http://www.destroydebt.com/blogs/mbrazier.html Freedom Debt Management www.destroydebt.com Thu, 02 Sep 2010 07:41:52 GMT webmaster@destroydebt.com webmaster@destroydebt.com http://www.destroydebt.com/blogs/mbrazier/2455-how-debt-consolidation-can-build-your-credit-.html http://www.destroydebt.com/blogs/mbrazier/2455-how-debt-consolidation-can-build-your-credit-.html Thu, 02 Sep 2010 07:41:52 GMT The debt management industry and the services within can be easily confused. While some consumers think debt management programs hurt credit there are some plans that can actually improve credit while enrolled. Primarily, it depends on the status of your accounts upon entering a program and selec...
Debt consolidation- not debt settlement- can help improve your credit score over time while paying back the debt. Accounts may be reported to the credit bureau as ‘being paid by a third party’. This notation does not affect your actual numeric credit score negatively or positively. It doesn’t hurt your credit rating in any way, shape, or form. At the end of the day, creditors and the credit bureau do not care who or how your payments are made, long as they’re made on time and consecutively each and every billing cycle. A debt consolidation plan makes the payments to creditors every month as payments are received from their clients. The due dates are renegotiated along with the other terms to ensure payments are considered timely and report positively, improving the score.

Making payments on time is the biggest factor in what affects your credit rating on a regular basis. 35% of your score is made up of timely monthly payments each billing cycle. In a consolidation plan, the due date is changed to coincide with a time that better fits your other monthly obligations and pay schedule and ensures timely payments right from the start of enrollment.

Did you know? Spending more than 30% of your available balance lowers your credit score? That means if you have a credit line of $5k, keeping a balance of more than $1500 is negatively impacting your credit. 30% of your credit score accounts for how much total outstanding debt you owe. These accounts may be being paid on time every month but if the balance is above 30% of the credit line the payments aren’t helping as much as they could.

Standard minimum monthly payments are designed to pay off 1% of the balance with every minimum monthly payment. That means if you stop spending on your account it could take around 100 minimum monthly payments to pay back your total debt at the standard rates, or 8.3 years. In a debt consolidation plan the interest rates are reduced to lower fixed rates, usually in the single digits. This allows the consumer to have the majority of the payment apply to the balance instead of the interest, bringing the balances down much faster- lowering your overall debt amount at an accelerated rate.

Standard rates and terms issued by big banks direct to consumers are set at a rate that would take over 8 years to payback with minimum monthly payments. In a debt consolidation plan, the minimum monthly payment requirement coincides with the interest reductions in an effort to get the consumer out of debt in 5 years or less, applying the majority of your minimum monthly payment to the principle balance not the interest fees.

You can still obtain new lines of credit while consolidating you debt. It’s not ideal….as the point is to get OUT of debt not incur more- but you can nonetheless. Not every account has to be consolidated either. Dent consolidation is not an all or nothing deal. Pick and choose which creditors are charging you too much in interest and only consolidate those accounts. You can always add or remove accounts from a consolidation plan at a later time without being charged anything additional.

One lower monthly payment. Lower fixed interest rates. No late fees. No creditor calls. Improving credit on a monthly basis. Debt free in 5 years or less. For more free information or a free financial consultation contact a certified credit counselor at a nonprofit debt consolidation organization accredited by the Better Business Bureau. Call 800-905-1563 or visit our website freedomdm.org and complete our contact request form or LIVE CHAT with a counselor during business hours. Freedom Debt Management is a BBB accredited A+ nonprofit organization helping people become debt free one household at a time. You can be debt free, Freedom Debt Management can help.]]> http://www.destroydebt.com/blogs/mbrazier/2454-nonprofit-credit-counseling-services-.html http://www.destroydebt.com/blogs/mbrazier/2454-nonprofit-credit-counseling-services-.html Tue, 24 Aug 2010 06:09:33 GMT Since its opening debut in 1950 credit card debt has been an ongoing problem as consumers began going into debt at an alarming rate. Trapped into unbearable terms and fees the cycle hasn’t changed much since inception. 85% of consumers in America have a household credit debt of $8k or higher, so...
Dreams aren’t much different today either. Like days before, the American dream to be debt free still sleeps on as we continue creating more and more debt with little hope to an end nearing of this vicious cycle. Unlike 1950 though, there are many different options available today to consumers who are genuinely tired of economic enslavement and are ready to get out of debt and stay out. Education, patience, and a relearning of behavior are key to success once one becomes debt free, to ensure they stay debt free.

Credit counseling, created by the federal government, was implemented to provide financial counseling services and assistance to consumers interested in exploring alternatives to becoming debt free.  More affordable payback plans are established that cater to the consumers ability to pay and a goal of becoming debt free in 5 years or less.

Agencies that are nonprofit, have established strong relations with creditors to provide clients lower interest reductions, lower payments, and freedom from debt in 5 years. The consensus is, a true nonprofit is geared toward assisting consumers in paying back their debt without impaling the consumer with exorbitant fees for services.  Nonprofit credit counseling organizations do charge nominal fees to cover administrative costs but most of the counseling service fees are paid by the lender themselves.

A certified credit counselor working for a nonprofit credit counseling agency will first assess your situation in a free financial analysis, outlining your debt to income ratio, assets and liabilities. Once your assessment is complete the counselor can then quote an affordable monthly payback plan that coincides with the creditor guidelines for debt consolidation. As the minimum monthly payment terms are agreed upon creditors then instill program benefits such as the stopping of fees and reduction to interest to lower fixed rates- usually in the single digits. This enables the consumer to payback the debt at a reasonable rate and within a reasonable time frame.

When Do You Need Credit Counseling?

• You can’t pay the minimums on your credit cards.
• The interest rates are too high and balances aren’t going down.
• You want to improve your credit score by lowering your outstanding balances faster.
• You’re consistently late paying one or more of your regular bills.
• You’re being harassed by creditors and collection calls.
• Your efforts to work out reasonable repayment plans with your creditors have failed.
• Your accounts have gone more than 6 months past due and legal pursuit has been executed.

Speaking with a certified credit counselor and receiving a free financial analysis of your household budget and credit debt will give you a better idea of what options are available to you that are within your fiscal means. Working with nonprofit credit counseling services can improve credit while eliminating debt in 5 years or less. For more information or a free financial analysis call and speak to a certified credit counselor today. BBB rated A+ nonprofit budget and credit counseling, call 800.905.1563 or visit our website freedomdm.org and LIVE CHAT or complete our contact request form and see what options are available to you. You can be debt free, freedom debt can help.  ]]> http://www.destroydebt.com/blogs/mbrazier/2453-fdcpa-consumer-rights.html http://www.destroydebt.com/blogs/mbrazier/2453-fdcpa-consumer-rights.html Wed, 18 Aug 2010 09:21:15 GMT Collection calls can become unruly and unprofessional but they do not have to. Most calls that entail such are usually in violation of your rights under the Fair Debt Collection Practices Act. What you don’t know can hurt you. Take an accounting of these common unlawful tactics that are in direc...
1. Ask you to pay more than you owe
The collector cannot misrepresent the amount you owe.

2. Ask you to pay interest, fees, or expenses that are not allowed by law
The collector can't add on any extra fees that your original credit or loan agreement doesn't allow.

3. Call repeatedly or continuously
The FDCPA considers repeat calls as harassment.

4. Use obscene, profane, or abusive language
Using this kind of language is considered harassment.

5. Call before 8:00 am or after 9:00 pm
Calls during these times are considered harassment.

6. Call at times the collector knew or should know are inconvenient
Calls at these times are considered harassment.

7. Use or threaten to use violence if you don't pay the debt
Collectors can't threaten violence against you.

8. Threaten action they cannot or will not take
Collectors can't threaten to sue or file charges against you, garnish wages, take property, cause job loss, or ruin your credit when the collector cannot or does not intend to take the action.

9. Illegally inform a third party about your alleged debt
Unless you have expressly given permission, collectors are not allowed to inform anyone about your debt except: Your attorney |The creditor | The creditor's attorney |A credit reporting agency your | spouse | Your parent (if you are a minor)

10. Contact you at work knowing your employer doesn't approve
A collector is not allowed to contact you at work if you’ve let them know your employer doesn’t approve of these calls.

11. Fail to send a written debt validation notice
Within five days of the collector's initial communication, it must send you a notice include the amount of the debt, name of the creditor, and notice of your right to dispute the debt within 30 days.

12. Ignore your written request to verify the debt and continue to collect
A collector can't continue to collect on a debt after you've made a written request to verify the debt as long as the request was made within 30 days of the collector's written notice.

13. Continue to collect on the debt before providing verification
After receiving your written dispute, the collector must stop collecting on the debt until you have received verification.

14. Continue collection attempts after receiving a cease communication notice
If you make a written request for the collector to cease communication, it can only contact you one more time, via mail to let you know one of the following: that further efforts to collect the debt are terminated, that certain actions may be taken by the collector, or that the collector is definitely going to take certain actions.

Repeated violations should be recorded and reported immediately. If you feel you have been a victim of collection harassment call a certified credit counselor for a free financial counseling session and see what options are available for you. You have rights and there are nonprofits out there who will work for you to eliminate collection calls and unscrupulous finance charges and fees. Call 800.905.1563 or visit our website freedomdm.org and LIVE CHAT with a certified credit counselor. You can also complete a contact request form and a certified credit counselor will get back to you within 24 business hours. Our BBB Rated A+ nonprofit counseling services have helped thousands of consumers like you stop collection calls and end creditor harassment. You can be debt free, Freedom Debt can help.]]> http://www.destroydebt.com/blogs/mbrazier/2452-credit-debt-relief-.html http://www.destroydebt.com/blogs/mbrazier/2452-credit-debt-relief-.html Tue, 10 Aug 2010 02:28:56 GMT A debt consolidation plan is the consolidation of all unsecured debts into one monthly payment to a third party agency, usually nonprofit. Debt consolidation can eliminate debt while improving your credit with timely monthly payments at reduced fixed interest rates. Learn the inner mechanics of ...

• Stopping of collection calls
• Stopping of late, past due, and over the limit fees
• One lower monthly payment that gets you out of debt in 5 years or less
• Reduction of interest rates to one single digit fixed rate
• Change of the due date in accordance with your other bills and pay schedule
• Bringing past due accounts current without paying anything additional
• Keeping accounts reporting positively to help improve your credit score

TIP: If you’re not behind and current a nonprofit debt consolidation plan can keep your accounts current so it does not hurt your credit rating.

TIP: If you’re behind and receiving multiple fees a nonprofit debt consolidation plan stops those immediately after enrollment and brings the accounts to a current status so they start building back your credit score. 

TIP: Most consumers are paying 2-3 different interest rates between purchases, cash advances, and balance transfers. A consolidation plan creates ONE low fixed APR, usually in the single digits between 0-9 percent.

A debt consolidation plan will start with a counseling session provided free by a certified credit counselor. These financial counseling sessions usually begin with a budget analysis, covering your debt to income ratio on a monthly basis. This allows both parties to identify where the consumer currently is with their finances and explore available options from there.  

TIP: Counselors usually find ways for consumers to save money monthly in their regular bills outside of the consolidation. Ask a certified counselor about insurance packages and utility bundles. 

For the debt consolidation quote, a certified counselor will want an accounting of the unsecured debts looking to be consolidated. To provide an accurate savings and payment quote a counselor will need each creditor name, balance, and current interest rates for the accounts consolidating. This allows the counselor to establish an affordable monthly payment within the consumer’s budget that will work with each creditor’s guidelines for minimum monthly payments to be debt free in 5 years or less.

TIP: You do not have to consolidate all your credit card and unsecured debts. You can leave some out as needed.

TIP: There is no minimum debt amount with nonprofits. If they can help you save money they will, regardless of how much debt you have. $10k minimum debt requirements are mostly FOR profit agencies posing as nonprofits and should be reported to the FTC ASAP.

TIP: Nonprofit consolidation plans are designed to get you out of debt in 5 years. A debt consolidation organization should not charge you anything extra or prorate a service charge for paying off the debt earlier than the 5 years planned.  

Once a monthly payment amount is established that is affordable for the consumer the counselor will then ask the consumer to select a payment date that works best for them around their pay schedule and monthly bills. This new due date is then negotiated by the org on your behalf to ensure payments are considered on time and continue to help improve credit.

TIP: 35% of your credit score is made up by payment history. This is the largest factor in what affects your numeric credit score.

At this point, you should have had a budget analysis and free debt consolidation quote from your certified counselor. If the savings are there and the payment is affordable it’s then time to finalize paperwork and get those debts consolidated!

Upon entering a debt consolidation program a certified credit counselor will ask you to make one final call to your creditors to cancel any promotional plans, insurance policies, automatic payments and lastly, the closing of the account. Once this has been achieved the debt consolidation org can begin managing your creditors and working with them direct.

Want more information on how a nonprofit debt consolidation plan could work for you? Call and speak to a certified credit counselor today 800.905.1563 or visit our website freedomdm.org and complete our contact request form. You can also LIVE CHAT with a certified credit counselor on our website during business hours. You can be debt free, Freedom Debt can help.]]> http://www.destroydebt.com/blogs/mbrazier/2451-identity-theft-and-credit-fraud-on-the-rise.html http://www.destroydebt.com/blogs/mbrazier/2451-identity-theft-and-credit-fraud-on-the-rise.html Thu, 05 Aug 2010 06:55:06 GMT Identity theft is up and running in America. This very popular crime has accelerated as the economy has declined and more people are acting out of desperation on both sides of the fence. With criminals looking for an easy steal deal and consumers applying for more and more credit, the informatio...
ONE: Keep your social private. Criminals usually start with a social security number to begin fraudulent activity on your credit dime. Protect your social security number and only provide to trusted sources. Most applications ask for a SSN but its usually not required until final processing.

TWO: Rigorous credit report research. Your credit report has your SSN, present and past employers, and a list of all lines of credit in your name. It’s a field day for theft and criminals have a hall pass to take what they want once they have access to your credit report. There are monitoring services available that provide updates and push notifications anytime your report reflects activities and inquiries. At the very least, please run your credit free once a year to ensure you have not become a victim of identity theft.

THREE: Create no way to paste waste. Old bank statements and credit card offers should be shredded and thrown out. If you can legally have a bonfire in your backyard this could become a monthly event, even a party. Crosscutting also works well if you’re sitting there thinking, yea I’m never going to buy a shredder. Removing yourself from marketing lists will also decrease the amount of junk mail and offers you receive via snail mail that publicize your personal information – making less to cut, shred, or burn.

FOUR: Keeping content close. There’s no need to carry around every single piece of plastic you have. It’s no longer cool to have, like, 20 credit cards- ask Lindsay Lohan. Carry the cards and IDs you need only. Better yet, make photocopies of your ID and credit cards front and back and carry those, leaving the originals at home or in a safe place. Use the copier at the office, they’ll never know.

FIVE: Actually READ your mail. Did you know? Studies show, 95% of Americans today do NOT read their mail or monthly statements?! Always take a good once over of your monthly statements. There may be purchases you didn’t make. JP Morgan may be charging you a fee you didn’t know about. First Premier raised a lot of APRs to 79.9% - could be you, have you checked your statement?

There are nonprofit counseling services that offer free credit report reviews with certified credit counselors. Contact a credit counselor today for a free review of your credit report and see if you have been a victim of identity theft and whats affecting your credit negatively and positively in a free consultation. Nonprofit credit counseling services can improve credit while eliminating debt at lower fixed interest rates. Call 800.905.1563 or visit our website freedomdm.org and LIVE CHAT with a counselor. You can be debt free, Freedom Debt can help.]]> http://www.destroydebt.com/blogs/mbrazier/2450-combat-collector-collection-calls-five-tips.html http://www.destroydebt.com/blogs/mbrazier/2450-combat-collector-collection-calls-five-tips.html Mon, 26 Jul 2010 07:06:32 GMT In our last article we provided insider information and training tips collection agencies are using against delinquent consumers to collect on debts. Here, we’re going to give you some ammunition of your own to combat collectors. Let’s first identify who our collectors are. Chances are the colle...
Let’s first identify who our collectors are. Chances are the collector behind the dial tone is working off an auto dialer. This means their computer has a list of debtors and every time the line disconnects the computer automatically dials another debtor. While that call is being processed the collection agent reads over the basic information regarding the debtor and debt in question. Collectors are very aggressive for one reason and one reason only. MONEY. Most collection agencies employ entry level customer service reps for minimum wage and offer a commission incentive for any payment they get over the phone. Its life or death for most collectors who are dependent on earning commissions from collection efforts.

One: Avoid collection all together. If you’re falling behind you can be proactive and give your creditor a heads up. An account usually isn’t sold to a collection agency until multiple consecutive payment shave been missed. Call you creditor in the first month of being late and see if you can make internal arrangements until the account is current again.

Two: Know your rights. The United States Federal Trade Commission has published several articles designed to educate consumers about their rights against collection harassment under the FDCPA, or Fair Debt Collections Practices Act. Get updated on your rights under the FDCPA and you’d be surprised how may collection agencies are violating your rights. Harassing phone calls, threats, and abusive language are illegal and should be reported to the FTC and your State Attorney General’s office immediately with as much detail as possible regarding the instance.

Three: Keeping copious notes. It’s a good idea to create a file for your debts or bills in collections and retain all correspondences regarding the debt for at least five years, or as long as you would keep your tax records. When making or receiving calls with collection agencies get as much information as you can. If able, record your calls but advise the collector you’re doing so beforehand.

Four: Check your checkbook. Do not ever provide your banking information over the phone to set up a payment for a later date. Collection companies are notorious for changing the payment amount or date to accommodate their needs and quotas. If your payment doesn’t clear on the designated date most agencies will make another attempt without first advising. Also, keeping Social Security and Disability payments in a separate account is also a good idea as they are exempt and cannot be used as a source for court ordered debt paybacks.

Five: Outsourcing. Working with a 3rd payment debt management agency, preferably nonprofit, is probably the easiest way to alleviate any and all calls and payment requests. A nonprofit organization will provide a free counseling session where they review your credit report for free and help sort through your bills to develop an affordable payback plan that’s within your monthly budget.

Speak to a certified credit counselor today for a free debt consultation and learn how you can better combat collection calls and improve your credit with nonprofit counseling services. A certified credit counselor will outline and detail your rights under the FDCPA to help stop collection calls. Live Chat with a counselor today on our website freedomdm.org or complete the contact request form to make an appointment with a counselor. Call 800.905.1563 and get a free credit report review and budget analysis to help improve credit and stop creditor and collection harassment. Nonprofit counseling services can help you be debt free in 5 years and build back your credit score while doing so. You can be debt free, Freedom Debt can help.]]> http://www.destroydebt.com/blogs/mbrazier/2445-debt-collection-a-look-inside-collection-training.html http://www.destroydebt.com/blogs/mbrazier/2445-debt-collection-a-look-inside-collection-training.html Thu, 22 Jul 2010 05:37:31 GMT As if the mass mailings and multiple calls weren’t enough to drive you to drink, collectors are also obtaining free online tips on how to better bang out calls to bring in your bucks. Learn what collectors are being coached on to better their efforts against consumers with accounts in collection...
1. Be Prepared: Write down a list of common excuses debtors make and prepare your rebuttals to combat the debtors excuses. Exchange other ideas with co-workers and then categorize the possible excuses and incorporate them into your call script. It’s also wise to have handy: Exact amount of debt owed, Terms of sale, Product/service purchased, Payment due date.

2. Think Positive: Develop a positive mental state before jumping on the phone. Act as if every call is your first call on a great day. Wear a smile, it helps with tone. Be positive and maintain control of the call.  Give the debtor a good personal vibe and work a payment out of them in a positive, professional manner. They may not like the collection agency, but you could be their best friend.

3. Respect My Authority: Tone is a strong tool when dialing for dollars. Debtors respond to tone. The tone, pitch, and speed at which you speak can have a powerful influence over your debtor. Take an anchorman or a radio DJ for example. Their voices command attention with little effort. You can take control of your call the same way with a confident tone and still maintain professionalism.

4. Establish Control & Maintain It. Address the debtor by name during the entire conversation. This displays respect and demands constant attention. Agree with your debtor, right or wrong. – I understand why you feel like that John – Validating their concerns keeps the lines of communication open and will eventually disarm the debtor. Ask open ended questions to lure your debtor in and absorb as much information as you can squeeze out. Silence is deadly. Count to 5 before replying to a debtor, wait a few seconds after being asked a question. An uncomfortable silence can create a sense of urgency in the debtor to satisfy the dead air, losing focus of the original reason for the call.  

5. Lock & Key. Don’t waste your call. Every call should end with a payment, partial payment, or a commitment to make a payment in the very near future. If you don’t get a payment by phone at least you have obtained some ammunition and an open invitation to continue contacting the debtor for a committed payment. Have the debtor set up a payment for an extended date. This alleviates playing cat and mouse down the road and locks the debtor into a payment.

6. Adaptation. Every debtor is different. Lock into details like location and accents. What was the debt you’re collecting on? Identify who your debtor is before making contact. Listen to your debtor and pick up clues about their lifestyle and personality. This will help you decipher the best way to handle each situation.

Understanding your rights under the Fair Debt Collections Practices Act (FDCPA) will enable you to defend yourself against collection tactics and unscrupulous measures to collect.  Use the information collectors are using against you to prepare and protect yourself when combating collection calls.

Nonprofit debt consolidation counseling services can stop collection calls and enforce your rights under the FDCPA for you. Make one monthly payment without the hassle of dealing with your creditors and collection agencies and be debt free in 5 years or less. Speak to a certified credit counselor today at 800.905.1563 or visit our website freedomdm.org and learn more about how you can stop collection calls and improve credit while getting out of debt. You can be debt free, Freedom Debt can help.]]> http://www.destroydebt.com/blogs/mbrazier/2444-types-of-credit.html http://www.destroydebt.com/blogs/mbrazier/2444-types-of-credit.html Mon, 19 Jul 2010 05:20:47 GMT Taking charge of your credit starts with understanding the four different types of credit, how they work, and how they affect your credit score. Establishing an educated position on different types of credit will enable you to make smart financial decisions and aid in deciding what steps you can...
Utility credit is one of the most common types of credit. Electric, gas, and phone companies issue a line of credit to consumers. Utilities are not paid in advance. The service, or energy, used is tallied and due after it has been used. Because of this system most utility companies require a deposit when establishing an account. They also charge late fees and can report late or unpaid accounts to the credit bureau. What they do not do is report your positive payment history. So you basically get no kudos for paying your utilities on time but will be stricken with a negative mark if not paid in accordance with the terms.

If you have a mortgaged home or a student loan you’re probably familiar with loan credit. An application qualification process begins the steps to obtaining a loan.  Banks and lenders have strict guidelines to ensure the loans they approve can be paid and will not default. Obviously this isn’t the case in every instance but remains to be the foundation in establishing lines of credit. A good credit score can greatly increase your chances for being approved for a line of credit. The better your credit rating the better the interest on the line of credit.  Timely payments are usually reported to the credit bureau to help improve credit. Missed or late payments over 30 days are reported negative and can cripple your good standing very quickly.  

If you have ever purchased a car or major appliance and made small monthly payments towards the total balance you have utilized installment credit. The interest or finance charges for this kind of credit are built into your monthly payments. Paying the debt timely will improve your credit score over time. Payment history accounts for 35% of your credit score. It’s the largest factor in the credit score formula.

Basic plastic lands in last place. Credit cards enable consumers to spend money they do not have and offer payback plans with minimal payment requirements and high interest and finance charges. Like other types of credit, rates vary based on the consumer’s credit history. Penalties and fees come in many forms and fashions and can be applied without notice. Late payments are reported to the credit bureau, dropping your credit score dramatically. Your score goes down a lot faster than it goes up. Missing payments is the most common reason scores drop. Spending more than 30% of the available credit will also impact your credit negatively and lower your credit rating. That means if you are approved for a Visa card with an available credit line of $5000 spending more than $1500 of that $5k will drop your score. High interest rates and small payment requirements create a payment cycle that maintains a good credit rating but never pays back the debt.

You can pull your credit report once a year to see what types of credit you have and how they are affecting your credit rating. Its always a good idea to run your credit at least once a year to make sure there aren’t any fraudulent charges and that you have not become a victim of identity theft. Websites like annualcreditreport.com provide free credit reports for consumers once yearly. A certified credit counselor working with a nonprofit organization will provide a free financial analysis and credit report review to consumers who want a professional and definitive review of their credit report and financial portfolio.  

Visit our website freedomdm.org and live chat with a credit counselor or complete the contact request form for your free financial analysis and credit report review. Call 800.905.1563 and speak to a professional today about your specific situation and financial goals. Non profit counseling services can eliminate debt and improve credit. You can be debt free, Freedom Debt Management can help.]]> http://www.destroydebt.com/blogs/mbrazier/2443-budget-first-steps-to-financial-freedom.html http://www.destroydebt.com/blogs/mbrazier/2443-budget-first-steps-to-financial-freedom.html Wed, 14 Jul 2010 06:21:39 GMT In these difficult economic times, the middle class is being squeezed more than ever.   As unemployment continues to rise the future is not exactly bright.  That is why everyone should be trying to increase their savings while trying to reduce their spending.  No matter how so...
So you want to save more but are currently barely making ends meet.  The first step to improving your financial situation is to develop a household budget.  One starts by analyzing their current spending habits.  The best way to get your arms around this is to use your debit card for everything you purchase for one month.  You now have a record of where the month’s income went.  If you don’t have the debit card or don’t like the idea, you can start by sitting down and listing all your monthly bills, then estimate what you spend on food, entertainment, maintaining your living space and vehicle, etc.  The challenge is to actually record these expenditures for a month as most people tend to underestimate their actual spending.  The bottom line is we all need to develop a household budget or spending plan and review its accuracy in order to effect any change in our financial circumstances.

This process can be greatly simplified by contacting a certified credit counselor at a non-profit credit counseling organization, as they should be willing to help you through this process at no-charge to you. 

The next step is to review your assets and liabilities. Assets are what you own, house, car, clothes, and other personal property.  Liabilities are what you owe to others.  For instance, in the asset column, you’ll list your vehicle at its current value.  In the liability column you will list what you have left to pay on your vehicle loan.  If the amount you owe is less than the value of the car it is a net asset.  If it is the other way, you owe more than it is worth; it ends up in the net liability column.  The same is true or your house or anything else that you have financed. The difference between one’s assets and their liabilities is one’s Net Worth.  If this is a negative number it means you owe more on your assets than they are worth. 

Now that you have an accurate assessment of what your current financial picture looks like, you can set goals and use budgeting as a way to achieve them.

For many younger adults the goal of Home-ownership is common, with the most common roadblock to achieving it being their credit situation.  For the past twenty years Americans have enjoyed “loose credit” but at a price.  (Interest rates on credit cards for most have climbed into double digits, with the average approaching 20% APR’s.  In round numbers, if you are carrying $10,000 in credit card debt, it is likely to be costing you over $2,000 per year just in finance charges.

This is where a non-profit credit-counseling organization can really help.  After going through your financial analysis with your counselor, they will discuss your financial goals with you and help you develop that spending plan to achieve them.  If you are burdened with considerable credit card debt, they have programs that can get your interest rates back into single, fixed digits and are designed to have you out of debt in five years or less.

For the potential homebuyer that has a high debt to income ratio these programs can help you get into a house years earlier than going it alone and paying those high interest rates.

For more free financial information please contact a certified credit counselor by visiting our website freedomdm.org and fill out our contact request form or opt into a live chat with a credit counselor during business hours. You can also call at 800-905-1563 and receive your free financial consultation right over the phone. Non profit counseling services can improve credit while eliminating debt. You can be debt free, Freedom Debt can help. Call us.]]> http://www.destroydebt.com/blogs/mbrazier/2440-credit-debt-solutions.html http://www.destroydebt.com/blogs/mbrazier/2440-credit-debt-solutions.html Wed, 30 Jun 2010 10:39:45 GMT The provisions in the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 should save consumers at least $10 billion a year, sources say. With the good though usually comes the bad. Watch these new rules and how they will affect you specifically. Learn the if-then scenari...
Consumers have expressed concern that it has become harder to understand how their credit card is really going to work as some companies seemed to hike up rates and fees without notice to the consumer. Some even imposed surprise fees on bills paid just hours late. New rules are intended to change this. Terms and conditions must stay in place for at least one year, including promotional plans.

Problem here: terms must be applied for a year – UNLESS of course you default on your payment – which is the main reason most consumers lose their original terms in the first place. This doesn’t sound very promising.

Second issue: new rules won’t change the fact that the terms will still come in a 2-font no spacing tri-fold that contains legal verbiage from header to footer, front and back. Who’s going to read that? Not me and not most consumers when they’re getting ready to open a new line of credit.

When rates are raised herein, the hiked fee can only be applied to new charges for cardholders in good standing. STOP. Good standing – read between the lines. If you’re in good standing why would they raise your rates in the first place? This means that creditors may still raise rates for no reason whatsoever to people in good standing and those who are delinquent will be hit with the maximum allowable interest increases and fees.

Consumers may be provided a pre-heed when nearing their credit limit in an effort to avoid going over and being charged a fee. Problem is some creditors may apply a service fee to provide such a service to their cardholder. Some creditors may even add this feature automatically to your bill with little or no notice.  Most wont, initially…it will probably come as a change advisement via mail that purposely looks like junk so you discard before reading.

Payback disclosures. This you’ve probably already seen on your own credit statement. Creditors must provide an easy to understand breakdown of your payback plan making the minimum monthly payments. The statement should include how long to pay off the outstanding balance at the current rate and how much the final payout will amount to.  This isn’t really an amenity, more like a visual reality reminder of just how deep in debt you really are- or could be.

Some creditors are now also providing an in house credit counseling plan and list a phone number to call on your statement. These consolidation plans though are internal and do not provide the same benefits one would receive through a non profit credit counseling organization. To further, the plan would only work for their accounts – not all your credit cards.

There are a few more of these new rules but I think the point is sharp and clear. New rules and regulations will always be in play to ‘protect the consumer’ and encourage spending. With each rule comes new loopholes for banks to jump through and counter the change to secure the bank’s main interest, earning interest.

You don’t have to go at this alone and most people don’t these days. Turning to a nonprofit credit counseling organization has been a growing trend for people who truly want to be debt free. A consolidation plan counters ALL the rules and eliminates ALL fees while reducing the interest rate to ONE FIXED rate in the single digits. This is currently the ONLY way people are getting out of debt within 5 years without hurting their credit. A consolidation plan, not a settlement plan, can eliminate debt and improve credit at the same time. Call and speak to a certified credit counselor today for a free financial consultation and see how our BBB rated A+ nonprofit counseling services can help you be debt free and get away from the ever changing credit game designed with one winner in mind – not you. Visit our website freedomdm.org and LIVE CHAT with a credit counselor or complete our contact request form. Super motivated? Call and speak to a credit counselor now 800.905.1563. You can be debt free, freedom debt can help.]]>