Who exactly is attempting to collect my debts?

The Fair Debt Collection Practices Act was written within the 1970s and provided a great amount of protection for debtors. You will find strict rules and regulations that a debt collector should abide by, and if any of these regulations are violated, there’s a great chance that you could sue that agency.

But what about that friend of yours who owes you five dollars? Do you have to grant them thirty days to refute the claim? Clearly, you do not.

Who Is Really A Debt Collector?

Courts think about several factors to find out whether the creditor should be regarded the actual credit card debt collector. An agency’s participation inside the actual debt collection process would have to be small.

Could be the debt collection agency is only a collection service?

Do the letters say if the debtor does not pay the credit card debt will be referred for assortment?

Could be the assortment agency paid only for sending letters, rather than commission?

Bill Collection Agencies

If the collection agency does not receive any payments or forward any payments towards the creditor, that is suspicious. If a debtor doesn’t make a response towards the letter as well as the selection organization has no further contact with the debtor, or if it doesn’t obtain the files of the debtors, they possibly are going to become regarded bill selection agencies.

Know Your Creditors And Your Rights

The lesson you must walk away with is that it’s crucial that you know who you are paying your debt to. It’s often wise being on the ball when it comes to your funds.

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There are many low interest and even 0 APR credit cards available!

Read the following tips to begin saving:

Find the Low or No Interest Card that is Right for You

Before you begin filling out that credit card application, there are a few different things to take into account.

Many credit card companies will offer 0 credit cards with an interest free introductory rate. This is great, but before apply for a credit card, you want to be sure you know all of the details.

Find out how long the introductory rate will last. Typically, the no interest rate is given to a new cardholder for the first six months.  It used to be as long as a year.

Check the regular APR when you apply for credit card. Find out what your rate will switch to once the 0 APR rate has concluded. You will also want to be aware of any additional fees that are associated with the new card, such as an annual fee. There are many cards that you can obtain without an annual fee. Since you are trying to save money, it is suggested you find a company that does not charge an annual fee on their credit card.

Initiate a 0 APR Balance Transfer

Initiating a 0 balance transfer can be done in two different ways.

The first and most recommended is to find a company that offers 0 balance transfers on the entire balance for the life of the loan. In this market, that is going  to be tough to do.  But, if you have good credit, you may be able to find balance transfer credit cards that offer a 0 APR balance transfer for the life of the loan.  Companies offering interest free credit cards are expecting to gain you as a long time customer.

Remember, any purchases you make on your card will be billed at the regular interest rate, but the balance you have transferred will be at no interest until you have paid it off. This is an excellent way to save money and cut down interest costs. This is also the most advised option. If you are unable to find a company that offers a no interest balance transfer, the second option would be to find a card that has a great introductory rate. In this case, it would be wise to pay off as much of the balance transferred as possible before the rate goes up.

Consolidate Credit Card Debt

Consolidating your credit card debt with a 0 interest credit card can save you a lot of money in the long run! If you have several credit cards, it is suggested that you consolidate them with one credit card balance transfer and save money with the lower interest and easier monthly payment.

Take a look at your credit card statements to verify the interest rates you are currently paying.

Depending on your financial situation, you will want to take some or all of your credit cards and open one new account that has the best overall interest and benefits for you.

Instead of making three different minimum payments, make only one to a company that is offering you the 0 balance transfers option.

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Many credit card companies are still offering offer 0 interest credit cards; and, receiving this type of loan easier if you have a good credit score.  But, with the recent FICO 08 changes, even those with minor credit blemishes still may qualify.

So what steps do you need to take to receive this interest free loan?

How to Obtain a 0 Credit Card

If you already have a low interest credit card, the bank may send you additional balance transfer offers in the mail.  Compare credit cards issued by your bank to others online.  There are several sites that offer credit card help comparing interest free credit card offers.

Your bank may not provide the best credit card deals for you.

If you currently have a credit card with a certain bank, look for 0 APR balance transfer checks or other 0 balance transfer offers. If you do not have a credit card with a specific bank, you might still receive a balance transfer offer as an incentive to get you to open an account.  If you receive one of these offers, be careful to apply for a credit card that offers the longest balance transfer period and the lowest balance transfer fees.

Note, that you may not receive offers like these in the mail if you have opted out on marketing materials. But, you can still search for an offer by visiting your bank’s website or by calling customer service. You can find attractive offers online.

How to Initiate a Balance Transfer

Once you have found the best credit card deals, you need to initiate the credit card balance transfer.

If you received an offer in the mail for a new credit card, fill out the provided form. You will need to provide the account number of the credit card you wish to pay off. Mail the form back to the bank in the provided envelope. Some banks provide an online form you may fill out instead.

If you receive a 0 APR balance transfer offer from a current credit card, checks will be attached. Use these checks to pay your other credit cards or merchandise.

How to Consolidate Credit Card Debt

When you find interest free credit cards, use them as an opportunity to consolidate credit card debt and pay down (or off) a higher interest credit card.

If you do not have excessive balances, you may be able to pay off all your credit card debt using this one 0 interest credit card.  But, even if you’re only able to pay off part of your credit card debt, you will save money on interest and probably lower your monthly payments.  The savings can add up quickly.

Additional Considerations For Interest Free Credit Cards

Consolidating your credit card debt can save you money and can reduce your monthly payment, but be sure to read the balance transfer terms and conditions very carefully.

All offers expire; some sooner than others.

If your offer is good for 12 months, you may want to consider paying it off within the 12 months unless you can transfer the outstanding balance to other low interest credit cards at the expiration of the balance transfer period.

Once the offer expires, the credit card company will charge you the regular interest rate. Sometimes this interest may be more than the credit cards you transferred it from.

Plan ahead to avoid financial problems in the future.

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Use Balance Transfer Credit Cards To Get Low Interest Rates

Consumers once received balance transfer offers in the mail almost every month.  Fortunately, those with better than average credit scores can still find balance transfer credit cards that will allow them to transfer all, or some of their credit card debt onto the new card with a 0% APR interest rate.

You will have to pay a balance transfer fee of 3% to 4%.  While these fees were once capped at $50, some issuers have removed the cap or raised it to $75.  So, read the fine print before making the transfer.

Read The Terms And Conditions Carefully

When selecting an interest free credit card, it is important to read the terms and conditions on the credit card applications very carefully.  Here are the features and benefits that you should look for in selecting the best credit card:

Length of Introductory Period. The chief aim is to find a credit card offer with an  introductory rate for as long as possible.  Not long ago, the standard introductory period was 12 to 18 months.  Over the last six months or so, that period has dropped to as little as six months.  Compare credit cards and focus on credit card deals with the longest balance transfer period.  This will offset the negative effects of the balance transfer fee that will be paid when the balance transfer is made.

Interest Rate After The Introductory Period. You want to focus your search on those offers that involve low interest credit cards after the introductory period expires, particularly if you are not going to be able to pay off the credit card at the expiration of the interest free period.  Unless you select an offer with a low interest credit card, you will quickly offset any interest savings within a short period after the introductory period expires.

Balance Transfer Fees. At one time, the standard balance transfer fee was 2%-3% and capped at $35 to $50.  Recently, some credit card issuers have increased the fee to 4% and/or increased the maximum fee (or eliminated it altogether).  Ideally, the best credit card deals are going to be the credit cards with the lowest balance transfer fees particularly if the balance transfer period is shorter.

Method Of Calculated Balances. Ideally, you want to avoid credit cards that use the two cycle average daily balance method of calculating balances.  If you plan to reduce your balance each month, the two-cycle average daily balance method will penalize you by averaging the previous month’s higher balance with the succeeding month’s lower balance.  This results in a higher average balance and higher finance charges.

Introductory Period Begins When Balance Is Transferred. You want to find an interest free credit card that begins the introductory period when you transfer the balance, not when the account is opened.  If the period begins when the account is opened, you have the added flexibility of transferring balances at a later date if necessary.

Do Not Use Your 0 Interest Credit Cards For Purchases

Once you have initiated a credit card balance transfer, that interest free credit card is off limits for purchases.  Cut the card up and do not use it for purchases.

If you have credit card balances on other cards (with higher interest rates) make the minimum payment on the interest free credit card and pay the difference onto the credit cards with higher interest rates.

When, and if, you are able to pay off all of your higher interest credit card debt, then pay the extra money on the interest free credit card if you are able to do so before the introductory rate expires.

Pay Your Credit Card On Time, Every Time

In order to enjoy the benefits of an interest free credit card, you have to pay the bill on time, every time.  Most balance transfer credit cards have a default rate that is triggered when the bill is late.  This means that, instead of paying no interest, you will incur a steep penalty interest rate the moment you are late or skip a payment.  In addition, continue to pay the old creditor, until you have confirmed that the balance transfer was completed.  Do not trust the credit card representative to tell you that the balance has been transferred.

If you can remember these rules, you can probably still save a substantial amount of interest on your credit card debt, even in today’s tight credit climate, provided you have the FICO score to back it up.

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These no or low interest credit cards offers are not easily found unless the consumer has excellent credit. The most common method of obtaining a low or no interest credit card is to find a deal of a balance transfers.  Most of the time, these cards don’t have an annual fee, although balance transfer fees of 3% to 4% may exist.  In the tighter credit climate, the balance transfer period is now shorter (an average of six months or less).  Even with the tighter requirements and shorter balance transfer periods, finding a low interest credit card is a key personal finance strategy particularly if the consumer is currently carrying a balance.

Qualifying For A 0 APR Credit Card

Obtaining any VISA credit card in the current credit market is not a simple task.

To obtain a 0 interest credit card today, there are tighter qualifications and guidelines that applicants must meet before being able to qualify.  Issuers offering the best credit cards are going “the extra mile” to make sure the applicant is not a credit risk.

Even with the adoption of FICO 08, issuers still closely review past payment history, credit score and number (and seriousness) of any delinquent accounts. If you have a good credit score and no seriously delinquent accounts, your chances of getting a 0 APR balance transfer credit card are reasonably good, even now.

Applying For A 0 APR Credit Card

To obtain a low interest credit card, it is best to start by filling out a credit card application through your own local bank or a qualified credit lender.  After all, the consumer already should have a positive banking relationship with this lender which should help in the credit card application process.  Ask for their low interest credit card offers. Most banks carry these and you will be sent an application either through mail or on the phone (depending on your bank).

Some consumers elect to go through online referral sites to apply for a VISA credit card, which is only okay.  But, the consumer would be wise to evaluate whether or not they have a history of good service.  If they try to charge you a membership fee or other fee to apply, look elsewhere.  A consumer should not be subject to any such fee, even if he or she has less than stellar credit.

0 Credit Card Offers:  Enjoy The Rewards Of Good Credit

If the consumer enjoys good credit, he or she should reap the rewards associated with a low interest credit card.  Owners of these types of credit cards enjoy rewards points that can be redeemed for hotels, airline tickets and, sometimes, cash.  While the bonuses vary from lender to lender, they are extremely helpful when needing to make future purchases. One caution is that bonuses that can only be spent at certain shopping stores or online marketplaces.

What About Those With An Average Credit Score?

In the credit market of today, lenders offering 0 balance transfer credit cards require excellent credit.

In some cases, the issuer might be a little lenient and qualify the consumer that has “good” credit instead. That is one of the benefits that consumers enjoy as a result of the recent FICO 08 changes.  Remember, the average APR is 14.9% on credit cards, which is almost twice as much as the low interest rate of 7% found on most low interest cards.

So, if a consumer has the credit score `1to qualify and the balance to justify paying the balance transfer fees, 0 credit cards are still a smart financial move.  In the end, any time a consumer can borrow money at a low interest rate, he stands a better chance of paying off the balance without any problems or late payments.

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While 0% APR credit card offers are getting harder to find, they can be a great way to consolidate debt and eliminate your outstanding balances – if used properly.  Here’s how….

Use 0% Credit Cards To Pay Off Existing Debt

Traditionally, there were two ways to consolidate your credit debt.  The first way was to get a debt consolidation loan.  The second way was to get a home equity line of credit (HELOC).

Honestly, most people never considered using a series of 0 APR credit cards to pay off the credit card debt with little interest.  In some instances, this may be the best option. If your credit is in good shape, a 0% credit card will allow you to payoff your credit card debt even quicker than a consolidation or home equity loan.  If you can secure a 0 interest credit card, you will be able to spend virtually all of your monthly payment eliminating principal instead of paying interest.

How To Use A 0% APR Credit Card To Eliminate Credit Card Debt

The process for using a 0 interest credit card to eliminate credit card debt is really straightforward.  Follow these steps:

1. Transfer your existing credit card balances to a 0% credit card.
2. Continue to pay down your balance as usual. But instead of paying just the minimum each month, add the amount of interest you saved and pay it as well.
3. Keep a careful eye on the introductory period.  One month before it expires, begin to shop around for a new interest free credit card offer and transfer your balance again.
4. Continue this cycle until you’re debt free.

Author’s Note: Be aware of these two traps when using this procedure.  First, with the recent changes in the credit card industry, you will find that you will incur a 3-4% balance transfer fee.  Second, transferring credit card balance repeatedly can slightly impact on your short term credit score.  But, in my opinion, this impact is greatly outweighed by the savings in interest.

0% APR Credit Cards vs. Debt Consolidation:

Still thinking about a credit card debt consolidation loan instead of a 0% credit card?

Well, let me wow and amaze you.

Let’s examine the details to see how much you can save, and how much quicker you can pay off your debt using the method shown above:

Assume you have an existing credit card debt of $15,000. You’d like to pay $250 per month until the debt is paid off. Your debt consolidation loan was approved at 7% which is quite a bit lower than that 16% APR credit card.  Congratulations on negotiating such a great deal!!  Let’s see how that works for you:

• Beginning Balance:        $15,000
• Total Amount Paid:        $18,516
• Total Payments Made:            75

Now let’s compare paying off this same debt using 0% APR credit cards.

• Beginning Balance:         $15,000
• Total Amount Paid:         $15,000
• Total Payments Made:            60

Your savings are $3,516 over sixty (60) months.  You will be debt free 15 months before your debt consolidation loan is paid off.

Using The 0% Credit Card Method:  Caveats And Cautions:

It is clear that consolidating credit card debt with a 0% APR credit card can be a real solid financial move.  However, you need to observe these cautions and precautions when using this strategy:

1. Do not switch credit cards more than necessary as it can negatively impact your credit report.
2. Search for the 0 interest credit cards that have the longest 0 APR periods
3. Check the APR on balances after the introductory period to make sure you aren’t hurt in the event you cannot continue to transfer the balances.
4. Do not continue to use the card after you pay it off.  But, do not close the account either.  Closing the account can adversely impact your credit score.  Just cut the card up and forget that it existed.
5. Do not overspend with your new credit card either even if you can make purchases at 0% APR.
6. Be sure to apply the money you save in interest (all of it!!!) to the payment as extra principal.  You will eliminate your debt much faster.

If you observe these tips and shop carefully, you may find that a 0% credit card strategy is a useful and lucrative alternative to consolidating your credit card debts with a traditional debt consolidation loan or home equity line of credit.

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