Credit card debt » Creditor

Credit Card Debt Elimination

admin — Mon, 11 Oct 2010 19:13:55 +0000

Sure, you’ve heard of people talking about eliminating credit card debt with a consolidation loan, but does it really work?. The answer is YES, it is a useful tool that can help if you are in a situation with your credit card debt that you can’t handle alone.

If you are in credit card debt and have recently received an interest rate hike due to making a late payment, or even if you just wish to eliminate your credit card debt, a credit card consolidation loan may be just what you need. Credit counselors are available to discuss your individual situation too see if you might qualify for one of their credit card debt consolidation programs.

Credit card consolidation has it’s advantages and by qualifying for one you will receive a lower interest rate than what you are currently paying now. If you have been late on your payments and your creditor bumped up your interest rate as a result, you will save money just from the lower interest rate right from the start. With a credit card consolidation loan you may also find that your creditors will waive your previous late fees and other fees for exceeding your credit limit, and this alone could save you a lot of money.

One of the best benefits of debt consolidation is that your payments are now all combined into one manageable payment for you to make every month. Most times the amount required to pay back a credit card consolidation loan is less monthly than the amounts you were paying before you entered the program. This will help you to drive your debt down faster and allow you to pay off more of the balance each month. Qualified participants discover that they can wipe out their credit card debt in five years or less, where before it seemed like you would be paying them off until the day you die.

By: Zach Ford

Credit Cards For Bad Debt – 5 Steps to Improve Your Situation

admin — Thu, 23 Sep 2010 09:46:03 +0000

With the world in financial meltdown, its important to ensure your finances are as good as you can make them. But what if you have a poor credit rating or a history of bad debt? It’s still possible to take positive action and improve your situation. If you do nothing then the situation will worsen – the credit card and loan companies structure their products this way. So doing nothing will not help. So here is what to do:

Step 1: Decide to take positive action. This is, for most people, the hardest step to take. They stumble along and hope that the situation will improve and that their creditors will take pity on them and wave a magic wand. It won’t happen. Financial products are designed with terms and conditions that continually penalise unless you take action and understand the rules.

Step 2: One major thing you have to keep in mind is your creditor is probably very willing to work with you. Its in their best interest to have you making some payment versus no payment at all. So the first step is to contact them – be polite but firm. Tell them about your situation and that you want to take positive action to improve the situation. Ask for a lower interest rate or a repayment plan. You may get a poor response but persevere and put your request in writing – it’s then a permanent record of your willingness to work with them to resolve the problem and its likely to get a better response.

Step 3: STOP using your credit cards. Do what you have to do, cut them up, bury them, freeze them, anything as long as it stops you using them. Any spend on credit (a socially acceptable word for debt) will make the matter worse and if you are already a bad risk because of previous situations then you are likely to be paying heavily for the right to spend money you don’t have – probably over 30% APR (Annual Percentage Rate) or even 40%. This will cost you huge amounts in interest.

Step 4: Decide to reduce your debt. Take a sheet of paper and list your debt in order of interest rate. Include all loans and credit cards, together with the APR being applied to each. Start paying the ones with the highest interest rate first and work down the list. Concentrate on those high interest rate cards by paying more than the minimum balance each month. If you pay the minimum it will take you years to clear the debt. It doesn’t matter how much you pay, just pay as much as you can possibly afford over the minimum required. Pay the minimum on the other cards and debts until the one with the highest interest is paid off, then start on the next highest.

Step 5: Keep going! Again, easier said than done but if you work consistently down the list you will eventually be debt free. Treasure that moment since you will be one of a tiny minority who have no debt. You can then spend your money on what makes you happy and start to build the life you want.

By: Colin Hardwick

The "Credit Card Debt Termination" Scam

admin — Sat, 18 Sep 2010 12:40:39 +0000

“Legally terminate credit card debt! You can be debt-free in 4-6 months!” Advertisements like this are for a new type of program that has spread via the Internet over the past few years. It’s called “Credit Card Debt Termination,” and victims are paying $1,000s for this bogus service. One victim I spoke with lost more than $15,000! In this article, I’ll review the principles behind this program and explain exactly why it’s a scam to be avoided.

First, let’s get our definitions straight. The scheme I’m describing here should not be confused with Debt Consolidation or Debt Settlement (also known as Debt Negotiation), both of which are legitimate and ethical methods for debt resolution. The easiest way to distinguish the Credit Card Debt Termination scam from other valid programs is based on the central claim that you really don’t owe any money!

With Debt Consolidation, you pay back all of your debt balances. With Debt Settlement, you pay back a lower amount (usually around 50%) while the creditor agrees to forgive the remaining balance. However, with the bogus Credit Card Debt Termination program, promoters claim that you won’t need to pay anything at all (except their outrageous fees, naturally). They make the surprising claim that you can legally wipe away your debts simply by using their super-duper magic documents. Based on some legal mumbo-jumbo, the claim is made that you really didn’t borrow any money from your creditors!

In order to understand this scam, a little background is necessary. Remember the tax protest movement back in the 1970s? People were claiming that the IRS tax collection system was unconstitutional, and based on their misinterpretation of the tax code, they refused to pay taxes. The IRS came down hard on the tax protest movement, and through the court system, they blew holes in all the legal arguments put forth by the protesters. The Credit Card Debt Termination scam is a lot like the tax protest movement. In fact, among collection professionals, it’s called the “monetary protest movement.”

Just like the tax protest movement, there is a common theme that runs through all of the promotional materials issued by the monetary protestors. The basic idea is that our Federal Reserve monetary system and generally accepted accounting principles (GAAP) do not permit banks to loan out their own money. Therefore, according to their interpretation, the credit card banks are the ones running the scam on the American public.

Stay with me here, because the logic is pretty strange. If a bank cannot lend its own money, how does a credit card bank extend credit? The claim here is that your credit card agreement itself becomes a form of money (known as a promissory note) the moment you sign it. The idea is that the bank “deposits” your agreement as an asset on their books, and then any credit you use is offset as a liability against that asset. In other words, the core concept here is that you literally borrowed your own money from the credit card bank.

So let’s say your balance with ABC Credit Card Bank is $10,000, which you borrowed against the card to make everyday purchases. The scam promoters say all you need to do is notify the bank that you want your original “deposit” back. However, you will permit the bank to offset the amount you borrowed against the amount you have on “deposit.” Presto! You don’t owe the balance anymore!

Now, as you can imagine, the banks don’t take kindly to such tactics. Many of the consumers using this technique are getting sued by their creditors. But the scammers have more tricks available, as if the “smoke and mirrors” financial nonsense wasn’t enough. One of their techniques is the use of bogus “arbitration” forums. Arbitration is of course a legitimate system that allows businesses and individuals to resolve disputes without going to court. What do the scammers do? They coach people on how to set up a fake arbitration forum, for the express purpose of making a dispute against their creditors! Naturally, the creditors will not send representatives to some non-existent arbitration forum, so the consumer gets to rubber-stamp their own arbitration award. If they get sued in a regular court, they present their bogus award to the judge in the hopes that the creditor’s lawsuit will be dismissed.

There are other techniques used by promoters of this scheme, but the key point to remember is the central claim that your credit card debt does not really exist. Of course, it’s all nonsense based on a misinterpretation of our monetary system, and if you step back and think about for a minute, the truth seems pretty obvious. What these scammers are saying is that the entire $700 billion credit card industry is operating on an illegal basis! Even if the legal theory used by the promoters were true (which it isn’t), do you think for a moment the government would allow this giant industry to go under? That’s exactly what would happen if the promoter’s claims were proven true and used on a widespread basis.

The Federal Trade Commission, which has jurisdiction here, hasn’t stomped on these con artists yet, but it’s only a matter of time. Unfortunately, in the meanwhile, consumers are being bilked out of millions of dollars for a worthless program that will only get them into deep trouble with their creditors. If you are approached by someone offering to wipe away your debts using this system, I strongly recommend you run in the other direction while you hold on tightly to your wallet or purse.

Remember, you can eliminate your debts if you take a disciplined approach to your finances, make a budget and stick to it, and don’t use your credit cards unless you can pay off new balances in full each month.

Good luck in your financial future!

By: Charles Phelan

Credit Card Debt Management Can Help You in Testing Times

admin — Fri, 03 Sep 2010 07:26:02 +0000

In this day and age, credit cards have become a necessity more than just a fashion statement. It is not rare to see people carrying several credit cards all at once. Credit card debt management deals with such numerous credit card debts that one might have. People are tempted to take loans on their credit cards these days. With the growing popularity of these credit cards, more and more companies offer such loans. It is in such cases that credit card debt management comes into play, in situations where a person might have multiple debts on one card or might have debts on more than one card. In such a case, things might get complicated. Credit card debt management becomes indispensable in such cases.

In credit card debt consolidation, which is part of the credit card debt management process, a borrower can take a separate loan which consolidates all the existing debts into one. This single loan can be paid off in easy installments. In spite of all the obvious advantages of multiple credit cards, it is advisable to use only one credit card, as this simplifies payments.

One of the several advantages of credit card debt management is the low rate of interest that the companies might offer. Also the fact that one is responsible to only one creditor instead of many might seem appealing to quite a few.

Credit card debt management is of two types. Secured; in which the loan is taken against a collateral. This collateral is generally one’s property. In case of non payment, the property is prone to be seized.

The second type is unsecured. In this there is no security involved; however, the rate of interest is much higher than in the secured type. There are several settlement agencies also at large, that would carry out all negotiations in return for a nominal fee.

People with a bad credit should not hesitate to take advantage of credit card debt management services that include debt consolidation, debt management, advice, negotiation discount and lots more. Debt reduction is also an effective means of dealing with such issues. There are several agencies out there that specialize in dealing with people with bad credit. Also, it should be noted that bad credit history is not permanent. One’s credit score can always be improved.

By: Alec Recce

What Happens If I Don’t Pay My Credit Card Bills?

admin — Mon, 05 Jul 2010 09:50:52 +0000

When facing amassing credit card debt, it is not uncommon for many individuals to ask “Why pay my credit card bills?” Granted, while this option is there and it may give you some extra cash for a few months, here are a few of the major repercussions you might be facing should you decide to go delinquent on your monthly payments:

1. Creditor/Collection Calls:

This might be the worst part of a delinquent debt-the constant calls from creditors demanding their money. Collectors have been known to call 8-10 times a day, at home, at work, on your cell phone. And these are the ones who follow the rules. Creditors have been reported to speak to bosses, neighbors, and family members (which of course is illegal). Once they get you on the phone they can be even worse. They use a number of psychological techniques to demean you and force you to give them checking account numbers or other bank information. In other words, they will do anything they can to make you pay. (Please keep in mind that your rights are protected by the Federal Trade Commission. To find out more information, please consult the Fair Debt Collection Practices Act.)

2. Damaged Credit Score:

Creditors will begin to report missed payments to credit bureaus which will inevitability have an affect on your credit score. These marks can be removed once a settlement is reached or payments are made.

3. Interest/Late Fees/Over-the-limit fees:

Not paying does not mean that interest will stop accruing. Once you go delinquent, many creditors will immediately raise your interest rate to the highest possible interest rate, about 30%. In addition, they will charge late fee penalties ranging between $30-50, and if your balance exceeds the credit limit, they are more than happy to tack on over-the-limit fees.

4. Legal Action:

Eventually, if a debt becomes very delinquent, a creditor may opt to take legal action which can result in liens, garnished wages, or other legal judgements requiring you to pay your debt. However, this is typically a long and complicated process that companies would like to avoid. Nevertheless, it does happen.

If you are considering not paying your credit card bills, it may be the perfect time to considering professional help. There are a number of financial companies that can help you find a Credit Card Debt Relief solution to your financial dilemmas. Why wait? Contact one today, as the first step in finding a solution to your economical problems is usually asking for help.

By: Scott Wallitsch

Credit Card Debt Negotiation

admin — Thu, 22 Apr 2010 18:41:47 +0000

Debt negotiation on credit cards is more commonly known as, credit card debt settlement. Credit card negotiation would be the next step for those have failed with attempting to consolidate your debt. If you are 3 months or more past due or cannot keep the monthly minimums of your card payments current.

Generally this works much the same as a debt settlement but usually only involves unsecured credit. The special nature of unsecured credit allows the debt settlement company to negotiate a pay off usually in the rang of 40-50% of the balance because in the event that a bankruptcy must be filed they run the risk of not getting anything back.

In this type of transaction when a settlement is reached the debt settlement company will make a one time payment to the creditor to satisfy the balance of the loan.
You then owe the debt negotiation company the amount of the pay off plus any fees that where agreed upon.

A draw back to this process is it can have a negative impact on your credit score and the fees may be high at some companies. Another option is to self arbitrate.

If you have all intentions and ability to pay your debt you may wish to contact your creditors yourself. This allows you to negotiate a lower interest rate or a more realistic repayment plan.

If you decide to take the self arbitrate route, you will want a written agreement between you and your lender or collector that makes note of the fact your settlement has been ‘paid as agreed’ or ’satisfied in full’.

Self-arbitration or working with a credit card debt negotiation program you can be beneficial and successful. Positive debt negotiation on credit cards will be successful if you are determined to pay your debt(s) and be debt free once and for all. A debt free lifestyle is truly amazing.

By: Tim Grimsley

Not Paying Your Credit Card Bills

admin — Wed, 21 Apr 2010 10:06:43 +0000

A lot of people when faced with mounting debt will ask “Should I pay my credit card bills?” Yes it will give you some temporary relief and extra money in the short term but can have damaging consequences down the long road.

When you first go delinquent it is very common that you will receive constant calls from creditors wanting you to pay what you owe them. They will hound you calling 10 or even in some cases 12 times a day. They can usually find out your cell phone and work numbers, even in severe cases they will contact distant family members, which is against the law for them to do. Now if they are lucky enough to get you on the phone they can use many practices that can demean you and scare you into giving into their demands. They will try anything in the book, even threaten you to get you to pay them. You are protected however, by the Federal Trade Commission and should find out what your rights are before speaking with anyone.

Your credit score will be ruined by them reporting to the credit agencies that you are late on payment or have become delinquent. This can be damaging to you if you try to finance a big ticket item such as a house or a car. Please remember that you can always reach a settlement or once you make payment that your scores can be improved.

You can have many late, over the limit and interest fees that can be tact on to the original amount you owe. When you are in delinquency these creditors will charge you the maximum interest rate possible, usually over 30%. The late penalties can add up as well, usually $25-$50, and if you exceed your original credit limit, watch out, they will add those over-the-limit fees as well.

If your debt becomes very delinquent, the creditor can take legal action against you. It is possible that they could garnish your wages, get a lien or other legal judgments requiring you to pay up. Just remember this is a long process and companies do not like to get this involed. Just be aware it can happen and sometimes they are ruthless.

If you are in a situation where you can not pay maybe it would be good to seek out a professional. There are a lot of institutions that can help you in a financial crisis

By: Bryan Burbank

Learn How Credit Card Debt Settlement Can Work For You – Part I

admin — Tue, 20 Apr 2010 11:05:28 +0000

Credit card debt settlement is where you contact your credit card companies and negotiate to literally pay pennies on each dollar owed to them in one lump sum, hence the settlement. So how do you do so to your advantage?

In this case you may decide to sit down with a debt consolidator and go over the exact amount of money you have to work with and the amount of credit card debt you have to pay off. This may work well with a debt consolidator or a credit counselor as they can sometimes negotiate more of a deal for you.

However, if you decide to go it alone and try to work out the best deal for yourself then you want to make sure that you get the deal that you want. Remember that you do have an advantage here as you have what the creditor wants and that is money.

The main thing is not to give in when they give you the first no. Stay calm cool and collected and above all don’t get angry with them as this will get you no where. Make sure to try to do your negotiations in writing so you have a paper trial to back up what they have agreed to.

So how much do you offer?

Let’s take a look at how much the collection agencies really make off of your debt. For debts that have recently been charged off, they get 6 to 7 cents on the dollar. For accounts that are a bit older and have been at a few collection agencies, they get 1

Credit Card Debt Settlement

admin — Wed, 14 Apr 2010 10:01:54 +0000

Have you started receiving credit card debt settlement notices in the mail? Have you been receiving collection calls? If this is the case, you have probably been in debt and been dealing with financial difficulties for quite some time.

Creditors are sometimes willing to settle the account for a lesser amount if the credit card account is seriously delinquent or has been written off. This creditor will usually accept the settled amount in one payment and the payment has to be made within a short period of time.

Now you may wonder why a creditor would settle for less than what is owed. Your credit card issuer is trying to reduce their losses and they have concerns about you paying this debt. Your credit issuer feels that recovering some of their money is better than not getting any of it back. Keep in mind that accepting a settlement may affect your borrowing ability in the future with this creditor, but it is a better option than bankruptcy or doing nothing at all.

A creditor will not usually settle on an account that is current. Normally, the account has to be at least 90 days delinquent before they will talk settlement and many credit card companies will wait longer than that. Here are a few things you should be aware of before agreeing to a settlement.

1. Your settlement payment may not completely satisfy the debt. There is a possibility that the uncollected portion of the debt could be turned over to another collection agency for further collection activity, but this is not the norm.

2. The IRS considers the amount of the debt that has not been satisfied as income. Any amount that exceeds $600 will be report on a 1099, to the IRS, by your creditors. You will be required to pay taxes on this amount.

3. Know what’s on your credit report. If the debt is not on their at all, it is not recommended that you do anything with this debt. If it is showing as being “charged off,” this is negative note on your credit report. If you settle, it will be noted as “settled for a lesser amount” which as also somewhat negative, but not as bad as doing nothing about it at all.

The best thing to do is to try to deal with the original creditor. Communicate with them in writing. If they will not deal with you, contact the collection agency in writing. If at all possible, try to negotiate a repayment plan on the balance. If you decide to settle the debt, get the terms of the settlement in writing to avoid problems on down the road. Once you have paid the debt, ask for a “release of debt” as proof that the company has agreed that the debt has been satisfied.

The best thing that you can do for yourself is to examine the curcumstances that caused your debt to get to this point and to put a plan in place that will prevent you from ending up there again.

By: Marjorie Salada

How to End Credit Card Debt Problems

admin — Sat, 10 Apr 2010 14:37:42 +0000

What on earth can I do to get rid of my credit card debt problems?

If this is the question you ask yourself every day, then the answer is, ‘A Lot’. Believe you me, just because you are in a bad debt trap, doesn’t mean you are doomed. There are quite a few ways that can help you out of your situation.

If you are already in a debt trap then I have both good and bad news for you. Let me start with the bad one first, the bad news is that it is a very dangerous situation to be in and you have very limited ways to get yourself out of your debts and the good news is, there are still bright possibilities to end your credit card debt problems.

Always tell yourself, it doesn’t have to be this way and you can and you will change it. Trust me this works a lot, and as for the rest, you have professionals to help you overcome your situation in the best way possible.

Remember, all it takes is patience, strong will power and hard work to come out of bad debts. So, if you have the will to work hard, then believe me, freedom from credit card debts isn’t too far.

There are a few ways that you may consider opting for, depending on your present financial state. The most popular ones are debt negotiation, debt consolidation and filling for bankruptcy, in a worst case scenario. Let’s take a quick look at all the three options and how they can possible benefit you.

Debt negotiation:

This is a process of negotiating your debts with your creditors and settling on a reduced debt amount that the debtor can afford to pay. However, it entirely depends on your creditors whether or not they want to agree on any settlement plan. Some times it is as easy as calling up your creditor asking for better rates but in most cases it isn’t this easy. Getting the best deal out of your creditors is a matter of experience which is best done through a professional.

Debt consolidation:

When you have multiple debts to be taken care of, it becomes quite a task to repay your debts. Debt consolidation helps in replacing your multiple payments with one single and lower monthly payment.

Bankruptcy:

This should always be the last option to bank upon. Although filing for bankruptcy can make your debt free but it will show on your credit report for many years which may keep you from getting many loans that you may require. Therefore, it is advisable to avoid filing for bankruptcy, unless it becomes a necessity.

I suggest, you analyze your present financial condition, do your own research and educate yourself better on each of the above mentioned options, so that you can make the best possible decision to put an end to your credit card debt problems.

So to conclude, there is no point crying over spilt milk. What is done is done, and now that you’ve got a second chance to set your previous mistakes right, go ahead and grab the opportunity and make the best of it.

By: Michael W Anderson