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Posts Tagged ‘credit card debt’

How To Get Back Up From A Bankruptcy

March 25th, 2018 Comments off

Bankruptcies can hang on your credit report for up to 10 years and can butcher your credit score by hundreds of points. But by using these tactics, you could improve your credit score and become creditworthy several years before the bankruptcy drops off your credit report.

Patching up your credit score after a bankruptcy is far from being easy. “Filing bankruptcy is supposed to be a fresh start,” says Stephen Snyder, credit expert and author of “Credit after Bankruptcy.”

After a bankruptcy discharge, make sure your credit report is correct. After all, your goal is to increase your credit score hastily, and inaccurate information will only draw out the time it takes to score high enough for conventional credit. You are entitled to one free credit report every 12 months from each of the three national credit bureaus. Credit bureaus generally have 30 to 45 days to investigate your claim.

One of the most efficient ways to boost your credit score after bankruptcy is to acquire a secured credit card, she says. Secured cards are credit cards secured by a deposit account (usually a savings account) owned by the cardholder.”Those cards were designed for people with bad credit to remain in very low-credit-limit situations for a long period of time at a high interest rate,” says Stephen Snyder, author of “Credit after Bankruptcy.”Having more than one type of credit line will help boost your credit score.

“The point is most people with great credit scores probably have two credit cards from well-known, well-respected banks, a house payment, maybe a boat payment, and they keep those balances below 15 percent [of available credit] every month.”About 10 percent of your credit score is calculated based on the types of credit you use (i.e., credit cards, mortgages, installment loans and retail accounts), according to MyFICO.com.

Another 10 percent is based on new credit accounts ” which can include credit lines established after your bankruptcy. Although the FHA program does not officially use credit scores to qualify a loan, individual lenders may. Some credit-repair and credit “doctor” companies make grandiose claims that they can clean the slate and repair your credit file, often for a substantial fee. Only time will cause those entries to drop off your credit reports.

Jonathan Summers is working for a New York Collection Agency and is working to help with your Business Debt Collection needs.

Why Higher Card Rates Make Credit Card Debt Reduction a Priority

March 11th, 2018 Comments off

Credit card debt reduction has taken on added importance lately. The reason? The average rates paid on credit cards has been edging upward since the beginning of this year. What does this mean for credit card borrowers is that there are greater risks. Here, we will explore three of the reasons for upgrading credit card debt reduction to the top of your To-Do list.

Higher Rates Mean Higher Costs

By paying higher rates on cards, borrowers are obviously wasting more money. It may seem like peanuts over the course of any given month, but over the course of a year or even compounding that potential growth gives a more accurate picture. Debtors realize that the more debt they carry at higher rates actually impedes their ability to save for a rainy day, something that has become a little more important with so many people out of work. By taking a strong credit card debt reduction strategy, people will improve cash flow and manage to save a little more.

Higher Rates Hurt Credit Scores

By bumping rates, even gradually, card lenders make the debt repayment process a lot slower. Consider that a 1% increase on a $10,000 balance translates into an extra $100 in interest, or 1/3 of most minimum payments. This means that Utilization (the amount of credit outstanding compared to what it is available) remains high. With Utilization contributing more than 1/3 of the FICO score, it makes credit card debt reduction even more urgent…

Higher Rates Can Increase Delinquencies

When you consider that many people are losing income right now, credit card debt reduction itself becomes difficult at best. However, when you bump rates, you make it even more difficult for regular folks to make ends meet and, consequently, delinquencies arise. The difference now is that the “delinquent” amounts are higher because interest has been capitalized, allowing balances to get out of control a lot of faster.

Evidently, credit card debt reduction has become a priority among individuals and government alike. The risks to the borrower are obvious, starting with reduced cash flow that will impact people’s ability to save; potential damage to credit scores which can sometimes last up to seven years; and higher delinquencies.

By making credit card debt reduction a priority now, borrowers will be better equipped to weather a worsening interest-rate climate. While higher rates might not seem like such a deal-breaker on a month-to-month basis, the trend has been that rates are rising at a pace of 1% every quarter, meaning the average card rate could reach 16% by the end of this year.

With more than 16 years of experience in the financial services industry, Chris has helped thousands of people with
debt management strategies. He maintains a regularly updated blog at How To Repay Debt.com.

Be the Consumer Credit Card Debt Collectors Do Not Want to Collect From

November 3rd, 2017 Comments off

Consumer debt collectors! Credit Card debt collectors! There ought to be a law against them! Fortunately, there is a law, and educated consumers have learned how to use it to fend off these debt collectors by making their job difficult.

Time is money for a credit card debt collector, who is in the business of collecting unsecured consumer debt, most of which happens to be credit card debt. These consumer debt collectors and collection attorneys work on a percentage of what is collected. Most people think there is a debt collector for every debt, when the reality is there is only a debt collector for every easy-to-collect credit card debt.

Over the last 30 years the credit card industry has grown exponentially and the consumer debt collection business has as well.

According to the Federal Reserve and Business Week, the consumer credit industry increased from $133.7 billion of consumer debt obligations in 1970 to $2.5 trillion of consumer debt obligations in November 2007.

Each year debt collectors put more than $40 billion back into the U.S. economy, according to ACA International, a trade group for the debt collection industry.

According to data from the U.S. Census Bureau, there were 173 million credit cardholders in the United States in 2006.

According to the American Banking Associate, in the first quarter of 2009, 4.75 percent of bank cards were delinquent.

The point is, there are millions of delinquent credit card accounts to go around to ambitious debt collectors.

Credit card companies must comply with Federal Reserve regulations by keeping reserves to for bad debts. Bad debt is part of their business. After these debts are written off, junk debt buyers bid on blocks of delinquent credit card accounts. If successful, they pay no more than 10 cents for each dollar of debt. With that discount rate junk debt buyers and the collection agencies and collection attorneys who work for them only need to collect 30 or 40 percent of the debts to make money.

If a consumer resists collection attempts (after they learn how to properly do so), it is simply not profitable for collectors to put more time into chasing them for their debt, when they can put that time in getting the easy returns from other people who put up no resistance. The Fair Debt Collection Practices Act (FDCPA) is the key to resistance.

According to the FDCPA the debt collector must notify the consumer in writing of their right to dispute the debt and have it validated. Validation means the collector must send copies of original documentation verifying the debt. The FDCPA also says the consumer can instruct the debt collector to cease collection attempts until they properly validate the debt. As original creditors credit card companies are not covered by the Fair Debt Collection Practices Act. However, the behavior of collection agencies, collection attorneys, and junk debt buyers is covered by this federal law.

Should the debt collector invest their time with those who put up no resistance or with those who properly dispute a debt and request validation for it?

Matt Highlander is a consumer who learned how to beat credit card debt collectors and collection attorneys at their own game.If you cannot afford to pay, read his Credit Card Debt Survival Guide.

New Rule Makes Now The Time To Settle Old Credit Card Debt Banks

December 22nd, 2016 Comments off

Defaults on credit card debt continues to soar and it is about to get worse for the banks issuing the cards. A proposed change in a Federal Accounting Standard could jack up the default rate by a third requiring banks to increase their reserves which in turn would decrease the capital available to lend.

So what does that mean for the consumer?

If you are seriously behind on your credit card bill and you see no way to pay it on a timely basis, now is the time to negotiate a discounted cash settlement. You may be able to save thirty to forty percent of what you owe. It’s a good idea to use a non-profit credit counseling service to walk you through the process and develop a plan to pay for the settlement.

It is a common practice of banks to bundle credit card loans into an investment vehicle and then sell them on the market. When they do this, they don’t have to show those loans on their balance sheet as they are “off the books” deals. The change in the accounting standard will stop this practice and those loans will have to be shown on the bank’s books.

Bank regulations require that a cash reserve be kept to cover bad debt on loans. However, since the off the books investment packages are not included on the bank’s balance sheet, there is no requirement to keep a cash reserve for them.

Bringing these loans back on the books is going to have a significant impact on the amount of cash a bank needs to cover the reserve. To give you an idea of the magnitude of this rule change, American Express says it will have to add $28 billion in loan liabilities while Citigroup says it will have to add over $98 billion! Didn’t we just bail these guys out?

Adding those kinds of numbers to their outstanding loans will mean that the cash reserves will have to be increased by billions of dollars. Consequently, banks are open to consumers negotiating a lump sum settlement. If a bank can get $700 on a $1000 balance, that’s $700 that they don’t have to hold a reserve on and that makes them motivated. Motivated to the point that some banks are actually calling the card holder first and they are calling themselves rather than hiring collection agencies.

There really is no downside for the consumer. By being late on the payments, the consumer’s credit rating is already damaged. If the cash can be put together the consumer can get a significant discount on their debt. However, the time to act is now. Late fees and a default interest rate of 30% are still being applied so why wait.

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High Credit Card Debt – Debt Settlement – Do It Yourself

July 10th, 2016 Comments off

Are you fed up with high credit card debt? Then you should consider debt settlement. You can do it yourself and save thousands of dollars negotiating directly with the financial institutions. You can totally avoid the responsibility of repaying your credit card debt in full.  Due to current economic conditions, these institutions would rather receive some payment otherwise lose it all to bankruptcy.  The remaining debt that you have can then be paid over a certain period of time.

Do you have several credit card balances? There are financial costs associated with credit cards when they are not paid in full. Credit card interest rates are huge, and they vary according to the credit card agreement. When interest rates go up, so does the minimum balance, so that reducing credit card debt is almost impossible.

Additionally, late payments are major a problem when not paid when due. Penalties for late payments can be very large, especially when they are compounded each month, so it is very hard to reduce credit card debt.

Quit paying credit cards.

Do not pay your credit cards for 6 months. During this time, you can save money or pay other bills. You can also save money by not having to pay legal fees or costs associated with consolidation groups.

You can then negotiate with the banks agreeing to pay 50% – 70% less of what you owe. The banks want to deal with the credit card holder more than a third party. These companies charge a percentage of money that you owe, typically anywhere from 15% – 25%. If you have  $ 10,000.00 in credit card bills, they would get $ 1,500 – $ 2,500.

Do not file for bankruptcy.

Many people think, to eliminate credit card debt, bankruptcy is the only way to go. This is not true. There are alternatives, but if you want to keep your personal assets, filing for bankruptcy is not the answer.

Today’s laws make it much harder to qualify for bankruptcy. But, if a person files a claim and is accepted, the bankruptcy will remain on their credit reports for ten years. That is ten years of poor credit. You would be committed to paying higher interest rates on purchases, if you are able to do so.

Debt settlement…a viable option.

People can benefit by employing debt settlement, plus they won’t have to deal with agencies and lawyers, but you need to know how. You can negotiate with the banks using scripts that have a proven track record. When done properly, debt settlement will save you thousands of dollars and your credit can be restored in 24 to 30 months.

As an example, Mary and her husband had $ 75,000.00 debt with five credit cards. They corresponded in writing to the banks to set up a time to meet to discuss their situation. After negotiations, a settlement was made on a $ 20,000 balance for $ 4,011. On another card, they settled an $ 11,800  balance for $ 2,300. This shows that it can be done.

Right now is the time to act. Finally, end the stress and anxiety and feel good again. Save money and get your credit rating in good standing, starting today. Do it without the lawyers, agencies, and bankruptcy. You can do debt settlement, by yourself, which is the best way to go.

Of course, you need to know the exact plan to take action. People have gone through this process and can give you the information you need to succeed.

Stop suffering and get info… click on  “Credit Card Debt Settlement”. Get a Free Report.