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10 Benefits of Credit Cards
10 Reasons to Love Your Credit Card Bank 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! Call me an extremist. A few issues ago I wrote to you with "10 Reasons You Should Hate Your Credit Card Bank". In this issue I will point out the other side. Boy, the banks are going to love me for this; too bad they won't be sending me a check! Love 'em, hate 'em, it's the same old story. Credit cards themselves are not bad. There are advantages and disadvantages. This time I want to take a look at some of those advantages... By the way, please take the survey when you're finished--thanks! 1. Access to money 2. Protection from merchants 3. A chance to build a positive credit history. 4. Other perks and cash back rewards 5. Warranty protection 6. Money in an emergency 7. Better deals than other loans 8. No chance of losing cash 9. Better than a debit card 10. Customer service 24/7 For free information about how we can help you reduce your debt, please fill out our form.
10 Negative Things about Credit Card Banks
10 Reasons You Should Hate Your Credit Card Banks! 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 2. CHANGING THE TERMS WITH FINE PRINT 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 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 5. DECEPTIVE OFFERS 6. CAN'T EVER SPEAK TO A HUMAN 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 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 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 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 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 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.
Advance Payday Loans
An advance payday loan isn't really the best thing, even if you get behind. What's a better idea for a short term loan is to get a credit card, assuming you have decnt credit. If your credit isn't terrible, you can get a reasonable rate for it, sometimes starting at 0% apr. Then you can charge some of your expenses, and though you'll still be in debt, you won't have to worry about the terrible rate that comes with an advance payday loan. Those loans can cost you 15 percent or more, and for what? Just to get a few days early the money you'll be getting anyway? Forget it. What a ridiculous idea. If you're starving – I mean, seriously physically starving – I can see the advantage of advance payday loan, but otherwise, it's usually no worse than the alternative. It makes more sense to pay the rent late, or the utilities late. That is, unless you are about to get evicted, or have your utilities shut off. Then of course, get an advance payday loan, and get one now! advance payday loans are usually the weapon of last resort for the very poor and destitute. If you are almost on the street, down to your last dime, then an advance payday loan could make sense and help you at least stay on your feet a little longer, but really, sometimes things get so bad that there's just no stopping them from getting worse. Of course that attitude is of very little consolation if you are the one who is very broke and about to get your house repossessed or your car auctioned, or even your kids taken away. If you are broke, before you get an advance payday loan, think of your other options. It is always good to consider your support network – your friends and family, and what they might be able and willing to do for you. Even someone you haven't talked to in years might be more than willing to bail you out rather than see you fall through the cracks. I know it is humiliating to have to ask for help like that. I know, because I have been there, but really, it is much more humilliating to be completely destitute because you lost 15% of your monthly earning using your advance payday loan, and are now out on the street. There's no reason to let yourself fall through the cracks like that, when help is around the corner. Also, you can use food banks and free meal programs to help you save money if you are really broke. Most cities have these programs.
Avoid Holiday Debt
5 Ways to Avoid Holiday Debt 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! Between Thanksgiving and Christmas people are going to spend $121.4 billion using their credit cards! The key is not to let this debt stick, not to allow yourself to get buried by that debt. Not ending up spending the next year paying off the purchases from this holiday season. How are you going to pay for the gifts? Credit cards of course! I'm sure many people are going to criticize me for even suggesting such an idea. I can hear it now, "Scott, are you crazy? Don't use your credit cards USE CASH! I thought you're the anti-credit-card guy?" I'm not the "anti-credit-card" guy I'm the DebtSmart guy. It's not the credit spending that going to put you into debt. It's the "spending." If you're going to spend $1,000 then it doesn't matter what you actually use to pay that $1,000. You can use cash, credit, or a check. Once it's spent it's gone! The key is to be smart about how you pay and using your credit cards is very smart. There are many reason to use your credit card for shopping here are a few: * Interest-free grace period What keep you out of trouble is that you stick to a plan. If for example you plan to spend $100 on a television and end up spending $200 only because you can use that credit card--that's when you'll be heading for trouble. Over the years I've been following a few easy steps that have helped me enjoy the holiday season without having to worry about its cost. It's my hope these suggestions can also help save you money as well. 1) Decide how much you can afford to spend. This is clearly the most important step. Before heading to the store you must know the total amount you can afford to spend. Total spending for all gifts. The average amount people spend is around $1,000. That also falls right in line with the response from DebtSmart readers who participated in our survey on 10/24/01. It's not the amount you spend that counts it's just important to know your holiday spending limit. When thinking about your limit keep in mind how much you would pay if you only were going use cash. How much money can you have available to pay for holiday spending when the bill arrive in January? 2) Make list and stick to it. Now that you have a dollar limit in mind you can start to make your list. We have been using an Excel spreadsheet to help with our list. I created a scaled-down version of this spreadsheet for your use. You can get it at: http://www.debtsmart.com/pages/holiday.xls The spreadsheet lists everyone on our gift list and card list. It shows the person, gift, and cost. The "Star" column indicates if the person still needs a gift. If there is a star by their name then they're gift has been purchases. Once you enter a number in the cost column the star disappears. Enter everyone into the worksheet, or if you don't have Excel simply create a list by hand, and estimate how much you want to spend for each person by enter a dollar figure in the "Estimate" column. After you done with these estimates check the estimate total. That total should not exceed your original holiday spending limit. If it does you'll need to go back and make some adjustments. Every year we update the list and make a printout. We carry that print out around starting in September just in case we find something on sale that will make a great holiday gift. Refer to your detailed estimate list while shopping. Stick to the numbers on your list and you'll be sure not to go over your original holiday-spending limit. 3) Contact creditor for best deal This is the best time of the year to make your credit card banks beg for your business! Many people feel at the mercy of their banks but that's not the case. The banks are at our mercy. Undoubtedly you have a few credit cards and now is the time for them to fight for you to use them this holiday season. Give each bank a call and let them know that they're going to have to give you a deal or you won't use their card this year. Tell them you want 0% for 6 months on purchases or else you'll use another card that will give you that deal. See what happens. I find that 50% of the time I'm able to strike a deal with one of my credit card bank. If they don't then I simply use another card! Give them a call right now! 4) Take advantage of department store card deals and transfer balances Again I hear people saying I'm crazy for using a high-rate department store card! And again I say that you just need to be smart about doing it. Every year I get offers from many department stores for discounts if I use their card. Discounts that are 10%, 15%, or more! I do use these discounts however, I'm sure to transfer my balance from the high-rate department store card to the lower-rate credit card before any interest is charged. This way I can take advantage of the discounts plus get low-cost financing (if needed). 5) Pay off the card in full when the bill arrives (if possible) Ideally you should pay off all credit card charges, in full, when the bills arrive. If you stick to your plan then you'd have spent within the holiday-spending limit. This limit should have been based on how much money you'd have to pay the bills when they arrive so, in theory, it will be easy to pay everything off right away. Of course, this doesn't always happen for many reasons like unexpected car failure for one. That's why it's important to use a credit card that's going to give you a few months with no interest on purchases. This way, if something does delay your ability to pay in full right away you can have a little time, at no additional cost, to pay off those charges. Is it worth all the work? Yes indeed! Say you spend 3 hours of your time juggling all the transaction, doing the balance transfers, and calling your banks. Most likely are you're going to save at least $60 by be being DebtSmart so that's $20 per hour! Is it worth $20 per hour? I think so. For free information about how we can help you reduce your debt, please fill out our form.
Avoiding Credit Card Late Fees
One day late, yeah right! 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 knew it, I knew it, I knew it! A couple years ago most credit card banks changed their policy of what "late" means to meaning "one day late is late." It used to be that late was if your payment was due on the 1st but received on, say, the 20th. Not anymore. If you're 24 hours late, it's late, and you will be charged the late fee. Late fees have also been rising and some are now as high as $35! What did I know? I had the feeling that since being one day late means that banks can charge a late fee, it's possible that, well, payments could "accidentally" be held for say, oh, 24 hours. Oops, you're late! My theory was a step closer to confirmation when one of my credit card payments was exactly one day late. I always track everything--every check, every payment date, and all transactions. I use Quicken and other custom software I developed to pay my bills. So when I was late by one day I took a look at the date that bank's check was mailed. Guess how early I mailed the payment? Seven days! The 8th day was the late day. I called the bank and told them that they'd better waive that fee or I would transfer my balance and close the account. They did waive the fee for me, but I wonder how many other people don't call to waive these one-day-late fees? I wonder how many people simply pay the late fee because they figure "I was late." Being exactly one day late has happened to many people I know. I asked them if they called the bank to complain and they said that they didn't because they thought they were actually late. Tell you what, being one day late isn't worth 35 bucks! There is no way that it costs the bank $35 for someone to be one day late. The way I see it is that it's like being mugged in an alley! As it turns out my theory is even closer to confirmation. Look at those small slips of paper with fine print that come with your statement. Many of those papers are lawsuit notifications from banks that are accused of "not crediting payments promptly," and charging late fees. The funny thing is that in these class action lawsuits, when the smoke clears, the lawyers get paid millions and most of us only get back a few cents! Every case that I'm involved in, because I'm a cardholder, has been settled without the bank having to admit any wrongdoing. What can we do? Be sure to look at every charge on your credit card statement. Don't let the bank get away with charging you a late fee. I don't care if it's really your fault for being late! First of all, it doesn't matter because $35 is a rip-off for being 24 hours late. And, second of all, the bank should treat you like gold for being a good customer, and should waive at least one late fee as a courtesy even if it IS your fault. For free information about how we can help you reduce your debt, please fill out our form.
Balance (Loan, Credit Card, etc)
The total (outstanding) amount of money owed. It includes any unpaid balance from the previous month, new purchases, cash advances, and any charges such as an annual fee, late fee or interest. The balance should not be confused with the monthly payment (the minimum payment each month), which is generally 2% to 5% for credit cards.
Be Careful with Low Interest Credit Card Offers
Chase Bank Tries to Pull a Fast One 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 knew it would happen! I read all the fine print. I reviewed every detail! I followed the instructions from Chase Bank exactly as they described in their low-rate-offer letter and they still penalized me! How did Chase Bank attempt to trick me and maybe you? I strongly recommend that you read this entire article if you have ever done a balance transfer or you're thinking about doing a balance transfer! It all started with one of the best credit offers I have ever received. A surprising 0% APR until February 1, 2003 with a one-time fee for each transfer of 4% of the amount transferred, up to a $50 maximum. According to the letter, "These checks may be used for any amount, up to your available credit line." This offer was received in January which meant 13 months of 0% on my entire credit line of $12,500 (which is available) for a one-time fee of $50. That's a true APR of approximately 0.37%! I wanted to take advantage of this offer for many reasons. 1) I wanted to see if what they promise in their letters is what they actually deliver when the bill arrives, and report the results to you, my dedicated readers. 2) My money market is getting 2.5% and the loan is costing 0.37%, so I'll be making about $250 over the course of the year for simply paying my bills on time. 3) This offer was slightly different than any transfer offer I've been interested in taking advantage of. It promised that I could use my entire credit line and implied that I can do this without penalty. I checked and rechecked the letter for any loopholes. I read all the fine print, to be sure that I was using their transfer offer within all the rules described in the letter. Everything seemed to check out, so I went ahead and wrote myself a check for $12,500 and deposited it into my money market account. When the bill arrived I noticed an overlimit fee of $29 assessed on my account--I KNEW IT! I had a feeling that they left out a few words in their letter that, of course, loophole their way to earning more money. I followed the directions described in the letter which stated, in three places, that the check amount(s) cannot exceed my credit line and I was still charged an overlimit fee. I've written about this type of "trick" in a previous article titled, Reading the Fine Print in Those Low Rate Credit Card Offers, however this case was slightly different. The credit offers I was referring to at that time stated in the body of the letter that you can use "any amount up to your available credit line." But in the fine print the letter warned, "You may transfer any amount, including transaction fees that are assessed, as long as it does not exceed the available credit line." Check out the Citibank offer I received that does this exactly. The offer from Chase however, did not provide that warning. Every mention in the Chase letter about the amount you can use, the total "check amount(s)" is that it can go up to your available credit line. Compared to the Chase offer, the Citibank offer tries to trick you in the body of the letter, but is at least honest in the fine print. In fact, the fine print in the Chase letter is even smaller than the fine print in the Citibank letter! As my editor Rick said, "It's as though Chase is trying to deceive people more than Citibank." As soon as I saw that overlimit fee, and reviewed the original letter to make sure I didn't miss anything, I promptly called Chase Bank to have them remove the overlimit fee, which they did immediately. When I asked why I was charged the overlimit fee, the rep told me it's because I was over the account limit since the $50 transfer charge plus the $12,500 check makes my balance $12,550.00. I explained that the Chase letter stated that I could write the check up to my limit and the rep (Ms. Beers) started arguing with me. I asked to speak to her supervisor (Mrs. Lett) and she also argued with me. I originally thought they would just waive the fee and apologize for the confusion. I thought they would say something like, "Mr. Bilker, we're sorry that the wording of the letter was confusing. I can certainly understand how you feel. I will certainly bring this to the attention of my supervisors and management so we can review these details. Thank you so much for calling!" Then they could have hung up and forgot about my call--but that didn't happen. Below are links to portions of the conversation I had with Chase customer service. Part 1: First rep removes the overlimit fee and argues about the fee. Part 2: Supervisor argues about the fee. It may be true that they said I could use the check(s) up to my credit limit. And it may be true that the agreement says that if I go over my limit I have to pay a fee. One could argue that if they told me to write the check(s) up to twice my credit limit, and I did, that I should be charged an overlimit fee because it goes over my limit. The letter could have said to jump off a bridge and if I do it’s my stupidity. However it is certainly implied that if they're sending me a letter, and I follow the directions in their letter, I will not be penalized. It's clearly stated that if you write a transfer check there's going to be a fee. However, their letter never said that if you write the check to the account limit an overlimit fee will be charged. This encourages people to write the check up to the maximum limit. Chase never mentioned anywhere in the letter, not even in the fine print, that there would be an overlimit fee if you do as they say and write the check up to the limit. One good analogy is to imagine a policeman telling me I can go through a stop sign. He says, "Scott, go through the stop sign." So I go through the sign and the same policeman immediately pulls me over and gives me a ticket. I say, "But you told me I could go through the stop sign." And he replies, "It’s common knowledge that it’s illegal to go through the stop sign. Didn’t you read the driving handbook?" Chase Bank, the policeman of their terms, said to "write the check to the limit" then when I did they penalized me, and probably countless others, who may not have even seen the overlimit charge on their statement. Or maybe they did see the charge, then called and were told they were stupid for going over their limit. It brings to light the fact that you cannot trust what their letters say. The bottom line in this situation is that the letter is very deceptive. It leads people to believe that they can write the checks up to the credit limit without penalty. When I called Chase I didn’t have to ask to have that overlimit fee waived. As soon as I mentioned that it was on my statement the rep removed it instantly! If they really believed that I was completely at fault they may not have done this so quickly. Also, the rep and supervisor seemed well versed in arguing their points and my guess is that it’s because they have had practice or training on the topic. How many of you have had this, or a similar problem? Especially if it was from this very same low-rate credit offer by Chase bank. Let me know if this has happened to you, and please, let me know if you agree or disagree with my position on this issue by filling out the response form. Lastly, aside from this situation, my past experiences with Chase have been very good. They have always offered me nice lending deals. Giving them the benefit of the doubt, I would hope that this particular situation occurred only because of these specific reps. I would hope that Chase reviews EVERY person's account that took advantage of this offer to be sure that they are not penalized--without that person having to call them first! Part 1: First Rep removes the overlimit fee and argues about the fee. Rep: "Card member services. This is Ms. Beers, how may I help you?" Scott: "Hi, what was your name again?" Rep: "Ms. Beers. How can I help you today?" Scott: "Alright. Well I’ve got a question about my account." Rep: "Okay, let me have your name." Scott: "Scott Bilker." Rep: "Okay Mr. Bilker, how can I help you today?" Scott: "Okay, umm, why do I have this overlimit fee?" Rep: "Because you are over your limit." Scott: "Okay. How did that happen?" Rep: "You did a balance transfer for $12,500." Scott: "Yeah." Rep: "Also there is a balance transfer fee of $50." Scott: "Umm hmm." Rep: "And that took you over your credit line. Your credit line is only $12,500." Scott: "Right. Okay well, you see I think that’s an error because I have the letter from Chase. You know I used one of these balance transfer checks Ms. Beers. It says these checks maybe used for any amount up to your available credit line. What was my available credit line before I wrote that check?" Rep: "Up to. Your credit line is only $12,500 sir." Scott: "Yes, but these checks may be used for any amount up to your available credit line. My available credit line was $12,500, I wrote the check for $12,500." Rep: "That’s the credit line sir, and of course you know you are going to go over your credit line. You can’t take it all off of there, you’ve got to leave something there for the fee…" Scott: "Uh, listen…" Rep: "Also for the finance charge. I did give you back the $29 overlimit fee." NOTE: Notice how she removed the charge without me even asking! Scott: "Okay." Rep: "It’s already been deleted. But you should have left a little room there for finance charges and also for the fee." NOTE: She keeps blaming me for following the directions in the letter! Scott: "Don’t you think the letter should say ‘You should leave a little room there. You shouldn’t write the checks up to your credit limit, maybe up to your credit limit minus the fee.’" Rep: "Okay, but the fees are in the letter also." Scott: "Yes, but it says these checks may be used for any amount up to your credit line. Doesn’t that give you the impression that you can write the check, well, up to your available credit line?" (Pause) "Hello?" Rep: "Sir, it’s in the letter. Okay, again you used your whole credit line, of course you are going to go over your credit line if…" Scott: "I know, but I am just concerned about the wording. I mean, if it said…" Rep: "Mr. Bilker, if you weren’t sure about how much you should use on the checks you can always call us, 24 hours." NOTE: No need to call because the letter said I can write the check up to the limit. Scott: "Right. Well it was very clear, I mean it said up to the credit line. I know you removed it and I appreciate that, but I just want a little clarification of the writing there. Because, you know, I don’t know what to believe anymore. I mean, it said…" Rep: "Sir, you wouldn’t take your whole credit line. If you know your credit line is $12,500 and you go over that, and you take that whole amount it is going to go over." Scott: "It doesn’t…" Rep: "You can go 'up to,' and you should never take the whole credit line because, yes, you will go over and receive the $29 fee on that." Scott: "I just don’t see where it says that. Like even in the fine print here it says ‘balance transfer check amounts may not exceed your available credit line. It doesn’t say valid balance transfer check amounts and charges may not exceed. It says the check amounts." Rep: "It told you not to exceed the whole credit line Mr. Bilker." Scott: "Well, no. It says the check amounts, the check amounts, not the…" Rep: "You go over the $12,500…" Scott: "I didn’t. I wrote it for $12,500." Rep: "Well, it’s $12,500, you took your whole credit line. That’s going to take you over the credit line." Scott: "But it said I can use up to my available credit line." Rep: "It says 'up to,' sir, it doesn’t say take the whole $12,500." NOTE: Talk about double-talk! Scott: "Up to means… Well you know what, I know you waived the fee and that’s great, but I’d like to talk to a supervisor about this." Rep: "Not a problem, hold on." Scott: "Thank you."
Rep: "Mr. Bilker thank you for holding the account supervisor Ms. Lett is on the line. You may go ahead." Scott: "Thank you Ms. Beers." Rep: "Mr. Bilker this is Ms. Lett, how may I help you?" Scott: "Hi. Well umm, I called because I used a balance transfer offer from Chase and umm, I got charged an overlimit fee. Although Ms. Beers did waive that overlimit fee." Rep: "Umm hmm." Scott: "But I’m just a little confused because the letter specifically states that I can use my checks up to my available credit, and that’s exactly what I did. I followed the directions exactly, but yet I was charged an overlimit fee." Rep: "Okay. You can use the checks up to that, but with each check written there is a fee." Scott: "Uh huh." Rep: "So according to the amount you write, you include the fee." Scott: "It doesn’t say what you just said." Rep: "It doesn’t have to say it, it’s telling you that there is a fee involved." Scott: "Yeah, but it says, let me just read this really clearly, it says, ‘These checks may be used for any amount up to your available credit line.’ In fact it says, at the bottom in the fine print, ‘balance transfer check amounts may not exceed your available credit line.’ Check amounts, it doesn’t say check amounts and fees." Rep: "Right, the check amount cannot exceed your available credit line. However, it also goes on to say, ‘With each check processed there will be a transaction fee.’ So included with the check amount there is a transaction fee that you have to include. If you are going to write three checks, you write three checks that are going to be up to whatever your credit limit is. But in those three checks, remember, there are three fees. So its just common knowledge." NOTE: Step one of their defense it to insult the customer. Don't you just LOVE these people. Way to treat your valued customers who don't have common knowledge. Scott: "Common knowledge? Well, even on the fine print on the back it says balance transfer check amounts… This is right after the fees, it says, ‘You will be charged a balance transfer transaction fee,’ and it gives the amount, and afterwards it says, ‘Balance transfer check amounts may not exceed your available credit line.’ It does not say balance transfer check amounts and fees." Rep: "It doesn’t have to. It’s explained and it’s outlined for you. If you know your credit line is $12,500 dollars, and they tell you that you are going to be charged a fee. And you write a check for $12,500 dollars, plus the $50 fee, you are now over the $12,500, because that is all that your credit limit is." Scott: "But it just doesn’t clearly say that. How could this be common knowledge? That’s my confusion. It says, the directions…" Rep: "Because if we tell you that you are going to be charged a $50 dollar fee. If you write a check for $12,500 and we have told you that we are going to charge you a $50 fee, $12,500 plus $50, is $12,500 and $50. Which means you are now over your credit limit. That’s what I mean by common knowledge. It’s simple math." Scott: "Well how come that common knowledge isn’t included in the statement? See, the statement clearly says these checks maybe used for any amount up to your available credit line. Common knowledge tells me that…" Rep: "Well okay…" Scott: "That I can use it up to my credit line. It doesn’t say, not up to my credit line, it says up to my credit line." Rep: "And when you use that check you’re charged a fee." Scott: "Yes, but it doesn’t say…" Rep: "Well, that’s included with the amount of the check." NOTE: The fee is not "included with the check" it's a separate charge. Scott: "Well, shouldn’t it say not up to your available credit line, or close to your available credit line? Wouldn’t that be a little more clear?" Rep: "I guess it’s the way you interpret it." …. Rep: "It is your interpretation Mr. Bilker. Unfortunately, you did not read the entire thing, or did not understand it." NOTE: Still blaming me for their deceptive wording. I wish I had that Citibank letter handy when I called so I could have asked Mrs. Lett to explain why Citibank clearly explains to keep the total of the fees and transfers under the available limit. Scott: "Where in this thing does it tell me I cannot write these checks up to my available credit line?" Rep: "It doesn’t tell you that you can’t. We can’t tell you what you cannot do." Scott: "Listen, it says...‘These checks may be used for any amount, up to your available credit line.’ It doesn’t say these checks and fees. These checks may be used for any amount. And listen, again, at the bottom, balance transfer check amounts, it doesn’t say balance transfer and fees, just balance transfer check amounts, may not exceed your available credit line." Rep: "It doesn’t have to say ‘and fees’ because the fee is already included with the amount that you write." Scott: "Hmm, really it sounds like some kind of trickery to me." Rep: "And again that depends on your interpretation." Scott: "Hmm, I wonder what a legal interpretation might be? Like disclosure interpretation." Rep: "We have a lot… Everything we submit goes through a legal ramification before it is ever sent to you. So, obviously it must be legal. This is a major bank. And they have a lot of lawyers…" …. Rep: "When it says to me that if I write a check up to my limit and I am going to be including a fee, and I know that my limit is a certain amount. If I’m going to be charged a fee, I know already that I’m going to go over my limit. If my limit is $10,000 I’m going to be charged $50, I know my limit is $10,000 and my balance is going to be $10,050. I already know that." Scott: "So, all those extra words you just told me should basically be included in this letter?" Rep: "There is nothing extra that I told you. I added it." …. Rep: "If you can add, then you don’t have a problem with that." NOTE: The blame-the-customer-defense continues, now I can’t add. …. Scott: "But it does not tell me, if you write the check up to your limit, then you will go over you limit. You cannot write your…" Rep: "It doesn’t have to." Scott: "It doesn’t have to! How do you…" Rep: "We give you your credit limit, if we tell you that your credit limit is $12,500. We tell you that you have $12,500 that you have $12,500 to use, you can do whatever you want with it. You can write this check if you want, but when you write this check there will be a 4 percent transaction fee with a maximum charge of $50. Now if you sit down and write a check for $12,500 and know you are going to be charged $50 you have now gone over your limit. If you add the amount that you wrote your check for, plus the $50 fee that you are going to be charged, you are now above $12,500." …. Scott: "Well, I think that they ought to change the wording here because it’s really confusing people." Rep: "Well Mr. Bilker you can write in and tell the bank that you want them to change the wording." Scott: "They should definitely change the wording. I think this is quite confusing, since when you say, ‘You can write your checks up to your credit limit,’ and you do that, it doesn’t anywhere, anywhere in this letter, say that if you write your checks up to your credit limit you will go over. Is that true that statement?... it doesn’t say anywhere that if you do that, you will go over your limit because of the fees. I think that should be in there that would make it quite clear. Don’t you agree Ms. Let?" Rep: "I don’t agree with you." Scott: "Okay. I just don’t understand how you can’t see it." Rep: "Well, you see it your way and I see it my way. We can look at the same thing and see two different things and I guess that’s just the point where we are." Scott: "You’re seeing a lot of extra words that don’t exist in the letter." Rep: "No, I’m just seeing that if I add how much I wrote a check for and add the fee that the bank is charging me I have now gone over my credit limit. That’s all I did." …. Scott: "Well you see, communication is the responsibility of the communicator. And this wasn’t communicated very well." Rep: "Well, I am very sorry that you feel that way. But that is the way that the bank sends their information. They do advise you of any fees up front." …. Scott: "When I have my credit card, my physical card, and my limit is $12,500, and I go into a store how much can I spend? How much?" Rep: "If you pay your balances in full, $12,500." …. Scott: "So you’re telling me that Chase tells me that I can use my credit card up to the limit, right?" Rep: "The credit card, yes." …. Scott: "So, in that case up to the limit means up to the limit. But in this case (the credit offer in the letter) up to the limit means not up to the limit. Even though the words are the same, you’re telling me that when they say up to the limit then…" Rep: "The words are the same, however, it says up to the limit. These says up to the limit including with a fee." Scott: "No." Rep: "Yes it does." Scott: "No, you said it." Rep: "You’re going wrong." Scott: "No, that’s where you are going wrong. You said to me, just a second ago, up to the limit including the fee..." Rep: "Okay, and again it’s your interpretation. I cannot continue this." …. Rep: "Thank you for calling customer service." Scott: "Bye, bye." Rep: "Bye, bye." For free information about how we can help you reduce your debt, please fill out our form.
Buying a Car with a Credit Card Cash Advance?
Buy a Car with a Cash Advance? 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! Hi Scott, Answer Thank you for writing! You're correct that you would probably have to write a check. And yes, it's a cash advance, however, I have many, many, many, no-fee, low rate, check offers. I have one I just used for 2.99%, no-fees, which is far better than any used car loan I could get otherwise. I said in my article to "consider" using your credit card. If it doesn't make sense in your case, then don't do it, but many people may be able to get a better deal this way. Talk to you later. Reply For free information about how we can help you reduce your debt, please fill out our form.
Cash Advance Loan
We all try to be as responsible as possible with our money by paying our bills on time, spending wisely, and saving whenever we can. But despite our best efforts, we simply can't be prepared for every single emergency or crisis that life throws at us. After all, who would have been able to predict that your car battery would die, your furnace would go out, and your rent would be due all in the same week? Sometimes you need a bit of help making it to your next paycheck. One way to quickly get the money you need is through a cash advance loan from an online source. There are many websites out there that offer same-day or next-day cash advance loans for amounts between $100 and $500. The process of getting one of getting a cash advance loan from one of these sites is relatively straightforward. The first thing you have to make sure that you meet the minimum requirements as set forth by the company's terms of service. Although each website might have slightly different requirements, in general they will consist of things such as being with the same employer for at least three months, being at least 18 or 21 years old (depending on your state of residence), and having a checking account with direct deposit available. As you can see, these minimum requirements are pretty easily met. It doesn't matter if you have a history of bad credit or bankruptcies; chances are you'll still be able to get a cash advance loan. The next thing you have to do is hand over some paperwork. What kind of documents do you have to provide? Well, that depends on the specific company that you're working with. Some lenders require all kinds of paperwork, copies of your driver's license, cancelled checks, paycheck stubs, and things of that nature before they will release a loan to you. You can either fax these documents in or drop copies off in person if there is a location near you. Of course, this means you have to have access to a copier and a fax machine. Then there are other lenders that process cash advance loans entirely online. The only thing they require of you is your checking account number and the authority to make a one-time automatic draft or withdrawal for the amount of your loan plus any fees and interest that you've agreed on. Speaking of fees and interest, you can expect to pay a high price for getting an instant cash advance loan. The specific fee schedule would of course vary from lender to lender, but typical rates start at 20% or more. In other words, you can expect to have to pay back $120 for every $100 that you borrow. But at least with the funds from a cash advance loan in your pocket, you'll be able to keep your car, your job, and/or your home. If you're in a tough financial position, you should consider applying for a cash advance loan online. The process is fast, easy, and completely confidential. You'll be able to get the money you need to get yourself back on your feet again no matter what your credit history looks like.
Christian Bankruptcy
Is your debt burden causing you to consider filing for bankruptcy? Christian Financial Consultants' unique Christian bankruptcy prevention program may help you to:
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.
Christian Credit Counseling
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:
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.
Christian Credit Counselors
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 Christian Credit Counselors can help you. Christian Financial Consultants' unique credit counseling and debt consolidation program may help you to:
For a free session with one of our Christian credit counselors, simply fill out the form on the right.
Christian Debt Consolidation
Struggling with the burden of excessive debt? Christian Financial Consultants' unique debt consolidation and credit counseling program may help you to:
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Christian Debt Counseling
Is Christian debt counseling right for you? If you've reached a turning point and are now ready to walk the path towards a debt-free life, our Christian Debt Counseling program can help you. Our program combines debt consolidation with Christian debt counseling, with the goal of helping you stay debt free. Christian Financial Consultants' unique Christian debt counseling and debt consolidation program may help you to:
For a FREE session with one of our Christian debt counseling specialists, simply fill out the form on the right.
Christian Debt Counselors
Our Christian debt counselors can help you become debt free. If you've reached a turning point and are now ready to walk the path towards a debt-free life, our Christian Debt Counseors can help you. Our debt consolidation, debt settlement, and credit counseling programs are designed to help make your debt payments more manageable, and eventually eliminate your debt completely. Christian Financial Consultants' Christian debt counselors are experienced and can help you to:
For a FREE counseling session with one of our Christian debt counselors, simply fill out the form on the right.
Christian Debt Management
Is Christian Debt Management right for you? For free information about how our Christian Debt Management program can work for you, please fill out the form on the right.
Christian Debt Reduction
Christian Debt Reduction lowers your outstanding debt Christian Financial Consultants' unique debt reduction and credit counseling program may help you to:
Christian Debt Reduction is more than just debt consolidation. Our Christian debt reduction program also includes christian debt settlement. With debt settlement, the principal of your debts can actually be reduced, easing your debt burden in a significant way. Please fill out the form on the right for a free Christian Debt Reduction counseling session.
Christian Debt Settlement
Christian Debt Settlement can lower your outstanding debt Christian Financial Consultants' unique debt settlement and credit counseling program may help you to:
Christian Debt Settlement is more than just debt consolidation. With our Christian debt settlement program, the principal of your debts can actually be reduced, easing your debt burden in a significant way. Please fill out the form on the right for a free Christian Debt Settlement counseling session.
Christian Financial
Having difficulty meeting your obligations despite your sincere intentions? Financial concerns distracting you from service to God, family and society? Christian Financial Consultants' unique debt consolidation program may help you to:
Please fill out the form on the right for a free Christian Debt Consolidation counseling session.
Christian Financial Counseling
Having difficulty meeting your financial obligations despite your sincere intentions? Christian Financial Consultants will light the path to freedom and will minister the support that all of His followers need in challenging times. Financial concerns distracting you from service to God, family and society? Christian Financial Consultants' unique debt consolidation program may help you to:
Please fill out the form on the right for a free Christian Financial Counseling session.
Consolidating Credit Cards to a Single Account
Consolidating Credit Cards to One Account 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! Hi Scott, Mary, Thanks for writing! I know just how you feel. I had the same situation when I was finished with college because I had to use my credit cards to help finance my senior year. Here's the deal. The most important aspect of that debt is how much it's costing. At least that's my opinion. The best loan is the cheapest loan and I consider it worth the work to write four separate checks if the rates are worthwhile. Many people make the mistake of consolidating simply because they don't like the work involved with handling many accounts. The mistake is that they consolidate at a greater rate for the convenience of having one payment. It's a personal choice to decide if it's worth a little extra in interest charges to avoid dealing with four accounts. It's not worth the extra cost for me. If you do consolidate your accounts into one then please do not close your zero balance accounts! If you close your accounts you close your credit options. You may need those other cards sometime in the future to make the current banks compete for your business. You always want to have credit options and the best options, in my experience, emanate from banks that you have had a long relationship with. Now let's talk about consolidating and saving money! You mentioned having trouble getting new lines of credit to consolidate that $4,000 but there's another strategy you should attempt. Call each of your existing accounts and ask for their balance transfer department. Tell the rep, "I have about $3,000 of debt on other cards. If you (1) raise my credit limit, and (2) give me a great rate, I'll do the transfer right now otherwise I have three other banks to call!" They may increase your credit limit on the spot by a few hundred dollars, they may do as you ask, they may need to get back to you, they may say no. No matter what happens, call each bank and see what they can do. If they do give you a good offer, then transfer your balance. If they deny your credit line increase, then be sure to get a free copy of your credit report from the credit-reporting agency that the bank used to reject your line-increase request. Good luck and please let me know what happens! Regards, PS: And you can take that to the bank! :) For free information about how we can help you reduce your debt, please fill out our form.
Consumer Debt Counseling
Is consumer debt counseling for you? Christian Financial Consultants can help you answer that question. Our consumer debt counseling program may be able to help you mange your debts and eventually to eliminate debt obligations completely. Get started today. For a FREE consumer debt counseling session, please fill out the for on right side of this page. There is no charge and no obligation for this consumer debt counseling session. Benefits of Consumer Debt Counseling:
Please fill out the form on the right for a free consumer debt counseling counseling session.
Credit Card Arbitration Fine Print
Giving Up Your Rights--Without Knowing It! 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.
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.
Credit Card Cash Advance Techniques
Advanced Cash-Advance Techniques 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! Dear Scott, Tracy, Thanks for writing! Note: Everything I suggest in this response is what I would do. You must be careful to analyze your specific situation to be sure that it will work in your benefit. Glad to hear the you read my article, Consider Financing Your Next Car with a Credit Card! It's great that you have a 0% deal on your credit card. I've used these deals in the past to purchase a few vehicles. Actually, it may not be such a problem that you seller is a private party. It's the same problem that you may face at a dealership. Dealership say they accept credit card payments however, many will not let you purchase the entire car with your credit card. They'll allow you to put your down payment on the credit card but not the entire amount. This is because they don't want to pay the merchant fees for accepting the card. These fees are probably at least 2%. Therefore, a dealer would also ask you to use a personal check or bank check. You need to find out if your 0% deal is good for cash advances. I'm guess that this may not be the case or else you wouldn't be asking, nevertheless, you should give your credit card bank a call and tell them that you'll write yourself a check, and deposit it in your account, as long as it's at the 0% rate. If that doesn't work then ask them if they would give you that 0% rate if they, the bank, did a direct deposit into your checking, or savings, account. The key is to get that money in your account at the 0% rate, preferably without any cash advance fees, then use that money to write a bank-check to car seller. Say it's the case that they still will not do this. They would probably entertain the idea of your transferring the balance from another card at the 0% rate, this way it's not a cash advance. Then, check with you other credit cards to find out if you can get a cash advance, with no fees. If so, you can write a check with the second card, deposit it into your account, buy the car, then immediately call the 0% bank and do a balance transfer. When the smoke clears you'll have that car at 0%. You just need to do one more thing which, is to mark your calendar as to when the 0% deal expires. You must be sure to pay that off before they hike your interest rate. Also, don't be late paying on that 0% deal! It's probably true that the offering bank will slap you with a crazy-high interest rate as a penalty. I've seen some as high as 26% for late payers. Good luck and please let me know what happens! Regards, For free information about how we can help you reduce your debt, please fill out our form.
Credit Card Company Raises Rate to 29.9%
Providian Raised My APR to 29.99% 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, Now, I just received an insulting letter from them informing me that my request to lower the interest was denied because I closed the account too late. The letter went on to say this was all outlined in the notice they mailed to me in February. I have yet to receive the notice!! I don't even think the notice exists. Another family member has this card, with a closed account, and Providian never changed his rate. I feel singled out. Is it legal for them to change the terms without any notice?? What are my options to fight this?? If they are in violation of a law, who can I report this to (I live in Las Vegas)?? Please help!! Claudette, Thanks for writing! What has happened to you is has become very common. I have also been receiving more and more notices with changes in terms. The deal is that you can decline to accept some of these term changes and it won't affect your account. For example, I have received many term changes regarding arbitration. If you don't decline the terms then you give up your right to bring them to court under certain conditions. For more on that read my article, Giving Up Your Rights--Without Knowing It! However, if you decline other changes, for example rate changes, then the bank will close your account and you'll have to repay under your original terms. Of course, you would have had to reply by their arbitrary deadline. To see the legal details you'll need to look at the original terms from your account agreement with Providian. I also have a Providian credit card and in my 10/5/1998 Account Agreement it states: "CHANGES. After we provide you any notice required by law, we may change any part of this Agreement and add or remove requirements. If a change is made to the Finance Charges section of this Agreement, the new finance charge calculation will apply to your entire Account balance from the effective date of the change. Changes will apply to balances that include items posted to your Account before the date of the change and will apply whether or not you continue to use the Account." The way I'm reading that is that they can basically do what they want. I guess the only argument you can make is that they have not yet "provided you" with a notice. If you want to bust chops you could try calling and asking them for proof that they mailed it because you have yet to receive the notice. Then make them send it to you by signature delivery like FedEx or Express Mail. Tell them that they have not yet "provided the notice required by law" and they cannot make any changes until they do provide that notice. If the rep or supervisor cannot help then ask for "an officer of the bank." You need to punish them! Teach them a lesson! You already closed the account but that's not enough! You must get a better rate, and let's face it, 23.99% is a crazy-high rate! Apply for a new credit card and transfer the balance from that Providian card. Do it right away! Check out my article, Getting better, cheaper credit--right now! and apply for a new credit card. Be sure to do a balance transfer from that high rate when you do the application. This will get rid of that high rate as well as increasing your chances of getting approved. Lastly, you can make a complaint to: 1) The Office of the Controller of the Currency (OCC), 1-800-613-6743 Good luck and please let me know what happens! Regard, Scott For free information about how we can help you reduce your debt, please fill out our form.
Credit Card Debt Consolidation
Credit Card Debt Consolidation can lower your credit card payments. Christian Financial Consultants' unique credit card debt consolidation program may help you to:
Please fill out the form on the right for a free credit card debt consolidation counseling session.
Please fill out the form on the right for a free credit card debt consolidation counseling session.
Credit Card Overpayment Refunds
Getting Your Overpayment Refund 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! Dear Scott, I receive your newsletter and love it. Very helpful! Recently I have taken out a debt consolidation loan. From application for the loan and closing on the loan was 3 months. The consolidation loan included preprinted checks made out to each of the creditors (5) with the total balance owed at the application time. The problem was that during the 3 months before closing I had been paying the minimum payment, so when the loan closed and the checks were issued the check amount was higher then the actual balance. I have received credit checks from all of the creditors for the difference but one. The one I have sent 2 letters to the customer service address request the account be closed and issue the check. It has been 2 months with no response from the creditor. I have received 2 statements showing the credit. What is the next step to getting the money back? They owe me $179.00 to much money to walk away from. What is very upsetting to me is that, if I owed them money, I would have to pay late fees, interest and get marks on my credit report. Sincerely, Aimee, Thanks for writing! I love your attitude! They should be required to pay you a late fee! But doubt that will ever happen but maybe someday a law can be added to the books that would require late fees due the consumer in this situation. I have certainly been in similar situations. By making an overpayment to any creditor, you create a credit balance. That credit balance must be returned to you. You asked for a check twice and they haven't sent it. Here's what I would do... 1) I'd call and speak to a customer service rep to see what's going on with the check. Maybe they sent it and the "check is in the mail." 2) If I still didn't receive the check, I'd use the credit card for my normal shopping, groceries, etc. Once I spent $179 I'd stop. If I went over $179 I'd pay them the difference and never use the card again. 3) Here's a technique you can try if you don't mind more hassle. I would do it because I'm also interested in finding out the results of creative financial techniques and telling everyone what happened. If I had credit checks issued on that credit line I'd write myself a check for $179 and deposit it into my personal checking account. There a few possible complications with this: (1) if they have already sent you a check for $179 then it would be a cash advance and subject to cash advance fees (2) even if they haven't issued the check they may still try to charge you a cash advance fee, even though it's your money! In fact, I would bet they would charge you the fee. If I received a statement, after writing the check, that the $179 brings my balance to zero (plus a fee), because it's my money, and they charged me a cash advance fee, I'd call the bank and ask to have that fee waived because they never sent me the credit check. They'd probably argue and say it's still a cash advance to which I would reply, "it's not an 'advance' against my credit line because it's not a loan, it's my own money!" If they still didn't waive the fee I'd formally dispute the charge. I don't know if you want to make a mountain out of a molehill however, it is an option. 4) Same as (3) but use the card at an ATM or do a cash-advance at a bank. Please let me know the outcome of your situation--thanks! Regards, For free information about how we can help you reduce your debt, please fill out our form.
Debt Burden
The borrower is servant to the lender. The financial cost Please fill out the form on the right for a free counseling session.
Debt Consolidation
Are your debts piling up and becoming difficult to manage? Debt consolidation can be an effective way to reduce the burden and help you along the path to completely eliminating your debt. Our debt consolidation program can help you:
For a free, no obligation counseling session with our debt consolidation specialists, please fill out the form on the right.
Debt Consolidation Help
Need debt consolidation help? Debt Consolidation can lower your credit card payments. Christian Financial Consultants' unique debt consolidation help program may help you to:
Please fill out the form on the right for a free debt consolidation help counseling session.
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Debt Negotiation
Debt Negotiation 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 For free information about how we can help you reduce your debt, please fill out our form.
How many cards are too many?
Scott, you have too many credit cards! 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, 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 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! 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.
Managing Credit Card Debt
Manipulating the System 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! It's Friday night and the phone rings... you know the call, it's late, the last bite of my dinner being chewed, all you want to do is watch TV and relax. Guess who's calling? Yes, it's a mortgage company that's trying to sell me a refinance deal! The girl asks me about my mortgage, my rates, and my credit card debts. To which I do reply, after all I'm always curious about getting a better loan (plus I love toying with these people). I ask her what their best rates are. She tells me that it depends on my credit history. I said, "Okay, say I have a credit rating like Bill Gates. NOW what's your best rate?" She said that she can't quote a rate however, the loan officer would let me know. So I agreed to have the loan officer give me a call. On Monday, while I'm trying to set up the new DVD player, the phone rings. Guess who? It's the loan officer, let's just call him Kevin. Well okay, so Kevin is really his name. I'm not going to change names to protect the innocent. :) Kevin starts his spiel about how he can save me money on my $110,000 30-year, 6 7/8% mortgage and $15,000 of credit card debt. I asked him what his best rates are and he told me it varied depending on my credit score, which he could check if I tell him my social security number--I don't think so! There's no way I'm giving that out over the phone. If his deal sounds real then I'll ask for paperwork to be sent through the mail. I told him to assume that "My credit history is the best of anyone on earth and in this universe. Now, what is your best rate?" He told me 6.5% with 1 point. He went on to explain that unlike other mortgage companies that ask for the 1 point at closing, they "conveniently" include that amount in the mortgage principal. I told him that 6.5% isn't that much better than my 6 7/8% (6.875%) and when you throw in the 1 point then your "best" loan is really around 6.6%. That's when he asked me what my credit card rates are. I told him that my credit card debts are at about 1.99% APR, which are a little high since I had the entire $15,000 at 0% for the prior 20 months. Kevin said that I'm really not getting 1.99% and that there's no way I ever got 0%. He said, "Tell me where I can get those credit card rates?" I told him to look in his mailbox. That's where many great credit card deals are found. And most really good ones are offered from your current banks. He still didn't believe me and said that if I look at my statement I'd see that I was really paying 16% or more. I explained that when I had those 0% deals, my credit card statement would arrive and show a balance of $15,000 and under "finance charges" the total is "$0.00." His response was, "Think about it, Scott...why would a bank give you 0%. They're not making any money!" I said, "To get new customers." Kevin then told me that it doesn't make sense that they would do that. I said, "Well then, does it make sense that Publisher's Clearing House gives away $10 million, or that McDonalds gives away millions in prizes? Why do they do it? To get business." Why do the banks offer 0%? Because they think that I'm going to forget that the offer ended and let my rate bounce to 15% (or more). I'm not! I'm simply going to transfer my balance to another low-rate offer when their offer ends. Overall, the bank will make money because most people (not DebtSmart readers--we're all too "debt smart") are not going to not notice that the rates have been increased or will be too lazy to continue transferring balances. After I told Kevin how I keep transferring my balances he said pretentiously, "So you're manipulating the system." I said, "I'm taking advantage of my best loan options. You just called me and are trying to get me to transfer my mortgage and credit card debt to your bank. If I decide to use your offer, am I then 'manipulating the system'?" That comment really caused Kevin's brain to freeze up. Almost as locked-up as Windows 98 with 20 open applications. He was forced to shut down and restart. He finally replied with, "Well no." "So then, if I use other bank's offers I'm 'manipulating the system' but if I use your offer then I'm not. Is that right?" Kevin said, "Well I guess you're just being smart." You see my friends, there is a stigma about transferring balances. People say that you're "credit surfing," that you're "manipulating the system" or "using Peter to pay Paul" (I don't owe Paul anything) or "paying one credit card with another." Hear me on this...DON'T listen to these myths. Don't be brainwashed by this dogma! It's always DebtSmart to use your best loan options! It's doesn't matter how many times you switch cards. You're always going to save money when you pick a better loan deal. Kevin changed the subject by trying to give me numbers for his refinancing deal. He said that my payments, with his 6.5%, 30-year, mortgage for my $110,000 would be about $750.00 per month. Of course I always have my calculator handy and I told him that the payments are more like $695.28, in fact, they are exactly $695.28. He said that he's including his 1 point fee in the payment. Well then, according to my numbers the payment is $702.23. I asked him how he's coming up with $750. Kevin said, "It's obvious that you have a calculator there." My response was "Yeah, I have a calculator here. What do you have there? Whatever you have doesn't seem to be able to come up with the correct payment." Finally, since he can't talk about facts anymore he starts to get emotional and says, "Look, I've been doing this for years. I do this all day. What do you do over there at Press One?" "I write and publish books, I run a web site, write an email newsletter." However, I never did mention to Kevin the subject matter. Lastly, I should say that Kevin was nice and I do want to thank him for calling because it resulted in this informative article. For free information about how we can help you reduce your debt, please fill out our form.
Managing Credit Card Debt while Saving for a Down Payment
Saving for a Down Payment 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, Answer I know exactly how you feel since I was in that very same position at one time. First of all you need to be sure that your credit card interest rates are as low as possible. By "low" I mean below 11.9%. There are many excellent credit-card offers available from numerous banks, which make the rates very competitive. Look through your junk mail and read the fine print in some of those offers. Start using the 0% offers and track the dates when they expire so you can be sure to transfer your balance before the rate is increased. Once you've minimized your interest cost, you need to make saving for that house a priority. The way I saved while paying my credit card bills was to make minimum payments. That's right, it's one of those exceptions to the pay-the-most-to-your-credit-cards- first-rule. In this case, to save for the down payment of your house, you make the minimum payments to your credit cards and bank the difference. The reason is that you need to save your own money to use as a down payment; you cannot cash advance money from your credit cards to buy a house. Well I guess, technically you could, but most likely you won't be given a mortgage if the bank learns that you’re buying a house with your credit cards. The strategy here is that you’re going create extra money by paying less each month to your credit cards. Many times banks will give you an opportunity to skip a payment. That's the perfect time to save that extra payment in a bank account toward your down payment. Many people would criticize me for suggesting that you pay less to your credit cards because you're going to pay a little extra interest. However, this interest cost is the fee you pay to be able to get the cash for the house. It was worth it for me and everything turned out just fine. Good luck and please let me know how things go! For free information about how we can help you reduce your debt, please fill out our form.
Money Saving Vacations
My family vacation for $32 per person per day! 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! That's right, $32 per person per day is what it worked out to cost for our family's April 2002 vacation. This article will cover the details of all costs related to this vacation! I think that's great price but please let me know if you think it's a thrifty, quality, vacation. The vacation lasted four days and three nights in Pennsylvania. While there we visited Herr's potato chip (and foods), Longwood Gardens, and Winterthur (in Delaware). The main reason the price of the vacation was low is because we stayed in a cabin. Cabins are great, at least I think so. First of all, because cabins are generally less expensive than hotels. And second because they're much more flexible for the family. Farm cabins are even better since young children love seeing, petting, and feeding animals. The cabin also helps save money because it comes with a full kitchen! This means that you don't have to eat out for every meal, or call for room service. If you're bringing young children on the vacation they'll enjoy, and you'll enjoy, allowing them to run free and burn out some energy, in the yard. Having had my kids stay with me in a hotel room I can tell you that a hotel room is simply a small room with two trampolines (beds). The beauty of the cabin is that it's much more spacious, less expensive, and provides more activities for kids. A major part of the family vacation is just staying at the cabin, relaxing, you know, the reason why you wanted to go on vacation in the first place. :) Researching for cabins, or any other lodging, is best done online. In fact, most of the places I've contacted say that people are finding them online. I always look for a place that has as much information as possible about a potential cabin since the cabin is my first choice.
Mortgage Refinancing to Help Pay Off Debt
Helping Daughter With Debt 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! Our daughter, who is 31 and single, has $15,000 in credit card debt that would we like to help her get out from under. This debt consists of two different maxed out credit card accounts that are both charging very high interest rates, as well as late charges and over the limit fees. We are considering refinancing our mortgage, which currently has a balance of $47,000 and a 5.75% rate. We will continue to make the same payments we're making now, and she will make the additional amount needed to pay off the loan in about 6 years. That way she would not have any debt showing up under her name, and we would be able to take the additional interest off as a tax deduction. Even though there would be closing costs involved on a refinance, I still feel that those charges would be less than the interest on the credit cards over the long term. Is this a good solution or not? By the way, we have had several lengthy discussions with her about how to manage her finances and also purchased your "How to be more credit card and debt smart" manual for her.
Thanks for writing and getting my book! Great question especially considering that last issues survey was about lending to family. The good news is that it seems, from those results, that lending to family works out better than lending to friends. Also, I'd like to speculate that lending to your children, in general, could work out well. The last thing anyone would want is a damaged relationship over money. I do believe that your plan is a good idea. And I believe this for many reasons. First of all you are going to be saving money by refinancing and your going to be saving money for you daughter by reducing her interest rates. Second, because the rate reducing is in the form of a mortgage you get that tax benefit. Third, once her loans are paid off by the refinance they'll be off of your daughters credit report. Daughter to pay back with interest. Now lets crunch some numbers. If she's going to be paying this loan back in exactly six years than a principal of $15,000 at 5.75% requires a monthly payment of $246.83. However, if you really wanted to work out the numbers there are still other cost considerations. Closing costs for example. If you were going to refinance anyway then all the costs that involve the property like legal, title work, loan applications, etc. you would have paid regardless of lending to your daughter. However, if there are points involved then your daughter's portions would contribute to increasing that cost. If there is a charge of 2% then your daughter's portion of that charge is $300. On the other side of charges, you will be receiving a tax refund based on the loan and extra savings because of her additional loan. You could refund that amount to her by simply reducing the rate of the loan based on your tax bracket. If you're in the 15% tax bracket then reduce the APR by 15% from 5.75% to 4.89%. This reducing in interest represents the amount you'd be receiving as a refund based on your daughter's loan. The 6-year, monthly payment of $15,000 at 4.89% is $240.81. Now that your daughter will have no outstanding credit card balances she'll need to be careful when spending. I suggest only using her credit for emergencies and budgeted spending. Managing credit overlaps managing spending. Hope that helps! Please let me know how it all works out! Regards, For free information about how we can help you reduce your debt, please fill out our form.
New Years Debt Resolutions
New Years Resolutions for 2002 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 didn't realize how much I was going to learn, personally, when I asked you all for your New Year's resolutions. I thank you for giving me so much to think about this year. I will be adding many of your resolutions to my own. First off, 84% of us are making New Year's resolutions, but only 28% say they usually follow through. I know myself that if I set out to accomplish a goal and run into a few obstacles that there is a chance I may throw in the towel. When this happens, when challenges arise and you seem to stop working toward your goal just remember that it's not over. You haven't failed. You can only fail if you quit! If you find that you've stopped pursuing your goal--don't give up! Simply start right back like you've never stopped. Every step you take toward your goal gets you closer. The Chinese Tao Ta Ching says, "People fail when they are on the verge of success. A tree as big around as a person's embrace begins with a small shoot; a terrace nine stories high begins with a pile of earth; a journey of a thousand miles starts under one's feet therefore, put as much care into the end as into the beginning and there will be no failure." When I wanted to stop smoking my goal was to go as long as I could without having the next cigarette--not to quit. So far it's been six years. There were other times that I though that I quit. I once went nearly one year without having a cigarette, but then one day I caved and had one. After that I figured that since I had one it's over, and I went right back to smoking. Before my last cigarette six years ago I started to slow down by seeing how long I could go without smoking and not beating myself up when I did smoke. If I was able to not smoke for five hours then I was successful because it was a few cigarettes less that day and I was moving toward my goal. Instead of getting upset about the one cigarette that I had when I felt weak, I focused on the success from the hundreds I had not smoked. It took two years before I stopped thinking about smoking every single day! Finally, I can say "no" to smoking without feeling like I'm missing it, but that doesn't mean I've quit. I can never let my guard down, I must always work on this goal. It's the same with your debt. You can always start paying on time, getting organized, and find the best credit deals. Just start today and you will find success! The resolutions everyone submitted seem to fit into different categories. Each of the resolutions discussed below is a grouping of many submitted by DebtSmart Readers. FINANCIAL RESOLUTIONS (My personal favorite.) Resolution: "Equip my children to be frugal and conscientious." Comments: This is on my list also. I need to get my kids interested in learning about money, understanding its value, and teach them how to track income and spending.
Paying Down a Car Loan
Make Payments For Son's Car 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! Dear Scott, Jim, Thanks for writing! The good news, certainly for your son, is that you're willing to help him. And because of that you'll be able to save him some money and keep his credit history clean. Since your son probably has your character, it's a good bet that he'd make sure to repay you when he's back on his feet. Here are a few ideas to save money, while helping your son at the same time: 1) Buy the car from your son. Check with your credit union or local bank and find out what the deal is for used car loans. The bank will loan you an amount based on the book value of the car, but the rate will most likely be far less than the current rate. If you cannot get the full $11,000 needed to pay off the original amount you may want to consider using a credit card cash advance if the rate is low. Call your credit card bank and see what they have to offer. Tell them that if they give you a good deal you'll use their line of credit otherwise you'll be calling your other credit cards to see who wants to make a profit. Or, if you have a low rate transfer offer on one of your credit cards, you could cash advance one credit card and immediately transfer the balance to the lower rate card. So between the bank loan and other financing you can take possession of the car and save money over the current financing. 2) Fix the car. 3) To sell or not to sell. If he wants to keep the car, then you could sell it back to him for the unpaid balance plus the cost of repairs. Or he could pay you monthly for all the financing. If he doesn't want to keep the car then sell it. Take that money and pay off as much of the financing as possible. You may not get enough from the sale to repay the entire amount. In that case you'd need to work out how that difference would be paid. As far as negotiating the amount goes, it's always worth it to give the lender a call and see if they'll reduce the balance. However, in this case, I believe the chances are slim. The above suggestions are the ideas I would consider. I hope you find them useful. Good luck and please let me know what happens! Regards, For free information about how we can help you reduce your debt, please fill out our form.
Personal Finance Management
9 Steps to Get Organized for Financial Success! 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! The beginning of my financial life was when I received my driver's license. Before that I rode my bicycle around and had no bills. Well, I needed a car, right? I had to get to work so I could pay for the car, to get to work. That's what started the bill cycle. The car was used (preowned) but it was the gas credit card that was getting charged. Let's not forget that I could now go to the mall, buy stuff, and take Larissa on better dates than McDonalds (we started dating before I could drive). So it didn't take long for the bills to start arriving in the mail. I just didn't know what to do with this mail. Nobody ever showed me a system for managing bills because I didn't have any to keep organized. So what did I do back then? Probably what many people do today. Bring in the mail, stack it on a desk, and tend to the pile at the last minute. Hopefully I didn't miss too much because I frequently found mail on the floor behind the desk. It didn't take long for me to realize that I had to do something. I had to get organized! That was a lifetime ago, really, I was 18 then, now I'm 35 and insanely organized about handling money, bills, and all finances. I've learned over the years that the better organized you are with all your transactions the less likely you are to: Bounce checks.
1) Filing system. The hanging files are the best. They're just easier to work with, easier to access. A basic filing cabinet costs around $30 and is well worth the price. Once you have a filing cabinet, and some hanging files, create a file for each bill and bank account, for example, mortgage/rent, electric, cable TV, water/sewer, health clubs, checking account, savings account, cash receipts, etc. For credit cards I name the file by the bank name and the last four digits of the card number, i.e., "Citibank 4323." Lastly, create one more file called, "Bills Unpaid." This is the place to put all those annoying statements until you have time to write the checks. 2) Take care of the mail when it arrives. Now when you're ready to sit down and take care of payment, all your bills will be in place and you won't have to spend time going through each envelope before writing the check. 3) Use accounting software. "If you have a computer, then you should be using financial software." That's a quote. Why? Money is like the blood of your financial life. It flows into every aspect of what you do. It circulates in, out, and all around everyone in the family. By using your computer to track spending, you'll always know exactly what's going on, where money is being spent, and how to plan for new purchases. The most powerful aspect about using software is eliminating that checking ledger. I haven't written in a check ledger since 1987! I have searchable records of every credit card charge and check that I've written in my entire life! The best part is that I don't bounce checks. It's easy to balance your checking account using the computer. There's no adding, subtracting, etc. You just match the checks (and ATM withdrawals) with your bank statement and everything should balance. If it doesn't then you can quickly find the problem. You know how you sometimes get a bill that you think you've already paid? It's very easy to find out by doing a search with the computer. A word of caution: if you do use software then you MUST back up that data! It won't take long for you to completely abandon those paper ledgers, but PLEASE make a back up EVERY time you work on your bills! Keep in mind that tracking alone won't solve money problems. For example, in 1995 I created a report for the year that detailed all my spending by category. I spent 18% of my income on the mortgage, 11% on groceries, 9% for utilities, 6% on federal tax, 6% on social security tax, 6% on property tax, 5% on medical. Those are the top-spending categories which, used more than 50% of my income for the year. I cannot make changes in any of those categories unless I decided to sell my house, or cut back on food. Tracking lets me know where the money is going, but I have limited control over those categories. Areas I can change don't really add up to much, like 1.4% for entertainment. 4) Enter the transactions into the computer. Entering your transactions in the computer is the confirmation that your perception of what's going on matches your bank's. That means that your computer should be what's correct, and the credit card statement better match what your computer says or there's a mistake somewhere. It's your way to make sure you really did charge every item and write every check. It's the way to detect fraud and bank mistakes! 5) Pay bills on a specific day. It usually takes me about 2 to 3 hours to pay my personal bills once every two weeks. Once I start on this task I'm focused! I review every single credit card statement, check, transaction, credit offer, etc. to make sure that I'm receiving the best rates and lowest cost credit options. Each transaction is carefully recorded in the computer. It's important that on this "bill pay day" everything matches. My billing statement matches what I have in the computer and all accounts balance. All check numbers line up so there are no missing checks. 6) Balance your checking account. By balancing your accounts and using software to handle transactions you can easily avoid an incident that happened to a friend of mine. She accidentally wrote two checks for her mortgage and the mortgage company cashed both. The result was that ALL her other checks bounced like super balls! The cost, when the smoke cleared, for those bounced checks was more than $800 plus the aggravation of dealing with all the banks, freezing of accounts, and stress. 7) Create a list of all bills and debts. Each time you pay bills be sure to update the list. I started out with a list on paper then I moved to using Excel. Now, because I have so many credit cards, I had to create an Access database to track that information. You need this list to be your roadmap. It's a planning tool for future spending. You'll be able to see your spending plans at a glance. 8) Create a list of credit offers. I also keep a list of new credit card offers; however, I do prefer to take advantage of the offers from my current banks since I have a long history of doing business with them, giving me more bargaining power. The key here is to create these lists. This way, if one of your current credit cards raises their rate, you don't have to look very far to find a better deal. You don't have to keep a stack of mail to go through. You simply pull out the list and start calling! 9) Start a financial notebook. Whether by hand or in a computer this is very important! You need to have detailed notes when you contact your credit card banks, checking bank, mortgage company, etc. The reason is that sometimes the phone reps don't make the proper notes in your account, and you'll need to reference your notes to keep all those banks in line. Your financial notebook should include your strategies, for example, "Be sure to transfer the $2,000 balance from the Discover card to the Advanta 3.9% offer by 11/25." The beauty of keeping an organized notebook is that you can refer to your notes, which means you don't have to think about all the details all the time. So there you have it. I have followed these steps for financial organization for years with incredible results. I've keep my interest costs down, I only have to deal with bills and payment one day every two weeks, I rarely bounce checks, I have corrected many bank errors (never in my favor of course), and I don't have to think about financial details on a moment-to-moment basis For free information about how we can help you reduce your debt, please fill out our form.
Service Charges
A component of some finance charges, such as the fee for triggering an overdraft checking account into use.
So Far in Debt; Can't Seem to Breathe
So Far in Debt; Can't Seem to Breathe 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 know you hear this all the time, I have been paying for over 2 years not charging anything and still cant get anywhere. I cut them 2 years ago, and called the companies to ask for a lower rate. They gave me like a year with low interest, and lower payments so my credit reports would not be hurt. Bottom line, my credit report looks so bad, we can't even refinance our home. I am in so deep that if I had a pill I'd take it! When I called a company to help me all they wanted to do was charge me more money that I don't have. I am not sleeping, and just don't want to leave my home. I own my own business, and I am just asking for your personal help. Please, please help me.
Thanks for writing (and listening)! Sorry to hear how much your debt burden is affecting your health. I can certainly understand how you feel. Knowing that you owe money, expensive money (at high rates), can certainly stress-out anyone who wants to make good on their financial commitments. As you're probably aware, getting out from under this debt will not be an easy one-step solution. It's going to be an ongoing process that will take years of focus, attention, planning, and work. The broad picture to getting out of debt is three-fold: Since you own a small business, I have a feeling you're fairly organized. Briefly stated; files, worksheets, list of all the debts and bills. It's number #2 that's the killer (no pun intended). You already mentioned that you've tried to call the banks and get them to reduce your rate. You may want to call back and give them one last chance. If the first rep cannot help you, then ask to speak to a supervisor. There's much more about this topic in my next book, "Talk Your Way Out of Credit Card Debt" which is available for pre-order at Amazon.com (shameless plug). If they don't lower the rate then you need to punish them! You need to spank their bottoms, well, bottom lines. Apply for new credit. Do it now. Someone will give you a chance. Even if the rate isn't that great, meaning that it's not better than your current cards, get the card anyway and transfer your balance to teach your current banks a lesson. After that it won't be long before the banks start competing for your business. You can read my article, "Getting better, cheaper credit--right now!" and apply for new credit. Next, correct any errors that exist on your credit report. You can get a copy of your credit report from Equifax or TransUnion. Dispute anything that you think is not accurate. The key to all of this is taking action. Start right now! Start calling right now, start applying for new credit right now. It's been my experience that it helps to have the same amount of credit as debt in order to get the banks to offer you good deals. The best deals, and I mean lowest rate offers, will originate from your existing credit accounts, so get more of them. Don't cut up your cards, because when you do that you're cutting out your options. You'll need $25,000 of available credit so you can transfer all your existing debt to new cards. Believe me, when those banks that just got paid off realize that they're not making any money from you they'll send a low rate offer pronto! Just be sure to pay on time! There is no greater sin in the world of credit than being late. As long as you don't pay late and are active in seeking new credit deals, you'll be able to reduce your rates in time. The last step is getting more money. You have a small business. What do you need to do to make it run better? What do you need to do to sell more? I love reading books about marketing and motivation. The correct marketing can make all the difference in the world. Here are a few of my favorites. 1) "There's a Customer Born Every Minute: P.T. Barnum's Secrets to Business Success", by Joe Vitale Lastly, in the scheme of what's important, your debt shouldn't make you feel unhealthy. Try to get back to sleeping. Relax. It will all work out. "Everything for the best," as Jhoon Rhee would say. One last book recommendation to help you feel a little better while you're working on your plan is "Don't Sweat the Small Stuff... and It's All Small Stuff: Simple Ways to Keep the Little Things from Taking over Your Life," by Richard Carlson. Good luck! I really hope that helps! Please keep in touch! Regards, For free information about how we can help you reduce your debt, please fill out our form.
Transfering Credit Card Balances
For free information about our debt consolidation program, please fill out the form on the right.Transfer Credit Card Balances 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. Answer 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. For free information about how we can help you reduce your debt, please fill out our form. |
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