Debt
Settlement - 4 Things To Look For!
If you're looking for a debt settlement
company to help you with your indebtedness problems,
consider these four points:
1. Be wary of promises to settle your
problems in just a few days. This process might take
several years to actually complete if your put on a
reduced payment schedule. Additionally, there's a very
real prospect of paying more interest and late fees
in a stretched out payment schedule.
2. Should a company "guarantee(s)
to get your creditors to reduce your debt", be
aware that it's illegal to promise or guarantee that
a creditor will accept partial payments.
3. Check for complaints. The Better
Business Bureau is one that register consumer
complaints; another source is www.RipOffReport.com.
If there are a large number of complaints you may do
well to avoid them.
4. Think critically! If it
seems the firm is hiding or omitting the bad side of
debt settlement, ask! If the firm doesn't respond to
your satisfaction, go to the next . As a consumer you
need to know both the upside and downside to debt settlements.
Credit
Card Facts and Tidbits
Comments gleaned from credit card experts...
• Do department store cards affect your
credit report?
If the store cards are reported to the major credit bureaus, store cards
can either help or hurt your credit. If your late or missing payments,
or have maxed them to the limit, it'll hurt. On the flip side, if the
credit is managed responsibly, they'll help your score.
• How many credit cards are too many?
There's no pat answer regarding how many cards are too many. FICO scores
are computed on a number of factors. Open the store cards you really
need and pay them off as soon as you can. Interestingly, if you have
some on your report you don’t use anymore, FICO generally recommends
you leave them alone rather than closing them.
• Cash advances from credit cards make for expensive loans!
Most credit card issuers charge a higher interest rate (20% or more)
plus a one-time fee (as much as 5%!) of the amount advanced. Be aware
that cash advances don't qualify for the usual interest-free grace period,
so interest accrues promptly. Additionally some credit card issuers don't
apply your payments to the cash advance until whatever lower interest
rate balances you have on the card are paid-off.
• Credit card issuers may increase APRs if your credit score drops or if
you miss a payment on another credit card
Higher interest rates go hand-in-hand with higher risk and they provide
motivation for cardholders to pay-off their higher APR balances first.
Card issuers don't want a loss on a credit card account so if they see
you are having financial trouble they want to send you the message to
pay-up and go elsewhere. Though seemingly unfair to penalize you in this
manner it is permitted under current federal regulations.
• Watch
Your Credit Lines
They may be lowered without your knowledge. Card companies are moving
away from raising interest rates on risky cardholders to simply reducing
credit lines. Monitor your account to make sure you still have the credit
line you remember; otherwise you might easily go over the new and reduced
credit line. Going over your credit limit at any time can cost money.
Stay safe - always stay 10% or more under your credit limit.
•The
average family owes more than you think on their credit
cards
Based on current industry statistics and consumer surveys the average
American household with at least one major credit card owes $9659. However,
given that 13% of Americans carry credit card balances above $25,000,
the median is about $6,600 for the typical card using household.
• How high can interest rates go?
The highest amount of interest that can be charged monthly on credit
card debt is nothing short of exorbitant. Credit card companies based
in Delaware or South Dakota can by law charge what they want. You might
well see rates as high as 32% to 41%.
• Call your credit union!
The bottom line to all this is manage your credit wisely, and pay no
more than you need to for borrowed money. Call ATDFCU to
discuss your loan needs before you turn to your credit cards!
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