bankruptcy

10 Credit Myths
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

As they say, "Knowledge is power." Many times people either act on false information or fail to act because they didn't know what could be done to their benefit. This is the case in many areas of life, but on the top of that list is money. And in the money category you will find lots of misinformation about credit.

There is so much to talk about on the topic of credit myths that an entire book could be dedicated to it.

Myth #1: I'm a complete financial loser for getting myself into this mess.

Fact: It may be true that you're responsible for getting into debt but that doesn't make you a loser. In fact, it may not be your fault at all. As long as you start working on becoming more knowledgeable when it comes to finances, you will ultimately find success in controlling your debt.

Myth #2: Credit is what got me into this mess.

Fact: Spending is what got you into debt. Credit was the means to spend. If you're problem is spending then very well may have spent all your cash. However, credit cards may make it easier to spend.

Myth #3: There's nothing I can do about it now. My credit is destroyed forever!

Fact: As long as you work, starting today, to rebuild your credit, you'll eventually get it under control. Rebuilding your credit means: (1) Paying on time; (2) Looking for better credit options; and (3) Learning more about money and credit.

Myth #4: If I cosign a loan for my friend, it has no affect on my credit.

Fact: When you cosign a loan it's like you took the loan on your own! It may be true that your friend is the first one responsible for the loan, however, if they default it's completely your problem.

Myth #5: It's fine to give out my credit card number for identification as long as I don't authorize a charge.

Fact: NEVER give out your information as a form of identification. When it comes to giving out any personal information, be sure you know exactly with whom you're speaking. This is especially true when someone on the phone.

Myth #6: If I pay off an old debt it will be removed from my account.

Fact: Most likely, no. In fact, when you pay past-due debts it restarts the time period that it can be reported in your credit history!

Myth #7: When I get divorced my "X" will owe half the debts.

Fact: If your name is on the account then you owe the money! If you have a joint account and your ex-spouse refuses to pay, even if you've agreed they would, then you're next on the collection list.

Myth #8: The government owns the credit bureaus.

Fact: Credit-reporting-agencies are not owned by the government. Although, there are many laws that dictate how they must operate.

Myth #9: I cannot change the information on my credit report. It's set in stone.

Fact: You can change the information! The Fair Credit Reporting Act outlines that information that's not 100% accurate or cannot be verified with 30 days, must be removed.

Myth #10: If I get in debt too deep I'll just file for bankruptcy protection.

Fact: The bankruptcy laws are changing to make it more difficult to eliminate all your debt in a bankruptcy so you may end up paying much of it back anyway. It will also be on your credit report for 10 years! Hey, if you have NO OTHER OPTIONS then you should certainly investigate bankruptcy. However, it's much better to settle the debts if you can.

For free information about how we can help you reduce your debt, please fill out our form.

10 Reasons You Should Hate Your Credit Card Banks!
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Buying a house forces you into debt, going to college forces you into debt, buying a car forces you into debt, if you don't have a credit card then you don't exist because you don't have a credit history. We just can't win.

And when you finally get some debt, the credit card banks are right there to take advantage of us! I've had enough! I'm sure you have too, so please tell me your story in the survey.

1. CRAZY HIGH-INTEREST RATES
Believe it or not my friend recently received a credit card offer through the mail with a starting interest rate of 35%. I can do better with almost any loan shark! Oh yeah, that bank IS a loan shark--depending on your definition of "is."

2. CHANGING THE TERMS WITH FINE PRINT
Ever notice that the bank's letters that encourage you to use your credit are in BIG BOLD letters. You know, the letters that say, "go on vacation," "write yourself a check," "buy a new wardrobe," but the letters that try to get you to give up your rights are in microscopic small type?

What are they hiding?

They're raising their late fees, getting you give up your right to bring them to court, jacking-up your interest rates, and much more!

The worst part is that these "amendments" are "negative response." That means that if you don't tell them that you don't want the terms, then you're agreeing with whatever they sent you.

It's like those music clubs. You know the ones. You pay 1 cent to join and get 12 CD's. The only catch is that if you don't tell them not to send the monthly selection they send it automatically and bill you! It's like making a deal with the devil!

I'd love to do business like that! I'll just ship you a television, and if you don't return it I can charge you! Real easy to get the sale isn't it?

I guess if you happened to die while the letter is in the mail then it's a guarantee you'll agree since there's no way to respond. If the banks had it their way they'd probably try to bill you in the afterlife.

3. BAIT AND SWITCH
You know those pre-approved credit offers you receive in the mail nearly everyday? Well, they're really not "pre-approved." Check the fine print. They always have some words that allow them to weasel out of giving you the card that you think you're applying for.

The offer may say, "0% for six months, then 9.9% fixed, with no annual fee, and $5,000 credit limit." Then you get the card and it's "6.9% for 3 months, 29.99% variable, $50 annual fee and $400 credit limit."

What happened?

Re-read the fine print in the original offer and you'll find the tricky legalese that says something like, "Ha, ha bet you can't read letters this small! We don't have to approve the pre-approved offer and can therefore send you any card we wish."

4. PENALTIES FOR BEING LATE TO OTHERS
You'll love this one! Many credit card banks have changed their policies so they can raise your rates, no surprise, but check this out. Some will raise your rate to 23% if you're late paying your electric bill. That's right! They check your credit file and if you are late paying any other bills, not just theirs, they slam you even more!

5. DECEPTIVE OFFERS
Even when you read all the fine print they can STILL do whatever they want. They'll send you credit offers and say, "you can use all your available credit" and when you do they'll charge you a penalty fee! Then when you call to complain they'll tell you that you're an idiot that doesn't have any common sense. See my article "Chase Bank Tries to Pull a Fast One."

6. CAN'T EVER SPEAK TO A HUMAN
Just try calling them to check on your account. It's takes forever to speak to a human! They always want you to key in all the account information, all the numbers, then when you finally talk to their drones they ask you for all that information again! Why the hell did I enter it in the first place!

I can get around this by hitting "0" then the "#" keys. I get a reply, "We cannot recognize your account number so please be tortured again by reentering it now." I keep hitting the "0" and "#" keys until the recording gives up and says, "Please hold while we transfer you to one of our new hires who probably cannot help you anyway."

Hmm, It's almost like they don't want you to talk to anyone...

7. BANKRUPTCY LAW HYPOCRISY
Here's another good one. The banks have lobbied Washington to change bankruptcy laws to make it more difficult to dissolve debts in bankruptcy. They want the consumer to be more responsible for repaying their debt!

Let's see. Who gave the consumer making $10,000 per year a $50,000 credit line? Who sent that consumer letters saying, "go on vacation, give a check as a present this season, buy a new wardrobe."

Give me a break. These banks want to have it both ways. It's just as much they're responsibility for making us able to get into debt.

Do you think they'd be in favor of a 3-day waiting period to give credit cards? How about the government has to call the consumer to verify that they can really afford to use the credit line? Think the banks would like that!

8. STOP YOU FROM GETTING A JOB OR HOME
If you have a problem with your credit card bank they're going to report this in your credit history. Everyone looks at your credit history. Landlords review it to see if you will be a good tenant, insurance companies look at that report, and employers also review your credit history.

What happens when the creditors make a mistake? A mistake that makes you look terrible to potential employers and landlords? Oops, not their problem. It's your responsibility to find and correct their error.

I bet many people have been turned down for jobs and are paying more for their insurance because of a mistake in their credit report that a bank made years before!

9. FEES, FEES, FEES
Late fees, overlimit fees, annual fees, bla, bla, bla. And they're going UP! It's like being robbed at gunpoint in an alleyway by a guy in an Armani suit!

Come on, give me a break! Does it really cost the bank $35 if you're late by one day with your payment? I doubt it.

Actually, you may not have been late at all. The bank may have just credited your account late and charged you anyway. see the article, "One Day Late--Yeah Right!" to read more about this.

Banks make 47% of their revenue from fees! Don't ever let a fee go. Call the bank and make them waive that fee, and if they don't, PUNISH them by doing business with another institution.

10. CREATE MORE WORK
I remember as a kid when my parents brought in the mail. I used to ask, "Is there anything for me?" What's was their response, "No, only bills."

Freakin' bills! That's all that's in the freakin' mail. And you have to read the details or they'll freakin' get you!

CONCLUSION
The only way to fight back is to use one bank against the other. They need our business so we need to reward the banks that are good to us and punish the ones that take advantage of us.

Banks are a business like any other. They're job is to service you and I. If we don't like they way they treat us then it's time to do business with another bank! Don't ever be "brand loyal" unless that bank has been "customer loyal." Meaning that they've always given you their best rates and service!

For free information about how we can help you reduce your debt, please fill out our form.

A term used to describe a poor credit rating. Common practices that can damage a credit rating include making payments late, skipping payments, exceeding credit card limits or declaring bankruptcy. "Bad Credit" can result in being denied credit.

For a free debt consolidation counseling session, please fill out the form on the right.

Bankruptcy is a legal declaration of the inability to repay debts. Bankruptcy should be viewed as a last resort. It will have a severe impact on a credit rating and will remain on a credit report for ten years. Furthermore, bankruptcy is not a solution in all cases. Federal student loans, Federal tax debt and child support are all exempt from bankruptcy protection. Bankruptcy agreements vary but there are two types of agreements that most people choose: Chapter 7 and Chapter 13.

For a free debt consolidation counseling session, please fill out the form on the right.

The new bankruptcy law, which went into effect on October 17, 2005, states that before filing for bankruptcy, one must enroll in a credit counseling program.

Christian Financial Consultants can provide eligible credit counseling. In fact, with our credit counseling, debt settlement, and debt consolidation programs, we may be able to help you avoid bankruptcy completely. When you file for bankruptcy, it stays on your record for 10 years -- making it difficult to get a loan, find a job, or even rent an apartment. For this reason, it has always been a good idea to try debt settlement and debt consolidation before considering bankruptcy filing.

Learn more about our credit counseling, debt settlement, and debt consolidation programs. Fill out the form on the righ side of this page for a free bankruptcy credit counseling session.

In a Chapter 7 agreement, the court resolves most debts by selling assets and property so that the filer is given a fresh financial start. The court takes all assets including cars, homes, furnishings, jewelry or anything else of value. The assets are sold to pay off the debt. There are some debts that a person may wish to repay on their own instead of having the court resolve it. This is called reaffirmation. Reaffirmation is a special payment plan with the court. For example, if a car loan is reaffirmed, the person keeps the car and makes payments under new terms. Chapter 7 bankruptcy will not eliminate debts due to taxes, child support, alimony, student loans, court fines or personal injury caused by driving drunk or under the influence of drugs. A Chapter 7 filing will remain on a credit report for 10 years.

For a free debt consolidation counseling session, please fill out the form on the right.

Is your debt burden causing you to consider filing for bankruptcy?
Christian Financial Consultants will light the path to freedom and will minister the support that all of His followers' need in challenging times.

Christian Financial Consultants' unique Christian bankruptcy prevention program may help you to:

• Lower your monthly payments In some cases monthly payments can be reduced up to 70%.
• Drastically reduce interest rates Christian Financial Consultants is currently achieving average interest rates between 6% and 8% for our clients.
• Eliminate late fees and over-the-limit charges

Before filing for bankruptcy, be sure to look at all your options. We can can help you decide if our Christian Bankruptcy, debt consolidation, debt settlement, or credit counseling programs are a good fit for your situation.

Please fill out the form on the right for a FREE Christian Bankrupcty and Debt Consolidation counseling session.

If you've reached a turning point and are ready to walk the path towards a debt-free life, we are here to provide guidance, inspiration and the assistance that bring your goals into reach. Our unique Christian Credit Counseling program can help you.

Christian Financial Consultants' unique credit counseling and debt consolidation program may help you to:

• Lower your monthly payments In some cases monthly payments can be reduced up to 70%.
• Drastically reduce interest rates Christian Financial Consultants is currently achieving average interest rates between 6% and 8% for our clients.
• Eliminate late fees and over-the-limit charges

For a free Christian credit counseling session, simply fill out the form on the right.

For more information about our Christian Credit Counseling program, click here.

Giving Up Your Rights--Without Knowing It!
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

If you have a Capital One credit card, then I highly recommend you read this entire article!

I just received a letter from Capital One informing me that "enclosed is an important legal notice regarding arbitration" and I need to "read the entire notice to fully understand its implications" to my account.

This isn't the easiest reading by the way. It's a legal notice, written in legal language at the college graduate level. Quite different than the 6th-grade level credit offers they send me trying to get me to use my credit lines.

Here's an example from the arbitration letter: "The arbitration of any Claim must proceed on an individual basis, even if the Claim has been asserted in a court as a class action, private attorney general action or other representative of collective action."

Oh yeah, makes perfect sense to me.

Here's an example of the writing that's meant for me to easily understand (from a credit offer): "One of the attached Purchase Checks is already made payable to you. Consider using the other check to purchase something you've always wanted. It's that easy!"

Gee, I can understand that no problem. Why the difference in writing style? Could it be that in one case it's meant for me to be confused and in the other they want me to spend money on my credit lines? Could it be that both cases are written to work in Capital One's advantage? We both know the answers to those questions.

Here's the bottom line on this arbitration letter: if you do not reject the Arbitration Provision then it becomes part of your account. It's a "negative offer" similar to the music clubs that automatically send you the "CD of the Month" unless you tell them not to send it.

So what's the Arbitration Provision? It means that if you have a dispute that's listed in what they consider to be a dispute, the matter is taken to an impartial person, or group, to be resolved. Of course, you can choose your arbitrator--from their list.

It means that if you allow this provision to become part of your agreement you will not have the right to take your claim to court or participate in a class action lawsuit. And it may cost MORE to go to arbitration, probably because your attorney's fee could be covered for many claims, like say a class action lawsuit.

You may ask why it's important retain these rights?

First of all, I don't want to give up any rights unnecessarily, but more importantly is that although we are only going to recover pennies in a class action lawsuit, it's still in our best interest to be a part of these cases. Sure, the lawyers get all the money, but these lawsuits are one of the best defenses to keep the banks in check. It reminds them that they need to obey the law or they'll pay!

Here is a list of some of what they'll consider a "claim" (dispute you have with them or they have with you): Transactions or attempted transactions on your account.
Any billing or collection matters.
Any fees, interest, or their calculation.
Any products, services, or benefits programs in connection with your account (any insurance, rebates, rewards, etc.).
Any posting of transactions (including payments and credit) to your account.

I called their contact number in the letter to ask questions but only connected to their recording system that delivers answers based on a phone menu. In others, words, I couldn't reach a human--no surprise there.

I would urge you to STOP the Arbitration Provision from becoming part of your credit card agreement! I don't see it as being in our favor at all! If you have a Capital One account and accidentally threw out that letter, listen to the recording at 1-888-578-5462 to learn how to reject the provision.

Here's the general rule: When businesses spend money to send you an offer it's usually in their best interest and probably not yours. There are exceptions; however; I always approach all offers with a level of skepticism.

I have received term changes from other credit card banks which, if rejected, mean that the account is closed. The only consequence of rejecting the Arbitration Provision, which I saw in the letter, is that it doesn't become part of your account terms.

Let's look at this from Capital One's point of view. They're lending money to many people who are going to stiff them in bankruptcy court. I can understand why they need to protect themselves, however, they must treat us "DebtSmart" customers with respect. We are their best clients, and we need to stick together to show all the banks who's really in control--who's paying their salaries!

Don't give up any of your rights!

To reject the Arbitration Provision you must follow the detailed directions for completing the "Arbitration Rejection Coupon" that accompanies the notification letter.

Although I feel like they are trying to pull a fast one here I still like Capital One and recommend their credit card because the interest rates are generally lower than other credit cards. In their defense, on this Arbitration Policy change issue at least they indicated all the salient information in bold print on the envelope and in the letter.

By the way, the deadline for reject the Arbitration Provision is 1/31/02

For free information about how we can help you reduce your debt, please fill out our form.

Debt Negotiation
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Question

I need to know if this will really work. It makes me very nervous in not paying my bills so they can be negotiated. I talked to DEBTCO and I got very excited that I could be out of debt in 3 years but when I got the papers (contract) I felt a little uneasy. Should I be uneasy? Should I think more about consolidation? Please help me make the right choice. I really need help with my debt. Thank you. --Jackie

Answer

Jackie,

Thanks for writing!

I do not know all the details for DEBTCO however, I'm certainly familiar with negotiating for payoff terms with credit card banks.

It's been my experience that credit card banks will negotiate settlements with customers who are having trouble. And "having trouble" does include not being able to make their payments.

My impression is that you're a good money manager and can find a way to pay your bills by using your credit options. You don't want to be late because you know that would really hurt your credit history. Worst of all, paying late may increase the cost of your outstanding balances if banks penalize you by raising your rates--not to mention all the late fees and other penalties.

My guess is that they (DEBTCO) want you to stop paying so you'll fall into the category of being in trouble and, therefore, it will be much easier for them to settle your accounts. Even if they can settle your accounts for less, which is probably the case, the settlement will be reported in your credit history and will certainly not look pretty to future lenders.

Okay, so I've written a lot of words so far but really haven't reached a conclusion. This is because there's always a trade off. You can do what DEBTCO says and probably (not definitely) have them settle your accounts for less thus saving you money.

BUT you risk the consequences of not paying your bills on time which can be further-reaching than the penalties on the accounts you want to settle. Lately, many banks have changed their policies to include clauses that give them the right to raise your rates if you're late paying other creditors!

Here's an example of that from my Citibank card: "If you default under any Citibank Card Agreement because you fail to make a payment to us or any other creditor when due, you exceed your credit line, or you make a payment to us that is not honored by your bank, we may increase the ANNUAL PERCENTAGE RATE (including any promotional rate) on all balances to a default rate of up to 24.99%."

What to do?

I never want to tell people what they should do. Ultimately you should base your decision on what you have learned. Speak with people that you trust to help you make our decision.

However, I can tell you what I would do if I were in your position.

I would call each bank that you want to settle with and ask to speak with their "settlement department." Tell them that you're going to be having trouble paying your bill and that you may even be considering bankruptcy (which you may have to sometime), but you want to find out your options for paying off the account in full if they reduce how much you need to pay to "settle" the account. For example, if you owe $5,000, tell them that you can pay it off in full for $2,500.

They may say that you must pay it off in ful,l or they may offer other payment plans or even reduce the interest rate to zero. They will need to be convinced that you really need help otherwise they won't consider settling the account for less than the outstanding balance.

Just make it clear to them that you'll be talking to a bankruptcy attorney to explore that option. Tell the bank that if they can offer you something reasonable you'll work with the bank, or else you'll be forced to consider the bankruptcy option.

What I'm suggesting is that you try to settle the accounts yourself first. You may not be able to get better payoff numbers than DEBTCO but it's possible that you can. Also, you may be able to avoid the problem of not paying your accounts on time.

I'd be happy to look at your contract with DEBTCO and give you my opinion on what they're promising. You can send it to me by email or fax to (609) 660-1412.

Good luck and please let me know what happens!

Regards, Scott

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Many Questions...Many Answers
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

I want to thank everyone who watched my interview CN8 in New Jersey, Pennsylvania, and Delaware on January 3rd, 4th, 7th, and 11th! The show is "Real Life" hosted by Mary Amoroso and it airs at 6:00 PM daily.

After each show I received many great questions and many of these viewers allowed me to share their questions with everyone. I received questions about mortgages, debt counselors, consolidation, credit histories, bankruptcy, medical bills, credit cards (of course), and many other topics. Below are the some of those questions and answers.

Question:
I have approximately $20k in credit card debt, the bulk of this is from one credit card @ 22% rate. I am not a homeowner, so I am considering the services of one of the non profit debt counseling companies, i.e. AmeriDebt, Cambridge Credit Counseling. I have been paying the minimum payments on my credit cards each month, but I need to be paying more. So far my credit report shows nothing abnormal. What will happen to my credit report/history if I use one of these credit counseling services?
--Dan

Answer:
Dan,

Thanks for writing!

It's hard to tell exactly what's going to happen to your credit history if you use their services. I would try to resolve the situation with each creditor one at a time.

You can read about the experiences of one of my readers, with credit counselors, at:
http://www.debtsmart.com/pages/article_contest_counsel.html

I would also look into getting the as much of that debt to a lower rate card--make the banks compete for your business! You can probably get better rates from other banks because you seem to have a good credit history. Read my article about getting better credit at:
http://www.debtsmart.com/pages/article_getting_credit.html

Good luck and please let me know what happens!

Regards,
Scott

The following signals may indicate that you have taken on too much debt:

-You are not sure how much you owe in total

-You have thought about filing for Bankruptcy

-You only make the minimum payments on you credit cards

-You are near or at the limits of your credit cards

-You need to use your credits for every day purchases

Fill out the form on the right for a free, no obligation Debt Counseling session to help assess whether you have too much debt.

Scott, you have too many credit cards!
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Scott,
I read your article in which you state that you have 80 or so credit cards. I'm not sure why this is advantageous. I have cancelled all but one card which I pay in full each month and by no means see my "options" (to get into debt, I guess) as being restricted.

For instance, I did need to carry a balance for 3 months to pay for an engagement ring at the beginning of this year. All I did was charge it to my everyday card, which has a lousy rate but gives me perks, get a new card with a low rate so I paid almost no interest for those three months, then closed that card when it was paid. This is actually better than calling the banks for the best rate because the cards with the perks almost always have the lousy rates, so you're better off putting it onto one of those cards, and then transferring it to a lower rate card, then you get the perks.

The problem with having multiple cards that go unused is that potential creditors will count available credit against you when you apply for a mortgage or a car.

Also, the more open accounts you have, the greater the chance of being defrauded. Having only one card is by no means restrictive there are hundreds of companies who would give me a card after a 5-minute phone call. I just don't see the point in keeping cards that aren't being used open. --Keith

Answer
It's true. Between my wife and myself (joint accounts) we have over 80 credit cards!

WARNING, I am NOT advising anyone to go and get 80 credit cards! The more credit lines you have available, the greater the probability you'll increase your debt, obviously.

So why do I have so many cards?

There are many reasons:

1) When I borrow money I want to have many loan options. About half of my accounts are offering me low-rate transfer deals all the time! I have purchased used cars with my credit cards at 0%! And because I have so many cards I can continue to transfer the balances and keep the rates less than 4% all the time. I've been doing that for more than 10 years!
2) I'm into this topic, saving money on credit cards. How can I write about credit cards if I don't have credit cards? How can I verify good credit card offers if I don't ever receive or use any?
3) I actually enjoy trying to uncover the true costs of credit. I need lots-o-data!
4) Who would you want writing about credit...someone who hasn't had or used a credit card for 25 years or somebody who deals with credit cards all the time?

I don't carry a balance on all of those credit cards. If I did, then this article would be about bankruptcy not being "debt smart."

If you think 80 credit cards are a lot then how many do you think the worlds record is?

According to the Guinness Book of World Records Walter Cavanagh of Santa Clara, CA is "Mr. Plastic Fantastic" and blows me away with a total of 1,397 unique accounts! I couldn't even image juggling that many credit cards.

Next, your strategy for using a card that gives you perks, at 0% for purchases, is good. You used the perk card then transferred the balance to a low rate card. When you were done you closed all the accounts. That's great!

I personally don't close the accounts as long as the banks aren't charging me an annual fee. I keep them open because they ALWAYS give me a great offer within a couple months after my balance goes to zero. I don't want to keep applying for new accounts and closing accounts.

It is true that you're going to have a difficult time getting a mortgage if you have many open credit lines--even if the balances are zero. That's because the bank doesn't want you to have the potential to get into credit card trouble since it could affect their mortgage profits.

How many cards are too many?

When you apply for a mortgage the bank may ask you to close some credit card accounts before they grant you a mortgage. When I purchased my home I had 24 credit card accounts and I got the mortgage with no problem and no questions asked. Each bank has it's own lending policies.

As far as having a greater chance of becoming a victim of fraud, I doubt the number of cards is going to make you a greater target. In the last email newsletter my friend, Robert Gamble, told his story of identity theft where someone was trying to get new credit lines in his name.

Actually, when you think about it, someone would have a difficult time getting new credit in my name. If they tried they'd probably get rejected because I have so many accounts right now. If I only had 2 accounts open then it would be much easier for someone to defraud me with identity theft. Ironic isn't it?

And since I don't carry all those credit cards with me, I only carry 2 in my wallet, I don't have to worry about losing the actual cards. Also, I keep a list of all the items in my wallet just in case I do ever lose it. Plus I have every account and every phone number in a database so I can contact each bank if there ever was a problem.

You said that you don't see the point to having that many credit cards. The point is a personal point, Scott's choice, for Scott's reasons. It works for me and may not work for everyone. I attribute getting out of debt to having all those credit cards. I learned how to beat the system by being immersed in it and developing good "Credit Card and Debt Management."

For free information about how we can help you reduce your debt, please fill out our form.

Transfer Credit Card Balances
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

My husband and I filed for bankruptcy in 1995. Since then we have established good payment records with high interest credit card companies. I'm ready to drop them and transfer my balances to a lower interest rate card(s). When I start looking on the net, I see introductory rates for first time applicants with good credit. I'm having a hard time finding cards with the transfer option.

I've had my existing accounts for several years (or more), plus we just bought a house, so I think we deserve better interest rates. I called my accounts personally, but they don't offer better rates, only a larger line of credit. I have enough credit already.
--Penny

Answer
Penny,

First of all Penny I'd like to say that I agree that you do deserve a better rate!

As you may know, bankruptcy stays on your credit report for 10 years. That means that all the banks know that you've had problems in the past, but that's long ago at this point, and I am sure there are banks that may be willing to give you a better deal.

The important issue now is how you've been handling your credit for the past few years. From what you've said my feeling is that you've been doing a good job with paying on time. That being my assumption it's time for the banks to give you a better deal or you should take your business elsewhere!

So you've already called your current banks and they won't budge on the rates. Try this, call them back and explain it this way, "I've just received a transfer offer in the mail for 1.9% and I'm going to take it if you don't reduce my rate. I've been happy dealing with your bank but it's just getting too costly. I'd be willing to stay a customer, but I need some type of reduction in my rate or I'll just have to take my business to another bank."

If the first rep you get on the phone cannot help you then ask to speak to a supervisor. If the supervisor says that they cannot lower the rate, then find out why and make it clear that they lost your business. WE MUST PUNISH THEM!!

Now, you mentioned that you have a few accounts. If the first bank won't lower the rate then call another account and transfer the balance from the first bank to this account. Tell the second bank, "If you give me a good deal on a balance transfer, right now, I'll do it." Well, at this point you should do it anyway. Just be sure to punish the first bank for not lowering the rate. Then, after the first bank doesn't have your business for a while you can give them a call and let them know that you're ready to start using them again if they give you a better rate or a transfer offer.

As far as the online offers go, it can sometimes be very difficult to get those low rate deals when applying online. I suggest you try in your snail-mailbox. That's where I always get the best offers. Actually, the best offers are from my current banks but there are other good offers from new banks all time. Last year banks mailed 3 billion offers to us consumers!

Never forget that no matter what your situation YOU are the customer and they should be treating you with the philosophy of "the customer is always right." There's a lot of competition out there for our business so let's all make them work to keep us satisfied.

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