Greenback Christmas

According to the National Retail Federation’s 2009 Holiday Consumer Intentions and Actions Survey, U.S. consumers plan to spend an average of $682.74 on holiday-related shopping. This is a 3.2% drop from last year’s $705.01. Only 28.3% of shoppers will use credit this year compared to 31.5% a year ago. No surprise to anyone in debt that when you use the PLASTIC it doesn’t hurt as bad as letting go of the GREEN. Using cash for those gifts will reign in unnecessary spending because consumers will stop to question the value of purchases versus the labor it took to earn the money! * Envelope System: ~Family ~Friends

Step 1. Put the cash in

Step 2. Write out your list on the outside

Step 3. Divide the dollar amount and go shopping!

*Remember~ dollar stores are a great source of inexpensive wrapping supply!

GIFT CARD “GOTCHAS”

( by Deanna Haynes 11/20/2009)

• If you don’t spend the card after the first 12 months, you could be hit with unexpected fees. In September, American Express announced it would no longer charge a $2 monthly service fee after 12 months -- and that change is retroactive to old cards, too. However, A study found that Discover, MasterCard, and Visa still tack on a $2.50 monthly maintenance fee after 12 consecutive months of inactivity.

• Store gift cards are free, others aren’t. There’s typically no charge to purchase a gift card from your favorite merchant. But if you choose to buy the gift card online instead of at the store, you could be hit with a handling fee. At Starbucks, for example, the fee is $1.50. Credit-card issuers, by contrast, always charge a purchase fee, typically $3.95, though it can vary depending on the card’s value.

• Pay attention to the "valid-thru" date. It’s something you’ll find on cards issued by credit card companies. While technically not an expiration date, it reflects the estimated lifespan of the card’s magnetic stripe. Shelf life for the stripe is about five years, and if you have a card with a past-due valid-thru date, contact the company for a replacement card.

• When buying a gift card from an individual merchant, be sure to ask if the card is valid for online use. While it’s not an issue for most retailers, some companies such as CVS, T.J. Maxx, and Marshall's do not allow their gift cards to be used online

5 Spending Habits that can lead to Debt

Debt isn't something that just happens as you go about your daily routines. There are certain spending habits that lead to debt.

1. Spending more money than you make.
This doesn't sound logically possible. If you only make $1,000 a month, how could you possibly spend $1,200 in a month? It's easier than you think. So easy, you might be doing it. Dipping into savings, borrowing from others, and using credit are the primary ways of spending more money than you bring in. You might be able to get away with doing this for a few weeks or months, but soon, your hole-digging spending habits will catch up with you. Before you know it, your savings is depleted, your credit cards are maxed out, and you can't borrow any more money.

2. Spending money you don't have.
Usually, spending more money than you make is enabled by spending money you don't have. You spend money you don't have by using credit cards and taking out loans. When you use these instruments to pay bills and make purchases, you're creating debt. If you can't repay the debt each month, it will continue to grow.

3. Using credit for ordinary purchases.
You should use cash to make everyday purchases like groceries, gas, clothes, and entertainment. The appeal of credit cards is the ability to pay later for items that you buy now. The caveat is that you're less to pay your credit card bill for items that you've already consumed, which most "ordinary" purchases are. Using credit instead of cash is a bad habit, especially when you don't pay your credit card bills in full each month.

4. Using credit when you have cash.
One of the quickest ways to get into debt is to choose to use credit when you have the cash to make a purchase. People do this with a "something for nothing" type of mindset. They want to receive the goods (or services) but they don't want to pay for them. The convenience of leaving your money in your wallet comes at a cost. Chances are, if you don't want to pay for it today, you're not going to want to pay for it tomorrow.

5. Using debt to pay off debt.
When you use credit cards to pay off other cards and loans to pay off other loans you're not paying off anything. You're just shuffling your debt around and incurring more debt each time you do so. Balance transfers have transaction fees and most loans have some kind of down payment or origination fee. So when you use debt to pay off debt, you end up worse off than when you began.

Author: Natasha Hopkins Client Relations at CreditAllianceGroup (886) 543- 9073

11 Surprising Financial Facts about Women

(Donna Millen)

Although, “The Savage Truth on Money,” a book by personal finance columnist Terry Savage, was published a decade ago, many of the facts and figures are still meaningful. Here, summarized, are 11 financial facts about women, from the book (with our comments in parentheses)...

1. Women live between five and six years longer than men. (The oldest person in the world, a woman in California, was 115. But the next oldest person, a man in Japan, is 114.)

2. A 65-year-old woman today has an average life expectancy of 19.2 years. (These days, it’s about 20 years, vs. 17.2 for a man.)

3. Women earn, on average, 76¢ for every dollar that men earn, resulting in lower Social Security and pension benefits.

4. Women spend more time out of the workforce, resulting in lower pension benefits.

5. Women outnumber men in part-time jobs, two to one. (But since the recession
began, more men are seeking part-time work.)

6. Women who work part-time are less likely to work for firms with retirement plans. (Many firms hire only part-timers so they won’t have to pay benefits.)

7. Half of the women over 65 are divorced or widowed.

8. Women make up 75% of the elderly poor. (See above for reasons.)

9. Elderly unmarried women get 51% of their total income from Social Security.

10. 80% of women living in poverty were not poor before their husbands died. (In 2007, “poverty” meant an income of less than $10,590 for a person living alone, or under $13,540 for a couple.)

11. An average woman’s standard of living drops 45% in the year following a divorce, while a man’s rises 15%. (Draw your own conclusions.)

Friends vs. Debt

Sometimes sticking to our budgets is hard to do when friends on a different pay scale are constantly nagging us to go out and spend money. Don’t get me wrong, I know it’s hard to watch everyone else around you living the good life and enjoying the finer things. But the reality is, you don’t know their situation like you know your own. They may be putting on a big show for all you know. The only thing that matters is you accomplishing your goal…not to the detriment of your relationships with people, but if they truly care about you, then once you’ve put your foot down, they won’t complain (much).

Author: Lucinda Ramos, Client Relations at CreditAllianceGroup (886) 543- 9073

Credit Debt Management Programs

These programs can come in many forms and from many different places, but the common thing between them all is the benefits they provide to those who take advantage of them. Unsure of what a debt management service can do for you? Take a look at the following benefits and find out if it is right for you and what you are really getting when you sign up for one of these programs.

Organizational Benefits

These programs can help you organize your personal finances, by taking the following actions:

1. Determining how much debt you owe and how much interest will be added onto that debt while you are in the program. They will also try to work with your creditors in order to lower the interest rates on your credit cards and other debts.

2. Taking your monthly bring home income and subtracting your needed expenses, in order to determine how much you have available to pay toward your bills each month.

3. Putting you on a 3, 4, or 5 year debt repayment plan. This will be determined according to how much debt you have and how much extra income your have each month to put toward your outstanding debts.

4. Distributing your monthly payments between your creditors, based on the amount of debt owed. Companies who you owe the most money to will likely get a larger percentage of your payment, in order to ensure that everyone gets paid off within 3 to 5 years.

Educational Benefits

A debt management plan can also help you discover the life rules for staying out of debt, so that you don’t have to deal with this situation ever again. They can also show you what living within your means really is, how to come up with and manage a budget, and what current expenses you should be cutting back on to stay within your monthly budget. The most important thing you need to take away from this experience, however, is responsible spending habits. Otherwise, the entire experience will have been pointless. A budget does not work if you do not stick to it.

Structural Benefits

For those who need a way to streamline their personal finances, maintain stability, and want to eliminate debt, a debt management program is a perfect solution that will make their lives better. The only choice you have to make now is which kind of debt management program is best for you and what company you want to sign up with.
‡ Please Note: Unsecured debts concern any kind of debts or bills that are not secured by your assets, such as personal loans, retail and other credit card financing, and outstanding utility bills. Car or home loans are not unsecured as the loan uses them as collateral.

Presupuestar

Por Cristina Gomez, 20 de noviembre 2008

Crear un presupuesto no es la cosa más emocionante en el mundo para hacer, pero cambia mucho las cosas a mantener su financiamiento en la orden. Una vez que haya terminado, usted será capaz de ver cuanto dinero esta llegando, donde va todo. Esto podrá ayudarlo a determinar lo que usted debe recortar y también ayuda al saldar alguna deuda más rápido. No toma mucho tiempo. Usted también puede intentar de utilizar los pasos debajo para ayudarlo a empezar.

1. Reúna cada estado financiero que usted puede. Esto incluye estados del banco, cuentas de inversión, cuentas recientes de utilidad y cualquier información con respecto a una fuente de ingresos o el gasto.
2. Registre todas sus fuentes de ingresos. Si sus ingresos están en forma de un cheque de pago regular donde impuestos son descontados automáticamente entonces utilizando los ingresos, o la paga para llevar, la cantidad está muy bien. Registre estos ingresos totales como una cantidad mensual.
3. Cree una lista de gastos mensuales. Anote una lista de todos los gastos esperados que usted planea a contraer sobre el curso de un mes. Esto incluye un pago de la hipoteca, pagos de coche, el seguro de automóvil, los comestibles, las utilidades, el entretenimiento, el seguro de automóvil, todo en que usted gasta dinero.
4. Sume sus ingresos mensuales y los gastos mensuales. Si su resultado final demuestra más ingresos que los gastos está en un buen comienzo. Esto significa que usted puede priorizar este exceso a áreas de su presupuesto como pagando más en tarjetas de crédito por eliminar esa deuda más rápido. Si usted muestra una columna más alta del gasto que los ingresos significan que algunos cambios tendrán que ser hechos.
5. Haga ajustes a gastos. Si usted ha identificado exactamente y ha listado todos sus gastos que el último objetivo sería de tener sus columnas de ingresos y gasto para ser igual.
6. Revise su presupuesto mensualmente. Es importante revisar su presupuesto para asegurarse con regularidad permanece en el vestigio. Compare sus primeros pocos meses. Esto le mostrará donde usted hizo bien y donde usted puede necesitar para mejorar.

Por: Cristina Gómez, Relaciones de Clientes y Acreedores en CreditAllianceGroup 866-543-9073

Christmas and the Risk of Debit Cards

November 20, 2009

The shopping season is approaching and many consumers are choosing to use their debit cards instead of a credit card this Christmas season. But despite their apparent safety, there are a few precautions you need to take to make sure that you don't end up in debt despite avoiding credit cards this Christmas.

Keep close track of your spending. While debit cards are a lot better than credit cards in terms of avoiding interest, fees and debt that you need to repay, debit cards have their own set of pitfalls, including pain-free spending. If you carry cash it can be quite painful to part with it when it comes time to pay for a purchase. As with credit cards and debit cards, just swiping a card makes spending money less painful causing you to spend more. To avoid spending too much on you debit card, keep a running tally of what you are spending as you go from store to store.

Opt-out of overdraft "protection" programs offered by your bank. As we have mentioned before overdrafts can end up costing consumers more than what the price of the original purchase. The average overdraft price tag was $34 in 2008. To avoid spending as much as twice what you paid for an item, don't allow you bank to "protect" you with their overdraft program, just simply opt-out. Note: The Federal Reserve has created new rules, effective July 1, 2010, which will prohibit banks from charging overdraft fees on automated teller machine and one-time debit card transactions unless the consumer opts in to the overdraft service for those types of transactions.

Author: Evan Cox, Senior Credit Specialist

Minimum Payments are Not Your Friend

Many people love the fact that they can just make minimum payments on their credit card balances. The thinking behind this infatuation with minimum payments is that they can purchase something that’s worth $1000 and only pay $20 per month to own it. Unfortunately, this thinking is faulty. Minimum payments are designed to make money for credit card companies because they inflate the total amount owed on any one item. They can also make it easier for consumers to run up additional debt which creates financial problems that could have been avoided. Although they seem nice, minimum payments are not your friend.

Think about it; would a credit card company create minimum payments if it didn’t benefit from them? These companies exist for the sole purpose of making a profit. The minimum payments make them this profit because it leaves a high balance on the credit card for an extended period of time. The interest rate is applied to that balance each month so that the consumer ends up paying a big amount to the credit card company just for the right to keep that balance on the card. This means that the item that cost $1000 initially can cost several hundred dollars more than that by the time that it’s paid off.

Some people don’t mind that they’re paying more overall if they can pay less right now for their possessions. However, the minimum payment plan also creates additional problems for the consumer. Because the individual is only paying the minimum balance, the rest of their paycheck is available for use on other things. This can cause them to do excessive spending with money that should be going towards paying off the credit card. This can create a cycle of financial difficulty that ultimately causes the consumer to go into excessive debt.

Furthermore, consumers who get caught in this cycle can be caught by surprise when minimum payments unexpectedly go up. This can happen as a result of a missed payment or it can happen just from changes in the economy. When it occurs, people who rely on low minimum payments to get by each month will find that they’re out of money and have nowhere to turn to be able to meet those payments. While it may seem at first glance that paying only the minimum due on credit cards is a great opportunity to purchase things you can’t afford, a closer look reveals that the problems this causes aren’t worth the benefits.

Sean Boyett, Director of Sales

Building your Savings

• Whenever you're paid, put only what you need to live on for one month (or two weeks, if you get paid every two weeks) into your checking account. (If you put more into checking, you'll probably spend it.)
• If you can, put money equaling one month's expenses into your expenses account for unexpected bills. The idea is to build at least a small stash so you're less likely to use your credit card if your car needs a new tire.
• Begin building your emergency cushion by depositing a portion of each paycheck into your "cushion" savings account. If your goal is to have three months' living expenses, you could reach your goal in 30 months by saving 10% of each month's pay — or in 15 months by saving 20%.
• Put whatever is left into your "investments" account, including found money such as birthday and holiday checks, bonuses, or money made from a garage sale. If you get a raise, put the difference into this account on a regular basis.
• If your bank can't link your checking and savings accounts, or if you find it hard to control your spending when access to your savings is easy, ask your employer about direct deposit. You can have money taken from your paycheck and placed in a savings account automatically.

Author: Natasha Hopkins Client Relations at CreditAllianceGroup (886) 543- 9073

Getting through Christmas Debt-Free

If you're like many people, a lot of your current credit card bills include Christmas expenses from last year that you're still paying off. Most will be paying off last year's presents well into the middle of this year. One way to keep this from happening down the road is to start saving now, so you have the cash on hand to pay for those gifts outright instead of having to resort to putting them on a credit card. The savings can be substantial as the interest fees on those charges can add up quickly if they're not paid off promptly.

How can you get that far ahead? Well, you can start by making sure that you pay all your bills on time. Each of those late fees of $25, $35 or more can add up to a lot of potential gifts. And that isn't even considering the interest rates. If you have hundreds or thousands of dollars on your credit cards, you must remember how much you're paying in interest. Many credit cards charge 19 percent or even more in interest rates. That means you're paying a lot more on every dollar of purchased gifts than you initially charged. If left long enough you could be adding hundreds of additional dollars extra in interest just to pay off last year’s gifts. That's money that would be better spent on this year's Holiday season.

So, work diligently to pay off those debts. Do what it takes to clear those old charges. That may mean tightening your belt for a few months to make larger-than-usual payments on your cards. Remember, the faster you pay down your balances, the more money you'll be able to keep in your own pocket by not having to give it to the credit card company as an interest payment.

Once you get your cards paid off, begin saving for this year. If you're fairly responsible and have the will power, you can just put this money aside in your savings account – that's assuming, or course, you'll leave it there and not dip into it from time to time. If you do take a little here or there, be sure to replace it as quickly as possible, or you'll be sadly disappointed at the toll it will take on your available cash come Christmas time.

For many people, it's necessary to open a completely separate account for this purpose. Most banks typically offer some form of 'Christmas Club' savings account, but evaluate and compare them carefully before signing up. Many offer lower interest rates than regular savings account, in which case it might be better to simply open a second savings account that you personally earmark for your Christmas money.

While you may still be suffering the repercussions of last year's Christmas
spending, the painful bills don’t have to be an annual tradition. With a little extra planning and effort this year, your Christmas can be funded in advance and leave you entering the next New Year debt-free.

Author: Regan Ricci, Client Services Group (866) 543-9073

The Inside Scoop on Store Credit Cards

It seems like every retailer is offering its customers its own credit card nowadays. While the incentives to applying for a new store credit card are often enticing — many stores offer 25% off the first purchase, no interest for one year, or monthly discounts or gifts to cardholders — having so many store credit cards in your wallet can put you into debt in a hurry, if not seriously hurt your credit score.

High debt is often a problem for holders of store credit cards, since they generally charge much higher interest rates than bank-issued cards. Unless you plan to pay off the full amount of the balance each month, expect high finance charges, likely enough to render obsolete any card holder incentives you may have received.

Having a different card for each store you shop in may earn you some store rewards here and there, but holding so many cards does not look good to creditors and thus, your credit score is likely to take a beating. Consumers should balance their card portfolios carefully and only apply for cards with genuine value, according to the National Retail Federation's senior VP Mallory Duncan.

The reason why stores are able to offer such huge incentives to their cardholders is because they reap huge savings on the transaction fees that Visa, MasterCard, Discover, and American Express charge. Visa and MasterCard charge a fee of 2% for each transaction, which comes directly out of the retailers' bottom lines. When a retailer co-brands with Visa or MasterCard, often times that fee is halved. When they offer their own independent card, the retailers can avoid the transaction fees altogether. While some of these savings are passed on to their customers, consumers should still exercise sound judgment when offered a new store credit card. More is not always better.

Donna Millen

Benefits of Debt Management

Debt management means that part of your debt is immediately wiped out by your creditor. You will find instant financial relief in your monthly budget. And the rest of your debt payments are much more manageable. You will also find that you can start rebuilding your credit from this point on. Instead of juggling late payments, high debt loads, and other factors, you can focus on managing your credit better.

Author: Lucinda Ramos, Client Relations at CreditAllianceGroup (886) 543- 9073

Creating a DIY Debt Management Plan

Learn how to create your own personal plan for reducing debt

Believe it or not, being swamped in debt isn't the end of the world. You might spend the night worrying about how to make ends meet, but you don't have to. The key is to set up a debt management plan and take control of your life. While there are many companies that offer this service, it is something you can do yourself.

Question why you are in debt
How did you get in so much debt? Were the purchases necessary? Are you living above your means? All of these questions are necessary. You need to find out what led you to this situation or you'll just make the same mistakes in the future. Debt management also means finding a way to stop adding on more debt.

Calculate monthly expenses
This may seem time consuming, but it's necessary to see where your money's going each month. Create a spreadsheet for your cell phone and track all your expenses for a month. Each time you make a purchase, type in what it was and how much it cost. At the end of the month, take a good look at the total compared with your monthly salary. If more money is going out than coming in, there's a huge problem.

Cut monthly expenses
There are several ways to cut costs on almost every expense. You can switch to generic brands, choose a lower cost cable package, turn off unused services, etc. The exact cuts you make will depend on your expenses. Take a hard look at the spreadsheet you created and determine which expenses you can live without and which ones you can reduce.

Prepare a budget
A spreadsheet is the perfect tool for creating a budget. Type in all the expenses you have such as housing, electricity, groceries, etc. Once all the expenses are typed in, insert a formula to display the total. You want to have money left over. This money can be stashed in a savings account for emergencies. The key is to create a budget you can stick to and not spend more than you currently make each month.

Consolidate your debt
There are two ways you can do this yourself. First, if you're a homeowner, you may be able to refinance and use some of the equity to pay off your debt. Another option is to get a debt consolidation loan from your bank, which allows you to just make one payment each month.

Avoid additional debt
Once you've consolidated your debt, it's time to put away the credit cards. If you can trust yourself with this step of debt management, you can put them in your safe so you don't have them handy when you go shopping. If you can't just yourself, run them through the shredder. It's important to not close all your accounts at once because this will have a negative effect on your credit score. If you want to close them, do so gradually.

Mary Schnickel

8 Great Tips to Improve Your Credit Score

Make these changes to your lifestyle and you can improve your credit score substantially.

These are some basic instructions for anyone to help improve your credit score and to keep you from getting into credit trouble.

Even if your credit score is already pretty good, chances are that it could benefit further from reading thru this list and following at least a couple of these tips to keep your score high.

These tips may seem like common sense, but to those people with a lot of debt, they can be more than a little difficult to follow.
Start with the one you think you can handle, then slowly move up to the more difficult ones.

1. Pay Your Bills On Time
This seems like a simple concept, but poor organizational skills and spending habits can prevent you from doing this. Late payments will hurt your score tremendously.
If you think you will be having a problem paying a certain bill, contact the creditor and explain the situation. They will most likely be willing to work out a payment plan with you without reporting a late mark on your credit report.
The goal here is to develop a long history of paying on time.

2. Live On a Budget
If you don’t have one yet, start one today. Following a budget cures overspending. There are new, online-based budget programs that are very easy to set up and follow.

3. Have 1 Credit Card
Try to hold on to 1 credit card and pay it off every month. This will help establish good credit history. Cut up all your other credit cards including gas cards, store cards and others. This is a must.

4. Keep Card Balances Low
If you need more than 1 credit card, try to keep your balances to a minimum. Avoid a high debt-to-credit limit ratio, which can lower your score. This goes for all your accounts. Use the debt snowball method to kill off your debts 1 by 1, or hire a professional debt negotiator to help you settle your debts for less than full balance.

5. Avoid Playing the Balance Transfer Game
This is so tempting, and I did it for a long time. By transferring balances too often, you can lower your score. Too many revolving credit accounts is seen as a negative to the credit reporting agencies. Even if you close them after you’re done with them, it still can damage your score.

By doing this, you are pretty much delaying the inevitable, which is defaulting on one or more accounts. Shifting your debt around never removes it.

6. Don’t Go Crazy Opening New Accounts
If a lender sees a bunch of new credit inquiries or several accounts opened up in your name in a short amount of time, you may appear to be soon overextended and perhaps a bigger risk. This goes for all credit and loan applications, like mortgages and car or boat loans.

7. Check Your Credit Reports at Least Once a Year
Get a free credit report and review your credit report it carefully to make sure your accounts are being reported accurately. Dispute inaccurate and unverifiable negative items. Don’t worry about checking your own credit report often. This doesn’t affect your score.

8. Maintain Stability
Maintaining a stable lifestyle is one the biggest factors in improving your credit score.

Lenders prefer that their clients have a history of being employed by the same company for a few years and don’t move around too much. This says to the creditors that you are a lower risk, thus your chance of getting a great interest rate will be much better.

The ingredients in maintaining a stable lifestyle are pretty simple. Here are the major ones:

1. stay employed by the same employer for at least 3 years
2. live at the same address for several consecutive years
3. don’t open new credit or loan accounts frequently
4. have a long record of on-time payments

Last Stop Bankruptcy

When you are on a runaway train get off before it is too late detour by way of Hardship programs like Credit Alliance Group offers. Many solvent families become insolvent with only bankruptcy as a solution. How does this happen? Unforeseen medical procedures covered for the most part by medical insurance still rack up the out of pocket expenses in most cases to the tune of thousands of dollars. Take into account the current unemployment rates and those without insurance are in even worse shape. If these bills are the result of serious illness or injury it can prevent good people from working to afford even meager debt. Most American family’s budgets are so tight right now that that there is no room to afford new bills. Forget about savings to offset the massive medical bills. If your medical debt is too high to handle but too low to file medical bankruptcy call me, as a senior credit specialist we can help you reach your destination Debt Freedom intact!

Guide to Getting out of Debt

Imagine being free of debt -- no more sleepless nights over mounting credit card balances, no more ball-and-chain of debt feeding your anxieties, and no chance of threats from dreaded collection agencies. You can do it! Here's the scoop -- in one minute flat.

Make it a habit as fundamental as stopping for red lights. Realize once and for all that if you can't pay for it today -- you can't afford it.

OK Debt has an interest rate well under 10% -- preferably with some tax advantages to boot. In the best case, what you bought with borrowed funds will appreciate in value. Home mortgages and student loans are examples of OK Debt. Automobile loans are on the border: They often satisfy the low-rate piece, but automobiles almost never appreciate in value. Bad Debt is everything else -- from your titanium credit card to the 35% loan from Larry's Kwik Kash.

Out of all your cards, pick the one or two major credit cards that feature the lowest annual interest rate. Resolve to use those cards for emergencies only. As for all the other plastic pals in your wallet, remove temptation by taking them out of your wallet. Throw them behind a major appliance, freeze them in a bowl of water, or decoupage them to a shoebox. Do whatever it takes not to use them.

Line these up on the kitchen table. Find the minimum monthly payment for each account and then add these up to get an overall monthly minimum. Pledge to pay this overall minimum PLUS a hefty additional chunk every month -- enough to make a solid dent in the outstanding balance of at least one account.
If you can't pull this off, you'll have to make a drastic move to increase your income or lower your expenses. It's harsh, we know, but it's also an inescapable fact.

Next, order the latest bills according to annual interest rate charged. Apply the "hefty additional chunk" (beyond the minimum) to the highest rate account(s). Repeat this process monthly until the last Bad Debt account is paid in full.

Grab a bill from any account charging you more than 14% interest. Dial the toll-free number on the bill and ask to have your rate reduced -- say, to 11%. Tell them that you'd really like to stay with them out of customer loyalty (embellish according to your acting skills), but that you have received offers for much-lower-rate cards. Expect to be made very uncomfortable, but stand firm and remember that, to them, you are both a customer and a profit center. You also stand to save a bundle. The more calls you make, the more persuasive you'll become.

Be aggressive in paying down Bad Debt, but don't get so ambitious that you risk missing minimum payments on your mortgage, automobile, or any other secured credit account. (Secured means that if you miss enough payments, the bank can show up and take away your stuff.)

On our Consumer Credit / Credit Cards discussion board, you'll find plenty of emotional support and great ideas. Help others celebrate their debt-free "happy dance."

You're done when the Bad Debt is 100% exorcised and you can make remaining OK Debt payments with ease, leaving plenty of budget room for savings.


Brittany Campbell
Negotiations Department

Sound Advice for First Time Credit Card Users

Getting that first credit card is a rite of passage in America today. It’s an exciting experience, and it’s one that can be a little bit overwhelming. Most people know that credit cards open up a world of purchasing opportunities but they also create a lot of responsibility for the borrower. The smart first-time credit card user will do his or her research into good credit card practices in order to make sure that the card works to his or her advantage instead of becoming a problem.

Here is some sound advice for first-time credit card users to follow in order to avoid problems associated with credit card debt:

• Set a monthly credit card spending limit based on your budget. You should be able to pay off the entire balance on your card every month so set a spending limit based on this goal. This limit will likely be lower than the credit line on the card so you’ll have to stay organized about keeping receipts and sticking within the budget.

• Get in the habit of pausing before every purchase to consider whether it’s a smart choice. Just taking a moment to think before buying can make a great deal of difference in using a card wisely and using it to your detriment. If you know in your heart that you’re making a bad decision, this moment of truth will help you walk out of the store empty-handed.

• Don’t take the card when you know it could be a problem. If you’re going out for a night of drinking with friends, you aren’t going to be responsible with that card. Take out cash instead to limit your spending.

• Make sure that you clearly understand the terms of your credit card. You will accumulate fees if you fail to keep to the terms so make sure you know them. You should know what actions will cause you to get fees, what changes in interest rate can occur for which reasons and what other terms there are on the card.

• Know when your payment is due and make sure you mail it well in advance. Late payments are a frequent problem for new credit card users. This causes fees to be applied and can ruin credit scores. Don’t let it happen to you.

• Get advice from someone wiser. Everyone should have a credit advisor even if it’s just a best friend or a parent. Find someone that can give you good advice about credit card spending to get you through the initial years of learning.
Getting that first credit card is a rite of passage. Getting into credit card debt because of it doesn’t have to be.

Layaway programs could be useful debt management tool

Economists and retail industry experts are increasingly eyeing layaway programs as a potentially helpful way for consumers to meet their holiday shopping needs while staying focused on debt management.

Since last year, Americans have been significantly paying down their consumer credit balances, relying more on cash and debit cards to meet their spending needs. This is a contrast from earlier in the decade, when easy credit allowed millions to live beyond their means and make purchases whether they were affordable.

However, the current economic climate could actually undermine prospects for a recovery, since even if consumers are paying down an unsustainable debt burden, they're still somewhat reluctant to make retail purchases that in the past accounted for some 70 percent of the U.S. economy.

A recent report in the San Jose Mercury News cited the growing popularity of retail layaway programs, which were common up until about the late 1970s before credit card use began to become more prevalent.

According to the newspaper, some of the nation's top retailers and even some websites are now offering layaway options.

"When you don't really have the money to buy something, putting it on layaway forces you to budget. Use a credit card and you've already bought it and are enjoying it and you don't think as much about making the money to pay it off. So layaway is safer. This country wouldn't be in the credit-card mess we're in if we'd all just use layaway," one consumer, Kent Fong, told the newspaper.

Looking ahead, strong retail sales will be widely seen as a sign of a pending economic recovery after the holidays. With that in mind, merchants will be inclined to do what they can to get more shoppers through their doors.

Heather Boyett

Getting Out of Debt and Staying Away from Debt

By Natasha Hopkins, November 9, 2009

If everyone knew the answer to that, no one would be having financial problems. The problem is, some of us know what the answers are and don’t follow them, but some of us just don’t know. We’re guilty of not planning and thinking we can do more than what we really can. The sad part is that most of us are just one paycheck away from bankruptcy – if we were to be laid off, we would have no cushion to protect us. With today’s economy and the uncertainty of jobs, everyone should have at least two months’ pay in a savings account.
The original question was how to get out of debt. The first thing to do is get rid of the credit cards – at least until you pay them off. Develop a plan where you pay one off, and then add what you were paying on the other to the second, and so on until you have paid off every bill you have. During this period, you also want to avoid adding any new debt or increasing any other payments in any way, including moving to an expensive house or apartment, or even adding a cell phone if you don’t already have one. Pay off all the old debt before you add anything new.
Once the debt is paid, you have to develop a plan to stay out of debt. If you’re a person that likes to shop, then either stay away from the credit cards, or have their credit limits reduced so they become an “emergency” tool. Get into the habit of not charging anymore than you can pay off when the bill cycles unless it’s an emergency, and that doesn’t mean a new pair of shoes or jeans. We’re talking about a car that doesn’t run, or a sick relative out of town, or maybe an out of town wedding that wasn’t planned early enough for you to save money. You must also start saving money every payday so that if something does come up, like the out of town wedding, you have the money in the savings account to cover it without using any credit cards.
Keep your spending to a minimum. You don’t have to go out to dinner three or four times a week, and even if you find yourself running late and don’t feel like cooking, at least go to the supermarket and buy something to put in the microwave. It’s cheaper than stopping at McDonald’s and better for you as well. Take your lunch instead of eating out to save money. Certainly, you can go out to lunch or dinner occasionally, but limit it to once a week for each. If you tend to be a “stop on the way to work for breakfast” person, break that habit, too, and start buying things at the grocery store that you can take to work and eat.
It sounds like a lot to give up, but if you want to stay out of debt, you have to make some sacrifices. You have come this far, and you don’t want to get back to where you were. Follow the plan, and you will find you have more money for the things that you need.

Author: Natasha Hopkins Client Relations at CreditAllianceGroup (886) 543- 9073

Get a Handle

Almost every consumer in America today owes some money to someone else on an "extended credit program." If you're looking to get a handle on your financial life, then you MUST stop spending money and start managing it.

It's an American dream to live a life that is debt free as well as stress free. To live such a life you may have to suffer a bit as luxuries decrease and savings and investments increase. In a debt free life, your "true net worth" will increase in size. This happens because principal and interest payments will be eliminated, leaving more money on your bottom line. Net worth is simply defined as assets minus liabilities. It's up to you to take the necessary steps in order to get from one place to another!
• The First Step: The first step toward living a debt free life begins by sitting down and taking a realistic look at your life style and the cost of maintaining it. Analyze your household budget. If you're making minimum payments on your credit cards, you have a problem.

Making just the minimum payments on your credit cards each month may take a person over 20 years to pay off the principal (depending on the minimum due and the interest rate). For most people, credit card balances grow each month because the minimum payment isn't enough to cover the interest (finance charge) being added. In addition, late and over-limit fees are also adding to the growth of your balance.
• The Second Step: Next, you must realize the problem and sincerely want to fix it. Filing bankruptcy (Chapter 7 or 13) is certainly a cure for this problem, but should only be considered as a last resort. For many people, a consumer debt management program provides the best solution and alternative to filing bankruptcy.

Since consumer debt management programs are funded by donations from credit card companies, many of these companies will actually encourage people to seek help from an approved 501 (c)(3) non-profit consumer credit counseling agency that has certified credit counselors that provide budget counseling and money management education as part of the debt management program.
• The Third Step: Completing enrollment into a consumer debt management program is simple. All information is private and confidential. After creating a realistic livable household budget and repayment plan, all of your credit cards and other unsecured debts will then be consolidated into one new payment, which is typically 20% to 50% lower than the combined payments you were making prior to entering a consumer debt management program.

Sticking to the livable household budget that you and your credit counselor created is paramount to your success in living a debt free life. Achieving a debt free life is possible only through patience and discipline. After completing a consumer debt management program, we strongly urge consumers to continue their monthly debt payment into a savings vehicle. By allocating that same monthly payment into various savings vehicles, consumers soon begin to accumulate the kind of "true net worth" which can then be used for the purchase of a home, education for children, and retirement. It's never too late to start.

Don’t be a Victim of Identity Theft

Identity theft is one of those things that everybody is aware of but nobody worries about it until it affects them personally. Unfortunately, by that time, it’s too late. Once someone has stolen an identity, they can run up bills and waste the consumer’s money. This can not only put a financial burden on the consumer but can ruin credit history. Even if it all gets repaired, the time taken to deal with the problem is time that could have been better spent in other ways. Like with many other situations, prevention of identity theft is a far better choice than trying to treat the problem once it’s arisen.

The Federal Trade Commission recommends a three-pronged approach to reducing the likelihood that you will become a victim of identity theft. First, this government agency recommends that all consumers work to deter identity theft by carefully protecting their own financial information. Second, they encourage all consumers to detect suspicious activity as soon as it occurs by monitoring accounts regularly. And finally, they ask that victims of identity theft defend themselves by reporting the problem as soon as it occurs. You’ll notice that two thirds of the process is about prevention.Prevention starts with protecting your financial information. The area of greatest concern is the transmission of credit information through the Internet when the site is unprotected. Never deal with financial transactions online from a wireless location which has shared Internet. Make sure that your own home Internet is locked and password-protected. And make sure that your passwords are varied and not easy to guess.

Also make sure that every time you deal with a credit website, it’s legitimate. Hackers often set up fake websites that look just like the real credit card websites to encourage people to input their information into insecure locations. The key here is to be cautious whenever you are sent any mail that asks for your credit card information. Even if it looks like it’s from your credit card company, it might not be. Unless you’re positive that the information requested is legitimate, you should call the company and discuss the transaction with them before submitting financial information online.

The Internet is the biggest source of identity theft but there are still “old-fashioned” thieves out there. Some will steal your credit cards from purses or when they are left on restaurant tables. Others will steal credit information from the trash and get your identity that way. Always pay attention to your cards and always make sure to shred documents with financial information on them.

Finally, always be aware of what’s going on with your credit cards. Not only should you know where the cards are but you should also monitor their use. Make sure that every time a statement comes in, you agree that the transactions listed on it are ones you made. Prevention includes strict monitoring of your credit so that you note problems as soon as they occur. By taking the time to prevent identity theft, you save yourself time down the line … and you may even save yourself from becoming a victim at all.

Director of Sales, Sean Boyett

How to Avoid Holiday Debt

By Natasha Hopkins, November 2, 2009

1. Save up. Spending cash instead of using credit for your holiday purchases allows you to avoid holiday debt all together. If you haven’t started saving, put aside something each paycheck starting now and use that to finance your holiday purchases.Start a Christmas Savings Account

2. Set a budget before you shop. Setting a spending limit and sticking to it will keep you from overspending. Be disciplined and don’t go over your budget, no matter what.How to Plan a Christmas Budget

3. Make a list. Santa makes a list and checks it twice, so should you. Even though you might feel compelled to splurge on everyone in your life, you don't have to. People appreciate simple and meaningful over expensive and useless.


4. Don't shop for yourself. Avoid the "one for you, one for me" shopping mindset. You'll end up spending double what you would have had if you would have shopped only for the loved ones in your life.

5. Ignore "big" sales. More often than not, they're not really sales at all. Those "Buy 2, Get 1 Half Off" deals only trick you into buying more than you would otherwise. Remember, stick to your list.

6. Shop online first. The internet makes it easy to shop around. It also makes it harder to buy on impulse. Since most retailers have inventory on their websites, you can decide exactly what you want to buy before going to the mall.

7. Leave your credit cards at home. Without your credit cards, you’ll have a hard time charging them up. If you must use credit for your purchases, pick one credit card and stick to your spending budget.

8. Don’t buy if you can’t afford to pay. Keep in mind that when you use credit, you’re borrowing from your future income. You know your finances better than anyone. Only charge what you can afford and you’ll avoid paying on your holiday debt until the next holiday season.

Author: Natasha Hopkins Client Relations at CreditAllianceGroup (886) 543- 9073

Debt Problems: How to Get a Debt Collector or Creditor to Stop Calling You at Home and Work

Do you jump every time the phone rings? Have you been embarassed at work because a debt collector keeps phoning you? If so, then there is a simple way to get debt collectors and creditors to stop calling you.

Congress enacted federal legislation that regulates debt collectors and collection attorneys and protects the rights of debtors. This law, The Fair Debt Collection Practices Act, requires that debt collectors and attorneys stop phoning you at home and at work once you ask them to stop. The law specifies that your request must be in writing, therefore, you should tell them to stop calling you at home and at work the next time they call, but then follow it up with a certified letter, return receipt requested. (Our debt kit includes a sample letter on this subject and 20 other sample letters.)

Sample telephone script:

You: Hello.

Collector: Is this Jane Doe?

You: Speaking.

Collector: Hello, Mrs. Doe. I'm Charlie with Acme Collections calling again about your delinquent credit card account with XYZ Bank. Could I get a payment of $250 by check over the phone from you today?

You: No, I don't have the money. As I told you before, I am currently unemployed and simply can't pay right now.

Collector: Well, Mrs. Doe, this account is seriously delinquent and we will continue our collection efforts.

You: I understand, but I simply cannot pay right now. It is a waste of your time and mine to keep calling me when I can't pay. I am requesting that you not contact me by phone in the future. I do not want to receive any more calls from you at home or at work and am asking you to communicate with me only in writing.

Collector: Okay, Mrs. Doe, I'll put your request in our files.

You: Thank you. Goodbye.

If the debt collector refuses to comply with your do not call request you will have to quote the actual law:

Collector: No, Mrs. Doe. We will continue to call you until you pay this debt!

You: The Fair Debt Collection Practices Act requires that you stop phoning me at home and at work once I request that you do so. I intend to send you a certified letter tomorrow putting my no contact request in writing. If you continue to phone me, then I will file a complaint with the FTC and the attorney general."

If the original creditor refuses to comply with your do not call request:

The Fair Debt Collection Practices Act does not apply to original creditors, like a credit card company; it only applies to debt collection agencies and attorneys collecting debt. Therefore, do not quote the FDCPA to get original creditors to stop calling. Instead, quote state law which governs original creditors but usually has similar provisions to the federal legislation. Sample script:

You: It is my understanding that [Texas, Michigan, California] law requires that you stop phoning me at home and at work when I request that you do so, is that correct?

Creditor: Yes, but we will continue our collection efforts.

You: I understand that, but Texas law says that you must stop phoning me at home and at work once I ask you to. I am officially requesting that you not phone me at home or at work. If you need to communicate with me, then do it in writing. I will send you a certified letter this week officially asking you to stop contacting me by phone.

Creditor: Alright Mrs. Doe. As you request, we will not phone you in the future.

Note: Collectors do have the right to call you after you request them to stop phoning you if the status of your account changes. They can call you to tell you they are (1) giving up collection efforts; (2) are turning your account over to an attorney; or (3) are going to sue you. But usually, they won't call you again after you request that they don't. If a debt collector does contact you after you request that he stop, you might have the right to sue and collect damages.

Posted by Donna Millen

How To Establish Or Rebuild Your Credit Worthiness

All my articles this week have shown how you can find out your credit history and score and what you can do to improve it. But what if you have no previous credit or some of your accounts went to collection agencies and now no one will give you credit? There are a few steps you can take to build or rebuild your credit file.

First of all, if you have accounts on your credit history that are in bad standing, getting them paid off and closing the account as soon as possible is a good idea. Your credit file will purge the account 6 years after the date of last activity so the sooner you get it dealt with, the sooner the clock can start on it disappearing from your credit report. The 6 year rule even applies to bankruptcies, so no matter how bad it gets, you can improve your credit over time.

One of the easiest ways to get credit is through a secured credit card. These are really just regular credit cards but you provide a deposit equal to the limit you want for your card. This covers the bank from the perceived increased risk of someone with either poor or no history. Not only will it give you new credit to improve your file, since you’ll now have a credit card you can benefit from being able to rent a car, book a hotel room or order online. Capital One offers a MasterCard that has a minimum deposit, and therefore credit limit, of $75. Home Trust offers a Visa with a minimum deposit and credit limit of $1,000.

Having a checking or savings account with a bank can improve your chances for a loan. While it’s not something that gets reported to the credit bureaus, having a bank account without any NSF charges or frequent overdrafts will show your responsibility and your ability to manage money.
Another thing banks will look for is stability. The longer you have worked for a employer increases the chance that you’ll still have a job when your bill is due. The longer you’ve lived in the same place decreases the chance that the banks won’t be able to find you.

And finally, while not always at the best rates, you might find it easier to get a car loan or a credit card for a retail store. Both of these types of credit have an extra incentive to the person considering your application, that it increases sales for their business.

Posted by Cristina Gomez

!!Get Rich Quick!!

So what is the secret of wealth? The secret is... there is no secret! Almost anyone can become wealthy. The problem is the process of building wealth is not what most people want to hear. It takes time and patience when most of us would rather get rich quick.

Sr Credit Officer, Alexis Boots

6 Tips to Avoid Checking Account Fees

1. Think about what you need: Before opening a checking account, think about what services you need. If it's just simple checking, bill pay, ATM or debit card transactions, then look for a free checking account.

2. Check out the account differences online: Most banks offer three or four checking account options. Visit the Web sites of several banks and see the differences between accounts. Do you really need free checks if you're going to have to pay a fee for the account? If you pay most bills online, perhaps you only need a couple of paper checks per month and it would be cheaper to buy them yourself. Carefully review what each account offer.

3. Consider high-yield if it fits: Interest on the balance in your account may sound good, but unless it's a high-yield account, you'll be stuck with a service that probably requires a hefty balance and pays very little interest. There are some high-yield checking accounts that allow you to maintain a very low balance but require you to adapt certain behaviors, such as using a debit card for 10 or 15 transactions per month, having a monthly direct deposit or automatic bill payment, and accepting electronic statements. If those stipulations fit your lifestyle, then a high-yield checking account can be an excellent choice.

4. Don't Bounce Checks: Overdrawing your account is the single biggest way to rack up fat fees. The average non-sufficient funds (NSF) fee is now $29.58. The key to not bouncing checks is simply to know how much money is in your account. Check your balance daily if you're going to be making several debits throughout the day. Keep your receipts until you've reconciled debits and credits with what's been posted to your account. If it helps, maintain a paper register so you don't have to log on every time you want to check your balance. Keeping a cash cushion in the account is also useful.

5. Set up overdraft protection: If overdrawing is unavoidable, then set up overdraft protection with the bank. You'll need a savings account, credit card or home equity line of credit which will be linked to your checking account and debited when you overdraw. This is not an automatic bounce protection program; you'll need to sign an application. Modest overdraft protection fees always save you money over costly NSF fees.

6. Use your bank's ATM: Almost all banks impose a surcharge if you use an ATM that doesn't belong to your bank. The average transaction fee is now $2.22. ATM fees can be avoided by assessing your cash needs on a daily or weekly basis and withdrawing money when you have access to your bank's ATM. Sure, there are times you make last minute plans and you need some cash, but the majority of withdrawals can be planned. If you travel frequently to areas where there is no access to your bank's ATM, consider an account with a credit union or a community bank that doesn't have an ATM network and will reimburse a certain number of fees each month.

Glen Hamilton - Sr. Credit Officer

Is a high credit score worth the stress?

Think about your situation:

Let’s say you’ve struggled and sacrificed to make your credit card payments each and every month. Because of this, your credit score is relatively high. Ask yourself; is it worth feeling stressed out just to have a good credit rating? Chances are you’re not getting much sleep at night. The situation is making you nervous and you can’t shake the depression because you’re always thinking about the money you owe and how you’ll be able to pay it back. This is a legitimate concern, and one that has the potential to remain for several years from now.

Think about your options:

You can always continue to do what you are doing. Keep making those minimum payments and protect that high credit rating. Because you are struggling as is, it’s very likely that at one point or another you’re going to fall late with these payments. If you’ve made some late payments already and/or your credit cards are carrying high balances, your score is probably not as high as you may think it is. Ask yourself; will you be able to continue this stressful process for the next five to ten years? And at this point you need to consider another option. If you are buried deep in credit card debt, you probably shouldn’t be asking if debt settlement affects your credit score. Instead, you should focus more on becoming debt free than how high your credit score is. Negotiating reduced settlements with your creditors, through debt settlement programs, can save you thousands of dollars, help you avoid bankruptcy and finally get you to the point of being debt-free and stress-free again. Sure enough your credit is going to take a hit, but when all is said and done you’ll be in a far better position to start rebuilding your credit once you have eliminated your debt.

Taking one step back to take two steps forward is much better than not moving forward at all. Ultimately, you should probably take a good look at what matters most to you – a lifestyle free of debt and concern, or a high credit score. When it comes right down to it, the choice really is yours, so be sure to make the decision you’re most comfortable with.

Sr Credit Officer, Natasha Payton

What is a Good Credit Score?

Have you ever gone online to get a loan for you? And if you have gone then have you ever wonder that you have got pre-qualified for a loan without anyone asking you your monthly income? Have you ever wondered that how your loan can gets cleared so quickly while your neighbor is struggling for the same one? And if at all he gets it then, have you noticed that the interest rates for both loans are different?

The answer lies in your credit scoring. Credit scoring plays a vital role in determining your financial status, condition in the market. So, you often wonder what this credit score is. To get a better understanding of the benefits of good credit score let us have a close look at credit score, the factors come in to play in determining credit score and its effects on your financial credibility.

Credit Score
In general terms credit score is a number generated by a mathematical formula – algorithm. This mathematical formula works on the information provided in your credit report to compare the same information with another people using some standard comparison scale to derive credit score. This resulting number is a precise reflection of your credibility. It accurately predicts how likely you are going to make the re-payments.

With its scale running from 300 to 850, these credit scores are extensively used as a formula by many lenders to determine if you are credit worthy or not. It can be used for mortgage, a car loan, a credit card and if you are having these previously then the rates you have received are often the reflection of your credit scoring. As simple as it is – people having the higher credit scores get lower interest rates compared to the rates offer for the people having lower credit score.

Scoring Categories
Lenders and the firms offering loans use diverse credit scoring patterns to determine your credibility. As these credit scoring patterns do vary slightly in their formula giving different percentage factor to different parameters, they result in production of different credit scores from the same credit information of a person. That means credit score of a single person can be different and varied with different credit scoring models.

To bring certain kind of standardization in this process Fair Isaac Corporation (FICO), a California based company develop the first credit score using a certain standard scales for different parameters. This FICO score has been accepted by all credit scoring institution as a base platform.

The three major credit bureaus use their own version of FICO scoring model. These three companies are Equifax, Experian, and Trans Union. Equifax uses BEACON scoring model while Experian uses Fair Isaac Risk Scoring Model and Trans Union has the Empirica Scoring Model. As all these three versions of scoring models are different from each other, they come up with different credit scores.

In general, studies have revealed the American publics credit scores break out. 13 % of American public belongs to the credit score 800 and above. Nearly 45 % people are having credit score in the range between 700 and 800 while approximately 27% people contribute to the credit score ranging from 600 to 700.

Good Score
While the factors on which credit scoring varies, generally individuals with FICO scores above 700 is considered as a good credit score. Of course, there is no standardization in black and white narrating what the good score is; it is believed that the normal average borrower is having credit score in the range of 600 to 700.

A new scoring model known as VantageScore is slowly catching up as a unique scoring method for everyone as all three – Equifax, Experian and Trans Union collaborated on its development. Its scoring ranges from 501 to 990 and the scoring have letter grades from "A to F". So a score from 501 to 600 will correspond to "F" grade while a score of 901 to 990 will receive "A" grade. So in Vantage scoring system, credit scoring grade of ‘C’ is considered as good credit score.

Factors Affecting Credit Score
As per FICO scoring model more than 20 factors in five different categories are taken in to consideration to derive your credit score.

1. Payment History – One of the most important factors narrating your payment history placing the emphasis on recent activities. It accounts for the 35% of your total score. It is based on payment information on all types of accounts like credit cards, retail accounts and details on late or missed payments. It also considers pubic records like judgments, suits or bankruptcies and collection items.

2. Amount You Owe and Available Credit – This is the second most important factor about your outstanding debt. The accounts for 30 % of your total score. It considers the information regarding the amount owed on all accounts, information related to the accounts showing balances, how much total credit line is used, etc. Here one thing has to be remembered that carrying of debt does not necessary mean that you are having low credit score. In fact, people with higher scores use their credit sparingly and keep their balances low.

3. Length of Credit History – The longer you are having credit the greater will be your score. This accounts for 15 % of your total credit score.

4. New Credit – The opening of several credit accounts in a short period of time hampers the credit scoring of an individual. This accounts for 10 % of the total credit score.

5. Types of Credits in Use – This accounts for 10 % of your score and considers your mix of credit types and the total number of accounts you have.

Although Credit Scores vary with different scoring methods, it provides a standard platform to gauge your credit worthiness. And even it is not clear that which number can be considered as a good credit score for a specific purpose, it is always advisable to keep your score higher than 700. it can be explained in a much better way by giving this example. A person carrying a score of 625 can be scrutinized for mortgage lending but at the same time the same score can be well enough for getting a car loan. So brace yourself to achieve that 700 – 720 mark and you will taste the fruits!

Sr Credit Officer, Demond Smith

Exploding Debt

This explosion of personal debt has led to a new growth industry - debt consolidation companies! This has unfortunately spurred a huge growth in this industry!

“Everyone else has this problem” is the common view of the vast numbers of people who carry average or above average credit card debt! However, if more people could excise themselves from the “average” bracket, and have a lower outstanding credit card debt, then the overall average would drop! In recent studies, it has actually been proven that an ordinary household has an average credit card debt of 00; which for many people is considered to be “nothing”!

There are many households with a high credit card debt level. The good news is there are things you can do about it! Obtaining professional assistance is recommended in many cases. With this advice, you will be able sort yourself out quickly! Another thing that you may do for yourself is to go through a credit card debt consolidation company so that you can get all your bills lowered down as well as brought together into one lump sum; and only have one bill to pay monthly. One of the best strategies is to get all of your payments rolled into one payment - this will make it much easier to manage.

Despite the tough times recently, the average interest rate (A.P.R.) is 14.99% for credit cards in this country. The figure is humongous when you take that percentage and multiply by .3 trillion dollars (2,300,000,000) and now you will see why the banks are so keen to continue their ways. And while the average working person works two jobs to support his or her family, the CEO’s of the big banks and multinational corporations earn millions of dollars in annual pay. This country has a proud history of corporate success, or some would say excess. But you can put your foot down. You can choose to pay on your credit card debt balances for the rest of your life, or you can put your foot down and finally put a stop to a battle that you can’t win!

Make sure you avoid getting approved for another credit card! By doing that, you will only be making your credit card debts higher; even if you planned to put all your debts onto that one card! The only thing you will achieve, however, is possibly getting your interest rates lowered. Your focus should be paying down those credit card bills!

By: Evan Cox

New Credit Card Law goes into Effect in February

By IsaBella, October 23, 2009

Beginning in February, it will be harder for students to get credit cards. The Credit Card Act that passed this spring will prohibit credit card issuers from lending to anyone under the age of 21 unless he or she has a co-signer or has proof of their ability to make payments. Also, unsolicited card offers will be prohibited to everyone under 21, and credit card companies can't entice students into signing up for a credit card with any tangible item anywhere on or near a college campus or at a college-sponsored event. The new credit card law requires card issuers to show how long it would take to pay off a card if you made just minimum payments. That will be a shock to some consumers.

Parents need to show their child the consequences of paying late and not paying in full. And they should talk to their kids about grace periods and minimum payments. Also educate your kids about the high interest rates associated with cash advances and the dangers of using a credit card as an ATM, running up a balance and paying late.

IsaBella is a Sr Credit Officer, Team Leader at Credit Alliance Group 866-540-3134

Realizing you have a problem with debt

The experts say there is good debt and there is bad debt and there are consumers that will say I’m in no debt at all. Facing debt is difficult. For many, taking the first step is the most difficult in that actually admitting you are in trouble is harder than taking the steps necessary to correct it.

Whether you are certain you are on the good side of debt or unsure of where you actually stand financially, there is no time like the present to reevaluate your financial situation. When debt isn’t far off, there are some general signs that will proceed it. If you sit down and look at your situation, you may find there are some classic signs appearing in your own life.

When it comes to debt, take a good look and see if you see any of these signs in your own financial life. If you do, make a commitment now to regaining control of your money and most importantly, admit that you actually do have a problem. Here are some signs of debt danger:

You Have No Clue Where You Stand
Unless you are independently wealthy, money management should be a top priority. If you have no idea how much you owe or who you owe it to, you are already in trouble.

You Are Late Most of the Time
Even if you aren’t late on bills and payments all of the time, you might be headed down the wrong road still of you are late at any time. Take a look at why you are late. Do you not have the money before the due dates of your bills? If so, it might be time to look for supplemental income to help you catch up. If you are not making enough money, you need to find new sources of income or consider getting a better paying job if you have no time to take on a second one. If you are late because you forgot the due dates, then you may need a refresher course in money management. Get a calendar for bills only and start tracking the due dates for all of your bills each month with a notation on the days prior to ensure your payment makes it before the due date. This will eliminate wasted spending on late fees and penalties.

You Never Pay A Dollar More than the Minimum
When you spend on credit cards, the financially-savvy way is to spend only what you have to back up in cash, meaning you should already have the money to cover your purchases. At the end of the billing cycle, you should have all of the cash to cover the balance and remit a check for the full amount. If you find you are not even close to doing that each month and are only able to squeeze the minimum amount from your budget, you are headed for disaster, as your interest rates and penalties are sure to rise, adding to your balance due and leaving you to face years of payments to eliminate the debt.

Your Credit Card Has Become An Extension of Your Income
If you find that you now have to use your credit card for daily living expenses such as groceries, gas, and other bill payments just to survive, you are headed for financial disaster. Credit cards are not meant to be an extension of your income. You should not make purchases that you can’t afford in cash. Not having enough money to meet your daily needs means you don’t have enough money in general. Using credit cards out of desperation will only make you sink deeper in debt. This is especially true when you find you have taken cash advances from your credit card to meet your needs because of the often excessively high interest charges.

Your Family Life Suffers Because of Cash
If you find that you and your spouse argue a lot over money and the family finances, you may consider this to be a red flag in your financial life. Being defensive and frustrated about the lack of money much of the time means there is already trouble. It is important to work as a team to handle the finances for the family. Get the kids involved by teaching them early about spending and the differences between needs and wants.

Brian Joyce

What Lenders Look For

The criteria lenders use to determine their risk level when you apply for a loan: such as a house, car, boat, any major purchase, can be categorized into three areas. These areas are Stability, Ability, and Equity.

Stability is determined by job time, residence time (time at current residence, previous residence and time in general area), and the future outlook of the applicant’s employment. Preferably a lender wants to see at least five years of continuous employment with the same employer, along with a minimum of five years history at the current residence.

Ability is based on monthly income, debt to income ratios, credit score, payment history on similar purchases, and the realistic future ability to make the loan payments. Lenders want applicants who have a overall low debt to income percentage, a ratio of the projected payment, for the new purchase vs the net monthly income (20% or less, 30% or less for a house purchase), a high credit score (a score of 720 or above) and long demonstrated history of paying similar loans on time (two years or greater).

Equity can be classified as the amount which is borrowed (loan amount) vs the value of the item purchased. The more equity a borrower has initially, the more favorable a lender will score the loan application. A loan application with a down payment of 30 – 40% will rate better than a one with only a 5 -10 % down payment.

Lenders want applicants to rate high in at least two of the three categorizes. The ideal applicant will rate high in all three areas. If an applicant has a high rating in stability and ability then the amount of equity, in the purchase, is not much of a factor. But, if an applicant has an average rating in stability, a low rating in ability (due to low credit score or other factors) then a lender will look real close at the equity level. For the applicants who rate acceptable in only one area their chance of being approved is virtually zero.

Before applying for your next major purchase, access yourself. How do you rate in all three areas?

Glen Hamilton – Senior Credit Officer

Reality Check: Debt Reduction is not for the Faint of Heart

Our world has changed. Cheap credit is a thing of the past. So listen up!
These are your debt reduction options:

1. Can you end at least 4% of your debt balance as a monthly payment?

2. Can you get a low interest loan from your bank or a family member?

3. Can you take out a loan against an IRA, 401k, 403b, or a mutual fund IF that is available from that institution? BUT, consider the consequences!

4. Can you qualify for bankruptcy under the new laws?

5. Consumer credit counseling model: Credit Alliance Group can this for you. The CCC program lowers your interest rates on credit cards but accelerates payments to 5% of your debt balance. The CCC model applies only to credit cards. You have to enroll all of them. It cannot include personal loans. But the CCC model is not welcome by all major credit card companies. Unfortunately, sometimes a credit card company will begin a CCC program with you and then drop it.

Major consideration: The CCC model requires us to be present on your credit report because we would be making monthly payments on your behalf. A third party on your credit report indicates an inability to deal with money…doesn’t look good!

6. Debt settlement the CAG way: We confirm your debt balance up front and negotiate a 40% settlement with your creditors over your time in the program. The payment is based on your beginning debt balance. We have no upfront fees, no hidden fees at the end of the program or prepayment penalties. The downside consists of late payments reported to your credit report until each debt is settled. But, late payments cycle off after 3 years. There is no third party presence on your credit report. When an account is settled, you get the letter from the creditor agreeing to the negotiated amount (which you approved in our program) and the creditor’s agreement to report the account closed, paid or settled with a -0- balance. We do not show up on your credit report. It appears that you settled your own debt.

There is no easy way out of debt. The party is over. Tighten up your belt and your ego.

Deal with your debt. Call us!

Katherine Listi

How I $pend it!

For many of us, the new home edition, car, or vacation we had been hoping for has gone down the toilet like the economy. While that is depressing, it doesn’t mean you have to be depressed. While we wait for our bank accounts to turn color other than red… the good news is it isn’t how much we spend that dictates our happiness, it is how we spend the money we have.

Spending our money to create life experiences over getting the most stuff is what is going to bring the best quality of life! I know I can look at a new work outfit and think it isn’t as nice as someone else in the office, but I don’t look at my dinner when I am eating out and think it is less nice than someone else’s. In fact, I may appreciate my $38 dinner out just as much as I would a two day trip somewhere nearby. Meeting a friend for coffee, or sharing some tea with a friend in the office is a lot more invigorating these days than spending $100 at my favorite store.

For my money this month, I am making an effort to laugh until I cry or can’t breathe with an old friend over the phone, getting up early to watch the sun come up and enjoy it after I have worked out. Or singing at the top of my lungs with the windows down at a cross walk! I am going to feel just as good as I did last year when the windows were up and I was rushing somewhere to spend too much money on food and entertainment I couldn’t remember today if you paid me. What will you do?

Alexis Boots

The concern over Credit

Misinformation about credit and an incomplete understanding of debt settlement can muddle facts about how this debt relief option can affect your credit score. Fortunately, as consumers learn more about their credit score, and its influence on their financial lives, they want to know how debt settlement could affect it. Financial education and awareness can build a better understanding of the real correlation between debt settlement and your credit.

Debt settlement can be a viable debt relief option for people who cannot manage to repay their debts and are looking for an alternative to bankruptcy. Many people who qualify for debt settlement already have poor credit because they are, or are about to, fall behind in their payments. For people who have maintained good credit, debt settlement can be damaging. After missing one or more monthly payments, creditors may send your account to their collections department or a third-party collection agency, if they haven't already, and they will report to the credit bureaus that you are missing payments. In addition, missing around 6 consecutive months of payments may result in charge-offs also being notated on your credit report, which too is damaging to your credit score. Settlements may be reflected on your credit report as “settled for less than the full amount” or something similar. It is important to understand your credit will be negatively affected before enrolling in a debt settlement program.

But perspective is important. Here are some points to consider:

· If you are behind on payments to your creditors, your credit is likely already damaged.
· You may be able to get out of debt faster with debt settlement than with credit counseling.
· If you are truly in financial distress, your credit may suffer with or without debt settlement.
· As with debt settlement, other debt relief options can also have an effect on your credit or your ability to obtain loans.


If you have great credit and the ability to pay off your debts, you are probably not qualified for a debt settlement program. Otherwise, take a look at the larger picture to balance your desire for good credit and your need to reduce your outstanding debt.

Some people may have specific reasons for avoiding damage to their credit. For example, if you are planning to buy a home in the near future, damaged credit could interfere with your plans. The bottom line is to decide what's more important: maintaining decent credit with the ability to obtain loans and additional credit, or, attempting to settle your current unsecured debt.

If your credit is your only concern, you may want to consider the bigger picture before you completely rule out debt settlement as a debt relief option. Your present and potential credit standing and your overall debt situation must all be considered before you commit to any debt relief option.

Ben Yaffe

Understand the Compounding Effect of Money

(By: Chris Garner)

The compounding effect of money is extremely important when making any financial decision. The compounding effect of money is often overlooked or underestimated by people when making decisions. When applied to all of your financial decisions, this effect is the KEY to long-term success! To illustrate the compounding effect of money, let me use some financial examples:

Suppose you had invested $1,000 today in a 5% savings account. In one year, that account would be worth $1,050 [$1,000 + ($1,000 x 5%)], yielding a $50 gain. However, in year two, that same initial investment would be worth $1,102.50 [$1,000 + ($1,000 x 5%) + ($1,050 x 5%)], yielding a $52.50 gain. And in year three, the same $1,000 would be worth $1,157.63, yielding a $55.13 gain. By year ten, the initial $1,000 investment would be worth $1,629 and by year 25 it would be worth $3,386.

From looking at this example, you can see that investing $1,000 today is much more valuable than investing $1,000 even a couple of years from now. To accumulate wealth, you MUST use the time value of money and the compounding effect of money to your advantage.

This second example shows how the compounding effect can work against you:

Suppose you borrowed $20,000 to purchase a car and your auto loan was at a 10% interest rate (for 5 years). Your monthly payments would be $424.94. Because the $20,000 loan continues to compound over the life of the loan, you actually pay $25,496.45 over the five-year period, meaning that you’ve in essence paid $5,496.45 because you spent the money before you had it. In fact, in your initial payments, the interest alone will account for almost 40% of your monthly payments. In this case, the bank or lender that gave you the loan uses the time value of money to their advantage.

Now look at this scenario, where instead of making the $424.94 car payment, you invest that payment at the same rate as what your car loan was (granted it’s a little high for a savings rate, but not unreasonable for other investments). Now, instead of paying the bank, you are actually earning interest and compounding the benefit yourself. After one year you will have saved $5,340 and have earned $240 in interest. After two years, you will have saved $11,239 and have earned $1,039 in interest. By the third year, your investments will be worth almost $18,000 and you will have earned $2,457 in interest. By month 40, you will have enough money to purchase a $20,000 car in cash!

So let’s weigh the differences between the two scenarios above. In the first case you paid the bank $5,496 to borrow the money and in the second case you earned $2,457 and could buy the car in cash after just 40 months (just over 3 years)! The opportunity cost of the first alternative versus the second alternative results in a net difference of $7,953 (a $2,457 gain versus a $5,496 loss). That means that by making a simple deferral decision (buying the car in 3 years versus today), you can get ahead by almost $8,000!

8 tips to being debt free

Draw out your monthly budget
1. Keeping track of your budget will give you an idea about where, when and how much you’re spending. Doing this will allow you to see where you can free up some cash to go towards paying back your debts.

Determine your financial position
2. It’s important to make a list of everything you owe. Being organized and having a visual on your debt can play a big part in becoming debt free.

Prioritize and your debts
3. List all the amounts you owe from highest interest rate to the lowest interest rate. Concentrate on paying off your debts from top to bottom. Paying off the more expensive loans first will save you money and allow you to keep up the required payment amounts on the smaller ones.

Pay more than the minimum
4. The minimum payment usually covers the interest rate and makes little impact on the principle itself. Instead build in a fraction more than your minimum payment in your budget towards each of your debts. This will influence your overall principle balance and allow a faster payoff.

Use up savings, if necessary
5. Although it’s a great idea to have an adequate amount of cash saved, it doesn’t make any sense to save money on one hand when you’re carrying substantial amounts of debt in the other.

Cut up cards
6. Taking the scissors to the plastic is a great way to stop the rot. Instead use a debit card, which only draws cash from your bank account.

Communicate with your lenders
7. It’s good to talk to your creditors and informed them of your financial issues. You will find that most creditors are open to revising your repayments and/or extending the time you have to pay.

Seek professional help
8. Debt can be stressful and can put a lot of pressure on a family or the person itself. Getting professional assistance and advice can put a little ease to your peace of mind.

Natasha Payton

Don’t be haunted by debt this Halloween

10 Tips: Avoid ghoulish levels of spending this Halloween

Everyone knows that the Christmas season leaves millions of people grappling with relentless credit-card debt – but who knew Halloween could pack such a wallop?

According to the National Retail Federation, consumers spent an estimated $5 billion on Halloween last year. About $1.5 billion of that amount went toward Halloween candy. Costumes accounted for another $1.8 billion.

Do such frightening numbers make your hair stand on end? If so, read on. The following tips can help you avoid feeling the consequences of this holiday in your credit-card bills for months to come.

1. Make wise candy purchases. If you want to hand out candy, you can’t really cut costs by making your own sweets at home since that won’t fly with most parents. Instead, consider buying wrapped candies in bulk or purchasing generic – but still delicious! – brands in order to save money.

2. Consolidate your giving efforts. Do you live on a cul-de-sac or a nice, quiet street? Maybe you can team up with some of your neighbors, sit outside on lawn chairs and hand out candy together from the same spot. Everyone can save by divvying up all the candy costs.

3. Decorate your own way. Decorating your home and yard can really get expensive – especially if you plan to do it again in just a few weeks at Christmastime. Consider forgoing fancy, store-bought decorations and making your own using construction paper, poster board, old sheets, old costumes and cotton balls. (They make great spider webs!)

4. Make your own costumes. Sure, it’s tempting to rush out and buy costumes featuring characters from blockbuster movies and TV shows, but stop and think: Haven’t some of the funniest costumes you’ve ever seen been dreamed up by creative friends of yours? Why not try the same tactic this year? You also can borrow used costumes or arrange a costume swap between your kids’ friends.

5. Watch those admission costs. It can cost a pretty penny to visit some elaborate haunted houses and other Halloween attractions. Look for low-cost – or better yet, free – alternative activities by scanning calendar listings in the newspaper, staying alert for coupons and discounts, and visiting the Web sites of your city’s or county’s recreation departments.


6. Stay safe. Considering how costly an unexpected trip to the emergency room can be, remember to supervise young children when trick-or-treating or carving pumpkins, and also to eyeball all candy before letting your kids devour it.

7. Remember where you are in the stream of time. The holiday shopping season is coming right up, so now is the time to be disciplined about spending and plan ahead for other big holiday-related expenses. Try to anticipate what you’ll spend between now and the end of the year and stick to a budget.

8. Devise a plan for tackling credit-card bills. If you always pay your balance off in full, then you’re doing fine. But if you can’t pay your balance off completely when you receive your post-Halloween bill, take great pains to pay more than the minimum monthly payment due, and never be late with a payment. Otherwise, interest and finance charges and late fees may overwhelm you.

9. Seek out help with number-crunching. Call your credit-card company and ask the person who answers the phone to calculate how much you must pay each month to eliminate your balance within six months, based on your current interest rate. The company must share this information with you.

10. Pursue a lower rate if necessary. If your current interest rate is too high, ask for a better deal. Be sure to mention the offers you’ve received from multiple competitors promising lower rates.

Heather Boyett: Manager of Customer Relations and Consumer Affairs

Do’s and Don’ts of Closing Credit Card Accounts

Most of the time, consumers seek out ways to open additional credit card accounts. However, there are instances which compel an individual to consider closing credit card accounts. Sometimes it is because the individual particularly dislikes working with a specific lender and wants to cancel the credit card accounts associated with those cards. Other times it is because there are too many open accounts for the credit card user to keep them straight and organizing means downsizing.

These reasons are valid reasons for closing credit card accounts. But there are good ways and bad ways of making that decision. Moreover, there are good and bad ways to execute that decision once it’s been finalized. Opting to close credit card accounts in a bad way can decrease lending credibility and increase the financial hassles. As a result, it’s important to follow some basic “do’s and don’ts” of closing credit card accounts.

DO:

• Carefully consider the reasons that closing the account makes sense. Write down the pros and cons and make smart choices about which accounts to close.
• Review credit reports. Reducing the number of cards available but maintaining the same debt can lower credit scores. Knowing credit report details can make it easier to make smart choices about closing accounts.
• Consider speaking with a financial advisor. There are good and bad things about closing accounts and it helps to get a professional opinion.
• Speak personally with a customer service representative. The company will want to keep its clients so they often offer great deals to people interested in closing accounts.
• Request confirmation in writing that the account has been closed.

DON’T:

• Cancel a whole bunch of cards at once. This reeks of desperation and sends a red flag to credit card companies making it more difficult to get loans down the line.
• Argue with customer service representatives about canceling an account. Consider all that they offer during the closing transaction and make a firm decision based on current financial needs.
• Complete the entire transaction on the phone. After closing the account on the phone, it is important to follow it up with a letter in writing. Simply review what was said on the phone, list the account number and state that it’s understood that it’s now closed. This is a way to make sure that proof is available should there be problems down the line with the account remaining open.

Closing credit card accounts is normally something that is detrimental to credit. However, there are times when it is the right decision for a particular consumer. Working with credit card representatives and financial planners can make it easier to make the right decisions. Being reasonable and open-minded when closing accounts helps to make the process go more smoothly.

Director of Sales: Sean Boyett

Creditors Keep Calling Me. What Are My Rights?

Very few things are more aggravating and annoying then creditors constantly calling you at home or at work all day and all night. It can disrupt your home life and your performance at work. Unfortunately, this can be the goal of the creditor in order to intimidate you into making a payment directly to them.

As a debtor you do have rights. Creditors and collection companies are legally not allowed to contact you with reckless abandon. The Fair Debt Collection Practices Act was put in place to protect debtors from creditor harassment. Below is an outline of what creditors are allowed to do and what to do if a creditor does not comply with these guidelines.

Hours They Can Call

A creditor is allowed to contact you between the hours of 8:00am and 9:00pm, Monday through Sunday.

Frequency of Calls

If you speak with a creditor once during the day they are not allowed to contact you anymore throughout the day. This is also the case when you have spoken with them and have asked them to not contact you at work.

If a creditor calls you outside of these hours or contacts you at work after you have asked them not to, or continually calls after your have spoken with them, it is important to write the following information down:

• Time and Date of Call
• Creditor Name
• Name of the Person who Called
• Phone Number

Nature of the Calls

The creditor knows you owe them the money and you know you owe them the money. This does not give them the right to use any sort of abusive or condescending language or make threatening statements about garnishing your wages or threatening criminal actions. A creditor is not allowed to threaten physical violence if the debt is not paid. This also applies to the creditor calling and threatening to take action such as seizing property or garnishing wages before a judgment has been filed.

The language does not have to be vulgar to be classified as abusive or condescending. If a creditor uses this sort of language with you or makes these types of threats, it is important to gather and log the same information as above.

Giving Information to Other People than the Debtor

A creditor is not legally allowed to tell anyone besides the debtor the amount of the debt, how far behind the debt is or any other material information about the debt. The only time they can do this is when they have received a judgment and are moving to garnish a debtor’s wages are speaking with the employer.

Posing as an Attorney Sending Documents that Appear to be from the Court

A creditor is not allowed to call and say they are an attorney if they are not one. This can be a popular collection tactic but it is illegal! The creditor also cannot send documents that appear to be from the courts in order to intimidate debtors.

The Bottom Line

If a creditor does any of these, it is important to gather the following information and create a log:

Time and Date of Call
Creditor Name
Name of the Person who Called
Phone Number
Save copies of the documents

Posted by Donna Millen-10/23/2009

Debt Threatens Prada, Escada, and More

October 23, 2009

WWD has a monster of an article today about our dear friend The Economy; contrary to the usual treatment, however, this one's an in-depth exploration of how the financial crisis will most definitely affect our fancy European friends. As it turns out, they're not immune over there: Several fashion and luxury-goods houses should prepare themselves for the next twelve to eighteen months to come. What to expect?

A drop in revenues almost certainly, with the sector expected to contract in 2009. More seriously, however, industry experts believe there’s a risk of bankruptcy for some firms as heavy leverage cripples their operations.

Companies without debt, like Giorgio Armani, Dolce & Gabanna, and Hermes International should be fine — in fact, there's "significant opportunity" for these houses, should they want to invest during the downturn. But for houses where debt exceeds earnings, there could be trouble on the horizon.

Prada, for starters, finished 2007 with $703 million in net debt. Execs are "convinced that [they] are among those in a better place," financial speaking, but the numbers are such that in September there was speculation that they might sell a minority stake to investors in Dubai (where investors are practically rolled off an assembly line). Escada, meanwhile, has cut its annual forecast twice this year and is warning that 2008 may close with bigger losses than 2007's $36.8 million. And IT Holding — which owns Gianfranco Ferré and licenses Just Cavalli, Costume National C'N'C, and Galliano — is "in serious difficulty." They're carrying some $405 million in debt, and their parent company has an additional $178.3 million of debt of its own.

Of course, if and how these companies survive depends a lot on how they've financed everything. But just knowing gloom and doom are a possibility in the European luxury markets is a serious blow to our happy-go-lucky-fashion savy- coping mechanisms.

Author: Regan Ricci, Client Services Group

Save your Money

The smartest words ever said by anyone: “A penny saved is a penny earned.” Start small. Don’t give up. Don’t dip into your savings unless it’s an emergency. Every little bit helps. Did you know that if you saved $1 per day and invested it at 10%, you’d have almost $200,000 in 40 years? Every little bit counts and it is very important that you take this financial advice, get out of debt and save money - and start saving it now! Click here to get tips on ways to save money.

You can save money in many different ways. For example, using coupons at a grocery store or buying things on sale that you’d buy regardless of whether or not it was on sale save you money. You can also save money by foregoing spending until a future date or by foregoing spending on non-essential items. For some people, self-control is a real issue and if the money isn’t “accounted for” immediately, they tend to spend it on impulse and luxury items that are non-essential. If you find yourself in this category, or have trouble saving, you should create an investment account that is automatically funded each month. To do this, you may need to create a monthly budget to determine a monthly savings goal. If you do create a budget, make sure that it is realistic, matches your lifestyle and that it leaves plenty of room for miscellaneous expenses that seem to pop up regularly. If you create an unrealistic budget you’ll likely save less than what your budget calls for, become frustrated and resort to your old ways.

Author: Natasha Hopkins Client Relations at CreditAllianceGroup (886) 543- 9073

In Case of Emergency Break Glass.....

I have hesitated cutting up a credit card because I wanted one just “in case of emergencies.” How about I can’t afford to get the car fixed, I just don’t have the money right now. Or I won’t go to the Dr. I just can’t afford it. The list goes on and on… I’ll do that when I have the money, then go out and buy extras from the gas station or catch that additional $5 meal on the go that turned into $11 after drink and a side. Well math is math and if you add up the things that sneak in extra you will be surprised where your new money for savings can come from if you pay attention.

Rule of Thumb: You should save enough money to cover your living expenses for at least 3 months. If your job is less secure, if the economy is weakening and job layoffs are increasing, or if you are self-employed, then you probably should save closer to 6 months or more.

*No Savings now? Stop doing what you are doing and get $1,000 in a bank, or in a safe place at home ASAP!!

But…..I’m not getting a raise and I can’t get another job? Maybe if I win the Lottery? Even better, you already have the money!!!!!! But HOW?

Splurge Price Times a Week/Month Savings

Vending Machine Soda 1.25 3/12 15.00

Venti Starbucks 4.95 1/4 19.80

Biolage vs. Suave Shampoo (24.99-1.79) 0/1 23.20

Vending Machine Snack .65 2/8 5.20

Convenience Store Chips .99 0/2 1.98

Pack of Gum .89 3/12 10.68

Fast Food Combo Meal 6.49 4/16 103.84

Your Savings 13/55 179.70

At this rate it would take you 5.56 months to save a $1,000 Emergency Fund! Make your own! Help a friend, start saving!

Alexis Boots Sr. Credit Specialist

Tips on Avoiding Debts From Identity Theft

Tips and advice like this may seem old-fashioned, but with 65,043 victims of identity fraud recorded by CIFAS Members in 2008, it just goes to prove that no-one should be complacent.

§ Always take particular care of your handbag or wallet. Don’t give thieves a chance. Be especially careful with your credit and debit cards. Try not to keep them together or have them all with you at the same time and never let them out of your sight. Also, avoid carrying documents such as passports unless necessary and never keep in the same bag as your wallet.

§ Shred all documents when you dispose of them. These can range from credit card or bank statements to letters from doctors, employers and indeed anything bearing your full name and address or signature. Receipts can also be valuable to a fraudster, so take care to shred these too.

§ Examine your bank and credit card statements carefully. Keep all your receipts until you have checked each one individually against the statements. This will help you to monitor your account.

§ Check your credit reference agency file regularly for unfamiliar items and take prompt action if you spot anything strange.

§ Don’t forget to keep your home secure, and keep your personal documents locked away. Increasingly it is these documents that are being searched for by burglars rather than TVs and computers. Theft or loss of documents such as your driving license or passport should be notified immediately

§ Don’t give your personal details to callers, charity collectors or “researchers” in the street. Check whether they are truly who they claim to be before giving them any information. Be just as careful when taking telephone calls. Fraudsters may try to dupe you into believing they are from banks or other companies. If you give them your account and security details they could run up huge debts in your name.

§ When buying online – keep your passwords secure at all times and regularly change your passwords. Make sure that you have up-to-date security software and only use sites that provide secure payments and be sure you know who you are dealing with.

§ Avoid online bank or shopping transactions when using public wi-fi zones or shared computers.

§ Redirect ALL mail when moving house or business addresses.

Author: Regan Ricci, Client Services Group

6 Easy Steps of Staying Out of Debt

By Natasha Hopkins, October 16, 2009

Step 1
Spend less. Today's easy credit tempts many into spending what they can't afford. The golden rule to staying out of debt is by not buy something unless you are sure you can afford it. Know what your income is and what your bills are. Make a budget and stick to it. Know how much money you have for what.

Step 2
Pay cash. Debit cards are handy but can make you spend more than you can afford. Know what you can spend. Pay cash if you can. If you don't have the money, then you probably don't need it.

Step 3
Ignore credit card offers. Use credit cards only in emergencies. If you are using them to get airline miles, only spend what you can pay off when you get your bill. The interest rate on a large balance will not help you to get out of debt, but will only dig you in deeper.

Step 4
Pay off credit cards. Always pay over the minimum, and pay monthly. Large balances and high interest rates are bad combinations. Use a zero balance credit card and try to pay off the debt in the six month time period before the offer ends.

Step 5
Buy on sale. Don't pay full price. Memberships in discount clubs like Sam's Club can pay off if you need to buy larger items. Buying in bulk or larger quantities can be cost effective for a larger family or things that are used often.

Step 6
Be realistic. We live in a consumer society that makes everything attractive. Ignore the siren calls. If you don't need it, don't buy it. If you can't avoid spending, don't go to a certain store. Invest in a hobby or something that will keep you busy and satisfy that desire to have something new.

Author: Natasha Hopkins Client Relations at CreditAllianceGroup (886) 543- 9073

Report Fraud

By Lucinda Ramos, October 16, 2009

Recognizing fraudulent callers is important; reporting them to the appropriate law enforcement authorities is critical, too. When you report, you can help stop telephone scammers. Report telephone hucksters to the FTC and your state Attorney General so they can prosecute fraudulent telemarketers who try to steal your money. Jot down the name and number of the caller, and the date and time of the call. To report phone fraud, visit FTC.gov or call 1-877-FTC-HELP.

Author: Lucinda Ramos, Client Relations at CreditAllianceGroup (886) 543- 9073

Divorce and Dividing Debt

That vow of for better or worse also meant that you share in whatever debts you and your spouse accumulated in the marriage. Mortgages and credit cards are usually the biggest joint debts. You are both responsible for anything you have signed together like joint tax returns, joint credit card debts, joint mortgages or loans. If your spouse is spending money recklessly after you file for divorce, file a motion with the court explaining what is happening and ask for an early hearing.

Keep track of any money you pay on joint debts, especially when the debt was your spouse's responsibility.

If you live in a state where all the property acquired during the marriage is put in a pot, judges have enormous discretion as to how they divide marital debt. If your state considers only property acquired jointly, judges consider who incurred the debt and who is in a better position to pay. Other states determine which spouse is responsible for the debt.

Essential things to Remember:

1. If you do share joint credit cards then you should cancel them as soon as you know your marriage is ending to insure that the balance does not increase any further. Be sure to include on your list not only your major credit cards but your department and gasoline charge cards as well. You will also want to get a new credit card in your name only so that you may begin to build individual credit.

2. If your spouse is unable to pay a debt assigned to them in the divorce agreement, the credit card company or loan officer can legally require that you pay the debt. Late payments made by your spouse may show up on your credit report.

3. In most states, any debt that was incurred by your spouse BEFORE you married is their sole responsibility.

4. According to the Federal Trade Commission, a creditor, by law, cannot close a joint account because of a change in marital status, but can do so at the request of either spouse. A creditor, however, does not have to change joint accounts to individual accounts. The creditor can require you to reapply for credit on an individual basis and then, based on your new application, extend or deny you credit. In the case of a mortgage or a home equity loan, a lender is likely to require refinancing to remove a spouse from the obligation.

5. If you are given a portion, or all, of a marital debt to payback- consider contacting the lender to negotiate a lower interest rate. Many companies will offer a slightly lower rate if they think they will lose your business.

6. Attorney Gayle Rosenwald Smith suggests that if you do hold joint debt you may want to borrow money, in your own name, to pay it off. This way you are only responsible for individual debt.

7. Know that your credit card company, bank or mortgage company are not bound by your divorce agreement. Whomever's name is on the dotted line is responsible, no matter who filed for divorce.

8. If you and your spouse have filed joint tax returns that you think may not have been correct you will want to speak with your attorney about adding a clause to the agreement that states that whoever is responsible for the errors be responsible for paying the tax due and or penalties.

Heather Boyett

Motivación de la deuda

Estoy bastante segura de que todos han tenido esa sensación de preguntarse donde su dinero se fue después de cada cheque de pago. Incluso para hacer sus pagos mínimos de tarjeta de crédito cada mes, todavía parece tener mucho tiempo para pagar. Muchas de las veces parece que no hay manera con el aumento de los precios del gas, el precio de los comestibles suben, y otros gastos que son necesarios. Aquí es donde el estrés puede golpear en usted puede sentir como si no existe una solución para conseguir todas sus deudas pagadas. Piensa en algo que te motiva como la familia, rodéese con la gente positiva, alguien que puede motivarle. Porque sin motivación no hay acción y sin acción no hay logros. Un programa de gestión de la deuda es una buena manera de reducir el estrés causado por el acoso telefónico, o preocuparse de si el saldo es cada vez va a bajar. También le puede ahorrar tiempo, dinero y ayudar a conseguir una paz de la mente en tan sólo seis meses para que pueda volver a las cosas que realmente importan.

Author: Cristina Gomez, Client Services Group at CreditAllianceGroup (866) 543-9073

LITTLE SPLURGES

While Americans are finding it harder and harder to afford big purchases such as homes and cars, a new survey of household spending and savings indicates that it's not the big-ticket items that get many consumers in trouble.

Instead, it's the little things that Americans concede they splurge on that often prevent families from reaching their savings goals .Surprisingly, the biggest culprit isn't frequent trips to the mall, Many Americans say dining out at restaurants is the thing they "splurge on most."

What's more, America has drastically expanded the list of things they deem to be necessities of life. For instance, 68% of adults now believe that a microwave oven is an absolute necessity, up from just 32% a decade ago. Fifty-nine percent say they absolutely must have an air conditioner in their cars, up from 41% who thought so in 1996. Roughly half of all respondents say that a home computer and a cell phone are needed to function in day-to-day life.

Yet when surveyed about their own savings goals, the vast majority of Americans described themselves as thrifty. The Pew survey, based on telephone interviews conducted nationwide this fall, said 77% of adults describe themselves as "the kind of person who always looks for ways to save money." Meanwhile, 67% said they are the kind of people who are "always aware" of how much they're spending, and 88% said they closely watch how much they spend. When pressed on the issues, though, 63% of respondents conceded they "should be saving more.

"This seemed to confirm the findings of a survey released last week. That survey found that around 21% of Americans feel that their single most important financial goal this year is "just keeping up with the bills." Another 21% said their biggest task is to pay down debt. Meanwhile, other laudable goals, such as saving for retirement, putting kids through college and purchasing a home, ranked much farther down the list.

Author: Christina Baker Client Relations at CreditAllianceGroup (886) 543- 9073

National Debt Cap Will Need to Rise

Congress will be forced to raise the legal limit on the nation's credit card sometime later this year, Treasury officials reported Wednesday, focusing additional attention on the expanding national debt just as lawmakers expect to be putting the finishing touches on President Obama's trillion-dollar overhaul of the nation's health care system.

The amount the government may borrow from the public, including foreign creditors, is limited by law to $12.1 trillion, a cap that has been raised several times since the nation slipped into recession in December 2007. Treasury officials predicted this week that they expect to borrow an additional $892 billion through the end of the year, driving the overall debt past the cap sometime in the fourth quarter.

"Given the uncertainty surrounding potential borrowing needs, Treasury will continue to keep Congress and financial market participants apprised of developments as the debt outstanding approaches the statutory limit," Treasury officials said in a written statement.

The debt is the accumulated borrowing necessary to finance years of annual budget deficits. This year, the deficit is on track to exceed $1.8 trillion, a postwar record compared with the size of the overall economy. Polls show concern is growing over the nation's spending habits, and that concern is already influencing the health care debate on Capitol Hill, where Republicans -- and some Democrats -- are questioning whether a nation so deeply in debt can afford an expensive new program to expand health care to the uninsured.

The need to raise the debt limit could also put additional pressure on 0bama to rein in other parts of his agenda: The Congressional Budget Office has projected that the policies laid out in 0bama's first budget would require an additional $9 trillion in borrowing over the next decade.

Author: Regan Ricci, Client Services Group

Teaching your kids debt and savings

By Natasha Hopkins, October 12, 2009

Teaching children to be responsible about money is not an easy task We often have a hard time managing money ourselves so it can be a bit overwhelming trying to teach your kids how to be good with money. Here are a few tips from the on steps you can take to make sure your kids understand the value of a dollar and how to manage it.

Consider an allowance: As early as kindergarten or first grade, your child is going to have to start paying for things they want or need. Try to match the allowance closely to the expenses the child is expected to cover – that way, they learn that their spending is not unlimited. Decide whether she needs to earn an amount for extras – toys and candy, for instance – then stress why working for treats is important. When kids are younger, you should keep a frequent watch over how they’re handling their cash – checking in every day or so – and then spread out that oversight as they age.

Watch how you act with money: Children learn by example. Do you drive a bigger car than you can afford? Every time you go to the store, do you pull out a credit card to pay? Do you and your spouse or partner fight openly about money at home? Your child hears all of this. While parents can’t be perfect, think about the money behaviors you’re demonstrating in front of the kids, and try to make them positive.

Buy a piggy bank: Young children need this tried-and-true symbol of saving. They need to know there’s a place to put pocket change they don’t spend, and they are free to tap it only to accomplish a goal that the both of you discuss. This isn’t about buying stuff. It’s about setting goals and knowing where the money is. Make sure they count their money before spending it, and make sure they do the same thing at the store while they interact with the cashier. Once they learn that money is finite, they’ll start making their first spending decisions.Author:

Natasha Hopkins Client Relations at CreditAllianceGroup (886) 543- 9073

Follow this 12-step plan to rejuvenate your personal spreadsheet and position yourself for a prosperous 2009.

1. Set goals, and put them in writing. Everyone's circumstances are different, so spend some quality time thinking about your own priorities.

2. Track spending. Feeling like you've lost control of your finances is not always about lack of income. Sometimes, it has more to do with a disorganized approach to finances or even simple ignorance about where your money really goes.

3. Change your attitudes about money. It's easy to fall off the frugal wagon, but fundamental changes in your outlook are essential to avoid lapsing into old spending patterns. Learn how to say no to your spouse or children without feeling guilty.

4. Make paying down your credit card debt a high priority. Credit cards carry higher interest rates than any other type of loan, so it makes sense to pay off outstanding credit card debt first, before other types of loans.

5. Avoid taking on new debt. Aside from a house, car or college tuition, adopt the habit of saving until you can pay cash for any purchase. Deferred gratification until you can pay cash means your purchases will hold more meaning and value for you.

6. Turbo-charge your savings rate. It's a recession-defense measure and could prove to be a lifesaver in the event of an office downsizing. Specify what you'll save (in writing, again), by what date and how you'll free up money to do it.

7. Give credit its due. Review your credit report and score and, based on your personal fault lines, resolve to improve your credit by building a track record as a responsible borrower.

8. Invest in yourself. If your job doesn't make you happy, doesn't pay enough or looks shaky, consider a career move to a growth industry, like healthcare, or one where layoffs are unlikely, like the military.

9. Pare down major expenses. Look for ways to cut your biggest expenses, like your mortgage or auto or homeowners insurance.

10. Trim recurring expenses. If making cuts on big annual bills isn't enough, look next to cut back on frills, premium cable/satellite, your "8-at-a-time" Netflix subscription, eating out or your gym membership. Decide what you can, and can't live without, and remember that an either/or approach isn't necessary; often, all that's needed is downsizing, not elimination.

11. Wean yourself from consumer society. Reuse, recycle, repair, or do without. Become a do-it-yourselfer. Grow your vegetables. Barter with others for things you need.

12. Know what's important. People and relationships, not possessions, are the truly valuable things in life. Cherish them, and experience what it's like to feel truly wealthy.

Brittany Campbell/ Negotations Department

A few reasons to use a Debt Management Program.

There are many reasons to use a debt management program when you are trying to get your credit back on track and several can help reduce your amount of stress almost immediately.

When using a debt management program you are able to eliminate the harassing and often upsetting calls from your creditors. We use a feature called the DAAN module which deals with the persistent creditors.

You will no longer have to deal with late fees or other added charges that can pile up when handling your debt on your own. As many people know the extra fees can sometimes wipe away any progress you may have made in the previous months, with a debt management program you can avoid all of this.

Debt management programs provide an alternative to filing bankruptcy that will enable you to eliminate the harassing calls and still pay off your debt.

Lane Watson
(214) 317-4060

Moving forward through tough times...

Many of us don't think through our choices and how they might play out down the line. Whether its jumping into home ownership without fully understanding the mechanics of mortgages or choosing to become a stay-at-home mom when the family income is already stretched thin, financial stress can be minimized with some advance planning.

Address. The worst move you can make is to do nothing when you end up in a squeeze. Choosing to avoid bills or relying on hope and a prayer to bail you out of a steep mortgage is not going to cut it. The more committed you are to taking action now, the better off you'll be.

Anticipate. The goal is to make sure that whatever choices you make today you can handle tomorrow. You can’t forget about the future by living in the moment. Financial security often boils down to the simple task of anticipating the consequences of your actions. If you don't have health insurance, the bottom line is that you'd better keep a lot of cash in an emergency fund to pay for life's curveballs.

Adjust. If your finances have been limited and you are barely hanging on, it's time to step back and go in another direction. For example, choosing to be a stay-at-home parent is great but only if it makes financial sense for the family. If it doesn't, there is no need to jump back into the workforce working overtime hours; find a part-time position to help you get on better footing. Every problem is solvable if you stop holding on to the past and embrace the decisions that make sense going forward.

By S. Leiva, October 2nd 2009

STUDENTS, PUT THE CARDS DOWN!

The majority of the student population has at 2-3 credit cards averaging about $3,000. This may not seem like much to most, but to a student this is a huge amount. Most students have not been properly advised on how to handle their financials. Debt can sneak up on you before you know it, building up enormous amounts right under your nose; this is called “creeping indebtedness”. I have put together a few tips on how to keep your debt in order:

Two great alternatives to credit cards are debit cards and secured credit cards. Debit cards are good because they are tied to a banking account. This works because it tends to keep you from spending money that you do not have. This process teaches you to learn how to live and spend on a budget. Secured cards are safer than regular credit cards because it is require of you to first set up a savings account with a minimum balance. So in the event of default you will be able to use the funds saved to offset the balance owed on the card.

Cash is the best solution overall. Try to use cash as much as possible. Cash is easier to keep track of while you are spending. Using this method you can see your money disappearing triggering the reaction to stop. As opposed to plastic you can spend and spend totally unaware of your daily totals until the bill arrives with the gift of added debt. With cash and debit cards you can avoid the hassle of late fees (about $39 each) and interest. The average interest on credit cards right now is between 20% and 30%.

Be smart! By the time graduation comes you could possibly get hit with a number of bills: the credit card bill, rent, car note, and of course student loans. That alone is too much new graduate to handle and that’s not even to factor in food and gas. Just think how much easier life could be with one less bill.

Author: P. Grainger , Title at CreditAllianceGroup 866-454-5044

Dealing with Debt

Not being able to manage debt is a major cause of many stress related health issues as well as marital difficulties. It’s important to learn how to control your debt and if it's already a problem, what you can do to make it through the situation. Recognizing the warning signs of too much debt, negotiating with creditors and, if necessary, handling bankruptcy can sometimes be vital to dealing with your debt. One of the most important things is to know your legal rights, responsibilities and options. Consumer debt continues to increase and many consumers find themselves looking for any way out of what can often seem like an impossible situation.
It is unfortunate but one option that many choose is bankruptcy, although there are other ways of dealing with the situation. Another is hiring the services of a debt management company to help when the situation seems too daunting. Instead of purchasing expensive clothing go only on sale days where prices are marked down substantially. Cut up all the credit cards you have except one. Keep it on hand, at home, for emergencies. Then, buy only with cash. When you get your monthly bills and review them you may feel overwhelmed by the amount of money that you’re spending simply because of debt. Don’t get discouraged because there are always ways of reversing this situation and solutions to your problems. Good debt should be obtained through wise decision-making about your current situation but also about your future as well.

Lane Watson

A few reasons to use a Debt Management Program.

There are many reasons to use a debt management program when you are trying to get your credit back on track and several can help reduce your amount of stress almost immediately.

When using a debt management program you are able to eliminate the harassing and often upsetting calls from your creditors. We use a feature called the DAAN module which deals with the persistent creditors.

You will no longer have to deal with late fees or other added charges that can pile up when handling your debt on your own. As many people know the extra fees can sometimes wipe away any progress you may have made in the previous months, with a debt management program you can avoid all of this.

Debt management programs provide an alternative to filing bankruptcy that will enable you to eliminate the harassing calls and still pay off your debt.

Brittany Campbell

All You Need to Know about Debt Settlement Programs

Many consumers swimming along happily in a sea of credit suddenly find themselves drowning in a quagmire of debt. According to a 1992 Federal Reserve study, 43 percent of U.S. families spend more than they earn and, according to Cardweb.com, almost one out of every 100 American households will file for bankruptcy during their lifetime.

What should you do if you are one of these consumers? You could take advantage of one of the many services available to you, such as debt settlement programs. You can have your financial freedom back again.

What Are Debt Settlement Programs?

For years, debt settlement has been a popular method for thousands of consumers to regain financial wellness. Debt settlement means that, with the help of a settlement negotiator, you work out an agreement with creditors to settle your delinquent payments or unpaid balances.

If you are behind on payments on a high interest loan, for example, it could take you as long as 20 years to pay your debt. Debt settlement programs can help shrink your payment terms and amounts, and they can also provide you with the following benefits:

A Current Credit Report

When you sign up for, and begin, a debt settlement program, many creditors will �re-age� your account, or bring it to a current status.

Lowered Interest and Monthly Payments

Depending on your debt settlement program, your settlement negotiator can help reduce the interest payments and monthly payments on your outstanding loans.

A Reduction in Creditor Calls

Creditors call consumers regularly if they are behind on their payments or not making payments at all. Negotiators can work with creditors to eliminate this practice once you are enrolled in a program.

In addition to these benefits, debt settlement programs can also assign you a credit counselor. Besides playing an active role in your settlement, these counselors can also provide you with financial tools to teach you how to maintain a healthy spending practice.

The hidden costs of credit cards…

Are you paying for things you aren't aware of? Understand how credit card fees are calculated and save.

Credit cards have become an essential part of everyday life. About 145 million Americans use them, and for almost every kind of purchase. An estimated 40 percent also use them as an easy form of short-term credit, carrying an unpaid balance from month to month. But while card holders may be aware of the relatively high interest rates they’re charged on their balances, they may not be aware of other ways card companies can raise the price they pay for this easy form of credit.

Universal default: A hot topic these days, this is the card issuers’ practice of penalizing you for falling behind on your other credit accounts, even if you haven’t missed a card payment. In some cases, a single late payment to any of your other creditors can trigger the card company to impose a penalty rate, which can be 29 percent or even higher. Reversing the charge can be difficult.

Low minimum payments: Low minimum payments may look like a blessing. But even with new guidelines that have recently caused most credit card companies to increase the minimum amount you’re required to pay each month from around 2 to 4 percent, it can often take a long time to pay off your debt, and you can still end up paying thousands in extra interest charges.

“Teaser” rates: Many people choose a credit card based on its low advertised interest rate -- in some cases, zero percent. But these rates don’t last. Many disappear after six months, and most are gone after a year, leaving you stuck paying a higher rate.

Changeable rates: Not many of us read the fine print on our cardholder agreements, but it often gives the card issuer the right to change its interest rates and its fees for any reason -- and sometimes for no reason. The credit card company often needs to give you only 15 days’ notice before bumping up your interest rate or raising its fees.

Varying rate levels: If you make some purchases at a promotional rate and others at the card’s regular rate, the card company often applies your payments to the lower-rate debt first, leaving you paying off the higher-rate debt. This can also occur if you take cash advances that carry a special higher rate.

Fees, fees, fees: Many cards carry a variety of fees you may not discover until you have to pay them. These include application and processing fees, late payment fees, transaction fees, fees for going over your credit limit, overdraft protection fees and balance transfer fees. And some even impose their late fee if your payment arrives after a designated hour on the due date.

You can avoid some of these costs by reading your card agreement, and by paying off your credit card balance every month. If you are in need of long-term credit, one strategy is to consider other, less costly kinds of loans. One option is a home equity loan, which can allow you to borrow money at a considerably better rate than a credit card. In fact, many cardholders use these loans to consolidate their credit card debt.

Chris Garner, Sr. Credit Officer

How Fast Do Banks Credit Your Accounts?

Banks are so quick to hit you with a fee for spending more than you have in your checking account but take their own sweet time in crediting deposits. It’s been nearly five-years since the federal law known as Check 21 took effect. The law allows banks to turn paper checks into digital images and settle them electronically instead of shipping bags of paper around the country on airplanes. But the old laws on how quickly banks must credit your account when you make a deposit did not change at all. They still haven’t. In fact, they haven’t changed in more than 20 years.

Banks are supposed to allow you to withdraw the following types of deposits no later than the next business day after the bank receives them: cash, electronic payments like paychecks and other direct deposits, government checks, postal money orders and cashier’s checks. That said, if you don’t make the deposits in person. Banks must make your deposits of local checks available no later than two business days after you hand them over. But they get a full five days on nonlocal accounts. In either case, they must make $100 available to you the next business day after the deposit as a sort of good-faith advance. That number, too, has not changed in two decades.

One piece of good news here is that because of the rapid adoption of electronic check imaging, the Federal Reserve is a year or so away from completing the consolidation of all its processing centers. As a result, many more checks are already local. So when you deposit them, they hit your account more quickly.

Author Bio: IsaBella is the Senior Lead Credit Officer at Credit Alliance Group 866-540-3134

Flirting with Finance

Today more than ever the playing field is level but that doesn’t make the game any easier. I am talking about Survival of the Financial Fittest. USA Today reported that the unemployment rate among married couples in August was 6.3% and a staggering 13.5% among Singles. As a single gal myself I know all too well that having a support team is vital whether it is your family, friends, or co-workers. Whomever you lean on to get through tough times for some is just not cutting the mustard. Men and Women of all ages, races, and genders are still going to look for the “ONE.” And one thing I have found is that when it comes to dating the old adage still holds true: “Money can’t buy me LOVE” many seek for a quick fix, and when times are hard it is natural for hopes to inflate also. My advice is skip the dating head hunters, skip the expensive online pay now and we will throw a bunch of faces at you method, try something that gives a little more for you money. Again this is just my personal advice any of these methods work, but will be taking a toll on your checkbook. If online is your groove by all means, but seek out a free site and instead of wasting time looking though and My Face Space Booking find out when there are events coordinated to go out and meet the people and potential Mr. Ms. Right. Try going to a B list event like a winery, or a dog park with a friend, or try a happy hour at a restraint you wouldn’t typically try. The bottom line is when it comes to money no one wants to rise in debt and finding happiness doesn’t have to leave your pockets empty.

Payday Loans Equal Very Costly Cash

“GET CASH NOW, UNTIL PAYDAY! . . . $100 OR MORE . . . FAST.” These types of ads constantly bombard us through radio, television, internet, and even the mail. The ads refer to payday loans, cash advance loans, check advance loans, post-dated check loans, or deferred deposit loans. The Federal Trade Commission, the nation’s consumer protection agency, says that regardless of their name, these small, short-term, high-rate loans by check cashers, finance companies and others all come at a very high price.

Here’s how they work: A borrower writes a personal check payable to the lender for the amount the person wants to borrow, plus the fee they must pay for borrowing. The company gives the borrower the amount of the check less the fee, and agrees to hold the check until the loan is due, usually the borrower’s next payday. Or, with the borrower’s permission, the company deposits the amount borrowed — less the fee — into the borrower’s checking account electronically. The loan amount is due to be debited the next payday. The fees on these loans can be a percentage of the face value of the check — or they can be based on increments of money borrowed: say, a fee for every $50 or $100 borrowed. The borrower is charged new fees each time the same loan is extended or “rolled over.”

Payday loans range in size from $100 to $1,000, depending on state legal maximums. The average loan term is about two-weeks. Loans typically cost 400% annual interest (APR) or more. The finance charge / fees range from $15 to $30 to borrow $100. For two-week loans, these finance charges result in interest rates from 390 to 780% APR. Shorter term loans have even higher APRs.

Payday loans are extremely expensive compared to other cash loans. A $300 cash advance on the average credit card, repaid in one month, would cost $13.99 finance charge and an annual interest rate of almost 57%. By comparison, a payday loan costing $17.50 per $100 for the same $300 would cost $105 if renewed one time or 426% annual interest.

Payday loans should always be a last resort for anyone in need of cash. If you do obtain a payday loan always be sure to pay the loan on or before the due date. Never roll over or extend the loan!!!!!!!

Glen Hamilton, Sr. Credit Officer

How to Stop Using Credit Cards and Take Back Your Life

A credit card is financial oxymoron because the thing that makes them attractive also makes them dangerous. Of course I am referring to the ‘ease of use’ factor. The main case for plastic is that it takes the hassle out of making purchases both large and small, but this has some not so unexpected side effects. The first is that by eliminating cash we also get rid of our spending boundary.

We are now not limited to the money we have in our wallets but by the size of our credit limit; which unfortunately, more often than not, does not correlate. The second is the fact that the cost of this convenience is actually very high. When you add up the interest on your purchase, assuming you are not paying off your balance in full on or before the due date, the risk of late payment fees, overdrawn fees and even identity theft, you have to ask yourself if they are worth it.

You have probably already made the decision to stop using credit cards but you may have been so seduced by the luxury of plastic availability that you are not sure how you are ever going to live without them. Here's a list of helpful tips below if you want to stop using credit cards:

1.Destroy the ones you have. You may think that you are strong enough to keep your card on you for ‘emergencies only’ but it is better to be safe than sorry. I have seen even the mighty fall beneath the irresistible pull of plastic, so before you start saying things like ‘buying this pair of shoes is an emergency… it will help boost my spirits and carry me through the work week so I can make money to get out of debt.’ These mind tricks are a sure fire sign that you are not as strong as you think and the best bet would be to take a huge pair of scissors to your credit cards now.

2.Stop the influx of new offers. There is simply no point in getting rid of your old cards if new ones keep showing up at your door. One of the easiest ways to kick the credit habit is to put some distance between you and access to credit cards. You can stop receiving unsolicited offers in the mail by sending a letter to the major credit bureaus or calling 1-888-5-OPTOUT. You need to provide your name, mailing address, phone number and social security number to complete the process.

3.Devise a monthly budget. Now that you have cut your ties to credit you are going to have to come up with a spending plan. Many people have no idea how much money they spend each month when they use credit cards. To make a workable budget you should document your income and make allocations for all your major fixed expenses, such as mortgage or rent, childcare, other loans and so on. Your discretionary spending allocations; which would include groceries, transportation, and entertainment, should be realistic. When you have these basic items down you can then estimate an amount to dedicate to savings by subtracting the total of your expenses from your income. If you come up with a negative figure this would most likely represent the amount you were spending on credit to supplement your lifestyle. In other words, you were living beyond your means and you would have to slowly find a way to cut back until you regain control of your spending.

4.Pay bills using an online account. When you quit credit all of a sudden things seem a little inconvenient. You can’t phone in a payment or make recurring charges to your card and you may be tempted to fall back into the trap. You can save yourself by setting up an online account so you can use your own money to pay bills online.

5.Plan before you leave the house. Now that you don’t have credit cards to swipe on a whim, you are going to have to think ahead. This may take some getting used to, but it will definitely help you to schedule your large purchases and put a cap on frivolous spending. Over time this will amount to increased savings and more responsible choices. Not a bad move at all and definitely worth the initial pain of planning in advance.

If you follow this simple five step plan you will be able to kick the credit habit and live within your means. Choosing to do this may mean the difference between building a savings account and watching a mountain of debt pile high. I know which I would prefer… how about you?

Sean Boyett, Director of Sales

What to Do in Case of Identity Theft?

Identity theft can devastate the personal finances of an individual or an entire family. It causes a mess that may take years to clear up, affect your ability to obtain a loan for a mortgage, credit cards or a car. If you become a victim of identity theft, you can take certain steps to protect yourself. The key is to act fast. Read these steps, to keep your medical, personal and financial information from being at stake.

Notification

1. Anyone who has experienced or suspects that he or she is a victim of identity theft must report it to the proper authorities. Start with local law enforcement and then call your existing creditors and let them know what has happened. Notify the Social Security Administration and Department of Motor Vehicles. Also call the Federal Trade Commission for advice. Consumers are also advised to cancel their credit cards so creditors may issue new cards and account numbers.Identify theft, however, is more than someone using your credit cards. With your private information, your medical privacy may be breeched, and passports, birth certificates or other documents may be forged using your name and information, which has far reaching ramifications.

Prevention

2. Check with credit-report companies at least once a year to receive a free credit report. This will enable many individuals to spot suspicious activities involving credit-card loan applications, mortgage applications or auto loans. If you have been the victim of identify theft, save these reports to be used to help clear your name and financial history, or to be used in a court of law in the event that the thief is eventually caught and tried. Always do your best to hide your account PIN numbers and prevent others from watching you punch in your PIN at a store, bank or anywhere debit cards may be used.

Reclaim Your Identity

3. Prepare to spend a lot of time on the phone, talking to various agencies. Keep records of whom you talk to, when the conversation takes place, and when possible, get a reference number for the telephone call. Speak with your local District Attorney or Attorney General if any crime is or has been perpetrated using your identity. The Internal Revenue Service can also help get you back in charge of your personal affairs in the event that you are a victim of ID theft, but it's important to contact them as soon as possible to inform them of what has happened. Be prepared to offer dates and other pertinent data that will be required, such as police reports and bank statements.

Donna Millen, Client Services Manager

Convertirse en un dueño de casa

Tratando de comprar una casa nueva puede ser muy estresante, especialmente si usted está abrumado con la deuda. Aunque puede ser muy difícil obtener aprobación para un préstamo, hay una manera de conseguir un buen camino y estar en su manera de ser propietario de una casa. Aunque la idea de comprar una casa puede ser muy emocionante, que puede ser abrumadora si usted no tiene buen crédito. Gestión de la Deuda es una de las opciones que se pueden estudiar para ser libre de deudas. El tiempo para completar un programa puede ser de entre 6-48 meses, pero una vez que haya terminado, usted estará en camino de convertirse en propietario de una casa. Aunque usted probablemente no esté en una posición buena de estar comprando una casa, esto no es para siempre. Si su deuda es malo y que usted está considerando un programa de gestión de la deuda como una manera de obtener su crédito y la vida financiera de nuevo en pista, tal vez haya encontrado la solución que usted ha estado buscando. Haga el salir de la deuda su meta inmediata y después revisite la posesión de un hogar.

Cristina Gomez, Client Services

5-minute guide to managing debt

At some point in our lives, most of us have borrowed too much. If you're in over your head, don't despair. But make no mistake: You must learn to live on what you earn.

First, stop making excuses about why you're in debt. Don't blame the credit card companies or your parents. Put that energy into reducing your debt.

Debt can be extremely stressful, so tell someone you're in financial trouble. Then get a handle on how big your problem is. When you have no idea how much you owe, simply establishing a number is a critical first step.

Don't avoid the B-word

The best way to start reducing debt is to set up a budget. It's not a punishment; it's a way of knowing exactly where your money goes. You'll need to add up your income and subtract your expenses, then set up a plan.

Don't lie to yourself. Budget more than the minimum on credit card payments. Paying the minimum is better than nothing, but you wind up paying a lot more in interest as you chip away at the balances.

• Start an emergency fund -- a savings account that should grow to at least three months of expenses. Even $10 a week can help.
• Without an emergency fund, unexpected costs or loss of income can drive you deeper into debt.
• What's your plan?

Use your budget to help you plan your debt-reduction strategy. List all of your debts, from the highest interest rate to the lowest. While making on-time minimum payments on the others. Your budget will dictate how much you can devote to paying down your balances each month.

In addition, consider these tips:

• If you have the money in savings, pay off what you can. The amount of savings income you get is usually dwarfed by interest rates you pay on your debts.
• Use any extra cash -- bonuses, extra paychecks, lottery winnings -- to pay down debts.
• Volunteer to work overtime, or get a second job.

If you can't earn more money, you'll need to spend less. Try these tips:

• Eat at home when possible. Avoid buying lattes and fast food
• Go cash-only. After the bills are paid, allot yourself a certain amount of cash for gas, groceries, etc. When the cash is gone, the fun is done.
• Forgo premium cable-TV channels and high-speed Internet service. Your public library typically not only offers free Wi-Fi but computer access as well.

Consolidation is a dangerous road

As you grapple with repayment, the temptation is great to borrow from Peter to pay Paul in one lump sum. You might be better off paying your debts bit by bit.

• Consider consolidating your loans only if you have the discipline to not use your credit cards. Consolidation means you take out one loan to cover all of your existing payments. If you do transfer a balance from a card, destroy that card so you won't be tempted to run up the balance again.
• Don't use a home-equity loan to pay off credit card debt. Even if the home-equity rates are lower than your cards' interest rates, trouble looms if you run up your balances again.
• Face up to your credit cards

Once you're out of debt, how can you stay that way? Of course, stick to your budget. In addition, figure out how to deal with credit cards, which likely got you into this mess in the first place.

• Stop charging right now. Cut up all but one of your cards, the one with the lowest interest rate. Use that card only for emergencies. If you continue to use your credit cards, pay in full every month and avoid interest charges altogether.
• Pull your credit reports once a year and check them for errors. Call your creditors and ask for lower rates.
• Leave your credit cards at home. Shop with a list and buy only what's on the list; don't be tempted by sale items you don't need.
• Don't use retail-store credit cards for the discounts. Chances are that card carries a high interest rate that you'll have to deal with if you don't pay off your balance each month.

When the collectors are knocking

If you've gotten in so deep that debt collectors are at the door, know your rights:

• Debt collectors may not harass, oppress or abuse you or any third party they contact. They may not falsely imply that they are government representatives or that you have committed a crime.
• They may not tell you that you will be arrested if you do not pay your debts.

Whatever you do, don't give up. You didn't get into debt overnight, and you won't get out that quickly. Getting out of debt takes time and patience, but it pays big dividends down the road.

Author: Christina Baker Client Relations at CreditAllianceGroup (886) 543- 9073

DEBT IN THE 21ST CENTURY

The view of people in debt changed throughout the 20th Century. At first, it was unacceptable when turn of the century people began to buy homes however, that changed. Debt became more and more acceptable, leading up to the roaring 20's when people were so immersed in their debt problems that the future became bleak. All these debt problems led to the Great Depression, which once again made debt a four letter word. Throughout the 30's, 40's and 50's, people would only get into debt to buy a home. Heavy student loans, car loans with double digit interest rates and credit cards wouldn't even have been considered.

However, as the 60's began, and especially the 70's, credit cards became more popular and people became more comfortable with debt. All of this led to the 80's, 90's and 2000's where debt became a way of life, and the only way certain people were able to afford big homes, nice cars and an affluent lifestyle.

All of this brings us to the 21st century, a time when debt problems have run amok, where people are turning to bankruptcy more and more, and where people are beginning to consider debt as an evil once again. However, as most debt settlement professionals will tell you, seeing debt as an evil is a good thing. Far too many people have allowed themselves to fall deep into financial ruin because they were comfortable with tens of thousands of dollars in credit card debt and other forms of unsecured debt. Debt settlement experts work with people everyday who have forty, fifty and even sixty thousand dollars in credit card debt, debt spent on clothes, food and possessions these people don't even own anymore.

The shame of debt problems throughout the nation is that few people got into their debt problems by purchasing things they needed. When debt settlement experts work with people who are trying to get out of mountains of debt, they hear stories about people buying boats, second homes, wardrobes, fancy meals and other frivolous items. However, people become addicted to a lifestyle and feel empty without the ability to buy what they want when they want it. Debt becomes an addiction, a way to gratify the desire to have things. This leads to heavy debt problems and a lifestyle of trying to own everything while not having enough to buy it. Debt problems crush people; they wind up avoiding phone calls from lenders, not opening bills when they come and so forth. All of this leads to stress, sleepless nights and some people even get heart attacks over worrying about their debt.

So, in the 21st century, hopefully people will be able to see debt for what it is...a necessary evil. Debt allows people to buy houses, own cars and sometimes even go to school, but it should be seen as a necessary evil, not a necessary good. Hopefully, this will be a truth that people will follow throughout the century, although history isn't on our side.

Ben Yaffe, Sr. Credit Officer

Giving her credit guidance in a funny-money world: Daughters

When your daughter was younger, she probably learned money lessons firsthand through a small cash allowance. But now she's going to need a lot more guidance to stay money-smart.
Increasingly, her transactions will involve credit cards, debit cards, and even her cell phone, which now allows kids to use credit at places like fast-food joints. As more girls get goods--from clothes on credit to cell phone minutes on a monthly plan--without plunking down "real" money, they may find it harder to make good financial decisions now and later, as they become adults.

When women have lower financial literacy, they suffer. In a recent national survey, female college students were more likely than males to have credit card debt over $5,000, pay their bills late, and not pay their balances in full--all practices that load on extra fees. Women ages 21 to 34 had higher credit card debt than men and many lived paycheck to paycheck, according to another survey.

"It is important for parents to help their daughters understand that becoming financially literate is the first step toward financial independence, something every female needs to set as a goal," says Harriet Mosatche, vice president of Program Collaborations and Initiatives at Girl Scouts of the USA.

Teaching her credit basics is crucial, given the hard sell credit card marketers aim at tweens and teens, especially girls. MasterCard rolled out the Hello Kitty credit card last year, aimed at 10 to 14-year-old girls. A third of high school seniors now have credit cards, and on college campuses, students are deluged by card offers with low interest rates that zoom up after a few late payments.

Credit cards are, of course, a fact of life for most parents. And used properly, they can be useful for girls. The key, says Mosatche, is to teach girls early on that "when parents use their credit cards, they are actually spending money and making decisions about what to buy in the same way as they would if they were using cash."

Parents should explain how the family budgets money. Only 40% of girls ages 13 to 17 have ever had conversations about...

Heather Boyett, Manager of Customer Relations and Consumer Affairs

Debt Management tips for Families

By Natasha Hopkins, September 25, 2009

Understanding the difference between smart debt and dumb debt is the key…

Debt management is an important skill to master, no matter what life stage you are in. As part of a mature family, you probably have established yourself in a career, but you may also have huge costs in front of you, such as your kids’ college expenses and your retirement. By understanding the difference between smart debt and dumb debt, you can become an expert at debt management and progress toward meeting your financial goals.

Smart debt
There are times when it may be more than just necessary to acquire debt, it may also be beneficial. Debt like this is known as smart debt. Smart debt typically leaves you better off financially than when you started because it leaves you with an asset that is worth the cost of the loan, or possibly even more. For example, a mortgage or student loan is considered smart debt. As a part of learning debt management, you need to understand the total cost of a loan (the principal, interest and fees) as well as whether the loan will help you or hurt you in the future.

Dumb debt
Dumb debt is the easiest type of debt to fall into, and it usually results from poor debt management. Dumb debt leaves you owing money, with nothing to show for it. This often occurs when you buy things on credit that you really cannot afford. It involves taking too long to pay off a debt, so you wind up paying an exorbitant amount in interest -- sometimes considerably more than the original cost of what you bought. Dumb debt also occurs when you are still paying for something long after you are done using it, or don’t have it anymore. A lack of good debt management can lead to the acquisition of dumb debt, which often results in stress, a limited budget and sacrificing long-term financial goals.

Author: Natasha Hopkins Client Relations at CreditAllianceGroup (886) 543- 9073

Indentured Redemption

According to Wikipedia an indentured servant is a laborer under contract to an employer for a fixed period of time, typically three to seven years, in exchange for their transportation, food, drink, clothing, lodging and other necessities. (I don’t know about you, but that sounded a lot like life as I know it and the way many of my friends and family live!)

Then~The need arose for this type of contracts from the labor-intensive cash crop of tobacco which was farmed heavily in the American South. In addition to slaves (who were mostly from Africa), Europeans, including Irish, Scottish, English, and Germans, were brought over in substantial numbers as indentured servants, particularly in the British Thirteen Colonies.

Then~A nation founded in debt…Over half of all white immigrants to the English colonies of North America during the 17th and 18th centuries may have been indentured servants. In the 18th and early 19th century numerous Europeans traveled to the colonies as redemptioners. In addition, a substantial number of indentured servants were brought over from the Indian subcontinent by the British East India Company in the 17th and 18th centuries. It has been estimated that the redemptioners comprised almost 80% of the total British and continental immigration to America down to the coming of the Revolution.

**Redemptioners were European immigrants, generally in the 18th or early 19th century, who gained passage to America (most often Pennsylvania) by selling themselves into indentured servitude to pay back the shipping company which had advanced the cost of the sea voyage. British indentured servants generally did not arrive as redemptioners after the early colonial period due to certain protections afforded them by law. Redemptioners were at a disadvantage because they negotiated their indentures upon arrival after a long and difficult voyage with no prospect to return to their homelands.

Now~ Americans fresh out of high school, on their way to bright futures see the land of opportunity and want to have what everyone else does it is our birthright “The American Dream” too many of us wake up before the dream is finished and miss the part about working hard to get what you want. So what do we do instead? You guessed it we look to the great equalizer PLASTIC!!!! Keep up with the Jones’s. Not surprising that our country is drowning in debt. We each want to work and make money and have our dreams come true, but instead of making an honest wage many people are having trouble finding jobs that pay the bills let alone make dreams come true. Worse yet when John and Jane Doe are using the Credit Card ship to sail into financial freedom. As well meaning Americans many of us “Borrow” plastic money to (see above) get from A to B, for food, drink, clothing, lodging, and other necessities. However times are far worse now than in the past. Now you start with a specific term, agree to pay back, but somewhere in the compounded interest end up stranded on Debt Island with no life boat and the water are rising.

Sweet Redemption~ With hardship debt settlement programs like Credit Alliance Group offer there may actually be a life boat within reach and paddles to boot! These programs do require payment, so you help yourself out of debt, but with these programs dry land is close by and debt free living is finally attainable. While not everyone has a bailout from Uncle Sam everyone is able to bail out of debt and work towards the “American Dream”

Sr. Credit Officer, Alexis Boots

CREDIT CARD INTREST RATES

Credit card companies are raising people’s interest rates at an alarming rate. Credit card companies basically can raise the interest to whatever they want since there are no regulations that does not allow them to do so. Some people interest went from 7% all the way up to 20%. They are also cutting credit lines under what they have already spent in order to make more money on late fees. I would just suggest not getting a credit card. They always lead into trouble and the credit card companies are in control not you. That is why they give them out so easy. It is a gold mind.

Sr. Credit Officer, Thomas Gobroski

Michael Jackson: King of Debt

Despite selling more than 61 million albums in the United States, filling concert-halls for much of his life, and serving as the theme for a decade-long attraction at Walt Disney theme parks, Jackson ended his life so riddled with debt that he had to be bailed out by friends and colleagues more than a failing bank.

Most recently, Jackson received help from Thomas Barrack, chairman and CEO of the real estate investment firm Colony Capital. Barrack purchased Jackson's Neverland Ranch for $22 million, just before the fairyland destination would have been sold at an auction to cover Jackson's debt.

Jackson purchased Neverland in Santa Barbara County's wine country in 1998 for $14.6 million.
At one point, Jackson owed Bank of America more than $270 million. In 2005 the bank sold that debt at a discount to private equity firm Fortress Investment.

Jackson was on the cusp of making a comeback before his untimely death, preparing to go on tour in July. This tour was designed, in great part, to help to pay off that debt.
Now instead of the tour, which was set to kick off in London on July 8, serving as a cash cow, it's another expense in Jackson's name. Tickets for the tour sold out on Tickmaster, of which Liberty Med is a major stakeholder. It's unclear if fans will want their money back and how they will be paid if they do.

Author: Regan Ricci, Client Services Group

Collection Calls-

Debt collectors are highly motivated to convince debtors to pay the money they owe to their clients because they receive commissions whenever they get debtors to pay. These collectors will do almost anything to accomplish their task – including bad behavior such as threats, intimidation, harassment, and the use of bad language. There are certain things that debt collectors are allowed to do when asking debtors to pay. Certainly, bad behavior like the ones mentioned is not allowed. Collection agencies implement certain rules on collecting debts, but sadly, not all agents are monitored, or they simply get away with their bad behavior. Laws say that these collection agencies must respect your privacy, so they should not be calling when you are at work, resting at home, or even when you are sleeping. If they insist with any of this bad behavior, you can file a compliant with the Federal Trade Commission or your State’s Attorney General.
If you are receiving collection calls, try to get as much information as possible and determine if the debt is indeed yours. Never fight back with your temper when talking to them because they might assume that the debt is indeed yours. The debt may not be really yours. Make sure you ask for specifics, like the name of their client (the bank or Credit Card Company) and the details of the loan such as how much it is and the date the loan was approved.

Client Services Group, Cristina Gomez

Debt or Credit?

By Lucinda Ramos, September 25, 2009


Here's the first surprise: "Debit or credit?" is actually an unfair, misleading question. There is no such thing as a debit card that's used as a credit card. When you hand over a debit card, you are engaging in a debit transaction no matter how you answer. When clerks ask this question, they are really asking you to pick one of two ways they can process your debit – a PIN (personal identification number) based transaction or as a signature-based transaction. One costs the merchant a little more and one takes a little longer to hit your checking account, but fundamentally a debit transaction is a debit transaction.
For all the reasons cited below, you want neither. So when I say pick credit instead of debit, I don't mean tell the clerk to use your debit card like a credit card. I mean put away the debit card you use to get money from the bank and pull out a true a credit card instead.

Author: Lucinda Ramos, Client Relations at CreditAllianceGroup (886) 543- 9073

Banks' checking and debit overdraft policies draw scrutiny

Consumers cry foul, banks soften policies as Congress, Fed look on

Amid increased national scrutiny of bank overdraft policy, bankers, legislators and consumer advocates are scrambling to paint the best face -- or the worst -- on the increasingly controversial practice.

Overdraft fees occur when consumers try to write a check or use a debit card to withdraw more money than a checking account holds. Instead of bouncing the check or declining the card, banks instead pay the charge, up to a preset amount, and then charge a fee. The fees have risen in recent years to an average of $35, and banks have increasingly relied upon these overdraft plans as a revenue source -- often enrolling customers automatically and denying them the ability to opt out. According to Moebs Services, a financial institution research firm, banks are projected to take in $38.5 billion in overdraft fees in 2009, more than double the amount taken in 10 years earlier.

Other policies make the damage worse, such as cashing checks in an order that maximizes the number of overdraft fees generated, or charging a fee when the bank is holding enough money to cover the charge. The rising fees and other overdraft policies have made overdraft the latest whipping boy for an already beleaguered industry.

Overdraft developments
The heat over overdrafts has shot up in recent days. Among the developments:

• The American Bankers Association, an organization comprised of various national banks, released a survey that suggests a majority of Americans are unaffected by overdraft fees, and that most fees are paid by a system-abusing few. According to the ABA, 82 percent of those surveyed had not paid an overdraft fee during the past year. "Once again, consumers have shown they can manage their bank accounts well and avoid paying fees," said Nessa Feddis, ABA senior federal counsel and retail banking expert, in a press release. "Clearly, consumers who pay overdraft fees are the minority, and that number is shrinking."The survey also examined consumer opinion about over drafting. Of the consumers who paid an overdraft fee in the past year, 96 percent said "they were glad the payment was covered," according to ABA. The Center for Responsible Lending (CRL), a typically consumer-aligned financial services research and policy organization, released its own numbers, finding that about 80 percent of consumers would prefer to have their debit card transaction declined if it meant escaping an overdraft fee. Both organizations surveyed people who previously over drafted, but CRL collected opinions only from those who over drafted when using a debit card. ABA garnered views from people who over drafted using any type of payment method, including checks.

• The ABA survey comes during the Federal Reserve Board's exploration of ways to adjust current overdraft regulations. The Fed proposed two possible changes last year, which would give consumers the option to enroll in their banks' overdraft programs or give customers an opportunity to opt out of the overdraft service. With the opt-in policy, banks would lose the ability to cover overdrafts automatically unless the consumer gives permission. The Fed is expected to reach a final decision on the regulations at the end of 2009, according to a Fed spokeswoman.

• U.S. Sen. Christopher Dodd, chairman of the Senate's banking committee, announced Sept. 18 that he will introduce legislation to rein in overdrafts. "Excessive, automatic overdraft fees are forcing many American families deeper into debt at a time when they are already struggling to make ends meet," said Dodd. "I am working on a bill to protect consumers from these fees." A similar bill was filed early this year in the House.

• This week, Bank of America, Chase and Wells Fargo announced they would alter their overdraft policies, slightly trimming back the trigger point for fees. BofA customers who overdraft an account by $10 or less in one day will not be charged a fee. Chase's and Wells Fargo's concession was $5 with no overdraft fees. Plus, the number of times you can overdraft in one day will be reduced to four times daily for BofA and Wells Fargo customers and three times a day for Chase customers. All three will offer the option to opt out of overdraft services. The changes are expected to take place Oct. 19 for BofA customers and early next year for Chase customers. Chase also will take the step to stop processing larger ATM and debit charges prior to less expensive charges first, which often forced an account holder into overdraft status more quickly. U.S. Rep. Carolyn Maloney of New York praised the banks, but added: "... what we need are consistent overdraft reforms for all Americans who have or open a bank account. My Overdraft Protection Act, H.R. 1456, would require all banks to allow consumers to ask for overdraft protection, require that consumers be notified when a transaction is about to incur an overdraft fee, and require that banks post the transactions chronologically." Sen. Dodd, on his Web site, stated that while these changes are positive, "the system has gotten completely out of whack. We are talking about abusive practices that never should have been instituted in the first place."

Taken together, the moves have placed overdraft protection in the center of the latest tug of war that pits consumer protection against banking practices.

A larger fight

Bankers lost one huge battle earlier in 2009 with the passage of the most sweeping credit card reform in decades, the federal Credit CARD Act of 2009. The fight over overdraft policies is itself part of a larger fight over President Obama's plan to create a new federal agency to watch out for consumers' interests in financial transactions, including overdraft fees, credit cards and mortgages.

That larger fight is being waged both in the corridors of Washington, D.C., and on national airwaves, as bank-related groups try to sway the public that more regulation would hurt ordinary consumers and small business owners.

The White House scoffs at the assertions. White House National Economic Council Director Lawrence Summers said in a Sept. 18 speech at Georgetown University, "Advertisements arebeing run on behalf of florists and other Main Street merchants suggesting that somehow we envision a regulator that would make it impossible for a florist to extend credit to one of their customers. I doubt very much that any florists are paying for those ads."

Heather Boyett

Debt

Debt isn't something that just happens as you go about your daily routines. There are certain spending habits that lead to debt. Recognizing these habits now could save a lot of money and stress later.

1. Spending more money than you make.
This doesn't sound logically possible. If you only make $1,000 a month, how could you possibly spend $1,200 in a month? It's easier than you think. So easy, you might be doing it. Dipping into savings, borrowing from others, and using credit are the primary ways of spending more money than you bring in. You might be able to get away with doing this for a few weeks or months, but soon, your hole-digging spending habits will catch up with you. Before you know it, your savings is depleted, your credit cards are maxed out, and you can't borrow any more money.

2. Spending money you don't have.
Usually, spending more money than you make is enabled by spending money you don't have. You spend money you don't have by using credit cards and taking out loans. When you use these instruments to pay bills and make purchases, you're creating debt. If you can't repay the debt each month, it will continue to grow.

3. Using credit for ordinary purchases.
You should use cash to make everyday purchases like groceries, gas, clothes, and entertainment. The appeal of credit cards is the ability to pay later for items that you buy now. The caveat is that you're less to pay your credit card bill for items that you've already consumed, which most "ordinary" purchases are. Using credit instead of cash is a bad habit, especially when you don't pay your credit card bills in full each month.

4. Using credit when you have cash.
One of the quickest ways to get into debt is to choose to use credit when you have the cash to make a purchase. People do this with a "something for nothing" type of mindset. They want to receive the goods (or services) but they don't want to pay for them. The convenience of leaving your money in your wallet comes at a cost. Chances are, if you don't want to pay for it today, you're not going to want to pay for it tomorrow.

5. Using debt to pay off debt.
When you use credit cards to pay off other cards and loans to pay off other loans you're not paying off anything. You're just shuffling your debt around and incurring more debt each time you do so. Balance transfers have transaction fees and most loans have some kind of down payment or origination fee. So when you use debt to pay off debt, you end up worse off than when you began.


Brittany Campbell Negotiations Representative

Co-signer

People make the very unwise and dumb decision to cosign for someone else every day.

If you cosign for a car, the lender will not contact you when the loan is paid late every month, but your credit is damaged every month. The lender will not contact you before they repossess the car, but you now have a repo on your credit report. They will contact you to pay the difference between the debt and the below-wholesale repo price they got for the car, which is called a deficit. If the lender did contact you, there is nothing you can legally do to force the sale of the car, because you don't own it; you are merely on the hook for the debt. When you cosign on a house you will get the same results. Two late car payments and your score is not good, three and you have poor credit.

The result is damaged credit and damaged or destroyed relationships. Credit is easy to destroy and can be tough to rebuild. If you truly want to help someone, give money. The lender requires a cosigner because there is a very high statistical chance that the applicant won't pay. If you don't have it, then don't sign up to pay it - because you likely will.

Silvia Leiva CreditAllianceGroup 866-454-5044

CHARGE!!!! OFF!!!!!

Have you been told by a creditor that your debt is about to "charge-off"? Did the bill collector make it sound like you will be ruined financially if you allow this catastrophe to happen? If you're behind on your bills, unable to keep up with payments on your credit cards and other debts, sooner or later you will hear a creditor representative threaten you with the dreaded "charge-off." So what is a charge-off anyway? What are the consequences of this mysterious event?

What banks and bill collectors call a "charge-off" is the point at which the creditor writes off the account balance as a "bad debt,” which is around six months of non-payment. Once “charge-off”, the creditor no longer shows the account as an asset. You still owe the money, of course, and will certainly make continued attempts to collect. The creditor is forced by the rules of accounting to zero out the debt on their financial ledgers. For causing this loss, they will punish you by placing a derogatory mark on your credit report. A "charge-off" is a serious negative mark, but it is not the financial ruination that debt collectors would like to have you believe.

Does the prospect of a charge-off mean you should panic if you have no way to pay the bill? No! Too often, bill collectors make a charge-off sound so bad, and they apply so much pressure, that people cave in and make payment commitments they cannot keep. Collectors usually demand payment via post-dated checks, and this frequently leads to bounced checks and even worse financial problems. Most of us are brainwashed by the banks and media on the subject of credit. Sure, good credit is important. But committing to payments you really can't afford just to preserve your credit is like watering the lawn while your house is burning down.

Here are a few simple rules to follow when trying to avoid a charge-off that hasn't happened yet:
* Don’t be intimidated or threatened by pre-charge-off collection tactics. Keep a cool head and don't take it personally when collectors try to get under your skin.

* Call your creditor to find out the minimum payment necessary to avoid the charge-off, and subsequent payments to keep the account current going forward. Don't commit to this payment (or series of payments) unless you're sure you can follow through.

* Negotiate a lump-sum settlement at 50% or less if you have the resources, or a plan for monthly payments that you can live with.

* Do not allow bill collectors to talk you into using post-dated checks, or providing your checking account details over the telephone. Instead, make payments via cashier's check or money order.

* Do not make payments based on a verbal arrangement. Get the deal in writing and signed by a creditor representative who has authority to approve the workout plan.

What should you do if you simply don't have the money to rescue the account from charge-off, or if the account has already been charged off by the creditor?

* Take a deep breath and relax; the sky won't fall on your head just because you had a charge-off.

* Realize that you still have an opportunity to resolve the matter by dealing with the original creditor or the collection agency assigned to the account.

* Negotiate a lump-sum settlement with the creditor or collection agency. Again, aim for 50% or less, and ask for the charge-off to be deleted from your credit report as a condition of the settlement. (Most creditors will not agree to this, but it's worth asking anyway. Do make sure that they will update your credit report to show that the matter has been resolved and the account has been satisfied.)

* If you can't work out a deal with the collection agency assigned to your account, then wait until it goes to another agency! Eventually, it will either be assigned or sold to an outfit that you can deal with to get the matter cleared up.

*Enlist the help of a Debt Management Program. To help pay off the bills you owe at a fraction of the cost. They cannot stop charge-offs but they can remove by settling the dent later.

To sum up, a charge-off is not the end of the world. It should certainly be avoided if possible, but not at the risk of making things worse by committing to payments you're not sure you can keep up with. Just remember that the creditor doesn't want to see a charge-off any more than you do, so use that knowledge to your advantage in working out a mutually acceptable arrangement. Get everything in writing, don't disclose your checking account details, and follow up to make sure the creditor reports the matter correctly on your credit report. You'll find that it's easier than you think to resolve a charge-off situation before it happens, or clean it up if it's already taken place.

By; PG at CreditAllianceGroup

Buried Alive

How to get out from under that mountain of debt.

Polonius is the guy in Hamlet who famously warned: “Neither a borrower nor a lender be.”

Fortunately, he wasn’t living in America. If he were, he’d be appalled at what’s going on today. Based on 2007’s consumer debt numbers, the average American owes around $8,500 (excluding mortgages) — and almost half of that is high-cost credit card debt.

This isn’t a great way to live: It means your ends don’t meet, you’re spending too much, and you don’t have adequate emergency reserves. In fact, if you were to charge $5,000 on your credit card every year and make only the minimum payments over 30 years, you’d have blown nearly $1 million in interest fees — and you’d still owe some $74,000! Basically, people with loads of debt probably aren’t managing their stuff right. But it’s not too late.

Here are some tips to get you to that heavenly land of zero debt:

• Borrowing your way isn’t the way to go. You know those ads about “bill consolidation” interrupt your favorite TV shows? What are they all about? You may lower the interest rate, and if you’re a homeowner, you may get a tax deduction. But here’s what usually happens: you turn six small debts into one big one. Then, guess what? Those other debts come back, big time.

• Size up your debts. Lay it all out—how much debt, how much it costs (interest rate), where it came from. Separate the “good debt” (if any) from the bad debt.

• Roll up your sleeves and make a payoff plan. Pay off your debts with the highest interest rates first, then go on down the line. Cut costs. Get agreements. You aren’t the first and you certainly won’t be the last — it can be done.

• Tear up those credit cards — the best way to stay out of debt is to make it harder to get into debt! Keep only the cards you need. If you absolutely must have a credit card, pay it off in full every month so your $60 shoes don’t wind up costing you $350.

Remember, not ALL debt is bad. Sometimes, it makes sense. If you’re buying a home (the American dream, right?) or an asset that will appreciate, debt is okay. Bad debt comes from spending money on stuff you don’t have—and, quite possibly, don’t need. You’re just digging yourself deeper.

Lane Watson, Negotiations Manager (214) 317-4060

Why Keep a Savings?

Even when you’re planning for a job change, having a safety net of cash set aside to help through the transition is a good idea since there can still be a few weeks where you may not receive a pay check. The last thing you want to do is to find yourself unprepared and have to rely on high interest credit cards to get you through.Start by creating an emergency fund as soon as possible. It’s always good to have an emergency fund. You should focus on keeping this savings in something relatively liquid such as a savings account or money market so that it’s easily accessible if you need it.

Client Services Group Rep. Cristina Gomez

BECOME A SAVVIER SHOPPER.

Have you ever gone to the store to get a new pair of walking shoes and you came home with a new pair of pumps, strappy sandals and a great pair of winter boots just because they were on sale? Was there a 50-percent-off sign in the mall that you just couldn't resist so you bought those $60 jeans marked down to $30—only to find they don't really fit well? Last time you and your best friend went shopping, did you buy something frivolous just to keep her company in the checkout line?

Admit it. You've probably done all of these things. Two-thirds of all women's purchases are unplanned, according to Paco Underhill, a shopping sociologist, whether they're made in the grocery store or at a chic boutique. Often we buy because we're looking for a pick-me-up or we want to reward ourselves. Or, it's because a sale looks too hot to pass up, or because we're shopping just for something to do—not because we need an item. Whatever the motivation, when you put all these shopping trips together, you've got a serious dent in your savings. You may even be putting yourself and your future in financial jeopardy. That's why saying no to impulsive, recreational and even compulsive purchases is so important.

By learning when not to shop, you'll also save a huge chunk of time. If you total up all the minutes the average woman spends in the stores, surfing the net, reading catalogs and watching shopping channels each year, it adds up to an average of 146 hours, according to The Bureau of Labor Statistics. That's more time than we spend reading or cleaning the house, and as much time as we spend cooking. If you rechanneled even half that time, say, into a workout at the gym can you imagine what the results would look like?

Understanding why you shop can help you get a grip on all this excess buying and help you focus on getting the best deals on what you really need, when you need it—like when your hard drive crashes and you've got to unexpectedly replace the family PC.

For savvy shoppers who know what they want and why they want it, it's never been a better time to bargain hunt. Thanks to manufacturers' ability to get new goods into the stores several times a year, retailers (both bricks and mortar stores and Internet sites) are motivated to move inventory as fast as possible. That means discounts, coupons, rebates and mark-downs galore. Sometimes you can even negotiate a better price right on the spot. Nothing is more satisfying than knowing you were smart enough to get a good deal on something you really need. Buying sale items on impulse, however, simply means you spent money needlessly, even if it's less money than you would have spent if you paid full price.

By Christina Baker

Four tips to help you start a budget

As mundane as it sounds, you may be surprised at what it reveals about your spending habits. Knowing precisely what you earn, spend and save is also the first step in meeting long-term financial goals.

"Once you start putting a pen to paper, all of a sudden you see where your money is going. Otherwise, it's hard to know where to start," said Lisa Kirchenbauer, a certified financial planner and president of Kirchenbauer Financial Management & Consulting in Arlington, Va.

There's no single method for calculating a budget, but a few key points will help you capture a better snapshot. Here are four tips to get you started.

Find a method that suits you

There are plenty of ways to track your spending. In recent years, numerous online tools have emerged to help people analyze and manage their finances. Software or even a straightforward Excel spreadsheet can assist when tracking spending.

But ultimately a simple pen and notepad may be the most useful starting point. Carrying a pad can help you record those small purchases that may not always be planned -- perhaps you had no choice but to incur an ATM fee, or decided to buy several newspapers declaring Obama victorious in the presidential election. Such incidentals can add up and be hard to track if not done in the moment.

Another easy way to get a spending snapshot is to review credit or debit card statements. All told, you should be able to get a well-rounded picture of your cash flow.

Separate fixed and discretionary spending

Identify which costs are fixed and which are not. This will make it easier to see where you can trim spending if needed, said Michael Kresh, a certified financial planner and president of M.D. Kresh Financial Services Inc. in Islandia, N.Y.

Fixed costs include items such as rent or mortgage, utilities and groceries. These are bills that you may be able to trim, but can't entirely cut.

Nonessential spending includes eating out, cable tv packages and gifts; this is the area where you'll probably be making the most changes.

Track all of your expenses, especially cash purchases

Forgetting to factor in ATM withdrawals is a common mistake -- even though it can account for a big chunk of your spending. Weekly withdrawals of $100, for instance, tally up to more than $5,000 a year.

"If you have money in your pocket, you tend to spend it without knowing where it went," Kresh said.

To keep closer tabs on where your money goes, use your debit card whenever possible and keep ATM visits to a minimum, Kresh said.

Also consider expenses that may not occur every month -- such as holiday gifts or car repairs. It's easy to forget these occasional costs if you're only looking at one month.

To get a more realistic sense of your expenses, many financial planners suggest looking at spending over a three-month time span and taking an average. This will enable you to set a more accurate target for monthly spending in a variety of categories.

Identify where you can trim spending

Chances are there are places in your discretionary spending where you can trim or make cuts. Do you really need that expensive gym membership, or can you find a cheaper alternative?

If that's still not enough, consider ways you can scale back spending on fixed spending -- such as utility bills, Kresh said.

Once you've created your budget, consider whether you're setting aside enough to meet long-term financial goals? Keep in mind that saving should be a part of your financial budget. If you treat savings as an expense, you'll be less tempted to spend that money on non-essential items.

In the end recognize that a budget is meant to be a guide to help you live within your means. While you'll want to be disciplined in tracking your spending, recognize that unexpected events will arise that may throw you off course. The key is to get back on track as soon as you can.

Client Services Group Manager; Donna Millen

The Old Swiss Bank Account Ain’t What it Use to Be

By IsaBella September 18, 2009

Due to international pressure to remove bank secrecy, Swiss bankers are looking at implementing a withholding tax on earnings that are generated by foreign investors.

“The model would generate tax revenues while respecting the privacy of bank clients and it would represent an efficient alternative to a system of automatic information exchange,” URS P. Roth, chief executive of the Swiss Bankers Association, said at a news conference on Thursday.

Mr. Roth stated the tax system would include dividends, income from collective investments and capital gains. It would apply to private individuals as well as legal entities. It will also be more wide sweeping than the new European Union savings-tax directive that is still in the planning stages. This will eliminate the risk of criminal prosecution or civil sanctions, the banking association said. The Swiss banking system, which is the largest foreign banking center in the world for foreigners, has been under attack by the United States and other countries due to the worldwide financial crises. The Swiss realize that they must make concessions to avoid international sanctions.

Author Bio: IsaBella, Senior Lead Credit Specialist at Credit Alliance Group 866-540-3134

Debt Settlement Company: Going for the Right One

Debt Settlement can give you the freedom you need in this troubled world. Current cost of living has been on the rise since major global matters such as oil price increase tremendously affect the economies of nations. Local price of goods shoot up and prices of other basic commodities have been jacked up as well. Those who don’t have sufficient money end up borrowing money just to make ends meet. Some apply for loans—car loans, house loans, educational loans even if sometimes some don’t really have a solid plan to deal with their debt settlement. That’s when the situation gets worse.

For those who are not that too keen on applying for loans, they resort to credit cards to purchase some needs when payday is still a couple of weeks away, or there are no ready cash at hand at the moment. For a bit of “trivia” here, it was recorded that purchases made by Americans using their credit card amounted to a staggering $1 trillion back in 1999. And to think that during those days times aren’t that tough compared today. Debt settlement has then been a perennial problem with those who are really laden with lots of debts.

There are people who are bent on considering seeking professional help from debt settlement companies which they believe are well competent and well experienced to help them deal and get through with the financial crisis they’re going into. So for those who are bent on hiring the services of a finance or credit specialist from a debt settlement company, they should study carefully to whom they will entrust their financial situation. They should be properly informed about the company’s background because this is after all a serious matter.

Never get the services of anyone or any company without first doing your homework. Do not be hasty with your decision concerning your debt settlement by heading out to the nearest company and rushing on hiring their services. You might be putting yourself in a situation that will not prove to be beneficial for you and for your financial status.

Upon coming face to face with a representative from a debt settlement company, prepare to inquire the person about the following important matters:

• Is your company accredited by The Association of Settlement Companies or TASC? There are bogus companies out there and of course you want to do business with a legitimate one. An accreditation from TASC will guarantee you that you’re dealing with a reliable company.
  
• How much are you going to charge me for your services? No more free lunch today. So ask how much will be the service fee in return for helping you deal with your debt settlement. Money is very important for you at this precise moment so better know how much it will cost you.
  
• Does your company have this certain service guarantee? If you receive a positive answer, asked for some detailed explanation and see if you could truly benefit from it.
  

There will always be ways to successfully deal with your debt settlement. You just have to find out for them and have the best one work for you.

Sr. Credit Officer Ben Yaffe

What Are the Positive Ramifications of Debt Settlement?

Many different good things can come from doing a debt settlement with a good reputable company. Some of the best things can happen to a person that chooses to use this program as their route out of debt. Things such as having a positive impact on your credit along with learning how to handle your money better and avoiding bankruptcy are just a couple positives about debt settlement.

For those of you who do not understand what a debt settlement is then simply put, the person who was assigned by the debt settlement company will work with your creditors to get them to settle for a lower amount that is to be paid on the bills you turn in for your debt settlement.

Most of the time the bills are settled for up to fifty percent less then what was originally owed. How great is that! Once the debt has been paid in full to the creditor the account will closed and marked paid on your credit report. Should you be someone who does not have very good credit then this will help your situation as it can have a positive impact on your credit.

Another thing a debt settlement program can do for you are to help steer you clear of a bankruptcy! You may be one huge financial rut but doing the program that was designed specifically for you will help you to gain control of your life and your finance once again. These programs are designed to help you improve your budgeting and your finances. Everyone needs a little bit of help in those areas; if you didn't then you wouldn't need the help of a debt specialist.

Debt settlements are becoming a bigger and more utilized thing as the year goes on. Millions of satisfied customers have been reported and have become debt free with the help of their amazing program specialist. Be sure to check with all companies so you can find the best one for your particular situation. Check into all certifications and credentials to know that you are getting the best program for particular situation and your budget.

By the way, by researching and comparing the best debt settlement services in the market, you will be able to determine the one that meet your specific financial situation. Nonetheless, it is advisable going with a trusted and reputable debt counselor before making any decision, this way you will save time through specialized advice coming from a seasoned debt advisor and money by getting better results in a shorter span of time.

Sr. Credit Officer Demond Smith

How to Budget Your Money

Before you can do any financial planning, it is important to examine your income and your expenses. When you spend more than you earn, you are heading for financial disaster. Calculate every cent you spend daily, no matter how small it is. Everything adds up.

1. Calculate your regular income. Count income from wages, tips, interest on savings, child support payments, and any other source of income. Include that of your spouse also. Also consider more variable sources of income. Do you receive regular overtime or a large bonus? Is it guaranteed? Can you calculate average amounts by using past bank statements or pay slips? Try to be accurate and get to an average 'net' (after taxes) income.

2. Identify your expenses. First identify your large, predictable expenses. For most people these will be housing, taxes, insurance premiums, and utilities. Then for at least one month, record every daily expense no matter how small the amount. Save all receipts and expenses for one month. Ideally, you need to carry around a pen and small pad with you for one full month. Write down every amount you spend, what it is for and where you spend it. Many people underestimate these small but frequent expenses if they don't keep careful records. Also try to estimate a budget for large, infrequent expenses. These are things like house repairs, insurance deductibles, and purchases like cars and computers. Convert these from estimates like $12000 every 10 years, to $1200 per year or $100 per month so you can compare them with the other expenses and income.

3. Compare income to expenses. Money coming in (income) and money going out (expenses). If your expenses are more than income, you need to take action! Which of the expenses identified above will be easiest to reduce?

4. Pay off debt and build savings. It is important that you commit to eliminating your debt as it will be difficult at first, but will get easier.

Sr. Credit Officer, Chris Garner 214-329-9149

Credit Card Debt Help

Our country is fast becoming a nation of debtors with the average American family in possession of about 10 cards, and excessive credit card debt. Banks and lenders are all too willing to extend and expand credit when times are good, however, at the first sign of trouble credit card limits are reduced and interest rates go rise tremendously. Generally no one is there to offer credit card debt help, the consumer with excessive credit card debt basically stands alone. A credit card contract is possibly the only type of contract where one party (the creditor) can unilaterally change the terms of the contract without the other party (the consumer) agreeing, or in some cases, even knowing about the change. It's staggering what they get away with.

Not only can excessive credit card debt pose a financial burden, it can also be a source of emotional and psychological suffering. The number one subject matter of family arguments and divorce for married couples is money and excessive credit card debt. A credit card debt management plan could very well solve not only financial problems, but family problems as well.

The process of creating a credit card debt management plan to reduce credit card debt does not have to be painful or scary, it's quite straightforward actually, and can boiled down to one simple rule to reduce credit card debt: You must have a realistic and budged plan to repay the loan or credit card charge before making it. Discipline is the key to credit card debt management. Of course, many consumers who are reading this section may already have excessive credit card debt, and so a discussion on credit card debt management may be called for.

CREDIT CARD DEBT MANAGEMENT

KNOWLEDGE IS POWER: The first step in crafting a credit card debt management plan and to get credit card debt help and reduce credit card debt is to understand the problem and creating a plan to solve it. At some point, you must run your personal finances like a business manages funds. There must be an understanding of how money is running through the system including the gross amount coming in, the fixed expenses, the variable expense, the discretionary expenses, and finally the disposable income. Understanding the money flow is the key first step to credit card debt help and reduce credit card debt.

MODELING: In order to properly evaluate whether a certain purchase, or certain loan is "affordable" or not is a matter of modeling what your finances will look like after the prospective purchase. Obviously, if you are paying cash for something, and the cash is sitting ready to go, the purchase will fit into your budget. However, if you are considering financing something on a credit card, you must determine what the "new" credit card payment will be after the purchase, and how much that item will really cost over time in "real" dollars (including interest paid over time). This type of evaluation can be shocking when you realize how much something will really cost, and the credit card debt management you may need to actually pay for it.

PAYING ON TIME: After you've crafted your plan to repay the excessive credit card debt incurred for the purchase you've made, it's time to execute the credit card debt management plan. One important part of that means to pay the bill on time, so you don't even need credit card debt help. A late payment can mean a negative remark on credit, and even an increased interest rate to the "default" rate and make it much more difficult to reduce credit card debt. This type of surprise can blow your well planned purchase out of the water and cause excessive credit card debt.

PLANNING: When you pile on more monthly fixed costs to your budget, planning becomes a real key. You've put yourself closer to the line now with less disposable income at the end of the month, and therefore less margin for error. Accordingly, all purchases over a certain dollar amount must be thoughtfully planned and accounted for. The less disposable income, the more planning that is required. It is a hard way to live, so consider leaving at least a certain percentage of income as your slush money for the month which can be used anywhere as needed (avoiding the future need for credit card debt help).

QUALITY OF LIFE: If you have cut your budget down to the bone because of overwhelming monthly fixed costs well that's no way to live. It may sound like an obvious "Suzi Orman" type statement, but the more disposable income you have (because of your good planning) the happier you'll be during the month because you'll have the flexibility to buy things you want (rather than things you really need). I'm talking about impulse type purchases like ice cream, coffee, snacks, knick knacks, trinkets, etc. Nothing you really need, but fun to buy nonetheless.

Obviously much of this type of credit card debt management planning and credit card debt help comes down to organization and diligence. If you are in the fortunate position of having little to no credit card debt, congratulations...if you are more like the rest of the country, struggling with excessive credit card debt, McFarlin & Geurts, LLP offers a free consultation regarding a strategy for credit card debt help and to reduce credit card debt.

Sr. Credit Officer, Evan Cox

A Quick Summary of the New Credit Card Act

FIRST PHASE - AUGUST 2009
- Consumers receive statements 21 days before payment due.
- Card issuers must give consumers at least 45 days notice of rate hikes.
SECOND PHASE - FEBRUARY 2010
- Card issuers can only raise rates on existing balances if (1) the consumer is 60 days or more past due, (2) a promotional rate expired, (3) the consumer does not complete a workout plan, or (4) a variable rate increased because of movement in an index.
- If a rate hike is the result of a late payment, the lower rate must be reinstated after the consumer makes six months of on-time payments.

Debt Settlement - An Alternative to Bankruptcy

In its most simplistic form, debt settlement is designed to hold your creditors at bay, long enough for you to conduct a business transaction with them that will reduce your outstanding balances and close your account at zero.

Debt settlement is not consumer credit counseling. It is not intended for those consumers who do not know how to manage their money or pay their bills on time. It is simply a means of reducing or eliminating unsecured debt, in order to avoid bankruptcy or other complications. It is considered to be the first step in seeking unsecured debt relief. The bottom line is that if you can avoid a third party assisted debt relief option, you will find yourself back on your feet in a much more expeditious manner and without the hassle of the long term affect that consumer credit counseling and bankruptcy leave on your credit profile.

Because of this, the following things must happen…..and this is true of many debt settlement programs.

You must be delinquent on the accounts before your creditors will consider and recognize your hardship and negotiate your balances.

There’s no viable way around it. If you are current on your payments and not experiencing financial hardship, what reason do your creditors have to negotiate the debt that you owe? Simply put, there isn’t one.

How fast can you save your money? Once you are 90 to 120 days delinquent, they will be concerned about their ability to recoup what is owed and will likely be willing to negotiate. If you have the money available, your negotiator will be ready to negotiate that balance and move onto the next. If not, your negotiator will wait until you have accrued enough in your settlement account to negotiate each individual balance, one by one.

You do not have 5-7 years to complete a debt settlement program.

Debt settlement is a short term debt relief option, available to a small percentage of consumers. If you can come up with the money to offer your creditors a settlement on these balances in a timely manner, you may receive the benefit of eliminating your debt in months and you can get back on your feet much more quickly.

Your creditors will not negotiate the balance until you have enough money to do so.

This is a business transaction. In most cases, your creditor will not negotiate a balance until they have reason to believe that you have the funds to complete the transaction. If you can’t pay your bills now, what would make them think that you were capable of saving money toward a settlement with them? It is common knowledge that if you don’t have funds available immediately to negotiate you debt with your creditors, you’ll need to use a reliable debt management program that will put you on a structured savings plan to accomplish these goals.

Typically, settlements are estimated around 40% of what you owe, so it stands to reason that you’ll need to save at least that much BEFORE anyone can really start working on the balance.

No one should promise you settlements at ANY percentage. While most programs claim to average 40% to 60% settlements on unsecured debt, your individual history and financial hardship will likely determine what percentage of your debt is forgiven by your creditors in a debt settlement program.

This doesn’t mean that your creditors won’t know what your intentions are. In most cases, your creditors will be notified that you are experiencing hardship and need help just as soon as you start your debt settlement program.

If your creditor agrees to a settlement that is less than 40% of the balance owed, any additional funds left in your settlement account will simply be saved for the next settlement. If your settlement average is below 40%, it stands to reason that you will be out of debt sooner than planned.

Balances are to be settled one at a time.

Once you have accrued enough funds in your settlement account, your debt negotiator will once again contact your creditor to initiate negotiations.

Any reputable debt settlement company will take the time to make sure that the program is suitable for your hardship and financial situation.

Flexibility is an important factor due to the nature of “life”.

Your original creditor always has the legal right to contact you.

There’s no way around this. Some creditors will ignore the limited power of attorney that is sent to them and will keep contacting you throughout the program. Some will respect that request to cease communication with you and will start communicating directly with your debt negotiator. Regardless, it won’t be your responsibility to speak to them. It’s your job to communicate with your negotiator or customer service representative that you’re being contacted and by whom.
If and when the account has been charged off and sent to third party for collection, those calls are more likely to stop.

Once a settlement has been reached with your creditor, you must approve it.

You will be notified of any settlement 50% or less. Of course, recommendations will be made, based on what is known about your account and your individual creditor. You have veto power at all times.
If you approve a settlement, an agreement will be obtained, in writing, from your creditor, detailing the agreement and how the transaction should be made. Once that transaction has been completed, a settlement in full (SIF) letter will be obtained, in order to document and confirm that you have settled and closed this account at zero balance and that the remaining balance has been forgiven.

Sr, Credit Officer John Kendrex

How are your finances?

Take this debt quiz to see where you stand.

1. Do you avoid looking at your bills and credit card balances?

___YES ___NO

2. Do you usually pay only the minimum on your credit cards each month?

___ YES ___NO

3. Do you sometimes pay your bills late or miss monthly payments entirely?

___YES ___NO

4. Do you use your credit cards to make purchases because you don’t have the money to pay for these purchases at the time?

___YES ___NO

5. Is your paycheck already spent before you receive it?

___YES ___No

6. Do you choose the longest allowable payment period or installment plan to make major purchases affordable? (for example a car or a major appliance)

___YES ___NO

7. Have you taken out a home equity loan, to pay down your credit card debt and then ran up new debt on you cards?

___YES ___NO

8. Do payments on your debt exceed more than 20 percent of your household take-home pay each month (not including your mortgage or rent)?

___YES ___NO

9. Is your total savings account balance, for an emergency (job loss, medical expenses, car repairs) less than six months of your pay?

___YES ___NO

10. Do you spend more time worrying about your bills than paying them?

___YES ___NO

Add up your “Yes” answers and check your score below.

Total Yes Answers ______

0 -1 Congratulations, you appear to have your finances under control.

1-4 Caution, you are beginning to show signs of a debt problem. You need to take hard look at what you are currently doing and develop a plan to address the situation before your debt problem grows or becomes worse.

5- 10 Help!!! You are probably already in a high debt situation and experiencing problems. Stop what you are doing. It is not working!!! Now is the time for some tough budgeting decisions, followed by a plan of action to eliminate this debt burden, once and for all.

If you need help, call us and let us start you on the road to becoming debt free.

Glen Hamilton – Sr. Credit Officer

Government home loan agency faces cash squeeze

In Washington the Federal Housing Administration said Friday its cash cushion will dip below mandated levels for the first time, but officials insist it won't need a taxpayer rescue.

The agency, a growing source of funds for first-time homebuyers, faces mounting concerns that it will soon need a taxpayer bailout. As of this summer, about 17 percent of FHA borrowers were at least one payment behind or in foreclosure, compared with 13 percent for all loans, according to the Mortgage Bankers Association.

Rising defaults mean the FHA's reserves may sink below the 2 percent mark required by federal law. The FHA says a study being sent to Congress in November is expected to show that ratio dipping below required levels for the first time.

David Stevens, the agency's commissioner, however, said in an e-mailed statement that FHA "will not require taxpayer assistance."

The agency itself does not make loans, but rather offers insurance against default. Many borrowers are willing to pay for the insurance because FHA loans only require down payments of 3.5 percent of the purchase price.

The FHA now insures about 5.3 million mortgages, up from about 4 million three years ago.
In an effort to weed out shady operators, it wants to require that participating have a net worth of $1 million, up from the current requirement of $250,000, and undergo annual audits.

Last month, FHA banned mortgage company Taylor, Bean & Whitaker from making any more federally insured loans after it failed to submit a required financial report, raising fraud concerns.

Sr. Credit Officer, Alexis Boots

The Truth about Bankruptcy

Myth: I'll just file bankruptcy and start over; it seems so easy.

Truth: Bankruptcy is a gut-wrenching, life-changing event that causes lifelong damage

Bankruptcy: That word sends chills up the spine. If you're facing the prospect of bankruptcy or in the middle of it right now, you know it's a living nightmare. It can devastate your job, destroy your marriage and steal your peace of mind.

Kathy called my radio show ready to file bankruptcy. Her debts were overwhelming, and her cheating husband had left with his girlfriend. The house was in his name, as was all the debt except $11,000. Kathy was 20 years old, and her brilliant uncle - a lawyer from California - told her to file bankruptcy. Kathy was beat up, beat down, and deserted without help, but she was not bankrupt. When her soon-to-be ex-husband ends up with all the debt in his name, he may be bankrupt, but Kathy won't be.

Why Avoid Bankruptcy?
Bankruptcy is not something I recommend any more than I would recommend divorce. Are there times when good people see no way out and file bankruptcy? Yes, but I will still talk you out of bankruptcy if given the opportunity. Few people who have been through bankruptcy would report that it is a painless wiping-clean of the slate, after which you merrily trot off into your future to start fresh.

Don't let anyone fool you. I have been through bankruptcy and have worked with bankruptcy for decades, and it is not a place you want to visit. Bankruptcy is listed in the top 5 life-altering negative events that we can go through, along with divorce, severe illness, disability, and loss of a loved one. I would never say that bankruptcy is as bad as losing a loved one, but it is life-altering and leaves deep wounds both to the psyche and the credit report.

Types of Bankruptcy
Chapter 7 Bankruptcy, which is total bankruptcy, stays on your credit report for 10 years. Chapter 13 Bankruptcy, more like a payment plan, stays on your credit report for 7 years. Bankruptcy, however, is for life. Loan applications and many job applications ask if you have ever filed for bankruptcy. Ever if you lie to get a loan because your bankruptcy is very old, technically you have committed criminal fraud.

Most bankruptcy cases can be avoided with proper help, such as our financial counselors and the Total Money Makeover. Your Total Money Makeover may involve extensive amputation of stuff, which will be painful, but bankruptcy is much more painful. If you take the thoughtful step backward to get on solid ground instead of looking at the false allure of the quick fix that bankruptcy seems to offer, you will win more quickly and easily. I know from personal experience the pain of bankruptcy, foreclosure, and lawsuits. Been there, done that, got the t-shirt, and it is not worth it.

Donna Millen 9/11/09

How you too can save money at home.

You can easily save thousands of dollars a year with very little effort by following even a few of the cost-saving measures in the "Save Money" series. The more money-saving measures you adopt, the more money you'll save. Potential savings will vary, depending on your personal situation. See the links to the right for more money-saving ideas.

Save Money On Utilities - Electricity

· Install the new type of fluorescent bulbs in lights you leave on for long periods. They provide four times as much light and last ten times longer than incandescent bulbs. Potential Money Savings: $10-$50/yr.

· Lower the temperature on your hot water heater to between 110 and 120 degrees. It's not necessary to have it any hotter and wastes energy. Potential Money Savings: $20-40/yr.

· Find out if your utility company offers free energy audits, where they inspect your home for energy effectiveness and recommend inexpensive ways to cut energy costs, such as insulating hot water heaters, weather-stripping, etc. Just insulating your hot water heater could save you $25 a year. Potential Money Savings: $50/yr.

· Set thermostats no higher than 68 degrees in winter and no lower than 78 degrees in summer. Turn your heat down even further at night or when you're not home (unless you have a heat pump, which operates more efficiently at one consistent setting). Each extra degree in winter can increase heating costs by 3%. In summer, each degree can raise cooling costs by 6%. Potential Money Savings: $325 to $500/yr.

· Cut back on the use of your clothes dryer. Not only is it a big energy drain, it can also suck heated air out of your house very quickly in winter. Hang clothes on a clothes rack to dry and use the dryer for towels and other heavy items. Potential Money Savings: $25-50/yr.

· Use your microwave instead of your oven whenever possible and save up to 50% in energy costs for cooking. Potential Savings: $50/yr.

Save Money On Utilities - Water

· Always do full loads of laundry. A typical full load uses about 21 gallons of water. A small load uses 14 gallons. Several small loads use considerably more water than one or two large loads. Over the course of a year, this adds up. Potential Money Savings: $25-$125/yr.

· Run your dishwasher only when you have a full load. Let the dishes air-dry instead of using the heat cycle. An average dishwasher costs $60 to $100 per year to run. Potential Money Savings: $35-55/yr.

· Fix running toilets or leaking faucets promptly. A continuously running toilet can use more than 8,000 gallons of water a year. Potential Money Savings: $25-125/yr.

· Install flow restricting shower heads. A family of four can save 8,000 to 12,000 gallons of water a year. You not only save on the cost of the water, but also the cost of heating it. Potential Money Savings: $100-$300/yr.$

· Add fabric softener to your laundry at the appropriate point in the cycle instead of adding it at the end and running another rinse cycle, which can use up to 10 extra gallons of water. Figure out how much time it takes your washer to reach the rinse cycle, and set a timer so you can add softener at the right time. Potential Savings: $25-100/yr.

· Use warm or cold water for washing clothes, and always rinse in cold water. Potential Savings: $50/yr.

Save Money On Utilities - Other

· Stick to basic phone service. Extra services like call waiting and call forwarding can almost double your costs for phone services. Potential Savings: $168/yr.

· If you can live without cable television, you can save between $300 and $600 per year. If you can't live without it, get basic service only. You can rent a lot of movies for the extra $150 to $600 per year you pay for movie channels like HBO, Showtime, etc. Potential Money Savings: $144-700/yr.

· Plant perennial flowers instead of annuals. You incur a one time cost and enjoy the flowers for years, with little additional effort or money. Annuals, on the other hand, require an outlay of cash and effort every year. Potential Money Savings: $100-$300/yr. · If you live in a cold region of the country, heating costs are a major expense. Tips on shaving some significant savings off your heating bill are covered in Save Money on Heating

By Christina Baker , September 11, 2009

Budgeting

Creating a budget is not the most exciting thing in the world to do, but makes a big difference in keeping your financing in order. Once you are done, you will be able to see how much money is coming in, where it is all going. This will be able to help you determine what you need to cut out and also help in paying off some debt faster. It does not take long. You can also try using the below steps to help you get started.

1. Gather every financial statement you can. This includes bank statements, investment accounts, recent utility bills and any information regarding a source of income or expense.

2. Record all of your sources of income. If your income is in the form of a regular paycheck where taxes are automatically deducted then using the net income, or take home pay, amount is fine. Record this total income as a monthly amount.

3. Create a list of monthly expenses. Write down a list of all the expected expenses you plan on incurring over the course of a month. This includes a mortgage payment, car payments, auto insurance, groceries, utilities, entertainment, auto insurance, everything you spend money on.

4. Total your monthly income and monthly expenses. If your end result shows more income than expenses you are off to a good start. This means you can prioritize this excess to areas of your budget such as paying more on credit cards to eliminate that debt faster. If you are showing a higher expense column than income it means some changes will have to be made.

5. Make adjustments to expenses. If you have accurately identified and listed all of your expenses the ultimate goal would be to have your income and expense columns to be equal.

6. Review your budget monthly. It is important to review your budget on a regular basis to make sure you are staying on track. Compare your first few months. This will show you where you did well and where you may need to improve.

Cristina Gomez: Client Services Rep

The Facts about Bankruptcy

When a person or a company finds themselves in so much financial trouble that they don’t think they’ll be able to handle it, they have the option of declaring bankruptcy. Legally speaking, declaring bankruptcy is the same as declaring that one cannot pay creditors. It gives debtors the chance to settle debts for what they can. The idea is to give those individuals declaring bankruptcy a clean financial slate and the ability to start over.

Chapter 7 & 13
In the United States, there is a set of laws governing bankruptcy known as the Bankruptcy Code. The code is divided into chapters, six of which describe specific types of bankruptcy:

• Chapter 7: basic liquidation for individuals and businesses
  
• Chapter 9: municipal bankruptcy
  
• Chapter 11: rehabilitation or reorganization, used primarily by businesses, but can be used by individuals with substantial debts and assets
  
• Chapter 12: rehabilitation for family farmers and fishermen
  
• Chapter 13: rehabilitation with a payment plan for individuals with a regular source of income
  
• Chapter 15: ancillary and other international cases

For individuals, Chapter 7 is the most common type of bankruptcy, followed by Chapter 13.
Choosing a Chapter 7 bankruptcy can be a difficult choice: as part of the proceedings, the debtor gives up their assets. Some assets are exempt, and it’s possible to make arrangements to keep a car or home that the debtor is still paying for. Bankruptcy is not intended to be anything but a last resort, and Chapter 7 can be especially difficult to go through. If a person considering Chapter 7 has much in the way of assets or is involved in a corporation and partnership, filing for bankruptcy under Chapter 11 or 13 may be much better. Chapter 13 offers the opportunity to create a repayment plan: a debtor’s assets aren’t liquidated because they are working to pay off debts rather than have them simply discharged.

Natasha Hopkins: Client Services Rep

Thieves steal your Identity

By Lucinda Ramos, September 11, 2009

Here are a few tips on how thieves steal your identity.

• They get information from businesses or other institutions by:

stealing records or information while they're on the job
bribing an employee who has access to these records
hacking these records
conning information out of employees

• They may steal your mail, including bank and credit card statements, credit card offer, new checks, and tax information.
• They may rummage through your trash, the trash of businesses, or public trash dumps in a practice known as "dumpster diving."
• They may steal your wallet or purse.
• They may complete a "change of address form" to divert your mail to another location.
• They may steal personal information they find in your home.
• They may steal personal information from you through email or phone by posing as legitimate companies and claiming that you have a problem with your account. This practice is known as "phishing" online or pre texting by phone.

Author: Lucinda Ramos, Client Relations at CreditAllianceGroup (886) 543- 9073

11 Dumb Ways to get in Debt

Donna Millen on September 11, 2009

There are many reasons why people fall in debt, such as medical issues, school, starting a business and purchasing a home. Some situation you do not have much of choice and the debt for a good reason, for example if you get in debt due to school it’s fine because in the long run you will be able to make up for it. However there are some bad reasons why many fall in debt, the list below illustrates the top 11 …well not so good reasons to fall in debt.

1. Leasing a Car – You are basically paying several hundred dollars per month in leasing only to return the car after a few years. After spending tens of thousands of dollars what do you have to show for it?

2. Purse and Shoes obsessions (or any other obsession for that matter) – Unless you are purchasing collectible items that increase in value, this is a pretty dumb way to get yourself in debt.

3. Financing a Car – If you cannot afford that $50,000 car why do you think you can afford to finance it? A car loses about 25% of its value as soon as it is driven off the lot. You will be stuck making payments for the next 5 years or longer on something that is losing its value faster …than Wall Street came down.

4. Using Credit Cards – So you want something you can’t afford, you put it on the credit card only to pay 19.99% interest on the item. Now the $150 purchase ends up costing you over $300 in a year. Smart!

5. Financing latest gadgets – If you cannot afford the newest Apple Mac books and other electronic gadgets, not a problem, Best Buy will finance it for you! Now you can enjoy the latest gadgets for the next year and pay for it for the next five years. Three times what it was worth, GREAT DEAL!

6. Having expensive hobbies – Hobbies tend to become money traps. We can’t afford to blow money on all of our hobbies, so we usually pick our favorite one (at the time) and waste all of our money on that. (Collecting comic books, DVDs etc)

7. Spiraling debt – You decided to take the great Best Buy financing offer for the newest LCD HD 52” TV, since you are at it why not get the newest Blue ray player with that….oh and do not forget the home theatre system……oh and the DVDs….etc…and the debt keeps growing …the spiraling debt!

8. Giving family and friends a loan or co-signing for a loan – Want to ruin your relationship with a family member or friend? Just give them a loan or even better co-signing for a loan, not only will you get rid of them but you will be left with a nice chunk of debt as a thank you.

9. Upgrading stuff - Why don’t you just upsize your fries and drink for 58 cents? What’s another $2/month to get the VIP gym membership? If you are already going to spend $200 on a cell phone, what’s another $100 to upgrade to a better one? And another $5/month to get 100 more minutes on your cell phone plan? Little things add up!

10. Playing the lottery or gambling – You are more likely to get hit by a lightening than winning the lottery…and that’s all I have to say for this.

11. Rent-to-own furniture and appliances – You can’t afford a brand new leather couch? Just Rent-to-own it! You don’t have $1000 in cash but you can do $100/month for the next 3 years. What a great deal!

Is staying at home affordable for you?

Consider the change in income and expenses and take precaution so you're protected in case things don't turn out as planned. In July, the unemployment rate stood at 9.4 percent, and 247,000 jobs were lost. Few jobs are truly secure, and the decision to give one up shouldn't be taken lightly.

Look Over Your Financial Situation

If you have a lot of credit card debt —in the thousands, not the hundreds—you're probably better off staying in the workplace, or at least not pulling out completely. It's not smart to give up an income when you're deep in debt. You don't need another thing to worry about.

One should have at least six to nine months' worth of expenses put away in a liquid savings account before even considering giving up a full-time job. Twelve months' worth is even better, particularly because you're dropping down to one income. (One way to easily beef up your emergency fund is to practice living on one income while you're pregnant. Bank the other, and you'll have quite the cash cushion at the end of nine months.)

Be as realistic as you can about the job security of the partner who is going to continue to work outside the home. You can never be absolutely sure that your job is secure, look for clues that it might not be, including other lay-offs, a restructuring of departments, a reduced workload or major cuts in the company's spending.

Do the Math

Start with your fixed monthly expenses, including the mortgage or rent, your car payments and insurance, your utilities, other insurance payments (life—which you need when you have children—homeowners, disability), savings and any debt repayment, like student loans. Then add in your flexible expenses add those together, and that's about how much you'll spend each month.

You may need to scrap your plan to stay home, or at least consider other options, like staying on with your company part time or working from home a couple days a week.

Benefits

You need to make sure that your spouse's job can provide comparable benefits.

Think Ahead

One day you will want to return to work so, keep your skills sharp by taking classes when you can, doing volunteer work in your field or staying on top of any changes to the industry. Do not forget to network

Author: S. Leiva, CreditAllianceGroup, (866) 454-5044

Credit Card Shock

I’m shock over the number of credit card companies offer multiple credit cards to the same person. Right when they get a card paid off the company sends a pre-approved offer to that person. Or better yet, they send pre-approved offers to a person that has a card with them, do they not review their records, but maybe they do and know the persons spending habits and issue another just for that reason. In my line of work, we have clients that may have more than 6 or 8 cards with the same credit card company and they are all at the highest credit limit amount. That’s not helping public or the economy, the credit card companies don’t actually want you to pay off your cards; they want you to carry a balance, it’s the temptation. More tricks are to raise your credit limit in hopes that you spend more, and if you have 2 or 3 cards from the same company along with a checking account, that company can withdraw directly from your checking account your monthly payment and surprise, you’re overdrawn. This person’s credit is out of control “again” and needs to enroll into a Credit card debt settlement company, just by asking Credit Alliance Group for guidance. First use a Debt Calculator to get in touch with your financials and prepare you for what it will take to have a debt free lifestyle again. Paying off your debt can be a great feeling. But you have to be careful; you must change your mind-set and your money habits. The best practice is to pay off your debt, and then do what you can to avoid getting back into debt.

Author: P. Grainger, at CreditAllianceGroup 866-454-5044