credit card debt Archives - National Debt Relief

How To Avoid A Debt Settlement Scam

June 18, 2013 by Paul Ritz

If you’re not aware of debt relief, this is where you hire a company to negotiate with your creditors to get your debts reduced – usually for pennies on the dollar. This can be an excellent way to get debt paid off, although not everyone will be a good candidate for debt relief (also called debt settlement). For it to be a good option, you must owe more than $7000 and be at least six months past due on your loan and credit card payments.

When done right

If you choose an honest and ethical debt settlement company, this should be a good solution for both parties. You would be required to pay just a fraction of what you owe, which would be good for you. And it’s good for your creditors in the sense that they get at least something vs. the nothing they would get if you were to file for bankruptcy.

Feds cracking down

The problem is that not all debt settlement companies are honest and ethical. The Consumer Financial Protection Bureau (CFPB) believes that some debt settlement companies are basically scams that prey on the most susceptible of us. For example, the CFPB recently lodged a complaint against American Debt Settlement Solutions (ADDS) of Boca Raton, Florida alleging that it “misled consumers across the country and charged illegal upfront fees for debt-relief services that rarely, if ever, materialized.” For that matter since ADDS was founded in 2008, it said to have obtained no debt settlements for 89% of its customers. And while they put close to $10 million into ADDS accounts, the company paid less than $2 million in settlements and charged clients approximately $500,000 while misrepresenting what it could do for its customers.

Other debt relief agencies have been targeted

The CFPB has also targeted other debt relief agencies including Mission Settlement of New York, and Premier Consulting New Jersey for engaging in deceptive practices. Plus, attorney generals in five states have filed an action against Payday Debt Solutions, Inc. for charging upfront fees before negotiating any settlements, which is not permitted by the FTC’s Telemarketing Sales Rule and the Dodd-Frank Act.

How to keep yourself from being scammed

If you are having a considerable problem with debt and are thinking that debt settlement might be a good option, there are things you can do to protect yourself from dishonest and unethical companies. First, be sure to check with the Better Business Bureau to make sure the company has been accredited and has a good rating. You should also go online and look for reviews. While almost all debt settlement companies have some bad reviews, the good companies will have many more good reviews than bad ones.

Don’t believe inflated claims

There’s an old adage that if it seems to be too good to be true it probably is. If you talk with a debt settlement company that makes unrealistic souding or inflated claims about what it can do for you, it’s probably not be trusted. Also, make sure you get everything in writing. As former Pres. Ronald Reagan once said “trust but verify.” Don’t rely on what you are told. Get everything in writing and review it carefully before signing up with any debt settlement company.

Pay nothing upfront

Stay far away from any debt settlement company that asks for upfront payments. As noted above, the Telemarketing Sales Act does not permit this unless the money will be used to pay an attorney to handle your debt settlement.

Always follow up

If you do contract with a debt settlement company make sure you constantly follow-up with your creditors to make sure that your debts are actually being settled and paid off. You should also be sure to you ask for copies of every settlement letter – again so that you will know your debts are actually being settled.

Are Credit Cards Turning You Into A Bad Person?

June 16, 2013 by Paul Ritz

Do you have credit cards? Almost everyone in America does. I read a report recently that the average American now carries at least six different credit cards. This ubiquitous “plastic” has just about made cash obsolete. Sweden has a national effort going on to make the country completely cashless within the next 20 years. And African merchants commonly accept money through mobile phones by having their buyers transmit a specific amount of money to the merchant’s specific number.

It’s happening here, too

We here in the US are also on the way to a cashless economy. Back in the 1970s, less than 20% of us had a credit card. Today something between 70% and 80% of all adults has at least one. If you are in a situation where you are being forced to pay with cash, it can feel like a real anachronism.

Here’s the problem

When we save money, we move today’s earnings to the future. Conversely, when we use a credit card we yank future earnings into now. But most of us don’t save a lot and are terrible at projecting future earnings. This means we end up spending a lot more than we can pay back very quickly. This makes it easy for many of us to get into trouble with debt.

We’re becoming irresponsible

Cash and coins are more difficult to handle and have a certain “reality” about them. They must be counted, organized, and and delivered to complete a transaction. Each of these actions is an inconvenience or a point of friction. In comparison, a card is only a card. All we have to do is pull it out, swipe it and we’re finished. This makes it very easy to spend whatever we want.

Credit cards can make us forgetful

Counting money is memorable because it takes time and effort. On the other hand, swiping a credit card is fast, easy and can make us forget that were actually dealing with money. As a result, we are less likely to remember details about our purchases and often will go on and buy additional stuff.

They can make us fat

When we are forced to pay for something with cash there is a hidden benefit. It makes it more difficult for us to cave into our indulgences. To put this another way, credit cards tend to weaken our impulse control. I recently read one paper where researchers had found that people using a credit card were more likely to buy unhealthy food products than when they paid cash. And unhealthy food products often lead to weight gains.

Credit card debt can easily get out of control

As noted above, credit cards tend to make us forgetful. This makes it easy to end up with big balances without even realizing what’s happening. If you’re not careful, you could run up balances so huge you would not be able to pay them off within 30 days. Once this happens and you began carrying balances forward, it’s easy to fall into debt hell because of the high interest you’ll be charged.

Most credit cards today have interest rates as high as 20% or even higher. As these interest rates are added to your balance month after month, it can get to the point where you will be able to make only the minimum payments and would never be able to get out of debt. There was an example I saw recently where if you owed $10,000 at 18% and made only the minimum payment of $150 each month, you would literally never get out of debt. And if you paid $200 a month, it would take you a bit over seven years to pay off that $10,000.

Are you a bad person?

Have credit cards turned you to a bad person? Have you become irresponsible in your spending habits, forgetful or even fat? If this is the case, you need to change your spending habits, begin saving money and use your credit cards more wisely. That way, you could turn back into a good person and get control of your finances and financial future.

Filed Under: Credit Card Debt Tagged With: credit card debt, credit card problems, credit cards

Did You Know Women Are Better At Handling Credit?

June 10, 2013 by Paul Ritz

The credit-reporting bureau Experian recently released a study showing that in general, women are better at handling credit than men. This study came from a sample of 750,000 credit reports nationwide.

Earn less but have better credit scores

Among other things, this study revealed that woman earn 23% less than men but have credit scores that are just a bit better. Their scores average 675 vs. 674 for men. The study also reported that men use 31% of the credit they have available and that women use only 30%.

Average debt

Women, the study found, carried an average of $25,095 in debt from personal loans, auto loans and credit cards, while the average man had $26,227. Men also take out larger mortgages (an average of $187,245) than women whose mortgages average just $178,140. And men have more of an incidence of late payments at 5.7% vs. women who have an incidence rate of just 5.3%.

Interesting but not as important

Experian pointed out it’s interesting to see that women are a bit better at handling credit than men but what’s more important is the value of building a good credit history. Today more than ever, debt and how we handle credit is critical. You need to pay attention to what’s in your credit report, make sure you never miss a payment and keep your credit utilization rates low as these are the three keys to financial good health.

What’s in your credit report?

I’m sure you’re seen the credit card TV commercial that ends with the phrase, “what’s in your wallet.” That might be important but what’s even more important is what’s in your credit report. Your credit report is used to generate your credit score and a bad credit score can make it practically impossible for you to get a mortgage, an auto loan or just about any kind of credit.

Conversely, a good credit score will actually save you money in the interest rates you’re charged. Here’s what I mean. If you apply for a mortgage, a good score of 750 and above could qualify you for an interest rate of 5.780%, while a poor score of 620-659 might result in an interest rate of 7.096%. Do the math and you’ll see that this represent a difference of 1.31%, which will mean thousands of dollars over the life of the loan.

Where to get your credit report

If you’ve never seen your credit reports (you have three) or haven’t seen them for more than a year, you need to get and review them. They are available free (once a year) from the credit bureaus – Experian, Equifax and TransUnion – or you can go to the website, www.annualcreditreport.com and get all three simultaneously. While this is easier and more convenient than going to the individual credit bureaus, some people choose to get their reports one at a time every four months as a way to sort of monitor their credit reports year around.

What to look for

When you go over your report(s) you need to look carefully for errors – especially negative items that could be hurting your credit score. A recent federal study reported that one in four Americans have errors in their credit reports and that about 5% have ones so serious they could be affecting their credit scores. When you go over your reports you need to look for items such as defaults, late payments and charged off debts that weren’t yours. If you find one (or more), you can write a letter to the appropriate credit bureau and ask that the item be removed from your report. The credit bureau is required by law to contact the organization that supplied the information for verification. In the event the reporting organization can’t verify the item or doesn’t respond within 30 days, the credit bureau must delete it from your credit file, which could result in a nice boost to your credit score.

Filed Under: Blog Tagged With: credit card debt, credit card debts, credit scores

4 Simple Things You Can Do To Cut Credit Card Debt

June 9, 2013 by Samantha Seiffert

Credit card debt got you feeling as if you were being circled by a pack of starving hyenas? If so, relax and take a deep breath. You can cut that credit card debt, get it under control and sleep better at night.

1. Prioritize those bills

The first thing you need to do is prioritize your bills. Put them in order of those that are most important such as your mortgage payment or rent or an auto loan. These are the expenses that are toughest to cut. On the other hand, entertainment, cable and cell phone packages are ones where you could make cuts.

It’s easy to prioritize credit card debts. You simply arrange them by their interest rates from highest to lowest. You may find there are huge differences between the interest rates you’re paying on your credit cards. You might learn that you’re paying twice as much interest on one card as another. For example, as of this writing the Capital One Standard Platinum Card had an interest rate of 19.30% vs. the 7.40% you would pay on the Capital One Premium Prestige card.

2. Learn to negotiate

If credit card companies are constantly harassing you, you may feel that you have no recourse. But you might be able to negotiate a reduction in your interest rates. Just call the company that issued the card and ask them to lower your rate. The worst they can do is say no.

A second way to lower your interest rate(s) is to do a balance transfer. This is where you transfer the balances on credit cards that have high interest rates to one with a better rate. Almost all credit card providers have introductory offers. Many now have 0% interest balance transfer cards. If you qualify for one, you could transfer the balances on all of your credit cards to this new card and be interest free for as many as 18 months. However, be aware that many banks charge balance transfer fees of up to 3% of the total balances you’re transferring. You need to watch out for these fees as they could completely wipe out the savings you would achieve from making the transfer.

3. “Snowball” your credit card debts

When it comes time to pay off debt, the best thing you can do is “snowball” them. The way this works is that you do everything you can do pay off the debt with the highest interest rate, which will most likely be a credit card. When you have paid off that first card you will have more money available to begin paying off the second debt and so on. This is called “snowballing” debts because as you pay them off slowly month after month, your progress will get faster and faster. Every dollar you pay will lower your finance charges and free up money that you can put towards reducing your debts.

4. Stay on course

You’ll find that snowballing your debts will get more comfortable as you get more used to it. Just make sure you don’t get back into trouble. Keep paying off those debts and try to pay cash for everything possible. You may run into a financial emergency that could set you back a bit but don’t worry. So long as you stick with the program you will eventually get out of debt. It will take discipline and some sacrifices but you’ll eventually become debt-free and probably faster than you ever had ever imagined.

A better solution

f you’re six months or more behind in your credit card payments, it’s way too late to snowball them. One good alternative is to choose debt settlement. You could contact a debt settlement company such as National Debt Relief to work with your credit card issuers to get your balances reduced. This could help you become completely debt-free in 24 to 48 months and with a monthly payment you could easily afford.

Filed Under: Credit Card Debt Tagged With: credit card debt, credit card debt reduction, credit cards

4 Credit Card Debt Relief Options – Which Would Be Best For You?

June 6, 2013 by Paul Ritz

If you enjoy being seriously in debt, you’re either a very unusual person or maybe as the British would say, you’ve taken leave of your senses. Most people struggling under a big load of debt want nothing more than to get out from under it. If your goal is to become debt free, there are four credit card debt relief options. Which would be best for you? Only you can make a decision. But here are pluses and minuses.

Borrow the money

One of the most popular ways to achieve credit card debt relief is to borrow the money and pay off the credit card companies. You might be able to do this in the form of a debt consolidation loan or you might be able to borrow from yourself by taking money out of your retirement account. In either case, you will get rid of your credit card debts – practically instantly – and should have a much lower monthly payment than the sum total of the payments you’ve been making on those credit cards. There are two reasons for this. First, you are almost sure to have a much lower interest rate than those credit cards and you will have longer terms – or more time to pay back the money.

The minuses

There are two disadvantages to borrowing money to pay off credit card debts. The first is that it does nothing to reduce your debts. You just move them from one set of creditors to a new one. And second, a debt consolidation loan is likely to cost you more in interest because of those longer terms as it could take you seven years or longer to pay back the money.

Credit counseling

A second popular way to achieve relief from credit card debts is through consumer credit counseling. It’s likely that there is a credit-counseling agency in your area. Many universities, community colleges and credit unions offer this service. What this amounts to is that you’re assigned a counselor who will review your finances and then negotiate with your creditors to get your interest rates reduced and any late payment or over limit fees eliminated. He or she will then help you develop a debt management plan to pay back your creditors. In most cases, they will accept your plan so that you will no longer be required to pay the credit card companies. Instead, you will pay the credit agency once a month and it will distribute funds to the credit card issuers.

The cons

The biggest downside to credit counseling is that it will probably take you five years to complete your payment plan. These are five years during which time you won’t be able to take on any new revolving credit and will have to live on a fairly stringent budget. In fact, these are the reasons why many people are never able to complete their debt management plans.

Debt settlement

Debt settlement is sometimes called debt negotiation because it requires you to contact you credit card providers and attempt to negotiate settlements of your debts for much less than you owe. To be successful in this, you must be at least six months in arrears in your payments to the credit card companies and must have the cash in hand to pay for any settlements that you negotiate. Plus, you need to be a good negotiator.

File for bankruptcy/strong>

The fourth option for credit card debt relief to file do a Chapter 7 bankruptcy. It’s a way to completely wipe out all credit card debts and probably in six months or less. Once you file for a chapter 7 bankruptcy, credit card companies can longer contact you. A chapter 7 bankruptcy can also get other unsecured debts dismissed such as personal loans and medical debts.

The cons

The biggest downside of a bankruptcy is that it will stay in your credit report for either seven or 10 years. And you will find it very difficult to get new credit for the first two or three years after your bankruptcy. In addition, bankruptcies are public records. This means a bankruptcy will stay with you forever. A prospective employer could see that you had had a bankruptcy, which could prevent you from getting that dream job.

Filed Under: Debt Relief Tagged With: credit card debt, Credit Card Debt Relief, debt relief

Could You – And Should You – Get A Credit Card Loan ?

May 28, 2013 by Samantha Seiffert

Getting a credit card loan or cash advance against your credit card is just drop-dead easy. There’s no application to fill out and no credit check since you’ve already been approved by your lender – the credit card company.

How a credit car loan works

The way this works is that you get the money at an ATM or by cashing what’s called a “convenience” check. You the pay the money back in installments just as you would a personal loan. There may be a processing fee and your credit card provider may limit or block cash withdrawal on your credit card to the extent of your loan.

The pros of a credit card loan

The biggest plus of a credit card loan or cash advance is that you get the money immediately and with no credit check. You simply go to an ATM or write a check and the money is yours. It can serve as a kind of short-term loan to cover expenses that couldn’t be covered with the credit card. For example, a father might use the money to help one of his children who didn’t have his or he own credit card/ Or you could use the advance to pay for an auto repair at a garage that was “cash only,”

The pitfalls of a credit card loan

The biggest negative to one of these cash advances is the interest you’ll be charged. It’s almost certain to be much higher than the interest rate you would pay on a personal loan or even on purchases made with the same card. I saw one study that interest rates on cash advances typically are 1% to 7% higher than the credit card’s standard rate on purchases.
This means that if your interest rate on the credit card was 12%, you might have to pay as much as 19% on that loan or cash advance. Plus, there could be fees attached to the advance that would cause it to cost even more.

You might not qualify

Another negative to a cash advance is that you might not qualify for one. The credit card companies tend to be very wary about “high risk” customers so whether you could or couldn’t get an advance will depend on your credit worthiness.

What to consider

If you feel you need a loan or cash advance against your credit card, there are some things to first consider. First, could you pay back the money in just a few months? Second, is there some other way you could deal with the financial problem you’re facing? Third, do you really need whatever it is you would buy with the money?

Think twice

In other words, it’s best to think twice before taking out one of these loans. Is there some other way you could get the money you need by selling something? Do you have a line of credit attached to your checking account you could tap into that would have a better interest rate? Could you get a cash advance where you work? Could you borrow from your retirement fund or a relative? Any of these alternatives would likely be better and cheaper than a cash advance.

If you’re having a problem with credit card debt
If you’re in a bind because of the debts you’ve racked up on other credit cards, there may be a better solution than “borrowing” money from one credit card to pay off another. As an example of this, Wells Fargo has a program where you could consolidate your credit card debts into a personal loan that would have a fixed interest rate for a fixed period of time.

Filed Under: Credit Card Debt Tagged With: card loan, cash advance, credit card, credit card debt, credit card loan, personal loan

Your Answer Just Might Be … A Budget

May 27, 2013 by Paul Ritz

Do you consistently run out of money before you run out of month? Are you struggling with debt? Are debt collectors harassing you? Do you feel as if your finances control you rather than you controlling your finances? Then your answer just might be … a budget.

Why a budget?

Every company in America has a budget. It’s the only way they can know where they stand financially. The same is true for us consumers. The only way we can know where we stand financially, where our money is going and how to control our spending is with a budget.

It’s not rocket science

Making a budget is not rocket science. All that’s required is that you track your spending for about a month and then organize it into categories. Of course, you could be shocked at what you learn. You might have been coasting along, thinking that you’re spending only a hundred dollars or so a month on entertainment only to find it’s costing you more than $300 a month.

How to make a budget

Once you know where your money is going by category, it’s relatively easy to make a budget. You could do it on a spreadsheet, on your computer or with your smart phone. There are a number of programs and apps that make budgeting just about drop dead simple. One program that’s available for use on your home computer or smart phone is called Mint.com. It will not only help you create a budget but can show you exactly where you stand financially at a glance. If you go over budget in any category, it will even send you an alert by email.

Other apps

In addition to Mint, there is PageOnce Money & Bills, Duck Software’s Budget Tracker, Xpenser, PowerWallet and many more. Most of these apps are free or cost less than two bucks. Many work on both the iPhone and Android-based phones. All you really have to do is go online, search “budget apps” and then choose the one that would seem to best meet your needs.

Where to make cuts

Learning where your money is going is only half the battle. The next step is to see where you can make cuts to get your spending and finances back under control. Of course, the first step is to reduce your spending to the point where it’s less than your earnings. This just takes simple math. If you total up your spending and find that it’s $500 a month more than you earn, you need to figure out how you can cut $500 in spending. The categories where most people find it easiest to cut costs are groceries, clothing, and entertainment. You might also be able to cut your transportation and housing costs although these usually take more work and more time.

Think of your budget as a game plan

The primary reason why people give up on budgeting is because they created one that is unrealistic and too restrictive. Here’s an example of what I mean. Let’s say you budgeted $300 a month on groceries but have been consistently spending $400. Instead of giving up on your budget, just make adjustments. You could change that $300 to $400 and then find some other areas where you could save $100 to make up the difference. The important thing is to stick within the total amount you budgeted for the month but be flexible in terms of your categories.

When budgeting is not enough

If you’re really in a world of dead hurt, budgeting will only get you some of the way back into financial freedom. You might have to compliment the budget by getting a debt consolidation loan, through consumer credit counseling or by settling your debts. Many families have chosen debt settlement as it represents the only way to get debts reduced instead of just moved around from one set of creditors a new one.

Filed Under: Debt Relief Tagged With: credit card debt, debt management, debt relief

How To Better Manage Your Credit Cards

May 22, 2013 by Samantha Seiffert

If you have multiple credit cards or credit cards along with student debt or a personal loan, managing your due dates can become a real headache. Even worse, you may find that you’re unable to manage your credit card bills and repay what you owe due to your spending habits and a lack of knowledge of the “mechanics” of your credit cards.

Understand the basics

The first thing you need to do to take control of your credit cards is to learn the meaning of the basic terms of minimum amount due, billing cycle and grace period. Taking these in order, the minimum amount due is the amount you must pay that month. You can always pay more but you can’t pay less.

Billing cycle is the days between the last statement and the statement you just received. These cycles are generally from 20 to 32 days.

Grace period is the number of days you have to pay your balance without having to pay a finance charge. This is usually 25 to 30 days.

It’s also important to understand the meaning of APR (annual percentage rate). It is the yearly percentage rate of the finance charge. It will be either a fixed or variable rate.

Stop erratic spending

The second thing you need to do to better manage your credit cards is to stop any erratic or impulse spending. It’s so easy to spend money these days what with all the shopping malls and online shopping marts that have been so cleverly designed to part you from your money. They make it so easy to go on a spending spree and completely lose control of your credit cards. Stop and think about your spending habits. If they’re a bit on the sloppy side and you do want to manage your credit card debt, you have to stop those bad shopping habits.

Pay within your billing cycle

The third step in taking control of your credit cards is to make sure that you pay within your billing cycle (as defined above) and that you pay the outstanding amount due.

Of course, this is much easier said than done. However, many credit card holders do use this effectively by timing their purchases and repayments within the billing cycle. Here’s an example of how this might work.

Let’s say you have credit cards with a due date of the 10th of the month. You could use the card to make a purchase on the 11th or 12th of the month, knowing that it will not show up on your credit card statement until the 10th of the next month, which would effectively give you at least 45 days (your billing cycle plus some grace period) to save enough money to pay it off. And you must pay off that balance before putting another charge against the card or you run the risk of carrying a balance forward, which would mean paying interest and accumulating debt.

If your credit card debt has spun out of control

If you’re so far into debt that it’s making you crazy with worry, the worst thing you can do is to do nothing. There are consumer credit counseling agencies available that could help you deal with the mess. There may be one in your area and if not, it’s easy to find one on the Internet. Just make sure that it’s a nonprofit and that it either offers its services free or at a very low-cost.

Alternately, if you have decent credit you might be able to get a debt consolidation loan and pay off all those credit card debts. You might also elect to hire a debt settlement company to help you reduce and consolidate your debts. Thousands of American families have found it to be the best way to cope with debt that’s gotten totally out of control and you might, too.

Filed Under: Credit Card Debt Tagged With: billing cycle, credit card, credit card debt, credit cards, debt relief

Surprise – You Might Want to Pay Off Your Ex’s Credit Cards

May 17, 2013 by Paul Ritz

Divorces can get nasty. Very nasty. Even if you live in a community property state where everything, including your debts, is supposed to be divided up 50-50, it rarely works that way in practice. It can be the worse if you live in what’s called an equitable distribution state. When this is the case, kitty bar the door. This is because everything is negotiable including what happens to your joint credit card debt.

What happened to my friend

I have a friend who got divorced while there was $100,000 remaining on a home equity loan. He had promised to take responsibility for half of this and mailed his portion of the payment to her every month. The agreement was that she was then to make the payment using an automatic payment program at her bank. Unfortunately, she somehow muffed on a few of these payments. As a result her credit score dropped dramatically and so did his.

The net/net

Without getting into all the nitty-gritty, suffice it to say that he was ultimately able to persuade his ex to refinance that line of credit. Unfortunately she was unable to do so because of her low credit score. When my friend could no longer stand it, he discussed this with a friend who advised him to start managing both his and his ex’s credit.

Could not directly affect the outcome

My friend soon learned that 35% of a credit score is based on payment history or how well he and his ex handled their credit. There was nothing much he could do to affect that is except to keep reminding his ex-spouse that she should make her payments on time. But of course, he could not control this.

Credit utilization

A second important factor in computing credit scores is called credit utilization. In fact, this accounts for 30% of a credit score. This is an area where my friend could affect his score because was near the credit limits on all his credit cards. What he learned is that credit utilization is based on the amount of credit he had used versus his total credit limits. This is called the debt to credit ratio. For example, if he had total credit limit of $50,000 and debts of $30,000, his ratio would be 60%, which would be much too high. When my friend learned what a mistake he had made, he immediately brought his balances down to zero and his credit score increased dramatically.

Sent a note to the credit reporting bureaus

My friend next wrote to the three credit reporting bureaus and explained that due to a misunderstanding over automatic debits between his ex-spouse and her bank, there were a number of payments reported late to the credit bureaus over which he had no control. In a few months, his credit score was 776.

Didn’t help her score

Of course, this did not help her credit score because credit scores are not transferable. She needed to do a refinance of the loan but her credit was still stuck in the mid 650s. Beyond the late payments, her problem was a $7500 balance spread over a few credit cards that she was required to carry because she was unable to pay them off. This, of course, played a major part in reducing her credit score. My friend ultimately agreed to pay off his ex’s credit card bills and had her write the credit bureaus explaining about the late payments.

What he accomplished

What this accomplished is that my friend’s credit score increased, he is now in charge of his credit score and he and his ex are still friends.

Not for everyone

Don’t take this to mean that if you have credit card debt left over from a former marriage that you should rush out to pay it off. But it does mean that, depending on the circumstances, you and your credit score could both get ahead of the game if you were to pay off some or all of that debt.

Filed Under: Credit Card Debt Tagged With: credit card debt, credit card management, debt and divorce

Don’t Let Your Rewards Points Go To Waste

May 14, 2013 by Samantha Seiffert

Are you among the 73% of Americans who are in a frequent traveler program or credit card rewards program but don’t know how many points you’ve accumulated? That can be one serious mistake.

How you need to think about your rewards

One financial expert has pointed out that the way you need to think about points and miles on your credit cards is that you’re getting back a percentage of what you spent. This means if you’re not maximizing your rewards, you’re actually losing money.

A different way to shop

Here’s an example of what you can do if you view your points and rewards differently. Let’s say that want to maximize your travel points. In this case you should first check your airline’s shopping malls. In most cases you will find the same products at the same prices but if you buy through the mall, you’ll earn extra miles plus those you earn on your credit card. For example, you might earn as many as 2000 miles just by renewing your mobile phone contract through your airline rather than at www.attwireless.com. I also read of one person who earned 10,000 miles by buying a sofa.

How to use those miles

One good way to use those travel miles is not to buy flights but to buy upgrades such as from coach to business or first class. You might be able to buy a fare on United or American for $150 to $180 and then use 15,000 or 17,000 miles to buy an upgrade that otherwise might cost $2500.

Concentrate on one or two cards

Most people who are experts at rewards programs say that you should keep the number of your rewards cards to the bare minimum. If you have many different cards, you could easily lose track of how many points you’ve earned on each, which is something the loyalty programs actually count on. On the other hand, if you have just one or two rewards cards this will keep your points more on the top of your mind and you won’t be as likely to forget about them.

If you never travel

Even if you rarely or never travel you can still take advantage of rewards programs. You could redeem your points for dining out, gift cards, clothing or household items. For that matter, if you have a card that gives you 2% cash back on everything you spend, that’s like getting cash in your pocket.

Even if you don’t have a credit card

There are other rewards programs available for people who don’t have or don’t use their credit cards frequently. For example, there is the Southwest’s Rapid Dining program, which lets you earn points by dining out or going to a club.

Put them into a central credit card points bank

Is also a good idea to accrue all of your rewards points into a central credit card bank, like through American express or Chase. Each of these has a number of different travel partners and redemption opportunities for everything from music to books and groceries. You can then use TripIt or Award Wallet to track all of your rewards points and when they expire.
Don’t get carried away
While earning points, travel rewards or cash back is a good thing, don’t get carried away using those credit cards. If you don’t pay off your balances at the end of each month,

Filed Under: Blog Tagged With: credit card debt, credit card rewards, credit cards