Archive for May, 2009:
Debt settlement services
IF YOU ARE STRUGGLING MAKING YOUR CREDIT CARD PAYMENTS?
ARE CREDITORS CALLING?
IF SO LOOK INTO ONLINE DEBT SETTLEMENT SERVICES
Debt settlement, also known as debt arbitration or debt negotiation, is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full.
As long as consumers continue to make minimum monthly payments, creditors will not negotiate a reduced balance. However, when payments stop, balances continue to grow because of late fees and ongoing interest.
Consumers can arrange their own settlements by using advice found on web sites, hire a lawyer to act for them, or use debt settlement companies. Some settlement companies may charge a large fee up front; or take a monthly fee from customer bank accounts for their service, possibly reducing the incentive to settle with creditors quickly. One expert advises consumers to look for companies that charge only after a settlement is made, and charge about 20 percent of the amount by which the outstanding balance is reduced.[1]
Now look at that piece of plastic, tucked away innocently in the card section of your wallet. That small thin glossy Visa or Master card looks oh so innocent as it shines and glimmers in the sunlight, awaiting its next day of use!
But the creditor who assigned you this seemingly innocent card are not clueless. Matter of fact, they realize exactly what’s going on.
It’s not a fluke that as stated by the Federal Reserve’s 2006 survey nearly half of U.S. homes are bogged down with credit card bills and are now looking for debt help. Credit Issuers have made a multi-billion dollar industry from predicting the average consumer’s habits. Below are a few things that creditors realize that credit card consumers are usually unaware of:
- Probability for Problems in the Economy. Many credit card companies have complete departments focused on studying the economy and predicting possible economic issues that would cause credit card holders to use their credit cards more regularly. It’s not a coincidence that at a time when a lot of experts say that the U.S. economy is experiencing a downturn as a result of the swelling cost of oil, food, and other everyday needs, creditors are gaining more profits due to a rise in the everyday use of credit cards.
- Your Usage History Determines the Future. Another morsel of invaluable knowledge that credit card companies profit from is your past credit card habits. They keep a detailed history of your previous buying activities, amounts owed, and what you have decided on in specific circumstances that have come up in your credit card history. What you have done in previous situations is a useful forecaster of your potential deeds. For instance, perchance you initiated a new company and used your credit account to purchase $1,000 in business related supplies one time. Now your bank realizes that you are probably going to use your card for both personal and venture-centered purposes. In another example, if a credit card company knows that you have a weakness for high priced fashionable , they won’t only predict that you’ll purchase further high priced items in the coming months, but furthermore forward you rare offers with your bill for fashionable items from its advertiser partners.
- Card Users Do Not Always Scan the Small Print. Creditors also rely on the notion that many credit consumers are too lazy to read the fine print of their credit card arrangements and agreements. If a credit card user will only pay the lowest payment possible, not taking note of what the APR is, and not understanding how payments are distributed, they can find themselves stuck in a lengthy cycle where they will pay off credit cards for a lengthy period of time. In the meantime, the bank will continue to harvest the benefits of the consumer’s deficiency of facts for a long time into the future.
- 0% Balance Transfer Specials Lure You to Charge More, Thus Raise Your Balance. Years ago, credit issuers started mailing out varied 0% balance transfer specials to convince consumers at other companies to move their balances. While a significant amount of people took advantage of these low APR specials to save money and pay off credit cards, they may not have taken into account the fact that by helping to free up credit on their credit card accounts, these credit issuers were really creating somewhat of a trap. If a customer who is trying to pay off credit cards for whatever reason uses the new 0% balance transfer card account after a certain period of time (even if the 0% balance transfer rate is in effect for the life of the balance transferred), the interest rate on that new purchase balance can increase to 18% or more, and is paid last. This means that 12, 22, or 32 years down the line when the 0% balance is finally paid off, the amount you put on the credit account at 18% has been amassing interest for all of those decades as well. You could find yourself in the same boat as you were in originally!
- “Rewarding” You With an Increased Credit Maximum Gets You Deeper. Creditors usually ”thank” excellent debt holders who pay their monthly debt in full faithfully each month by increasing their spending maximums. But in truth, they know that when your maximum increases, you are likely to swipe the card on a more regular basis. At some stage in that course of action, you will reach a height where the creditor will quit increasing the credit threshold and is profiting from the increased interest costs on your credit card bills. It’s all about foreseeing the credit user’s activities.
Life Challenges Occur
The most important thing that credit card companies know way beforehand that we regular folk don’t predict is that life happens. Unexpected costs come up, cars need to get worked on, and medical and dental procedures have to be carried out. In many of these situations, customers have found themselves so far in economic problems that their instant response to unexpected expenses is to resort to credit. And so persists the sad story of American consumers who are trapped by high credit card debt and resourceful banks that rack up profits off of the despair and unawareness of customers.
If you have put yourself in a situation where you have been taken by all of these attempts to lock you into unsecured debt for life and have mounted up a substantial amount of credit balances due to life happening, it’s dire that you know that there is a silver lining, and yes there is an answer to your debt issues. Debt relief programs akin to the one you’ll stumble on at NetDebt.com have made many consumers break out of their bad dreams involving debt.
PLEASE DO YOUR DUE DILLIGENCE BEFORE YOU GET STARTED.
Debt Negotiation Companies
Also a type of debt settlement firm, they offer a consumer a different way to get out of debt. These companies work with consumers who have no cash to make settlement offers with the credit card companies. Debt Negotiation companies set up “trust” for you – though they are not always a licensed bank entity under the Federal Reserve. They collect a monthly fee to maintain the account, with the idea being that you are saving enough money to settle the accounts at a future date. A portion of the monthly payment towards the “savings account”, a part of the payment is taken as a fee for the debt negotiation company. Unlike consumer credit counseling services, they do not pay your creditors each month, they put money into your “trust”. Your creditors are not told of your “arrangements” with the debt negotiation company. A legitimate company will use an FDIC insured company for the trust account and give you access to it online 24 hours per day. They should also provide you with access to the negotiation correspondence with the credit companies.
The drop out rate of consumers from debt negotiation companies is high. The debt negotiation companies do not handle calls from the credit card companies, nor the collection agencies. Credit card accounts typically go into collection after they are charged off, typically 180 days after the last payment on the account. The length of the program is often 3-5 years, and many consumers cannot keep up the payments for this period of time. Often, consumers wind up being sued or even more deeply in debt with added interest and fees piling up. This can be avoided by using companies with good standings and practices that protect consumers from these procedures.
Subscribe to the comments for this postWhat are the Benefits of Debt Consolidation?
If you are in too much debt, remember that debt consolidation is an option. Financial dues and notices may be very stressful for you, especially if you have a lot of them. Dealing with credit collectors may be very strenuous especially if you do not have the money on hand to repay your debt. Well, it is good to explore debt consolidation as an option. But before actually getting a debt consolidation loan, it is important to know if it will be beneficial for you.
When you consolidate your debt, this means that you get a single loan to repay all your current loans. It could be that your entire unsecured loans will be consolidated to a single unsecured loan or you can get a single secured loan to pay off all your unsecured loans. Secured loans require collateral to acquire the loan. The collateral comes in the form of house, car or land. Sometimes, jewelries and other valuable materials are also considered as collateral. Because of the presence of a security deposit, the secured loan is actually a low-risk loan for the part of the creditor. In case the debtor does not repay the amount borrowed on the stated maturity date then the creditor gets the asset which served as the collateral. He can then keep the collateral for himself or sell it to get back the money he lent to the borrower.
In effect, he is willing to peg lower interest rates and gives way to better payment schemes. Unsecured loans have higher interest rates than secured loans. This is because the creditor faces a higher risk when lending money in an unsecured loan. Unsecured loans such as credit card, shop cards and the like do not require collateral or security deposit.
One benefit of debt consolidation is the low interest rates. If you are a good and patient researcher, then you might find a debt consolidation loan that has interest rate that is seventy five percent lower than the interest rates offered by credit card companies or other unsecured loans. When you get a debt consolidation loan, remember that you must agree on a monthly payment which you will be able to repay.
If you could not pay the monthly obligation, then your debt consolidation will be useless. A debt consolidation calculator is used to compute for the amount that you can borrow as well as the monthly payment. Flexible payment schemes are also offered by debt consolidation companies. There are also companies which offer benefits if you pay twice or thrice the monthly amount in one payment.
Why Bad Debt Must be Paid Off First
You may heard credit specialists on cable and financial websites teach about “ good debt ” and how it contrasts with bad debt. You are taught to pay off your bad debts first because they normally are tied to costly interest rates and are not balanced by something of value. It’s good to first understand the distinction between good and bad debt when you are looking into a debt reduction program.
All You Need to Know Concerning Good Debt
- What’s Good Debt? A good debt is any obligation that can actually increase your net worth. The rule follow is: if holding the debt could create a spike in your net worth, then it is thought of as a good debt. Good debt will develop a profit for you through an escalation in value or business sales. Perhaps, a good debt may additionally be a debt that causes a rise in your overall quality of life. Finally, a debt that’s tax deductible, which means that holding the debt decreases your tax bill every year, should without question be put in the category of a good debt.
- What are A Couple Examples of Good Debt? The most important example of a good debt would be a house loan. Assuming that it is backed by a property or portion of terrain that’s increasing in value, a mortgage loan creates an income through the equity that’s developed in the house. A further example of good debt would be a college loan, due to the fact that it is back by learning and should produce later income. A new business line of credit can additionally be thought of as a good debt if the business breaks a profit and results in an ongoing residual income.
Why Do People Refer To Certain Debt Bad Debt?
- What’s the Easiest Way to Decide If I am Dealing With Bad Debt? Simply put, if the credit account doesn’t produce additional worth for you and/or your bottomline, then it is bad. An auto loan is not a good loan due to the fact that vehicles go down in worth. The rule of thumb is that as soon as you take a new automobile off of the dealership you leave behind 20 percent in worth, and that decrease in worth carries on right up until the automobile is paid in full. The most widespread example of bad debt would be your credit card bills. Credit cards are the most damaging kind of bad debt for three major reasons: 1) it is not associated with objects of worth (except if you consider the sandals you got in 1998 something of worth!), 2) it commonly carries an expensive rate, and 3) it is a rotating account that could continue all through your life.
How Do I Get Rid of My Bad Debt?
You have a few options when you’re searching for a debt solution. Some the population decide on a bankruptcy lawyer, which may eliminate your debt but cause you to be denied by future banks, jobs, and other businesses for up to a decade. Some debtors settle on their own debt reduction plans, and many have learned about the advantages of plans proposed by debt settlement companies. Whatever approach you settle on, your bad debt should in every case be the first on your list because it it high in cost and in effect takes value from your bottomline.
How to Observe Memorial Day
The “Memorial” in Memorial Day has been ignored by too many of us who are beneficiaries of those who have given the ultimate sacrifice. Often we do not observe the day as it should be, a day where we actively remember our ancestors, our family members, our loved ones, our neighbors, and our friends who have given the ultimate sacrifice:
by visiting cemeteries and placing flags or flowers on the graves of our fallen heroes.
by visiting memorials.
by flying the U.S. Flag at half-staff until noon.
by flying the ‘POW/MIA Flag’ as well (Section 1082 of the 1998 Defense Authorization Act).
by participating in a “National Moment of Remembrance”: at 3 p.m. to pause and think upon the true meaning of the day, and for Taps to be played.
by renewing a pledge to aid the widows, widowers, and orphans of our falled dead, and to aid the disabled veterans.
Also, please consider adding your voice in support of the efforts to restore the traditional day of observance of Memorial Day back to May 30th (instead of “the last Monday in May”). This would help greatly to return the solemn meaning back to the day, and to help return minds and hearts to think upon the ultimate sacrifices made by those in service to our country. Just one day out of the year to honor our loved ones, our ancestors, our friends who died in conflicts and wars — not to honor war, but those that died in those conflicts and wars.
I receive many emails from people expressing their thanks for those who have served and gave the ultimate sacrifice for this country. The following, received in 1999 and used with the author’s permission, sums up all the emails I have received very elegantly, and is true to the original spirit and meaning of Memorial Day.
“This weekend I am going to do something different. I am going to buy some carnations each day and go to one of the nearby cemetaries and walk through the sections for soldiers. When I find a grave that has no flowers, I’ll leave one and say a prayer for the family of that person, who for some reason could not bring their soldier flowers. I will pray for our country and all who serve or have served. For their families, who also serve by losing precious days, weeks and months spent with their loved ones who are off serving, preserving peace and the freedom we have in this country. I’ll pray for the families who paid the ultimate price, who’s loved ones died, or were taken captive and never returned. I’ll pray for anyone who may still be held in captivity and thinks perhaps they are forgotten. I do NOT forget.
I’ll say a prayer for every person on the Internet who takes a moment from their time to come to sites like yours and be reminded of what this holiday really means. And I’ll say a prayer of thanks and ask God’s richest blessings on you.
Thank you again…. and God bless!
Sylvia Mohr”
No, Thank you and God Bless you, Sylvia. May more follow your example.
In fact, wonderful people in other nations sometimes show more of the true spirit and mission of the U.S. Memorial Day than we do here. For example, a 2001 US Memorial Day Guestbook entry from a citizen of the Netherlands states:
“Hi,
In 1999 I laid flowers at the grave of a young U.S. fighter pilot who was KIA in my village in 1945. In the Netherlands I know of schools ‘adopting’ graves of Allied servicemen, keeping those graves in excellent condition ! Does anybody know of adopting graves in the U.S. by schools ?
Sincerely,
Paul Patist <patist@wanadoo.nl>
Castricum, The Netherlands – Tue May 15 04:50:29 2001″
More schools in the U.S. could follow the lead of the Netherland schools. Let us take a few moments this Memorial Day to reflect on the meaning of the day, to observe the day and be mindful of the sacrifices of others before we go and enjoy the freedoms they bought for us.