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Are Debt Settlement Programs A Good Debt Relief Option?

Thursday, October 13, 2011

Let’s face it, the financial recession has forced many consumers into positions that they don’t necessarily deserve to be in. With financial hardships setting in, many consumers have to make decisions of which bill they are going to pay with this paycheck this week and which bills they won’t be paying. Living through financial hardship has lead many consumers into the thought of using a debt settlement program. But, is this the right option?

Well, depending on the severity of your financial hardship this may or may not be the best option for you. It is up to consumers to decide what will be best. However, I will go over the debt settlement process and some other options that consumers may have.

The first step in a debt settlement process is contacting a professional. There are thousands of debt settlement companies nationwide. However, it is important to do your research before contacting anyone. Look for good companies with great reputations to help you! Once consumers have found a company they are willing to work with they will need to call that company.

The representative of the debt settlement company will need to know your total amount of debt and will create a payment plan that consumers can afford. Once the payment plan is created and the consumers agree the process starts. The debt settlement company sends a letter to the credit card companies letting them know that they will be working with the debts and they are working on obtaining a settlement.

This process will last several months and in some cases can last several years. During which time, consumers will be paying the debt settlement company but the debt settlement company will not be paying the banks until they have one complete lump sum! This lack of payment can have a detrimental affect on consumer credit scores.

Once the debt settlement company has saved enough of your payments to offer the bank a settlement, they will offer pennies on the dollar and start the negotiations process. Because the banks haven’t received a penny for months or years, they are apt to take a lower amount than what is owed because they think if they don’t they will get nothing. At this point a settlement will be negotiated and paid.

Although at this point, the consumers have no credit card debt left, they also have no ability to obtain a loan. The debt settlement process would have affected the consumer credit scores so much, they would have to pay cash for everything.

Another option consumers have is calling the banks and letting them know that they are facing a financial hardship. Believe it or not, many of these banks are willing to assist consumers with fixed interest reductions to as low as 0%! All it really takes is a simple phone call to the credit card issuers in most cases to get a decent level of relief!

This article was written by Joshua Rodriguez and is brought to you by:
JEMCreditCards.com: Discover Cards, American Express Cards
The-Card-Mart.com: The Card Mart
To find out how to be featured in articles written by Joshua Rodriguez, please call (561) 856 – 4721!

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Tips For Repairing Bad Credit Scores

Thursday, October 13, 2011

Due to rough financial times, many consumers have faced financial hardships that show when they pull their credit scores. However, now that the financial hardships are over for some consumers, they are ready to start building their credit scores. But, what are the best ways to build credit scores?

The first thing that consumers should do when they start building their credit scores is get a copy of their credit report. It is impossible to fix something if you don’t know what is wrong with it. All consumers are entitled to 1 credit report from each of the reporting agencies per year for free! This report can be obtained at www.AnnualCreditReport.com. Once consumers get a copy of their credit report, it’s time to start working on paying of the outstanding debts. This may be a time consuming process but is a very important process in repairing bad credit scores.

Once all the bad debts have been paid off, consumers will start now with a clean slate. It’s time now to start the actual credit building process. The next thing that consumers will need to do is open a secured credit card account. A secured credit card is just like a regular credit card. The only difference is that when consumers open secured credit cards, they must place a security deposit with the banks before actually being able to use their credit card. So, in a sense the consumers are borrowing their own money and the bank is alleviated of the risks associated to loaning to consumers with bad credit.

Once consumers open a new secured credit card account, it is important to remember to use this credit card properly. Using credit cards improperly can lead to even worse financial hardships and credit scores. Here are a few best practice tips for building credit with secured credit cards:

Always send payments at least 2 weeks early: Credit card companies are looking at how consumers make payments. The more loyal consumers that make consistent payments are less of a risk to the banks and increases consumer credit scores. By making payments consistently 2 weeks early, consumers show lenders that they are responsible borrowers.

Never spend more than 50% of your credit line: The credit line on a credit card is the amount of money a consumer will be able to borrow using that credit card. However, the credit line is like a trap. It is always there able to be spent at any time. However, more responsible borrowers maintain an open credit line for emergencies. Once over 50% of a credit line is spent, it can show banks early signs of financial hardship which can actually harm consumer credit scores.

This article was written by Joshua Rodriguez and is brought to you by:
JEMCreditCards.com: Discover Cards, American Express Cards
The-Card-Mart.com: The Card Mart
To find out how to be featured in articles written by Joshua Rodriguez, please call (561) 856 – 4721!

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Can People Make Money Using Credit Cards?

Thursday, October 13, 2011

It seems as though with the down economy, many consumers are looking for more and more way to bring money in. However, is it possible to make money using credit cards? Many consumers have brought up balance transfer credit cards in other articles for making money so we will dissect this process and see if it is actually possible. I have also seen many articles about making money with cash back credit cards but, is the small percentage of cash back worth it?

Starting with balance transfer credit cards. I have read what seemed to be a pretty simple process. Consumers would apply for a new balance transfer credit card. Upon receipt of their new balance transfer credit card, they would transfer all the money possible at 0% interest to a savings account for the introductory period. Therefore, the consumer would earn interest on the money that they are currently borrowing for free. But, is this money really being borrowed for free?

Well, I have indeed found a few wholes in this story. First off, balance transfer credit cards are designed to pay off another credit card transferring the debt. Balance transfers are not designed to be transferred to a personal checking or savings account. This would be a cash advance. A cash advance which tends to carry a higher interest rate. Also, if the bank allows the consumers to call this a balance transfer, most credit card issuers are now charging fees of 3% to 5% of the total amount of the transfer for processing. With the average savings account yielding far less than this in interest, it seems to be almost impossible to make money this way.

I will say however, in very rare circumstances, consumers with EXTREMELY good credit will get an offer in the mail that may allow them to transfer money to a bank account at zero percent interest for a year or longer with no fee! However, this is very rare these days, it simply costs the banks too much money!

Now let’s look at cash back credit cards. Cash back credit cards work like any other credit card. The difference is that when consumers use cash back cards, they will earn points towards cash back rewards. But, how quickly can consumers earn money this way.

The average cash back credit card pays 1% to 3% cash back bonus on some purchases. However, the interest rate on cash back credit cards is much higher. Also, these credit cards tend to have annual fees. So, to make any money using a cash back credit card, consumers will need to pay the card off immediately after each purchase to avoid interest. Also, the consumers using this technique will need to use their credit card often and may get a bit carried away with it. This may lead to a financial hardship situation.

Honestly, I have to say, don’t look at credit cards as a way to make money, look at them as a financial tool that can help maintain financial stability in the household. Looking at things this way will help many consumers avoid future financial hardships!

This article was written by Joshua Rodriguez and is brought to you by:
JEMCreditCards.com: Discover Cards, American Express Cards
The-Card-Mart.com: The Card Mart
To find out how to be featured in articles by Joshua Rodriguez, please call (561) 856 – 4721!

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How To Pick The Best Rewards Credit Cards

Thursday, October 13, 2011

Credit cards have become a huge part of the average consumers lifestyle. One thing that the average consumer has in common with any other consumer is they generally have a credit card in their wallet. However, there is no better feeling then when consumers first build their credit to a point where they will qualify for rewards credit cards. This point not only means that interest rates will go down and these consumers are more financially stable than before, it also means they will get rewards when using credit cards. But, when consumers first start looking for rewards credit cards, what should they look for?

The first thing that consumers should look at when it comes to rewards credit cards is the interest rate associated with the account. Unfortunately, some rewards credit cards increase the interest rate to cover the expense of the rewards. We don’t want these cards! Discover is usually a pretty decent bank when it comes to providing rewards credit cards. Make a list of all the rewards cards that you would agree with the interest rates on.

Once consumers have their list of potential future credit cards, it’s time to start looking at the rewards. Rewards cards are generally separated into categories for consumers to easily choose the best ones. These categories are generally:

Cash Back Rewards: Cash back rewards credit cards offer consumers points towards cash for each purchase made using the credit card. When the consumers have enough points to redeem cash, they cash out and the credit card issuer will send out a check in most cases! Cash back rewards are generally a lower value than most other types of rewards so, I don’t usually recommend cash back cards.

Sky Miles Rewards: Another great type of reward is sky miles. Sky miles rewards are more for consumers who travel often. Each time consumers swipe their sky miles credit card, they will earn points that may be redeemed in the future for airfare, hotel reservations, and other travel benefits.

Flexible Rewards: Some rewards credit cards are a mixture of multiple options. Consumers can use these reward points for flights, cash, hotels, gift cards and more! For the consumers that don’t know what type of credit card to choose, this is usually the best option!

No matter which rewards card you choose, it’s important that it is one that you will enjoy the rewards on. Remember you worked for this. You got good credit, you did it, now have fun with it. However, it is always important to continue using credit cards responsibly. Improper use of credit cards (rewards or otherwise) can cause consumers severe financial hardship even leading to bankruptcy!

This article was written by Joshua Rodriguez and is brought to you by:
JEMCreditCards.com: Discover Cards, American Express Cards
The-Card-Mart.com: The Card Mart
To find out how to be featured in articles by Joshua Rodriguez, please call (561) 856 – 4721!

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How To Use Student Credit Cards Properly

Wednesday, October 12, 2011

Ah freedom, being a college student provides young adults with the freedom that they have been looking for. However, with this freedom comes responsibility. Many students find that finances are a bit hard to cope with and they need a credit card to get by. However, the one course not given in school these days is how to use credit cards properly. As a matter of fact, consumers with poor credit scores usually obtain their credit scores as young adults. This is why I can’t stress how important it is to use credit cards properly. Here are a couple of tips:

Never spend more than 50% of your credit line: When consumers first get a new credit card, they are given a specific credit line. This credit line is the amount of money that consumer will be able to borrow using that particular credit card. However, it is best not to exceed 50% of your credit line. This is because consumers facing financial hardships normally will use all of the money on their credit cards first. Therefore, spending more than 50% of your credit line insinuates to the banks that you are starting to experience a financial hardship and may have a harmful affect on your credit score.

Always send payments at least 2 weeks early: This is a big key to getting and maintaining a good credit score. Although when consumers send birthday cards, they usually are received within 3 days, the recipient does not have to process the message. When it comes to banks, they may receive your payment within 3 days of you sending it but this payment still needs to be processed. With thousands of payments coming in each month, it is understandable that these payments may take this time. Sending payments 2 weeks early assures that these payments will always be received on time.

Never pay just the minimum payment: Credit card minimum payments are exactly that, the minimum amount of money the bank is willing to accept as a payment for the credit card debt. This means that it is indeed OK to send more than the minimum payment. A best practice is to send at least double the minimum payment. By doing so, consumers will notice a speedy increase in their credit score. This is because by paying back loans faster than required, consumers are able to show banks that there is a smaller risk in loaning money to them.

Never spend more than you can afford to pay back: The biggest mistake that consumers make when it comes to credit cards is borrowing more money than they can afford to pay back. As balances grow, so do minimum payments. A general understanding of how much your minimum payment grows with your balance and how much money you can afford to pay each month will help to gauge the amount of money it will be OK to borrow. Borrowing too much money on credit cards is the leading cause of financial hardship in the United States! Don’t become part of this statistic!

This article was written by Joshua Rodriguez and is brought to you by:
JEMCreditCards.com: Discover Cards, American Express Cards
The-Card-Mart.com: The Card Mart
To find out how to be featured in articles by Joshua Rodriguez, please call (561) 856 – 4721!

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What Is The Best Credit Card?

Tuesday, October 11, 2011

Let’s face it, it’s hard for consumers to get by these days without a credit card in their wallet or purse. This leads many new consumers looking for new credit cards. However, on their search, they find so many offers that they just want to know, what is the best credit card? Unfortunately, there is no one size fits all answer to this type of question. This is because each individual consumer has their own individual needs. However, there are a few tips I can give to help consumers choose which card is best for them themselves.

The first thing that consumers should do before applying for a new credit card is take a good hard look at their credit report. A credit report is a report that follows consumers wherever they go and help banks gauge the risk of loaning money to consumers. This is a very important step because each different credit card is designed for consumers of a certain risk level. The higher the risk to the bank, the lower rewards and higher fees associated with the credit card.

Once consumers know their credit score and if it is bad, fair, good or excellent, it’s time to start looking at the different types of credit cards for that specific credit score. With bad or no credit, consumers will generally need to go with a secured credit card. Secured credit cards work just like unsecured credit cards. The difference between the two is that a consumer will have to place a security deposit with the bank before using a secured credit card. This security deposit will alleviate any risk to the banks to loaning consumers with bad credit money through a credit card.

Consumers with fair credit have a bit more options. Fair credit credit cards are the first level of unsecured credit cards. These accounts tend to have higher interest rates however, consumers will not need to place a security deposit with the bank before using these cards. In some cases fair credit credit cards will even come with rewards programs. However, when it comes to fair credit credit cards, rewards programs are usually outweighed by the higher interest rates that consumers pay on fair credit rewards credit cards so this should not be the basis of deciding to choose a specific credit card.

Consumers with good credit have even more options when it comes to looking for a new credit card. Good credit credit cards tend to have lower interest rates, lower annual fees and more rewards and abilities. Once consumers get to the point where they have good credit, lower interest rates and annual fees should be the basis of the decision for choosing a credit card. However, the rewards programs on good credit credit cards tend to be of better quality than those programs with fair credit credit cards and much less expensive in the long run. Therefore, rewards should play a small part in choosing a good credit credit card!

Finally, consumers with excellent credit have all of the options in the world when it comes to looking for a new credit card. This is because consumers with excellent credit pose a very low risk to banks. This means that consumers with excellent credit will be able to enjoy the lowest interest rates and best rewards. When it comes to excellent credit credit cards, the interest rates generally are about the same. The main basis for deciding which credit card will be best when consumers have excellent credit should revolve around the rewards and benefits of having the credit card.

I hope this helps in your search for a new credit card!

This article was written by Joshua Rodriguez and is brought to you by:
JEMCreditCards.com: Discover Cards
The-Card-Mart.com: The Card Mart
To find out how to be featured in articles written by Joshua Rodriguez, please call (561) 856 – 4721!

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How To Reduce Credit Card Interest Rates

Tuesday, October 11, 2011

How To Reduce Credit Card Interest Rates

It is no secret that aside from the annual fee, the way banks make money from credit cards are the interest rates on the accounts. The lower the interest rate on a credit card, the more money a consumer will pay to borrow money using that credit card. This leads many consumers into wanting to lower their interest rates. Thinking that banks are big bully corporations, consumers often hire debt consolidation companies. These debt consolidation programs tend to have an adverse affect on consumer credit scores. But what if there was a way to reduce credit card interest rates without actually harming credit scores or hiring a debt consolidation company. Well, the good news is there is!

The big issue with the general thought about banks is that consumers think banks are bullies that are not willing to help consumers. Although, I love to agree with consumers, I have to say that this is not at all the case. As a matter of fact, this couldn’t be further from the truth. Although most banks are large corporations that do follow a corporate ladder, they are also much like a mom and pop store at the end of a busy block. Without the consumers buying into the products that banks have to offer, the banks would have no reason to be around. This is what makes banks willing to work with consumers and in most cases all it really takes is a telephone call!

Most major banks have special departments that are there specifically to retain upset customers. Now, I’m not advising anyone to call the bank that issues their credit card and go off on a tangent at all. The best way to negotiate with banks is politely tell them the honest way that you feel. However, before you get started, it is best to get prepared.

Preparation is simple. First, consumers should get all of their credit card statements into a pile and grab a pen and paper. Make of list of the credit cards from highest interest rate to lowest. The list should include the credit card account number, interest rate and customer service phone number. Once consumers have this list compiled, it is time to go on to the next step.

At the top of the list, consumers should call the bank that issues the credit card that they carry with the highest interest rate. When the call is first made, in most cases, consumers will have to navigate through the automated system to get to a live representative. Once on the phone with the live representative, consumers should say something to the effect of “Hi, I was looking over my credit card statements and noticed that this account has the highest interest rate by far, I love your bank and the rewards offered with this credit card but, I just can’t see paying this interest rate with so many other options. Is there anything you can do to help me with this?”.

At this point, the customer service representative will place the consumer on hold. When the customer service representative comes back they will have one of the following answers:

Answer 1: Congratulations, your account qualifies for a lower interest rate, it will be ___ and I will go ahead and activate that now!

Answer 2: Unfortunately, your account does not qualify for a lower interest rate because ______. (In most cases it is because of past late payments)

Answer 3: Unfortunately, this is not my department, let me get you to someone who can help you with that.

If you get answer 1, thank the representative and end the call. If you get answer 2, thank the representative, end the call and start working on ways to fix whatever defaults may have been explained to you on your account. If you get answer number 3, follow all the same instructions with each new representative until you get answer 1 or 2.

If negotiations don’t happen to work in your particular situations, you may want to look into balance transfer credit cards!

This article was written by Joshua Rodriguez and is brought to you by:
JEMCreditCards.com: Discover Credit Cards
The-Card-Mart.com: The Card Mart
To find out how to be featured in articles by Joshua Rodriguez, please call (561) 856 – 4721!

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What Are The Benefits Of Balance Transfer Credit Cards

Tuesday, October 11, 2011

It is no secret that credit cards have become a staple in American society. As a matter of fact studies show that the average American has at least 1 credit card in their wallet. This high demand for credit cards has lead to more and more banks providing more and more options. The overwhelming competition in the industry has lead banks into offering balance transfer credit cards. But, what are they and what benefits do they provide?

Balance transfer credit cards work just like any other credit card for the most part. They are small rectangular pieces of plastic with information contained on a magnetized strip on the back of the card. Consumers can still use balance transfer credit cards for purchases and cash advances as well. The major difference in balance transfer credit cards is what they are named for, the ability they give consumers to transfer balances from a higher interest rate credit card to the new low interest rate balance transfer credit card.

Upon the arrival of the first balance transfer credit cards, the success was obvious. Consumers were looking for more and more balance transfer options. But what are the benefits that the ability to transfer balances from one credit card to another provide?

The major benefit to balance transfer credit cards is the debt relief they provide to many consumers. As the banks fall into tougher situations, interest rates charged to consumers continue to rise. This rise in interest rates has lead many consumers into financial hardship situations. This is because as interest rates rise, so do monthly minimum payments. The consumers who have found themselves in this situation find the most benefit from balance transfer credit cards because they aid in the reduction of the interest rates on the consumers debts.

Another great benefit to balance transfer credit cards is the introductory interest rates that they usually provide. Because of the overwhelming competition now in the balance transfer credit card market, banks had to come up with something that would give consumers even more. The answer quickly became introductory interest rates. Introductory interest rates are low interest rates some times as low as 0% that last from the date of opening the account to the end of the introductory period. Introductory periods these days can range from 6 to 18 months with most balance transfer credit cards.

Finally, as with many other types of credit cards, many balance transfer credit card products offer exceptional rewards programs. Rewards programs can range from miles (consumers can earn travel rewards like airfare and hotel accommodations) to cash back (consumers earn cash back points with every purchase) and everything in between!

This article was written by Joshua Rodriguez and is brought to you by:
JEMCreditCards.com: Discover Cards
The-Card-Mart.com: The Card Mart
To find out how to be featured in articles written by Joshua Rodriguez, please call (561) 856 – 4721!

Filed in Balance Transfer Credit Cards, Credit Card Debt Help, Credit Cards, Debt Help, Personal Finance, Rewards Credit Cards, Uncategorized | | Comments (0)

Credit Card Debt Relief Options!

Monday, October 10, 2011

The financial recession that we have been dealing with for quite some time has a great deal of consumers looking at their charge card bills and banging their heads on the wall. Unfortunately, as the unemployment rate continues to rise, so does the average amount of debt in the American household. Thousands of consumers have looked into options and felt as though none of the options would work for their particular situation. The good news is, chances are you haven’t seen all of the options. There is usually something out there for Americans that can help them alleviate the thought of bankruptcy.

The first debt relief option that people have is working with the credit card companies directly. Fortunately, thousands of large banks have implemented financial hardship programs to help people in need. To qualify for these programs, people must be facing a financial hardship but, the hardship must not leave them underwater at the end of each month. Generally, Americans who pay all of their bills and only have between $1 and $150 left at the end of the month will qualify for financial hardship programs directly through the bank. Although, people must close their credit cards to take part in these programs, the reduction of interest and monthly payment may be well worth the account closure for those dealing with true financial hardships.

Once Americans try working with the credit card companies directly and still need a higher level of relief, it is time to look into more productive options. Although financial hardship programs can save people thousands, it is understood that this is just not enough for some consumers. The next step is to start looking into debt consolidation. Debt consolidation is the process of rolling all debt into one loan with a much lower interest rate and longer term of payoff. Although a great deal of debt consolidation programs do harm consumer credit ratings, those who truly need debt consolidation have probably noticed that their credit is already bad.

Debt consolidation does indeed help thousands of Americans each year. However, some Americans need even a higher degree of relief. This next option is one that I only advice for consideration as a final resort before bankruptcy. This option is called charge card debt settlement. Credit card debt settlement companies will assist people with negotiation of not only the interest rate associated with their debts but also the total balance of the debts. Although these debt settlement programs can save people exponential amounts of money, it is also important to remember the detrimental affects that debt settlement will have on consumer FICO ratings.

Sadly, if debt settlement proves not to provide the level of relief that Americans need, these consumers will most likely need to file for bankruptcy at some point in time. However, remember that although bankruptcy does have a severe impact on consumer credit ratings, it is nothing to be ashamed of these days. For the Americans that have found themselves in this situation, it’s time to wipe the slate clean and start over. Only this time, please remember to be more careful with your finances!

This article was written by Joshua Rodriguez and is brought to you by:
JEMCreditCards.com: Discover Credit Cards, American Express Cards
CardMartUSA.com: The Card Mart
To find out how to be featured in articles written by Joshua Rodriguez, please call (561) 856 – 4721!

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