You are here: Home / Archives for Debt Management

America’s Credit Card Debt

July 9, 2011 By Jason Leave a Comment

It is difficult to find credit card debt statistics because they are not widely known. It is also hard to measure and analyze the data of credit card debt statistics as there is no good system in place for doing so. However, the lack of statistics rivals the amount of people struggling to manage or get out of their debt. A great resource for those looking for numbers on credit card debt in America is the US Census Bureau Report.

Millions of US citizens have accumulated a combined $886 billion dollars in 2010 and the projections for 2011 are only worse. The average cardholder has approximately five thousand dollars in credit card debt. This figure is a direct increase from 1990 where the average credit card holder owed around three thousand dollars. After almost doubling, the national credit card debt seems to only intrinsically increase over the years. It is imperative for credit card users to know the options available to them for credit card debt relief.

The most logical and sure-fire way to reduce or avoid credit card debt is to learn new ways to save money. Saving money before you allow yourself to secure any type of debt, be it mortgages, car loans, student loans, or credit cards, will give you an alternative plan that will save you from financial ruin. Research different methods to save money by reading online articles or talking with successful close friends and family. Once you have figured out the best route to save money, employ those practices and avoid debt in its entirety.

For those who have already accrued a sufficient amount of debt, there are many different options for getting out. By putting forth all your efforts to pay off a debt, you are sure to eliminate all of your debt at a quicker and less-stressful pace. Talk to your credit card companies and attempt to renegotiate the terms of your debt repayment. Creditors and debt buyers are willing to work with those who are willing to work with them. Settling or negotiating your debt is a safer way to remove debt without filing bankruptcy. Be sure to use bankruptcy as a last resort and only for an extreme situation where no alternative is available.

Americans will consistently find themselves in debt unless they decide to do something to change it. Credit card debt will follow an individual where ever he may be go, so it is vital to understand the methods and resources to avoid credit debt entirely.

Filed Under: Bankruptcy, Credit Card Debt, Debt Management Tagged With: , , , , , , , , ,

4 Simple and Smart Ways to Save Money

June 26, 2011 By Jason Leave a Comment

In any type of economy, it is a good idea to consistently save money. Saving money is an activity that many people seem to struggle with daily. In order to learn how to be better at saving money, it is necessary that you learn good saving habits. These habits will ensure that you save money every week, increasing your overall savings dramatically.

1. Change your attitude at the store.

Daily activities require people to visit a myriad of stores weekly. From groceries to power tools to shoes, it seems like there is always something worth getting from the store. The next time you are about to go to the store, consider doing a few things differently. Check circulars for sales, clip coupons, plan out meals, make a list, and eat. Shopping while hungry may increase your impulsiveness, causing you to spend more.

2. Get rid of the non-essentials.

Being aware of the simple things that you can do around your house to save money will help you save money fast. Turning off the lights, cutting back the heat, joining a carpool, using a filter instead of bottled water, canceling your landline, and eating at home are all good saving habits. You can also make some extra cash by having a garage sale or selling things on Ebay or Craigslist. Removing the non-essentials from your life will help save and make money.

3. Get a second job.

No one wants to get a second job since working full-time is difficult enough. But the truth of the matter remains, getting a second job will bring in a lot of money that you did not have before. Finding work that fits around your schedule is easier now than ever thanks to the power of telecommunication. Freelance work is always in demand and easily located through your favorite search engine. Other jobs like baby-sitting or dog-walking are simple, yet fast ways to make money.

4. Open a Savings Account

Once you start making more money to save, it is important to  have a safe place to put it. The safest place to store your money for the future is at your local bank branch. Opening a savings account is usually free after an initial deposit. This is how you save money every week. Simply deposit a portion of your paycheck into your savings account each time you are paid. It will quickly start to gain interest, effectively paying you to keep your money there. Any extra money made from selling non-essentials should be placed in this account as well.

Filed Under: Debt Management Tagged With: , , , , , , , , , , , , , , , , ,

How to Get a Small Business Loan

June 26, 2011 By Jason Leave a Comment

Owning a small business is a responsibility that a lot of people are anxious to take on. Being your own boss has tremendous appeal, but most small business owners need help with finances from time to time, whether it’s for start up costs or to improve the business. No matter what the purpose of the loan, it will need to be repaid. Conditions for repayment may vary, but basically the loan process is the same as any other loan–you borrow money and pay it back with interest. Following are a few tips on how to get a small business loan.

What Is the Money Going to Be Used For?

Before you approach a lender, the first thing you must determine is what you’re going to do with the money from a loan. There is obviously a need or desire in some area, or you wouldn’t be considering a loan in the first place. Sit down and write it out on paper so you will have something solid to present to a potential lender. If they see you have a definite business plan in mind ahead of time, they will be much more likely to lend you the money you want.

How Much Money Do You Need?

Immediately after answering the question of where the money is going, you need to determine how much it will take to make it happen. You need a firm figure in mind before approaching a lender. Go over the details of your business plan and apply a money amount to all aspects of the project. Make sure you allow for any possible problems that may arise. To be on the safe side, include a safety margin. Cost overruns are common, especially in construction projects. If your plan includes adding onto existing architecture or building something new, make sure you allow for additional time and expenses.

How Are You Going to Repay the Loan?

The obvious first question a lender will have is ‘how are you going to repay the loan?’ You need to have an answer readily available. If you are able to show the lender that you will be able to repay in full and on time, they will most likely give you what you are asking for. Collect your income statements and tax records and have them ready to show to the lender. Have a business income perspective available. The more organized you are ahead of time, the less confusion there will be when you’re talking with the lender, and the more likely they will be to be impressed with your sincerity and dedication to making your business venture succeed.

Are You a Good Risk?

Lending institutions are in the business of making money for their shareholders. They can’t do that if they lend money and it’s not repaid in a timely manner. You need to look at things from their perspective when approaching them for a loan. As you are asking for money, they are asking themselves if you are a good risk. The better prepared you are with a sound business plan, and projected method of repaying the loan, the better your chances are of the lender agreeing to it.

Collateral
No matter how good a risk you are, the lender will more than likely require some collateral, also known as tangible assets, to secure the loan. The idea is that if you’re unable to meet the requirements of the loan you will voluntarily give up something you own of equal or approximate value. Collateral can come in many forms. It could be equipment, land, vehicles, or anything that the lender would be able to sell and recover all or part of their loss if you default on the loan. It’s a standard business practice to require collateral for a small business loan.

Sell Yourself

Part any loan procedure is to sell yourself to the lender. They don’t do their job based merely on facts and figures; they also take you, personally, into consideration. You need to present yourself in a respectful, professional manner. Make sure you inform them of your experience in the business you’re trying to borrow money to start or improve.

Guest post from Bailey Harris. Bailey writes for www.businessinsurance.org.

Filed Under: Debt Management, Featured Tagged With: , , , , , , , , ,

Protect Your Credit Score by Preferring Debt Management to Debt Settlement

June 16, 2011 By Jason Leave a Comment

When you’re drowning in a sea of debt, anything that resembles a lifeboat can be your life-savior. But you must make sure that you don’t jump onboard without determining the ins and outs of a particular option before taking the plunge. While it is important to reduce your debts and pay them off, you must also take care of the credit score so that you can remain creditworthy in the near future. Debts can have a detrimental effect on your personal financial life and if you want to avoid such an impact, you must get your debts consolidated through a debt management program. Have a look at 3 financial moves that you must consider while managing your debts.



Start organizing your finances while opting for debt management: Debt management is just a way of reducing your debt burden. It is not that your debts will soon get reduced as soon as you opt for debt management. You have to take care of your personal finances so that you don’t hurt your credit score while making the monthly payments. If you enroll in a DMP, you have to write single monthly payment checks to the credit counseling agency that will be disbursed off to your creditors in due course of time. Here, if you make late payments, you can trash your credit score.

Stop spending much and save money: This might be an obvious advice but there is no alternative to saving money. Financial experts usually suggest people to save at least 10% of what they make in a particular month. Without a frugal budget, it can be difficult to make sure that your expenses are less than your monthly income. Create a savings account so that you can easily make your money grow and boost your income resources.

Get help from a financial counselor: If you don’t have much confidence on your personal budgeting skills, you can get help from a financial counselor. He will assess your current financial state and determine whether or not you’re making timely payments and taking the right steps.

Make the monthly payments on time: When you’re repaying your creditors through a DMP, you must always try to make the payments on time. As you make the payments, your debt consultant will disburse off the payments to your multiple creditors but if you’re late, you can easily hurt your score and become unworthy of getting credit. It may become difficult for you to get loans at an affordable rate.

Thus, if you want to get back a firm grip on your personal finances, repay your debts through debt management options and become debt free. Wealthy financial tips must be considered so as to protect your credit score and also eliminate high interest credit card debt.

Filed Under: Credit Card Debt, Debt Management Tagged With: , , , ,

How To Get Out Of Debt: Reducing you monthly costs by identifying your “musts” and “wants”

June 15, 2011 By Jason 1 Comment

When you first start off to working to become debt free you are going to have to determine what are your wants vs. your needs. People have a hard time doing this so we are going to go over a little of what you should consider and what you can do to make it less painful.

Nobody likes to give up anything. Especially when it means lets entertainment and the little luxuries of life. But in most cases if you are in over your head it’s going to take just that to get past that towering debt. This doesn’t mean however that you have to give up everything but you will have to cut back costs and keep track of every little thing you spend and do.

The first step once you have laid out your complete budget on paper showing what you have coming in vs. what you have going out, is to make a list of you needs. For the average person you are going to need food, electric, internet, phone, transportation, and other items for some. Food is going to be the biggest thing because as you know without it you won’t be around long. So this is going to have to be in your budget. But there are things you can do to cut down the cost of your money food usage. For example you can use coupons and look for sales and plan ahead and build a grocery list can save you money. Another thing people do without knowing it is waste food. The average household throws away about 25 percent of the food they purchase. Just imagine if you could reduce your grocery bill by that amount.

Though you can live without electricity, in today’s age I just couldn’t imagine it. Electricity is just like food and it’s something you cannot live without. But again like food you can find ways to cut costs down by changing habits and taking notice every day of your power usage. The main cost factor coming from cooling and heating and you can help reduce this by simply buying a programmable thermostat. Then setting that thermostat to cool or heat only at the peak times when you are home. This could cut over 100 dollars a month from your heating or cool bill. I know when my bill was 400 a month I was panicking and found that making the right adjustments to the time that the air was on or off saved me over 150 a month.

You internet and phone bills can rack up fast as well. In today’s world you need both in most cases but you can reduce your phone and internet bill by downsizing your plan you are on. If you have a smart phone you could save yourself a lot of money each month just getting a regular cell phone and leave the internet to your home computer or local coffee shop. With the average person paying around 100 a month for a smart phone service plan you could cut that in half. Also if you can if you have not already get your internet bundled with your phone plan. Usually you can save a few extra a month by doing this.

Transportation today is very expensive but is a must have unless your living in a city and can use local buses etc. If you do own a car however you may take a look at what kind of car you have. Some of you will be able to trade your car in for a reduced monthly payment and also get a better model that uses less gas. This is a hard one because it depends on what you are requiring vehicle wise. If you have a large family with several kids you may not be able to downsize to a compact car due to the fact you could not hold everyone. Either way with gas prices as high as they are now you can try and watch the routes you take and cut down on the miles. Take notice if you are running over to a friend’s if you need to pick something up for the store you have to drive by. Make every trip count so that you limit return type trips if you can. You could end up cutting your gas bill by 25 percent if you make good effort in doing this.

The basic thing you are trying to do is eliminate as much as you can from the money going out the door rather than in. It may not be the thing you want to do right now but it’s what it takes to pay off your debt. There are lots of families out there making due with a lot less. Above we only talked about some of the must have items and how you could possibly reduce the your monthly costs with them. Other ways of getting out of debt when looking at your must haves and wants is to also reduce your wants.

Wants are items like going out to eat and buying clothing and renting movies etc. People can spend more than they realize doing these different things. Going out to eat can cost people up to 300 or more a month just by going out once every weekend alone. This is usually the first place people have to go to in reducing the amount they spend and to free up money. You can rent movies now for 1.00 using Redbox rather than going to a movie theater. And cook hotdogs while having some friends over on the grill on the weekends will save you money as well. Having people each pitch in a plate can create you a great weekend event for less than 5 or so bucks. Now unless you are completely broke I do not suggest you completely do away with your entertainment budget but you should drastically reduce it until you can afford it again. Everyone needs to get out but you don’t have to ever day.

By going through your budget and listing your items that you have to live with and the items you can live without will help you drastically reduce your monthly outgoing cash flow. And remember this is only temporary until you are debt free and once again can start affording the luxury items. But this time you will have better knowledge to manage your debt so that you don’t end up in the hole again.

Jason

Filed Under: Debt Management, Debt Relief, Featured, How To Get Out Of Debt Tagged With: , , , , , , ,

How To Get Out Of Debt Quick: There really is no secret to it.

June 12, 2011 By Jason Leave a Comment

 

Over the past few years the economy and credit world has taking a huge down turn. If you live on this planet then you surely have noticed it in some fashion or form. Be that your 401k took a beating or you credit rating took a dive. The majority of us including me have been impacted in some way with the credit crisis.

With this said the number one thing people ask when it comes to this subject is how to do I get out of debt quick or fast? Well the answer is the same no matter how you ask it. You can ask how do I get out of debt? Or how do I get rid of this credit card debt? No matter the question around it the answer is the same. There is no really fast way unless you really are not in debt and just pay it all off with funds you have in your savings or stocks etc. Or you could file for bankruptcy if you qualify but what good does that do for you other than letting you start from scratch with zero credit. Now that may be some peoples only option but we are going to try our best to keep you out of that. So for now it’s not an option unless its keeping your from eating or having roof over your head.

The truth is that it takes patience, guts, and some planning to get out of debt. You have to truly want and desire to be debt free and adapt to what it’s going to take. Since everyone has different situation’s you are going to have to put what we suggest in a means to work for your personal situation. All we can do here is provide you with the road map and support that you need and you will have to do the rest. Below is just a few things you will have to do along the way to being able to say your debt free. And I will be the first to admit that I am still on my journey as well to being able to say I am completely debt free.

The first initial step has already been taken care of and that is taking action. By you being here means you are already on your way to getting yourself out of debt. But there are a few more things that you will have to do and I will try and give a brief idea of each and later will go into details. The first thing you need to do is know your exact income and the exact about amount of money that is going out. The only way you will be able to do cut costs etc is to be able to see it all on paper so that you can start planning a budget. Once you have done this and know exactly what you have to work with or what you dont have we move on to creating a budget.

This is not something that is easy for people or anyone for that matter. Having to cut down your living style is something most people don’t want to do but it may be what it takes to get yourself and your family out of debt. You have what is called must have items, and what is considered luxury items. Luxury items are the things you could live without like the smart phones that cost you a hundred bucks a month etc. While you need food and water and electricity which are the must haves. You need to make a list of what your must haves are and what your wants or luxuries are. To do this you will take your budget that you have created and list out what, the must haves are, and then the ones that are the luxury items. And you can even reduce your the cost of must have items but we will get more into that on another post.

Once you have done this you should see what you can cut out of your budget either by reducing your cable package or whatever you have for television. And you can also reduce your phone or maybe even downgrade the car. There are a lot of ways to reduce the luxury items depending on how bad your situation is and how committed you are to getting out of debt. Remember once you are out of debt you will have knowledge to manage your debt better and these items will once again return but in a smarter fashion. Once you get through this and cut the fat of and see how you stand it’s time to line up your debt that you have be it the credit cards, loans, mortgage, etc. There are a couple ways you can go about this but I like to put my debt in order from the highest amount that needs to be owed to the lowest. That way you can see what you have to owe and how much you owe on each etc. You will also want to get the what percent rates they are at for each month etc so that you can make the best judgment when it comes to which one you are going to pay off first.

I personally would target the highest monthly payment with the lowest amount owed. You will start to generate what is called the snowball effect. It allows you to open up more money for paying off debt and at the same time giving you the satisfaction of clearing a debt of the list. The sooner you are able to knock out your first one the more motivation you get to do it to the next one. You just go back to the list and do that same thing again and find the next costly one with the lower debt amount and knock it out. Once you are on a roll you will see that you pay it off faster than you think you can.

Now something I didn’t talk about was if you had some savings should you use it or not? Well this gets tricky depending on how much you have saved up. The average person doesn’t have much so we recommend that you always have a security blanket in your savings. So if you have a few thousand just hang onto it unless you have a high loan that will open a great amount of money that you could just pay off. If you have this situation pay off the loan and just use that money you saved each month and put it right back into savings until you get it back to a safe balance. We will go over this more fully in a later post but I just wanted to get it out there that it’s important to have an emergency fund.

Well I know this is not what you wanted to hear as to the quick or fast way out of debt but its the only true way of getting there. We only briefly gone over the basic idea, but honestly its not rocket science. It’s just something that takes patience and while power to get done. But once you can say your debt free you will love life even more because the stress of making payments or rather trying to stretch the paychecks will be over. I will be posting a few times a week in hopes to leading you in the right direction and providing resources to help you get out of debt.

Jason

Filed Under: Credit Card Debt, Debt Management Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

How To Get Out Of Debt: A Few Simple Ways To Help Save Money

March 10, 2009 By Jason

If you are buried in debt, don’t worry, your not alone and there are ways out. I would say 1 out of 4 households are way over their heads in debt today. Everyone is wondering how to get out of debt and the answer is really not all that hard to accomplish.

 

Getting rid of your debt may seem like an overwhelming task that you have no hope for. But the truth is that you can get out of debt and with a few simple steps you can be on your way to living a stress free life.

 

You first step is that you need to create a budget. The best way to invest money is to sit down and assess everything from what your bills are to how much you bring in. Once you figure out how much you make verse how much you have going out you will have a clear picture of where you need to make cuts etc. Keeping track of every dollar spent goes a long way with saving money and finding money to put towards debt. You will tend to see wasteful spending and of course you need to always ask yourself when your going to purchase something is that do you really need it?

Save Money Get Out OF Debt

 

Your next step is to take a look at your credit cards and loans. You want to pay attention to what you’re paying for interest. It is possible to consolidate you credit cards and loans so that you have one payment that would be less each month with a lower interest rate. Though keep in mind you must do the math to make sure its worth while and that your actually saving money. Another thing you could do also is if you have cards with high rates you could look into applying for another card that allows balance transfers. You could then transfer your high rate to your new card that has the lower one.

 

The last thing and this would be recommend for the last resort is contact a debt consolidation service or debt management service which will help you reduce your debt. They tend to do this by calling the lenders you owe money to and trying to cut the finance charge so that your just paying what you barrowed back. Don’t fall for the scams that you see on T.V were they state that they had half their debt removed. Most likely you will just get a really low rate to lower your payments so that you can pay the monthly charge. Just do your homework before you sign a contract with one of them.

 

These are just a couple of steps you can take to reduce your debt. Remember it can be done but you must want it. You must keep track of every dollar and do not exceed your budget that you set. If that means you don’t get to eat out then you don’t get to eat out. It will be well worth it once your debt free!

Filed Under: Debt Management, Stress Management Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Debt Solutions: Fixing Your Credit Report

January 16, 2009 By Jason

Many people ask how to fix my credit? To be able to get rid of a collection from your credit report you are going to first need to educated yourself on what a collection is. If you have a bill that you suddenly stop paying on the company will continue to send you monthly statements each month waiting for payment. Normally after six months has passed without a payment your account will be sent into collections. There are some companies that will wait longer then that however six months is the usual time frame.

When an account is sent into collection it is usually the creditor’s last chance at trying to retrieve the money that is owed to them. It is at this point in time that the creditor has tried calling you to try and set up some type of repayment schedule and has also sent several notices through the mail to inform you that your bill is past due. There are many creditors have their own in house collection departments while other creditors will outsource their collection needs to outside collection agencies.

There are many occasions when an account that is overdue is sold off to collection companies for pennies of the dollar. Normally if the account is still maintained by the original creditor and they are working with a collection service they will be paying the collection service a portion of what is recovered.

Ok now that we have gone over that information let’s discuss how to remove a collection from your credit report.

To be able to remove an entry from your credit report that has gone into collections you are going to need to dispute the account. To do this you need to write a dispute letter to the credit bureau or bureaus that are reporting the account. You need to make sure that you are sending basically the same letter to each of the bureaus that are reporting the account that was in collection. The letter needs to identify the item that you are disputing and why you are disputing it.

When your letter reaches the credit bureau they will be opening an investigation. The bureau will then be contacting the creditor that made the entry and let them know the reason that you are challenging the account entry. The credit bureau will then ask the creditor to prove that the entry is valid.

If the debt that is being challenged is fairly old then the creditor may not have the documentation readily available. The documents are likely to be in storage somewhere. If this happens to be the case for your debt it is very likely that the company will not want to spend anymore time or money on your account. If this is what is occurring they will most likely not reply to the credit bureaus inquiry and the the credit bureau will then take the entry off of your credit report.

Now if the company does send the credit bureau proof of the entry that you are disputing this is what is referred to as being verified. This does not mean that you are out of luck 9in getting it removed from your credit report. What it means is that you are jus going to have to pay it off or attempt to negotiate a lower payoff amount. In order for you to be able to remove the entry in this case you need to negotiate it being removed from your credit report as part of the payoff agreement.


Filed Under: Credit Card Debt, Debt Management, Debt Relief, Featured, Stress Management, Student Loan Debt Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Keeping Debt Under Control

January 16, 2009 By Jason

Paying off existing debt is one matter, but it’s important to keep yourself from getting further into debt, too. This can be tough when you’re trying to pay down your debt, because you’re putting so much of your disposable income into paying it down. That leaves you with very little left to actually spend on the things you want or need.

The temptation then, of course, is to use credit cards to take up the slack. You may be tempted to think that you could just put your bills on your lower-interest cards while you pay off the higher-interest ones, but that’s still keeping you in debt. The purpose is to pay off your debts without getting further into debt elsewhere. If you have absolutely no way to make decent payments while still paying your monthly bills, you may have to float bills on lower-interest cards while paying off the higher ones, but if you can possibly avoid this, you should.

Once you manage to pay down some of the higher-interest cards, you should be making fewer monthly payments. This should allow you to have some free cash for paying your bills each month without having to float anything additional on credit cards. This is when you’ll find that you can pay your cards off even faster.

Debt can spiral out of control very quickly if you let it. You have to work hard to wipe out your debts, but it’s very important to keep them under control so new debts don’t mount up and undo the work you’ve been doing to get your debts under control.

Filed Under: Debt Management Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Credit Card Solutions

January 13, 2009 By Jason

There are people with credit card debit all over the world. There are many consumers that manage having a credit card quite well: payments for purchases are made on time each and every month and they carry very little credit card debt. Then we have the group of credit card owners that do not manage having a credit card so well.

Perhaps they got a credit card too soon and were just not equipped to handle the purchasing power that a credit card gives a consumer. Maybe they simply have poor money management skills, either way they are facing some type of credit card debt. The following are some simple ways to deal with facing any level of credit card debt.

The first thing that you need to do is stop using your credit cards. You can not get out of debt when you keep creating it. Next you need to work out some type of repayment plan so you can get on top of repaying all of your debt. While you are working on creating this budget you need to make a list of everything that you spend in a month. You need to bite the bullet and get rid of all unneeded spending. This is the best way to free up the money that you are going to need to get out of your credit card debit.

In order to have a budget that is going to be successful you need to make sure that you can make a payment to your credit card debt while still being able to meet your other monthly obligations. If you are unable to take care of your basic needs while repairing your credit card debit you will most definitely be in a worse situation then you first thought.

If you do not decide to get rid of your credit cards all together you should consider transferring your credit card balances to one card with a low interest rate. This can end up saving you a lot of money while you are working on paying off your debt.

You can also look into using a debt consolidation service to help deal with your credit card debt. Do plenty of research before settling on a service to work for as it cannot be stressed enough how important it is to work with a legitimate debt consolidation company so that you can be sure that your money is going to the correct destination and that your payments are being reporting to the three main credit bureaus.

You do not need to feel overtaken by your credit card debt. All you need is a little determination and the will to stick with your budget and repayment plan and you are going to be enjoying a debt free life faster then you think.

Filed Under: Debt Management Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , , ,