Everyone is trying to find new ways to reduce their debt, increase the income all while bringing world peace to us all. Well at least you can find some comfort in knowing that because of the incredible financial crisis there are companies and individuals who can help you save a great deal of money on a variety of things. Reducing debt is a general term, or debt reduction as it’s also known. Essentially the main thing is to create a budget and stick to it. Use that budget to keep your expenses as low as possible and then pay off the most important debt you have first. If you can’t do it on your own then you should consider using a debt consolidation or credit counseling company to help you. The money you’ll save is something that’s tangible, but your peace of mind is priceless.

Tips on Credit Cards, Part 2

However, something that can help your monthly payment without increasing the interest rate or the length of time you will need to payoff your credit card is to look at the advertising you get in the mail for new charge cards. That is, these financial companies will frequently offer you a new charge card at a very small “teaser” interest rate of say 3% (instead of the usual 18%) for the first year. Obviously, it is worth their effort to offer this in order to get a new customer. Along with the small interest rate they will quite often suggest you transfer your outstanding balance(s) from higher interest rate cards. They figure that you will transfer these loans to their card for which they will give you a lower rate for one year and then up the interest back to 18% at the end of the year and you will not even notice. And most people do not notice! However, if you are serious about having more money in your life, you will pay attention and mark 11 months on your calendar. When you have used their low rate for 11 months, start watching the ads again for a special low rate on a new card. This way you are continuing to payoff the outstanding balance but with a smaller payment or the same size payment with more of your money paying the outstanding balance rather than the interest owed.

There is another type of credit card that people have a tendency to overlook. Let’s say you go into a store to buy a new mattress and box springs. You can fill out a credit form at the store and make monthly payments on your new purchase. The store has simply contracted with some lender to put this charge onto a charge card. You now have another card payment to make each month. If you need that new mattress set, take your time and shop around for a store offering “no payments and no interest for one year”. Now this may seem like you are just delaying the inevitable payment. Yes and no. Most important, as with any loan, you do not want to use this unless it is for something absolutely necessary. After you are out of debt you can buy things you simply want to have. The secret to this type of buying and saving money is to, again, mark your calendar. Before the time period is up you will need to find one of these charge card specials for 3% or so.

Yes, this does take some extra time and thought on your part, but it does allow you to save quite a bit of money over the course of this small loan. However, there is one warning. Be very careful and make sure they are offering “no payments and no interest for one year”. Some companies offer no payments but you still have to make the interest payment each month. Needless to say, we want to avoid as much interest as possible, not pay more. On this blog you’ll find lots of information on how you can save money in a variety of ways. We strive to provide you with great information on reducing debt, debt management, debt reduction and how you can settle debt for less and more. So stay tuned!

Tips on Credit Cards, Part 1

In today’s society, charge cards are used not only for necessary items and needs, but also to keep up with the Joneses. Although this was not their intention, so long as you continue to make your payments, the banks will encourage you to keep spending on anything and everything that you want in life. Because most people have misused these, credit cards are also one of the easiest places to save money. We don’t know if there is such a saying but there should be one for “if you want to save money, stop spending money”.

Thus the first way to save on your credit cards is to stop using them. Do not carry them with you. Cut them up keeping only one for emergencies. Only carry that one with you when you are traveling and might have an emergency such as a car problem. It is too easy to see something you think you want, know you should not spend the money on, and charge it anyway. If you do not have that card with you, you will have to think longer about whether you really want to drive all the way home and back to get that item or not. And, do you want to use the extra gas to drive back and forth?

However, you still need to work on the outstanding amount you owe on your cards. First, make a list of each card with its present monthly minimum payment (assuming you will not use the card again), the remaining balance to be paid off, and the interest rate. The way to get out of debt and save money at the same time is to work on paying off the card with the highest interest rate because that card is costing you more. Thus, each month you will make a minimum payment on the other cards and pay whatever additional amount you can on the highest rate card.

Do not consider consolidation loans. They may look good in the commercials but you are only getting a smaller monthly payment for all of your bills while paying a higher interest rate and for a longer period of time. If you want to get out from under your debt, instead of just living with it for the rest of your life, you must get them totally paid off. Consolidating your loans usually will not help because if you reduce your monthly payment but then charge on those cards again, you have just created a larger debt to payoff. Consolidating your loans only covers up the real problem of spending too much money. It is better to work at paying off those cards. Credit card debt is no fun. Look out for part two of this article soon.

Bankruptcy

 The idea of filing bankruptcy as been around a very long time but with a lot of changes occurring. Not so many years ago, filing bankruptcy was something embarrassing and humiliating. Unfortunately, our laws have made this procedure easier to do, easier to live with, and thus less embarrassing. 

The idea is that you owe so much money that there is no way you can ever pay it all off. So you file bankruptcy. In the old days, this meant that your creditors could still take everything that you had left to try to compensate them somewhat for trusting you. The laws now protect the individual up to a point. That is, you are allowed to keep any vehicles deemed necessary to earn a pay check and you can keep your home in order to have a place to live. Then your creditors have to leave you alone. Today the law also says that this bankruptcy will be stricken from your credit files after seven years. Thus, in the future you will be able to get loans again and once more get yourself into debt.

 w says and actually enforcing that law can be two different things. For instance, technically an old bankruptcy is to be stricken from your record. However, in actual life, any bank running a credit check on you is going to find out about that bankruptcy and will deny you credit. Yes, this is illegal, but they do not deny you credit because of the bankruptcy. They simply find some other little item that they can use as a reason. This is what actually happens no matter whether you approve of bankruptcy or not.

 Now, in all fairness, we have to tell you that we do not approve of bankruptcy. You took on your debts and it is your responsibility to pay them off. Our constitution guarantees us life, liberty, and the pursuit of happiness. It does not guarantee that it will take care of us financially for the rest of our lives nor should it. There is no debt that cannot be paid off eventually. Yes, your children may end up paying it off after you are dead, but it can still be paid off. Obviously, it is much better to work at paying it off now and staying out of debt for the rest of your life.

Keep in mind, that in the “old” days and in many countries around the world, if you do not pay your debts for any reason, you end up in prison. We did away with debtor prisons believing that a person imprisoned then had no way to work at paying off those debts. Therefore, we allow people to remain at large filing bankruptcy and then getting into even more debt. No, we are not suggesting going back to having “poor farms”, but we do feel the bankruptcy laws are actually hurting individuals more then helping them and, in the process, are hurting the financial well-being of our country which ends up effecting your family, friends, and even future generations. 

Basically what this boils down to is that you need to have pride in yourself and you cannot have pride in yourself if you feel our government should be taking care of you instead of you taking care of yourself. Remember to be socially responsible about debt and be realistic about what you really need and can afford. If you need a new car, you may not be able to afford a BMW convertible, but you can afford a Chevy. 

Are we the only people who feel this way? No. In studies of people who do pay their bills (even if occasionally late), the vast majority felt that our bankruptcy laws end up hurting the debtor by making it too easy to get out of what they owe. It also hurts our economy and families who do not have debt because companies have to make up that lost money from somewhere and guess who pays the bill? The rest of us. Interestingly, this same study found that the majority of Americans do feel that others who file bankruptcy should feel embarrassed by their actions. So if you decide to file for bankruptcy and feel there is nothing to be ashamed of, you are still looking at the world through rose-colored glasses just as you were when you ran up all those loans and charge card accounts.

If you are so far in debt that you cannot make your payments even after cutting costs and earning more money, you need to talk to your creditors and set up smaller payments. Most creditors will work with you on this. They really do not want to spend the time and money necessary to foreclose on your home or repossess your car. However, keep in mind that you have already promised them once that they would be paid. If you do not stick to even the reduced payments, your creditors will come after you very quickly. 

Then you could end up loosing your home and everything you own including your self-respect. 

If you have children, remember that how you handle yourself and your life, including living within your means and working part-time when necessary, is what you are teaching your children also. 

Credit Card Companies Find New Rules A Little Stifling

Regulators are expected to issue a new rule today that will help crack down on some of the most unfair business practices of Credit Card Companies. For decades consumers have been forced to agree to go along with sudden interest rate increases, ridiculous fees and fines. Banks are already reducing the amount of credit available to consumers, even with the bail-out packages. There’s no doubt that this much needed rule revision will only increase the banks actions to protect their profit margins.

Let’s be clear, it doesn’t really seem fair that after getting this huge bail-out package they actually want to hold back as much of the cash as possible. It’s very important for business espcially to have avialable lines of credit. Unfortunately only time will tell if and when the banks start to release capital to business owners and consumers.

Some of the new rules expected to be implemented are:

• A credit card issuer will not be able to raise rates on exsisting debt  unless it’s associated with the end of a promotional period, or if a payment is more than 30 days late.

• A rule that will prevent credit card companies to apply payments only to lower interest debt. For  instance if an account is over limit, the interest rate may be 12% higher (or more) for any balance over limit opposed to the regular under limit balance. Many companies will apply payments first (and the interest rate associated with that debt) to the over limit balance. This essentially enables the company to receive a higher interest rate overall.

• A new rule will bar banks from charging late fees unless they’ve given consumers a fair amount of time to submit the payment. The rule will give consumers 21 days from the due date to pay before they’re hit with a late fee. The maximum late fee is up to $39.

On average the industry charges the following fees:

Average penalty rate - 26.9%

Average late fee - $25.90

Average over limit fee - $29.13

Average annual fee - $43.50

Average returned payment fee - $32.03

Percent that change APR for “any reason” - 77%

Percent that change APR because of record with other creditors - 45%

Average grace period - 23 days

Amount that require arbitration to settle disputes - 71%

Hopefully the credit card issuers will find that having better overall business practices might actually increase their overall returns. Many consumers are simply walking away from their credit card debt. They’ll simply write it off in their mind and instead contract with a debt reduction company or tax relief agency who offers similar services.

Again only time will tell, and hopefully we’ve all learned something from this crisis.

Starting Your Own Business, Part 1

We stress this option because it is what we believe in. But how are you going to find the money or the time to start your own business especially when you are short of money right now anyway? And what are you going to do? If you have excessive debts then you might want to try to resolve those or find out information on a debt payment plan. You can usually find a debt reduction or debt management service provider pretty easily. In fact ReduceDebt.net is one of the leading providers in this area.

These concerns are all tied in together and basically boil down to “do what you love and the time will be there and the money will come”. The best way to explain this is to give you some examples. And remember that a lot of these can be done by anyone from 13 years old to 90 years old. And all of them take extremely little cash to start up.

Do you love animals? If so, you could try to get a part-time job with a veterinarian. Or you could start your own part-time dog grooming business. Sit down to your handy home computer and write up a flyer about what you will do, such as a complete shampoo and blow dry. Run off some copies of your flyer (this few dollars for flyers will be your only expense) and go out walking your own dog in a different area every evening. Every time you meet someone else with their own dog, hand them a flyer. It would be easy to fit this into a tight schedule.

Do you like flying kites? You could teach a class on Saturday mornings at your local Parks and Recreation department on how to build different types of kites and how to fly them (so they actually stay up, that is). Or you could start your own business by offering these classes in your own home. Again, your main expense will be flyers to post around town. However, learning how to get on the radio for free to preach the wonderful benefits of flying a kite would bring you even more customers.

Do you like spending your weekends biking around the countryside? You can offer your own tours and advertise them through bike and outdoor life stores. Or start a newsletter for bike riders about the most beautiful or safest or most kid friendly or easiest or more strenuous rides in your region, your state or even the whole country. You get to do what you love and still make money at it.

Do you love gardening? Again, offer classes on growing a healthy diet, one class for adults and one for kids. You don’t have enough room where you live to do this? Find a country person who does and offer to grow them so many pounds of whatever in exchange for a few month’s use of some land. Live in the city with only enough room for your own small garden? Teach the city dwellers about container gardening. You could even offer a class in your own kitchen on 50 ways to cook and enjoy broccoli. Sell your leftover vegetables to your neighbors.

If woodworking is your thing, you just need to focus on the area you like best. Do you like cabinetry and can, therefore, start a custom cabinet business? Or is furniture more enjoyable to you? Or do you like repairing old houses? Or do you and your spouse like doing the arts and crafts type of thing? Or do you want to teach others how to do these things?

In other words, think about what you really love spending your time doing and turn that into a part-time occupation. We all need time to relax during the day. What better way to spend it then by doing something you love and making a little extra money at the same time? On top of that though, you may find that you really love doing this thing and you are building up clientele so that eventually you can quit the job that you do not particularly like and have your own full-time business. This is truly the best of both worlds.