This just arrived in the mail for me. It’s a huge chocolate VISA card, complete with my name. It’s about the size of a hardcover novel and as thick as an iPhone. Who sent it? None other than our good friend Bill Hardekopf, CEO of Lowcards.com

Thanks Bill!

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See Also:

• 100% Of Credit Cards Being Offered Online Involve Practices That Will Be Banned
• Citi Jacks Credit Card Rates To 29.99% On Unsuspecting Customers
• Shock and Awe: Pre-Approved Credit Card Comes With 79% APR

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That was the last ace up his sleeve.

Daryl Simon, accused of forging credit cards and buying cars with fake cashier’s checks, placed his face onto pictures of old and injured people at charity events – as though he was someone taking care of sick patients or next to teenagers – in order to ask his judge to lessen his jail time.

We might applaud his attempt as a brave last-ditch effort, but it turns out it was disappointingly half-hearted.

First Simon was caught running a organized credit card forgery. He had pleaded guilty to credit card fraud in 2007, but since then lived as a fugitive, working as a magician while hiding from the police. Caught again in Astoria, Queens in 2008, he is now condemned to 285 months of prison, or 24 years.

Hoping to earn some points from a kind-hearted judge, he turned in photos of himself doing charity work and letters that referenced his good nature.

It’s not a bad idea, but it was very poorly executed. The photos were obviously photo-shopped. Apparently, he didn’t even use a different picture of himself for the pictures, he just flipped it. (We’re currently on a search for the photos.)

In addition to that, he conjured fake letters of support from random individuals in court.

So it’s no surprise the judge did not applaud his last hattrick; he’s going to jail.

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The spread on credit card interest–the difference between the interest rate on your charges, and the Treasury benchmark rate–is the highest it’s been in 22 years.  The culprit?  The CARD Act, which has given banks much less flexibility in the fees they charge.  Banks now have to give you 45 days notice before they raise your interest rate, and they need to give you the option of paying off the debt in order to avoid interest rate hikes.

This is entirely unsurprising; if you want a fixed interest rate (or the option to get a fixed interest rate), you’re going to have to pay to offload the risk onto someone else.  If you want to avoid penalty fees (those are also now controlled), then you’ll have to pay for that too.  Bank cards are an extremely competitive industry; it wasn’t likely that banks were simply going to eat the losses.  If you’d added controls on the interest rate, they’d be dumping their riskiest customers.

That doesn’t necessarily mean that the rules are bad; there’s a plausible argument that the increased transparency is worth the higher interest rate.  As Carolyn Maloney says in the article, “Better that consumers should know up-front what the interest rate is, even if it’s higher, than to be soaked on the back-end by tricks and hidden fees.”

Of course, lots of people weren’t being soaked on the back end by tricks and hidden fees; the people who pay their bills on time or even early. Those people are paying more, while folks who have temporary cash flow problems (or permanent forgetfullness) will pay somewhat less.  Whether or not you think this is fair depends on a set of moral judgements about indebtedness; do the timely bill payers deserve a bonus for living within their means, or do the bill-missers deserve some help because they’re more likely to be hard up?

What’s actually not clear to me is whether the people now paying more are, as a group, better off than the group that is now paying less.  The new interest rates are not going to hit the affluent folks who pay their bills off every month, any more than the old late fees did.  Instead, they’re going to be hardest on people carrying a substantial balance–people who may have made the payments on time, but did not have the necessary scratch to pay the whole thing off.  Are people with large credit card balances less deserving than people who miss payments?  In some cases, they’re the same group, of course–in which case, it’s not clear to me whether the new rules are better or worse for them. 

But where the two groups do not overlap, I am not sure that the group we are rescuing from sudden interest rate changes and late fees is more needy than the group who is now paying higher interest rates to counterbalance the fees.    Indeed, the higher interest rates could conceivably tip some people into the “misses bills” group.

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When you don’t have a credit card you usually have to go to the ATM and get extra cash before you can make a big purchase. At first it might seem annoying, but when you realize it gives you an opportunity to reconsider if you really need what you are about to buy without a salesperson putting pressure on you. Those opportunities to think clearly have saved tons of money over the years for people just like you.Even when you do have the cash in your wallet to buy what you want scientist have shown that you are likely to spend less when you pay with cash than with plastic. If you think about it you can almost feel the psychological pain that is associated with handing over cash in exchange for goods or a service. And using the card is just so much easier.

When you don’t have any credit cards laying around there is no getting tempted and having to deal with the internal arguments for and against starting to use them again or not. And another benefit is the fact that you are unable to increase your credit card debt when you don’t have access to the cards.

In many cases the first and most important step towards debt relief is cutting up your credit cards. So are you really ready to get out of debt? Then it’s time to get your credit cards and a pair of scissors and put action behind your words.

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Note: This article was originally published on OPEN Forum.

For many small-company owners, especially those who haven’t been in business for that long, your personal credit score is the key to getting anything from a bank loan to a lease.

“It’s simply crucial to finding financing,” says Gerri Detweiler, credit advisor at Credit.com and author of Business Credit Success (Success Publishing, 2010).

For that reason, before you even approach a bank, you need to figure out what your credit score is and how you can boost it.

Here are a few steps you should take when starting this process.

Click here to see how to improve your personal credit score >

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See Also:

• How To Maintain A Winning Credit Score
• 8 Things To Consider When Choosing A Credit Card for Your Business
• How To Build Up A Credit Rating For Your Small Business

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Did you know you can reduce 50% of your credit card debt if you negotiate with the credit card companies? Yes, you can!

In the past credit card companies could do what they like but something changed in the law that protects the person with a debt. Actually, you are covered by several laws and one of those laws is that your credit card company must offer you a credit card settlement. Getting a settlement is not an easy process, it can take long but the results can be amazing too. Knowing how to negotiate with the credit card companies is key.

Understanding Leverage

Knowing which side had leverage is one of the keys to negotiation.

When we talk about credit card debt yo are the person that has the leverage. The credit card company wants to get paid and does not want to sell your credit card debt to a collection company. A collection company buys your debt for a little fraction of what it is worth so your credit card company want to explore other options first.
Knowing this as a fact you can put a credit card settlement offer on the table that is 30% of your total debt and work from there.

Longer The Debt – Lower The Settlement Price

When you have a debt that is seven years old it falls off your credit report, credit card companies want to collect your money before these seven years. They can do two things: sell the debt to a collection company or make a deal with you. So if you have for example a credit card debt for five years you can start out with a very low settlement offer.

Before having the conversation over the phone with your credit card company make sure you know what to say. Make notes, stay calm, friendly and reasonable. I hope you will succeed in lowering your credit card debt and the credit card company gives you some credit card debt forgiveness.

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After some signs that consumers were starting to catch up on their credit card bills, charge-offs are back on the rise!

Reuters: Capital One Financial Corp and Discover Financial Services reported that credit-card charge-offs rose in November — a sign that consumers remain under stress.

In a regulatory filing on Tuesday, Capital One said the annualized net charge-off rate — debts the company believes it will never collect — for U.S. credit cards rose to 9.60 percent in November from 9.04 percent in October.

In another regulatory filing, Discover said its charge-off rate rose to 8.98 percent from 8.54 percent after two months of declines.

JPMorgan’s charge-offs are up as well.

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See Also:

• CHART OF THE DAY: The Amazing Spiraling Mortgage Delinquencies
• Credit Corrosion Continues With Bank Delinquencies At A Record
• Best Buy Sees A Stingy Consumer This Christmas

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Disappointing news on the consumer front, courtesy of the latest charge-off numbers:

WSJ: The rate of charge-offs on U.S. credit cards rose more than a half-percentage point in November, snapping a two-month run of drops from an all-time high in August, and delinquencies rose for the fourth consecutive month, Moody’s Investors Service said.

Charge-offs, which are those loans a credit-card company doesn’t think it will be able to collect, were 10.6% for November, compared with 10% in October. The ratings firm also said the delinquency rate, which gives a glimpse of issuers’ potential losses and how much they may need to set aside in reserves, rose to 6.2% in November.

Read the whole story — >

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See Also:

• Stiglitz: The U.S. Will Crash Again Unless We Pass Even More Stimulus
• Chris Dodd’s Incredibly Stupid Credit Card Rate Freeze Will Destroy The Consumer
• Desperate Retailers Bring Back "Layaway" Plans For The Holidays

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If you want stop calls and notices from your creditors, then a debt consolidation loan can be the answer to obtaining the financial relief you need. There are a variety of free debt consolidation programs on the Internet that can steer you towards lenders who can help in this respect.

Use the Equity in your Home

If you’re a homeowner, you can receive a great deal of financial benefit by using debit consolidation services to obtain a home equity loan. In fact, statistics show that most people take out a home equity loan to reduce their credit card debt. By going to a site that offers debit consolidation resources, you can find a lender that can give you the amount you need to pay off your creditors.

A Secured Loan Usually Has a Lower Interest Rate

Therefore, use the equity in your home to obtain the needed funding to pay off you high-interest credit cards and lessen financial strain. A home equity loan is a secured loan, so you can usually get the loan amount you need at a lower rate of interest. That’s because the loan is secured by the guarantee that if you should default on the principal, the bank can use your home to pay off the debt.

Obtain a Consolidation Loan Even with Poor Credit

If you don’t own your home, you can still receive funding by going through one of the credit card debit consolidation lenders online. Without a home to use as collateral, you can still obtain an unsecured loan, or a signature loan. An unsecured loan will typically have a higher rate of interest than a secured loan because it’s not backed by any type of collateral. Nonetheless, you can still obtain one if you have a regular source of income from a job and fairly good credit. Even if your credit isn’t exactly pristine, there are still bad credit debit consolidation funding options for those who need this type of assistance.

Take Care of Your Bills Today

Take some time and investigate your options on the Internet. Don’t allow your current debt situation to cause you to feel sick with worry. Check out the various consolidation programs online for the right remedy.

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Before you get too excited about the new federal rules on nasty credit card practices going into effect Monday, consider this: there are still plenty of ways to get screwed. 

Nine months ago, President Obama signed the Credit CARD Act, which ended practices like “any time for any reason” increases on existing balances or late bill mailings, Sunday due dates, and other tricks that result in late payment penalties, for example, according to Americans for Fairness in Lending.

That’s great, but credit card companies have found all sorts of new ways to make up for the lost revenue (at least billion a year, according to Morrison & Foerster as noted today in the Wall Street Journal).

“The CARD Act has some very significant benefits for credit cardholders. The restrictions on interest rate hikes and the ban on over-the-limit fees are tremendous. Consumers have cried out for these protections for years and they are finally about to take effect,” says Bill Hardekopf, CEO of LowCards.com. “However, there are a number of unintended consequences that have resulted from the CARD Act. These changes might affect more credit card consumers than the law helped.”

What are those unintended consequences? LowCards.com has the rundown:

• Since issuers will be unable to raise interest rates on new accounts for twelve months, they simply raised the advertised APR before February 22 so it affected everyone shopping for a new credit card account. According to the LowCards.com, the advertised Annual Percentage Rates for credit cards averaged 13.46% last week. Six months ago, the average was 12.11%. One year ago, the average was 11.51%.
• People under 21 will find it harder to build up their credit score. If they do not have a job with enough income, they must get an adult to co-sign. Many young adults will not take this extra step, losing out on the opportunity to build up a good credit history throughout college. Without a positive credit history, they may not receive as good an interest rate on their first house or car loan.
• Fees, fees and more fees. Issuers are introducing more cards with annual fees, increasing existing fees, and putting new fees on accounts. Last October, Bank of America notified a small percentage of their customers that it is adding an annual fee of to on their accounts beginning in February. Balance transfer fees, which have been at 3% for most issuers, have now been increased to 5% by Chase and Discover. Fifth Third Bancorp recently added a inactivity fee if your card is unused for a twelve month period.
• The scarcity of fixed rate credit cards. Most issuers switched their fixed rate cards to variable rates, since the CARD Act allows APR increases in variable rate cards if the index used to on calculate that variable rate increases. As an example, if the index for a variable rate card is tied to the prime rate and the prime rate increases by 1%, the APR on that card can increase 1%. Many issuers switched their fixed rate cards to variable rate cards so they could maintain their margins once the CARD Act was instituted.
• Since any amount above the minimum monthly payment goes toward the balance with the highest APR, some issuers raised the minimum payment up to 5% on a number of accounts.
• A decrease in the amount of credit card rewards or cash rebates. Reduced rewards could come in several different forms: (1) a cutback in the payouts of cash back cards; (2) more miles or points needed for that free airline trip or hotel stay; or (3) higher tiers required for consumers to receive the same level of rewards.
• A decrease in the number of credit cards awarded by retail stores. Providing proof of income when applying for a credit card will make it significantly harder for consumers to instantly qualify for a credit card. This will certainly impact the marketing efforts of the 10-15% discount on a purchase if you sign up for a store’s credit card. Retailers rely on this marketing strategy to increase purchases and to build their mailing list of customers used for offering future coupons or early-bird discounts.

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See Also:

• 10 Ways Credit Card Companies Are Still Screwing You
• Capital One’s Credit Card Charge-Offs And Delinquencies Jumped Again In January
• Oops! Bankers Love The New Credit Card Rules

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Before you get too excited about the new federal rules on deceptive credit card practices going into effect today, consider this: there are still plenty of ways to get hosed. 

Nine months ago, President Obama signed the Credit CARD Act, which ended practices like “any time for any reason” increases on existing balances or late bill mailings, Sunday due dates, and other tricks that result in late payment penalties, for example, according to Americans for Fairness in Lending.

That’s great, but credit card companies have found all sorts of new ways to make up for the lost revenue (at least billion a year, according to Morrison & Foerster as noted recently in the Wall Street Journal).

So, what to watch for?

We run down the new practices here >

See Also:

• New Credit Card Rules Start Monday, But You Can Still Get Screwed
• BUSTED: Bank Of America Caught Lying About Not Raising Credit Card Rates
• Credit Card Companies Scrambling To Screw You Now While They Still Can

They’re jacking up rates

According to the Center for Responsible Lending, issuers are using the power they still have for a few months to implement “any time any reason” price changes to raise the interest rates for large groups of customers. 

One top issuer recently raised the rate across the board on a very large group of low risk consumers who have always paid on time to an astonishing 30%. Just a year ago, this high a rate was unheard of for a regular purchase rate on a non-subprime credit card. 

That’s confirmed by a new Federal Reserve study on the CARD Act: 54% of banks have already increased or are planning to increase the credit card APR on their good (prime) customers. 74% of banks have already or will increase APRs on those with poor credit (subprime).

They’re increasing penalty rates

Penalty rates are also going up (rate increases triggered by specific events, like being late by one day), according to CRL.

Even though the companies claimed to need more than a year to change their systems, most issuers seem to be waiting until the very last minute to stop giving penalty rates to everybody they can. 

As with regular rate increases, anybody who has their APR raised to a penalty rate before the law takes effect does not benefit from the new rules on APR changes. 

Their rate change is permanent and will not be reversed, even if it is implemented the day before the reform date.

They’re closing unprofitable accounts and reducing credit limits

Issuers are reducing credit limits, sometimes without any notice at all, says Hardekopf of LowCards.com.

Plus, getting a new card is more difficult than ever.

According to the Federal Reserve study, 47% of the loan officers said they have or will raise the credit score requirements for prime customers qualifying for a credit card. That number jumps to 53% for subprime customers.

They’re increasing cash advance and balance transfer fees

According to CRL, issuers have raised cash advance and balance transfer fees to new highs.

They’re increasing annual fees

Hardekopf says now only about 20% of cards have annual fees, but that will go up.

According to the new Federal Reserve study, almost 40% of the banks had increased or will increase the annual fees on credit cards.

For example, some Bank of America cards for existing customers now have to annual fees, according to LowCards.com, which rates credit cards and tracks industry practices.

They’re manipulating rates–to their advantage

According to CRL, issuers are converting rates to variable ones, just when prime (the index rate) is extremely low and likely only to go up. 

Also, issuers are adding floors to the variable rates making these them “partially variable,” as a Pew Trust research report called it. These rates can only go up from where they start and will never go down.

They’re redefining terms…to collect even more fees

According to CRL, issuers are also changing the definition to fees to make sure that more people pay them.

For example, some issuers have changed the definition of an international fee to charge people even if the transaction is in dollars.

 Photo: orphanjones (Flickr)

They’re cutting rewards

According to LowCards.com, some issuers are changing rewards programs, like making the threshold for a free flight or getting cash back higher. 

Going from 1.5% to 1.25% cash back doesn’t seem like much, says Hardekopf, but “you put that over the course of a year, or over millions of consumers, and you have a lot of money.”

They’re adding NEW fees!

Issuers are adding fees they never had before, says CRL.

For example, one issuer added an inactivity fee. Another added a fee if activity falls below a certain level (a low activity fee)

They’re closing accounts without notice

Finally, some issuers are closing accounts, sometimes without notice, according to LowCards.com. That means you could be denied for making a purchase and only later find out your Visa card was canceled, for example.

That comes as consumers are being pushed to spend less. According to the Federal Reserve study, just over half of the banks have cut or will cut the credit limits of their credit card customers.

What to do about it

Credit card companies may have high fees and tricks buried in the fine print, but little of that matters if you spend within your means and pay on time. Banks can exacerbate debt, but it’s always initially caused by consumers themselves, not the proverbial Man.

Some basic tips on using credit cards from Americans for Fairness in Lending:

• Don’t Get Tricked Into A Card With Bad Terms. Beware of those attractive low introductory rates that come in the mail.  The fine print in credit card contracts is filled with traps to catch the unwary.  An introductory 0% interest rate can quickly leap to over 20% with just one slightly late payment.  If you are going to use a credit card, shop around for one with  a long-term low interest rate (APR), and read on to find out what you’re in for.

• Don’t Let Your Guard Down. Once you choose a card, your credit card company can still change the rules if it wants to.  Read your mail – a nondescript mailing may include a change in terms relating to your interest rates, fees or due dates.  The company can even change your interest rate on debt you’ve already accumulated.

• Avoid Late Fees. Pay your bill several days in advance of the due date to avoid sneaky late fees.  If your due date falls on a Sunday and your payment arrives on Monday – surprise – you’re late and your interest rate may jump to a much higher level!

• Pay in Full. Pay your bill in full whenever possible to avoid paying interest on your balance.

• Do Not Go Over Your Credit Limit. If you do, you’ll get hit with an overlimit fee and a penalty interest rate.

• Beware of Costly Cash Advances. Cash Advances are a credit card company’s best friend.  The interest rates on this borrowed money are much higher than on purchases.  In addition, the credit card companies apply your monthly payments to cash advances last so that the interest owed just grows and grows. 

• Don’t Buy What You Can’t Afford. But if you’re having trouble making ends meet and find yourself using the “plastic safety net” to pay bills, you’re not alone.  Read these tips from the Consumer Federation of America for avoiding high cost loans.

• In Trouble?  Get Help. If you do find yourself in serious trouble with credit card debt, do not delay.  Get help immediately.  Contact the Consumer Action Help Desk.

Now that you know about how credit card companies are screwing you…

Now, learn how to avoid investing scams.

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The situation however is not as bleak as your debt collector would like you to believe and successfully negotiating credit card debt settlement with them is still possible. It is not going to be smooth sailing, but with the right method and enough persistence, it can be done.

A few important considerations:

Collection agencies usually pay only about 5 cents on the dollar for your debt from your credit card company!

The number can vary from 1-10 cents on the dollar depending on how old the debt is. At this point, your original creditor believes this is the best he can salvage (the creditor also receive tax benefit).

What does this mean to you? Well, you can expect to reach a better settlement when you negotiate credit card debt with them because they will still be making a profit.

Tips on how to negotiate credit card debt:

Start your first offer at about 15% to 20%. You can probably expect to settle somewhere around 25-40%, but each creditor is different and a good settlement for one company may not be a bad deal for another.

Remember, the collection agency still makes out on top for a 25% settlement because they only pay a couple cents on the dollar for it. You can also expect a to settle for lower the older the debt is.

Always remember your best leverage when you negotiate credit card debt settlement: bankruptcy. Take comfort in the fact that you are in the driver’s seat and have something they are after.

Don’t get flustered if faced with rejections, your creditor would be more than happy to settle and receive a portion of the balance than lose everything if you declare bankruptcy.

Demonstrate your financial problems by providing income, budgeting problems, and debt obligations. Show evidences. Never tell them you need the settlement to buy a new car or home, which probably isn’t a good idea anyways at this moment.

Late fees and additional interest are usually garbage. Look at your actual principal and analyze your balance and find out how much do you actually owe and how much are penalties.

Most penalties are made up by the collection agency to fatten their wallet and can easily be waived when negotiating.

Everything you agree upon should be in writing. I prefer to communicate everything through mail (registered) that way you easily have access to written records. Effectively keep track of everything and it could make a big difference on your settlement.

Your final arrangement in credit card debt negotiation is your credit rating.

Try to have the collection listing removed from your credit report if possible. Otherwise, try negotiate the listing, in descending order of preference, as: “paid” only, “settled” only, and “paid charge off” only, with no other negatives for each.

Remember, you want to limit the damage to your credit as much as possible otherwise your credit would be just as bad as if the debt remains unpaid.

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This will afford you getting the harder items off your plate and let you concentrate on getting your life back on course.

Restoring credit is essential in some many areas of a person’s life today, as you rely on your credit score to obtain financing, a job, homeowner’s insurance, and automotive insurance at reasonable prices. When you are thrust in a lower scoring credit rating, the aforementioned services will charge a premium to do business with you, as they see you as somewhat of a risk to do business with currently.

This may be the farthest from the truth, and being out of control temporarily of your financial situation caused this avalanche of pecuniary problems.

To restore your credit score start by prioritizing a list of companies that you own money to, and talk with your account manager with firm. Explain the situation that you have been traversing recently and ask them for help in a repayment plan that they find acceptable, and you can adhere to at the same time. Remember, they hold all the power over your credit rating, and in this case being professional, and not losing your temper when speaking to the various account managers is the only ways you will be able accomplish your goal of credit restoration.

Stay on top of this situation until every creditor is taken care of and take steps to prevent this monetary tragedy from occurring again.

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Since this is the case, many of those people try to find ways on how to solve the problems on their debt; mortgages are just fine, it can wait since it is a secured loan, but what about the credit card debt? It’s not secured and if one keeps on falling behind his debts, he will then be forced to file for bankruptcy. Before the same thing happen to you, start applying for a credit card debt relief.In this day and age, looking for a credit card debt relief agency is easy, just search the web and you will be able to find tons of credit card debt relief agencies offering the best kind of service you can get, or is it really the best service you can get?

Finding a firm that can be of service to you is really easy, but the challenge comes when you are trying to find a reputable and honest firm that is after your best interest and not only the fee that you are going to pay them.

The first thing that you have to be alert when it comes to finding the right credit card debt relief agency is how long they promise your debt will be. If they are telling you that you can settle your debts in 4 years or more, you’re better off looking somewhere else because creditors can only wait for at most 3 years when settling for debts that have been re-negotiated.

You should also take note of how much fee they will be charging you. If they set their service fee to more than 17% of your total debt, then you should think again whether you are really going to afford their service or not.

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But before you come to this conclusion, think about all of the other debt relief options that are available to you.

First, you can seek credit counseling. Finance professionals can help you create a plan to get back on the path of financial success. You can find these services in a variety of places. Sometimes there are local non-profit services available for free help. Talking with finance experts can be an extraordinary help because they may know of options that you have never heard of before.

Many professionals can even help you settle some of your debt for less than what you owe. By allowing these people to speak to your creditors for you, you may see all of your interest charges and late fees disappear from your balance due.

Plus, these debt relief programs may even subtract a portion of your principle as an incentive for you to pay off the balance at such a discounted rate.

Loan consolidations are also helpful tools that can help pay off high interest credit cards or loans with a consolidated, low interest loan. They may also be a relief to people who owe a large amount of money to the IRS.

But before taking out a loan to pay off a tax debt, talk to an IRS representative first to see if they can help you with a payment plan or another option.

When you find yourself buried in debt, it is important to remember that there are solutions out there.

Before you decide anything, speak to a professional first to determine what the best course of action is for your unique situation.

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There are many debt reduction programs that claim to help with debt. Unfortunately, many of these programs fail to provide meaningful debt solutions. Instead, they rely on gimmicks and smoke screens to entice consumers to enroll in to programs that simply do not work. This makes it important for consumers to know what to look for in a quality debt reduction program.

With this thought in mind, here are some tips and suggestions that can help consumers find a debt management program that gives consumers the quality help with debt they deserve.

Choose A Reputable Debt Consolidation Agency

The first step in choosing a debt reduction program is finding a debt elimination group that has a proven track record of honesty and success. Always conduct a careful background check of a firm to see if it is honest to do business with.

When conducting the background check, check to see if the firm is a member of the National Foundation for Credit Counseling (NFCC). The NFCC has strict standards that force members to be financially responsible and to be completely honest with every client they help. These two things ensure consumers who use NFCC members receive honest help while trying to get out of debt.

These things also make NFCC members a good choice for credit card debit help or other debt management services.

Choose An Agency With A Good Track Record

In addition, check the success rate of the debt reduction program.

If the program’s success rate is verified by an independent auditing agency to be about 80-85%, the chances are good that the firm can help consumers get the credit help they need. That rate may seem high, but legitimate companies will go out of their way to help their clients get out of debt.

This makes the firm’s success rate a good benchmark to use when deciding on which firm’s services to use.

Choose A Debt Consolidation Firm With A Broad Range Of Services

In addition to providing honest debt management services, a good debit reduction agency will also provide other meaningful financial services.

For example, look for an agency that helps consumers create realistic budgets and avoid home foreclosure. A debt management agency that provides these services is trustworthy to provide credit card debit help because it shows the agency is able to provide help to consumers no matter their financial situation.

Getting Help With Debt:  Do Your Research First

If consumers do some research in advance, they will find many trustworthy agencies that provides quality help with debt.

There are several resources online that can help consumers find these trustworthy agencies. Try a Google search using the keywords, “help with debt” and “debt reduction programs” to start. From there, look for a listing of programs in your local area.

With time and perseverance, finding a debt management agency that is trustworthy to do business with is possible.

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The more monthly payments you have the trickier life may get, and the need for debt consolidation help should be something to seriously consider.

Let’s take a brief look at the tips, tricks and traps of debt consolidation.

Debt Consolidation Can Lower Your Monthly Payment

The key benefits of consolidation loans are that you only have one monthly payment instead of many, and more than likely you can lower your payments as well.

For example, say someone has four credit cards and they are paying around $100 per month to each of them. By obtaining a debt consolidation loan, you can pay off all of these credit cards and combine them into one loan. The payments will be based on the total of the loan, which will be equal to the total of your balances on your credit cards.

Let’s say your new payment comes out to be about $300 a month. Now your are saving $100 per month, paying out $300 instead of $400, and now you only have one creditor to pay instead of having to send payments to four different companies every month.

Debt Consolidation Options

There are many debt consolidation companies doing business today that offer to consolidate credit card debt and consolidate loans of all types.  Home equity loans are available to consolidate debts, as well as personal loans.

Banks and finance companies usually will approve people for these types of loans more than not because of the fact that you will be saving money on your monthly payments as well as combining your bills into one.

Once You Consolidate Debt, Do Not Borrow Money

Credit card debt consolidation can be a tricky thing though, as most people don’t have the discipline to stop using their credit cards after their consolidation loan pays them off. Most of the time, the debt consolidation company will require that the credit cards being paid off be closed out, meaning those cards can no longer be used. However, this is not always the case, and even when it is, people can just apply for another credit card and likely get approved.

Once you consolidate credit cards you don’t want to fall into the trap of opening up more credit card debt, as this will make the consolidation loan meaningless.

Think about it.

You took out the consolidation loan to make life easier by having one payment and paying less each month. By opening up new credit cards you now owe them money and have to pay them monthly, and you still have to pay on your consolidation loan as well.

Now you will be in a worse position than you were before you consolidated your credit cards. This is something to keep in mind for anyone who ever considers consolidating their debt, and a pitfall that it is wise to avoid.

Conclusion:  Debt Consolidation Can Help You If You Are Disciplined

When you consolidate credit cards it should be a good thing. It should make your life easier and less stressful, as well as help you save money.

However, it is key to make sure you don’t fall into the trap of opening too much new debt, as you will find it could lead to some great financial trouble.

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Credit debt consolidation resolves financial problems by providing a manageable way to repay debt. Those who succeed commit to the discipline of budgeting and wise financial management.

They live within their means, build a solid credit history, and create a strong financial base for the future.

How A Bad Credit Debt Consolidation Loan Can Help

Consolidating credit card debt into a single loan has many advantages. It makes the creditors happy. Harassing phone calls at work and at home become a thing of the past. You feel good again, knowing you’re taking constructive action to settle the matter, and holding up your end of the bargain.

A debt consolidation loan will give you a lower and more manageable monthly payment, in an amount you can afford to make consistently every month. It also affords you a longer period of time to repay your debt. Whether your consolidation loan is secured or unsecured, you will still pay lower interest on it than you would on your credit card accounts.

Making one convenient and regular payment on your debts every month means you’ll avoid late charges from forgotten, late and missed payments. Credit card bills can be due at inconvenient times, and late payments can quickly result in late fees that raise the balance over the maximum. This causes additional fees for being over the credit limit. All these fees can multiply your debt, even when you’re not making purchases with your card.

If you’re considering a credit debt consolidation loan, your credit score may already have suffered. When you begin to consistently repay debts, your credit score will reflect it. Although it may take time for damaging information to be removed from your credit report, credit reporting agencies give more weight to recent repayment history than to old habits. As you decrease your debt responsibly, your FICO score will improve considerably.

Options For Credit Card Debt Consolidation Loan

You can consolidate credit debt into a secured loan or an unsecured loan. A secured loan offers the advantage of lower interest rates and is secured by collateral, such as your home. A secured loan has the additional advantage of helping consumers to take the loan seriously, since having a place to live is contingent upon timely repayment.

An unsecured loan requires no collateral, but the interest rate on the loan will be higher.

Only you can decide if you’re in trouble with credit card debt. Ignoring a problem will only make it worse. Whether you’re just seeing warning signs, or already considering bankruptcy, debt consolidation loans offer a proactive way to get back on track. It’s true that you’ll have to change your lifestyle and cut up the credit cards. You may have to live more economically.

But the rewards are worth it. Within a few years, you can transform your financial position from scary to solid.

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What Is “Unsecured Debt?”

Secured loans are borrowed against collateral, such as your home, car and other possessions. If you file for bankruptcy, these assets are liquidated immediately in order to pay off your creditors. Unsecured debt is not borrowed against collateral but your credit rating can be severely damaged if your monthly minimum payments are not made on time every month.

Can Debt Consolidation Help?

When you find yourself in a difficult financial situation, you can begin to let your credit card payments and other unsecured debts slide. When this happens, you are typically charged usurious late fees and your credit score begins to crumble immediately. A solid debt consolidation program can help you to gain control of your finances by obtaining unsecured debt consolidation loans with which to pay off all of your creditors in one fell swoop.

Once your unsecured debt is paid off, the negative marks on your credit report will stop immediately. When you consolidate credit card debt, your various accounts are closed in good standing and your credit score receives an instant boost. Bill consolidation loans have a similar effect, as all of your creditors are paid off in full, which gets collectors off your back and signals to future creditors that you take your responsibility for repayment seriously.

When you consolidate loans with a reputable agency, your payments are all streamlined into a single monthly amount that is custom tailored to fit into your budget. This means that every month, as you make your consolidation loan payments on time, your credit score continues to improve.

Work with the Best

Bad credit debt consolidation companies are available in abundance, which means that you have a wide selection from which to choose. Make sure that you thoroughly research several different agencies before you settle on one with which to do business. Credit card debt consolidation companies charge differing fees for their services and it is important that you are made aware of all associated fees, interest rates and penalty charges before you enter into a contractual agreement.

Spend a fair amount of time talking in person with several different consolidation company representatives, in order to get a feel for each service and for what they have to offer. Choosing the best consolidation program available to you will pay off in the form of a simplified journey into financial freedom.

Conclusion:  Unsecured Debt Consolidation Loans

Unsecured debt consolidation loans can help you to stop the downward cycle of your credit score and can put you on the fast track to financial recovery. The streamlined repayment schedule available through most agencies can help to reduce your financial stresses and focus you attention on enjoying life, as you slowly but surely become debt free.

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Others are well past this point and now find themselves drowning in unsecured consumer debt, leaving their credit a shambles. With these developments, credit repair promises to become a growth industry in the financial world. In response to these trends, many banks and credit card companies are now offering credit cards for people with bad credit.

Bad credit cards offer a way for those with poor credit to re-establish their credit and restore their good name.

Your Credit Score, Your Future

It’s alarming when one considers how important good credit is today. A poor credit history can effect everything from the car one drives to whether or not one is eligible for a job. It is, of course, absolutely crucial for those interested in ever owning a home. Bad credit credit cards may be crucial in restoring distressed credit, provided the bad credit cards are used wisely with a repair plan in mind.

There are a number of factors that determine your credit rating. First, you have information that comes from people who loan money, like banks, credit unions, credit card companies, or parties that may check credit histories. Then there is information that comes from other sources, like the courts. The single biggest factor in determining a consumer’s score is whether they make consistent, timely payments.

Hope Through Credit Cards For Poor Credit

Bad credit cards allow consumers to start again, even though they may have a poor record of paying the bills. These cards usually carry interest rates that are higher than normal, though some consumers may be able to negotiate a lower rate. The key is to ask. The worst that can happen is that they say no.

Credit cards carry an intrinsic level of safety, and can actually be highly useful in paying for routine bills. The safety lies in the fact that the card carrier isn’t using their own money to pay right away, but borrow someone else’s on a short-term basis.

For instance, a consumer has a bad credit visa card and uses it to buy, say, a new blender which turns out to be defective. If, for some reason, the store won’t take back the item, the consumer still has an option; they can contact Visa and have the charge disputed. Since the consumer has used Visa’s money for the transaction, Visa has a vested interest in defending the consumer’s claims.

If used with discipline and care, even bad credit cards can be a real asset in maintaining financial security.

A Word Of Caution About Bad Credit Cards

Consumers with poor credit should approach using credit cards for bad credit with extreme care. Read all the application terms carefully, ask any and all questions you may have before signing, and commit to paying the balance early and consistently.

If used prudently, credit cards with bad credit can actually turn around a bad financial situation.

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