BUYERS BEWARE RETAILERS ARE OUT TO GET YOU … TO SPEND AGAIN

Retailers are making major changes from the way they have gone about business in the past, when customers were aplenty and the spending seemed to never end … ahh the good old days … but the times they are a changing as the song goes.

Retailers reeling from the pain of a holiday season of shoppers who cut spending by the most dramatic amount in at least 39 years, have been scrambling ever since trying new strategies and concepts to bring customers back to the register.

They are cutting out marginal suppliers creating a leaner inventory and hiring outside experts to analyze where they can increase sales, examining methods specific to their particular markets, as well as targeting the clientele that is still buying and making new roads to insure customer satisfaction shoppers have never seen before.

Primarily this is actually good news for consumers who will see an array of products at lower price points, from the ordinary supermarket groceries to designer brand names you could only put on your wish list in the past. Pricing consumer goods for debt ridden and an anxious customer base is the primary goal in hopes of bringing the customers back in.

Luxury retailers such as Neiman Marcus are getting creative too, by eliminating some vendors and focusing on serving its best customers. They are trying to retrain it’s customers to buy regular-price goods by hosting more frequent smaller private events for groups of 20 to 30 clients. Weaning customers off discounts is a big challenge for the industry because consumers have gotten so used to them.

As shoppers simply stopped buying, stores were forced to discount as much as 75% in some instances even before the holiday season began; resulting in the weakest season since at least 1969, when the ICSC index began keeping retail statistics.

Alas my words of caution for you the consumers struggling with debt, up to your ears in debt, just plain tired of debt, beware of the friendly vendors who are out there inviting you to come back, because if you’re on a debt diet and trying to stick to it, you just remember … the retailer is out to get you … to spend again! Don’t get yourself stuck in debt, or worse yet find yourself having to consider debt cosolidation unless absolutely necessary.

Great ways to avoid credit card debt

Credit card debts are becoming the most common forms of debts today. The process of settling the credit card debts is much simpler and hence should be settled faster.

Debts and credit cards

Credit cards are the most essential financial tool provided to consumers today. Immense competition in the world of banking and financial tools has resulted in easy availability of the same. Having multiple credit cards is no big deal with 0% charges and no balance prerequisites for getting a credit card. But this facility is often used in the wrong way by consumers. The benefit of paying later and buying now is an appealing prospect but leads to high interest payments with bills piled. Credit cards are used for payments of utility bills, medical bills, grocery bills and all kinds of bills. These pile up and result in debts. If not paid on time the high interest rates can make the financial situation worse. Hence avoiding debts of credit cards is the best way out.

Avoiding credit card debts

The best way to avoid debts on credit cards is to limit the use of the same. Also reducing the number of credit cards is another way out. Generally if card has overdrawn its limit then another card is used. This results in a repetitive chain of debts which are never ending. Hence by reducing the number of credit cards and trying to make payments by cash are the best ways to avoid debts on the credit cards.

Settling smaller bills

The credit card debts result in poor credit rating which can be a problem for future financial investments and loans. Credit rating can be improved through the settlement of smaller bills. Usually the smaller bills are piled on because they are less in amount and the general conception is to settle these all together. But by settling smaller bill amounts the credit rating can be improve and also unnecessary interest charges on these bills can be saved. Settlements of smaller amounts of bills are the best ways to avoid credit card debts.

Negotiations for credit card settlements

Even though avoiding debts are the best way out of credit card debts there are unavoidable circumstances like illnesses and loss of employment which leads to the same. In such circumstances negotiations are the best way out to avoid further debts. Negotiations can lead to reduction of the credit card debt. The amount can sometimes be reduced to almost 50% which is a benefit only on credit card debts. It helps to improve the credit rating and the remaining amount of the debt can also be paid in installments.

Using common sense is also always a very good option.

Avoid Credit Card Debt - Consider Hidden Credit Card Costs

The Fixed-Rate Credit Card That Isn’t: When you take out a fixed-rate mortgage, you know what the rate will be for the entire life of the loan. When you take out a fixed-rate car loan, you know that the interest rate will be the same on the first payment as the last. When you take out a fixed-rate credit card, it’s an entirely different story. Severe credit card debt can be avoided if you’re careful.

Variable-Rate Cards: Just like with mortgages, a variable rate means the interest rate is tied to another interest rate in the economy, and will change if that interest rate changes.

Every card issuer that offers a variable-rate card is free to decide how it’s going to compute the rate. One, for instance, may determine the rate by adding 5 percent to the prime rate as listed in the Wall Street Journal. Another may choose to tie the rate to the federal discount rate.

Most variable-rate cards change rates quarterly but some do semiannually-it is up to the card issuer to decide. Information about how the variable rate is determined, and when it changes, has to be disclosed up front in applications and solicitations. According to CardTrak.com, most variable-rate cards have interest rate “floors” below which the interest rate cannot go, even if the index rate goes lower. If rates dip very low, as they did in 2001, consumers may be better off getting a lower-rate card elsewhere than sticking with a bottomed-out variable rate.

Tiered-Rate Cards: A few credit card programs offer tiered rates: The interest rate depends on the balance on the card. For example, a tiered card may charge 17 percent on balances up to and including $1,000, and 13 percent on balances above $1,000. This rate structure is designed to reward higher balances and make more money off lower balances. Tiered-rate cards are usually not good deals because they “reward” customers for going deeper into debt.

Different Rates for Different Balances: Many cards now charge different rates for different balances. There may be a lower rate for the balances you transferred from another card during a promotion, for example, or another rate for cash advances. If you have balances subject to different interest rates, your issuer will print an “effective” rate on the statement, which is basically an average of the different rates you are paying.

A caution: All issuers allocate payments to the lowest-rate balance first. That means you’ll be wiping out the cheapest balance first. This is directly contradictory to the most common advice for paying off debt, which recommends you pay off your highest-rate balance first. Consider yourself forewarned.

Teaser Rates: 5.9 percent or even 0 percent interest sounds great. And it can be. But remember: Card issuers would not continue to offer teaser rates if they weren’t profitable. Many teaser rates just don’t last that long. Six months sounds like a long time, but by the time you’ve completed the transfer (which can take a few weeks), you may not benefit from the new rate that long. And if you don’t find a new card or negotiate a better deal, you may be stuck with a higher rate than you need.

So which do you choose: a fixed-rate, variable-rate, or tiered-rate card? It really doesn’t make a difference whether you choose a fixed-rate or variable-rate card, since neither is completely stable. So far, there have been no studies that tell whether fixed or variable-rate cards change rates more dramatically. We think it’s a matter of finding a bank that has a general reputation for charging low rates (fixed or variable) and hoping they don’t decide to suddenly change their marketing strategy. Whatever you choose, you are taking something of a chance. The exception are cards from Arkansas banks, where state law keeps rates very low. If you can get one of these cards, you know the rate will be good as long as that law’s in place!

When Your Account Changes Hands

It’s true that the big banks keep getting bigger-at least in the case of credit card issuers. Credit cards are so profitable for banks that “do it right” that many of the larger banks want to get more and more customers. Sometimes, they’ll just buy them from other issuers.

Card issuers have to give you fifteen days’ advance written notice before changing the terms of the credit card. This is also true if a bank buys another bank’s cards and raises any of the costs. In addition, individual states may have laws that cover banks located in that state.

If, for instance, your new credit card issuer is located in Delaware or New York, you will have extra protection against a sudden rate hike. Delaware and New York laws require issuers to give customers thirty days’ advance written notice before raising the rate, and also require banks to give customers the opportunity to pay off the card at the old terms and surrender the card.

Online solutions for non profit credit card consolidation

There are options like non profit credit card consolidation online and through regular services also which help in eliminating all credit card debts. All of these services have one common goal; to essentially save a consumer money.

Online credit card consolidation

There are various companies which provide online non profit credit card consolidation so that debts can be settled and the consumer can get good credit rating. These companies function through online modes and the entire process from application to the settlement of debts is done online. Contacts are made through email and personally when required. These non profit companies check the credentials of the clients like their home addresses, employment status and other verifications and then begin the process of consolidation.

Benefits of online consolidation of credit cards through non profit companies

The online option of settlement of debts and credits is a very useful option. This process is much faster than the regular consolidation companies. The verification of the company and comparison of the services offered can be done in minutes and that too in the comfort of the house or office. There are more options to choose from and the time taken for the same is very less. Moreover these non profit credit card consolidation companies also give the benefit of free services like credit counselling which helps in better management of debts. There is no fees charged for the service and the users in dire strait can avail these services to get out of debts. Consolidation of debts against the credit cards is done with the same benefits like low interest rates and monthly repayment options.

Other non profit options for settling credit card debts

Apart from the non profit credit card consolidation there are also options like credit counsellors who help in negotiating with the banks and the service providers. There are expert negotiators who settle debts for their clients and also help in reducing the amount of the debts. Through these negotiations the debts on credit cards can be reduced to almost 50% in many cases. The reduction is done because of many debtors become defaulters and don’t pay any amount of their debts. In such cases the banks have little options left except legal battles. Hence with negotiations they have the chance of getting back a good amount of their money.

Selecting an online service

While selecting an online service for non profit credit card consolidation comparison and research on the companies is required. The services should be non profit with no hidden charges in their terms and conditions. Accreditations are also a vital factor while selecting online credit card consolidation options. It is common for these services (even though they are a non-profit) to have some minimal monthly service fee. If they didn’t charge something they wouldn’t be able to afford to continue the service. In most cases the fees are minimal. Any company that asks for a service fee that seem either too high or too low should be scrutinized carefully.