffering from large quarterly losses and are watching their credit card delinquency rates rise to historic levels.
According to a recent CNNMoney.com article,
“Credit-card companies will “pull back on growth and aggressively manage credit lines to manage through this cycle,” said Meghan Crowe, an analyst at Fitch Ratings. “Charge-offs will increase. Margins will be squeezed because of higher funding costs, higher provisions and as consumer spending slows down.” The credit ratings company expects an increase in charge-off rates among borrowers with strong credit to hit at least 7% by the end of the year from 6.4% in May.”
Essentially, credit card companies will need to restrict credit limits for some of their customers to help curb future loses. They expect more accounts to go delinquent and expect less revenue from a reduction in consumer spending.
(4 votes, average: 5 out of 5) Loading ...Credit Limit Increases Should Be Weighed Carefully
I recently receive a notice from my credit card company that my credit limit had been increased because I’d been a “good customer.” I didn’t request the increase but it’s not uncommon for card issuers to increase limits for customers who pay their bills on time or have low balances. Generally, the better your credit, the more likely you’ll be offered an increase on a credit card.
However, for many people an increased credit limit is simply a temptation to spend more money. They may be better off declining the increased limit to avoid running up too much debt. It only takes a phone call to the credit card company to ask that the limit not be increased. Another reason to decline a limit increase is that other creditors may look at that increase as a sign that an individual has too many lines of credit open. If another creditor gets nervous that a customer won’t be able to make payments on their card, they may decide to lower the limit on that card.
Carefully weigh any limit increases offered and don’t be dazzled by big numbers. Each individual must look at their own situation to decide whether they can really handle having access to a large amount of credit.
About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.
(1 votes, average: 5 out of 5) Loading ...- This blog covers a wide variety of debt consolidation and loan topics.
We rely on a large network of financial experts and leading authors to write the content for the DebtHelp.com Blog.
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Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno.
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