My Credit Card Balance is Zero ? Now What Do I Do?

By William Blake

Once your cards are paid off, it can be tempting to start charging again. But that's the worst possible thing you could do. There is some disagreement as to the best course of action. Here are the things you could do, along with their pros and cons.

*Some financial advisors say that if you keep your credit card but don't use them they can boost your credit scores. That may be the case. But an empty credit card lying around the house may be quite tempting.

If you have accounts that you are not using you will probably not be reviewing them every month. This is a perfect situation for a person who wants to steal your identity. They could do a lot of damage before you ever notice.

* Keep your cards and use them occasionally. This will build up your credit rating, as long as you pay the balances in full each month. But still, by keeping the cards you could be tempted to run up the balances again, putting yourself right back where you started.

*A less tempting option is to hold onto only your lowest rate credit card and close all the other ones out. This gives you something to fall back on in an emergency situation but you have all those other accounts tempting you to buy.

But even when you only have access to one credit card, it's possible to get into more debt than you can handle. If you're offered a credit limit increase, turn it down.

*If you don't trust your ability to control your spending it is best to close all your credit card accounts and not have access to credit. This may seem a bit extreme but it is better than going back into debt.

The latter should be a last resort because credit cards are helpful in building good credit. They can help improve your financial situation by helping you obtain low interest rate loans when you need them.

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Credit Card Counseling

By William Blake

There is an appropriate and beneficial time to use a credit card. Sometimes we have an emergency or need to make a purchase right away and simply do not have the cash available. That is the time to use a credit card. At times when we receive the statement we are still not quite ready or able to pay for the purchase. This is even worse for people who find it very difficult to control their credit card spending. For them, they truly dread receiving that statement at the end of the month.

Get Help

If you have a credit card that has a growing balance due to the high interest charges don't feel that all is lost. There is something you can do. You can call the credit card company's customer service department and try to negotiate a lower rate. They will be able to inform you quickly if you qualify for such a reduction. If you are able to reduce your interest you can begin to chip away at the balance because you will not be spending so much money each month on the compounding interest.

Utilize the Internet

Other help is available and can be found on line. There are thousands of financial experts out there who can help you with your credit card debt and they can easily be located on line. Sometimes it can be arranged for you to have a live chat with credit counselors that can help you get back on track and better manage your finances. There are also web sites that sell reading material with instructions on how to get out from under debt.

Counselors That Can Help

Credit counseling is also available on the internet or face to face. Credit counselors can evaluate your situation and explain to you where you have gotten off track. Also some are willing to negotiate with your creditors in your behalf to reduce your interest and give you a more manageable payment. Seeking help from credit counselors will help you drastically improve your credit scores.

Credit Counseling for Free

You will find that most credit card counselors offer their services free of charge. Simply pull all your debts together and prepare the information for them to review. They will give you options and help you choose the plan that will help you in time to get back on your feet financially.

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Making a Budget: The Basic Steps

By William Blake

If you want to start living a more frugal life, you will need to start the process by doing some important planning. The most important part of planning for your finances is making a solid budget. Regardless of how much you make, how you make it, and how much you have now, you can make a budget that will work for you. Consider the following steps that will help you take the first step to a thriftier lifestyle: making a budget.

1. Write down your spending. You can't plan out how you will spend your money until you know how you are spending it at present. Carry around a small notebook for a month and write down every purchase you make. This will help you see how your money is disappearing.

2. Make a list of all your expenses and include the spending you have in your notebook along with any monthly bills that you might not have written down. Total up the categories that you have and the total spending as well.

3. Write down how much money you make and how often you receive it, whether that be on a weekly, bi-weekly, or monthly basis. Then total up how much you earn.

4. Based off of the information you have gathered during the last month, make a budget. Once you have it written out, compare it to your total income and make any necessary adjustments so that your income is more than your budget is, either spending less or making more money.

5. Study your budget and even take a few days to really think about the items you have listed there. Make better choices. If you only watch your television once a week then cancel your cable. Save that money for something else. If you have so many clothes that you can't open your closet then determine to pass on the shopping for a while. Decide to choose a future instead of a fleeting present.

6. Once you have cut out all possible expenses, look at your budgeted totals for earnings and spending. If you still wind up spending more than you earn, you might consider getting a better or second job. Your budget will not be able to help you save money if you plan to spend more than you earn.

7. Review your budget. Since our lives are in a constant state of flux, your budget will no doubt need to be adjusted from time to time. As your lifestyle gets progressively more frugal, you may notice more expenses that can be cut.

If you want to live a frugal life then it is important to understand your spending and learn to get it under control. Setting up a budget is a first step towards that prosperous way of life.

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Dealing With The Debt Collectors

By Darren Cason

Anyone can be anxious when the debt collectors are constantly ringing up and sending threatening letters of demand. But rest assured that there is protection in a number of forms and ways that you can deal with the debt collectors that hassle you.

There is an Act that lays down the guidelines as to what a debt collector can and cannot do when they are trying to collect a debt. It is called the "Fair Debt Collection Practices" Act. This Act states, amongst other aspects, that the debt collectors are not allowed to call before 8 a.m. or after 9 p.m.; they cannot garnish wages in those states where it has been made illegal and they must cease the continual phone calls if you ask them to.

[For the full text, see: http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#801]

There are several things you can do.

Don't take the call. Use an answering machine to screen calls. For those people who have caller ID or call blocking, you will be able to get rid of the call entirely.

If you do decide to take the call, it is entirely reasonable for you to request that they do not contact you further. If you send the agency a "cease and desist" letter, they are then legally prevented from contacting you. Any legal action can be expensive, so it is wise to try other ways first.

If the debt is in fact yours to pay, if you are able to, you should think about paying it. After all it is your responsibility and should be paid. If you are truly finding it difficult to pay, then perhaps you can negotiate a way of making regular, lower payments until the debt is paid in full.

Make the committment and stick to it and the annoying calls should stop. These debt collectors are real people just doing their job, even if some of them are less than pleasant about it and they will usually not bother you once you have an agreement with them.

Maintain a record of calls that have been made either by you or to you in a diary, together with any arrangements that have been made. Keep a record of when you have asked them to stop calling - this is most important if they have been calling you at your workplace. If it is legal in your state, you may consider taping the phone call, but keep in mind that often means that you have to tell the other person that you are recording them.

There are not many debt collectors that are brave enough (or unwise enough) to say things that may compromise them when they are aware they are being recorded. The record or diary will be helpful if you have negotiated a change in the payment regime.

The majority of debt collectors are able to agree to a lower payment, but because they usually get a commission based on the percentage of their collection, they will push you to pay as close to the whole amount as possible. However, they do understand that if you are able to pay 50% of $500, it is preferable to receiving 100% of nothing at all.

When you make an agreement, the debt collector should also make their own commitment that they will not put any further adverse comments on your credit report or credit rating. Ask them to report any increase on your credit score as well as the payments that you do make as soon as possible so you can adjust the amount owed accordingly.

Be sure that you obtain agreements in writing before you send any substantial amounts of money. A "good faith" payment is fine as it will show that you are sincere in your efforts to clear the debt, but if you send too much at one time, they will be less inclined to adhere to their side of the bargain.

There are three things that you should always retain when you are dealing with debt collection: patience, a realistic outlook and remaining calm when discussing matters financial. If you remember these, you will reduce the stress of the situation.

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Secured Credit Cards using Home Equity

By Simon Martin

A home equity loan is a loan which is secured. The home is used as collateral to secure the loan. And this equity can also be used to back a secured instant approval credit cards Your home equity is calculated by subtracting the current value and mortgage. Suppose if you own a house worth USD 200,000 and you have mortgage of USD 150,000, the equity amount comes to USD 50,000 on your home. This equity of USD 50,000 would help you to borrow money as a security for the loan. Since your home is used as collateral for the loan, if you do not pay the loan then you could lose your home. This loan is also called as second mortgage.

If you get a home equity loan you can get tax benefits. The interest rates are also lower. Since it is a secured loan the lender is also at a low risk. Credit cards and personal loans charge huge amount of interests. The home equity loan can be utilized for anything from paying off your credit card bills, home renovations, education, investment or buying a Porsche or any other automobile. The interest rates you pay on credit cards are very high, if the home equity loan is used to pay off the credit card outstanding, then it is a good deal.

There are two types of home equity loans:

The Standard Home Equity Loan:In a standard home equity loan the amount of interest is fixed. The monthly payment and loan tenure is also fixed and does not change. You will receive the amount and a fixed monthly installment which you should pay over the life of the loan. For instance: If you apply for a home equity loan amount of USD 30,000 with an interest rate of 7.5%, you will have to pay monthly installment of USD 356.11 over a period of 10 years.

If you have backed your credit card with Cash from this loan you will have the full spending power of the card up to the cash back limit. Home Equity Line of Credit: In this you are approved a loan amount and you can withdraw the money as and when you like. You are supposed to pay the interest only on the amount borrowed. The interest rates vary over the life of the loan. Even fixed interest rates can be negotiated. You can borrow the money, pay off the money in installments and again re-borrow that money. For instance: If you are approved a home equity line of credit for USD 30,000 and you borrow USD 10,000 and are charged USD 6% interest and if you pay back USD 5,000, you still have USD 25,000 line of credit which can be borrowed anytime you require. Normally, the interest rate on home equity line of credit is not fixed.

Interest rates are the most important thing while you apply for home equity loans. The annual percentage rate is the most important rate. The interest rates are not the same for standard home equity loans and home equity line of credit. Due to competition many home equity loan companies offer free processing fees. Introductory rates are also provided to attract more customers. The introductory rates are normally valid for a very short period. After the introductory period is over, you will start paying a higher rate of interest than the introductory rate. Be sure to ask about the introductory rate and its period. How much will it increase after the introductory period? It is best to compare the home equity loans online before applying for it. Comparisons could prove to be very helpful in selecting the best home equity loans. There are many websites, which provide ratings and reviews of home equity loans.

If you avail home equity loans you have to make sure you pay the monthly installments on time. At the end of the tenure of the loan ensure that there is no payment left. Any money, which has not been paid for the sum, borrowed through home equity loans or a home equity line of credit is called balloon payment. Try to avoid balloon payment. For instance get a home equity line of credit of USD 30,000 and withdraw USD 30,000. You make monthly installment for the interest amount only and at the end of the loan life you are said to pay USD 30,000 or else you have to sell the home. The lenders are happy to provide balloon payment. If you accept balloon payment the interest payable monthly, would be very low. But at the end of the loan life you have to pay a huge sum of money. Read all terms and conditions carefully while applying for standard home equity loans and home equity line of credit. If you are unable to understand any points consult a family member or attorney.

Another thing to keep in mind is LTV (loan to value ratio). For instance if the value of the home is USD 200,000 and it has first mortgage amount of USD 150,000 and home equity loan of USD 50,000, then the LTV ratio is 100%. Although many lenders provide loans up to 75-80% but there are many lenders who could provide LTV's of even 120%. High LTV loans means you have to pay more interest and you lose tax benefits.

If a person mortgages his home for USD 100,000 and USD 50,000 home equity loan and the LTV ratio is 120%, and if the home is sold for USD 130,000 subtracted by real estate fees - the total amount owed would still be around USD 20,000 -30,000. Never exceed your loans above the value of the home. It is a very risky proposition.

A person can avail a low rate of interest on home equity loan in interest rate could save thousands of dollars. Compare with many lenders and decide the best offer. There are websites through which you can get instant quotes from various lenders. Always remember it is your money and if the amount you are going to repay is less compared to others, go for it, as you will be saving hard earned money.

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Avoid Bankruptcy Now

By Renee Dunn

Are you trying to avoid bankruptcy? Don't worry there is a way to sort out your debt and produce a good financial future.

It's easy for debts to get out of control, today's bustling and troubled world brings many challenges. Overspending, unrestricted spending, a job loss or malady can all lead to money troubles.

To avoid bankruptcy it is important that you get hold of an expert financial counselor, attorney or an accountant. You need to get hold of a professional money manager or debt consultant such as an accountant or bankruptcy attorney but before you do that you need to ensure your creditors know what's happening. The people you owe money to will be real keen to talk to you about your debts if you are getting behind in repayments, keeping in contact with them is really crucial.

Nevertheless, if your state of affairs is becoming really acute and you have creditors mailing court appearance dates and or threatening to send you bankrupt then you must act quickly and contact one of the experts named above, an known bankruptcy lawyer could be your optimum choice if things have gotten to this degree.

With some professional help it will be easy to devise payment programs that suit you with all your lenders and from there they are bound by those agreements. This should save you of those tough phone calls or knocks at the door from someone threatening you with court-ordered action if you don't pay.These types of arrangements are part of the Bankruptcy Act and in most circumstances will leave a very unfavorable record on your credit report for years into the future so be certain to educate yourself well on the little differences between debt agreements and full scale bankruptcy; the main difference really is that in one case you are paying back your debts and your current assests are somewhat safe from repossession compared to bankruptcy where you pay nothing back unless over a tested income threshold and some assests can be sold to fund your bankrupt estate.

So to avoid bankruptcy you really must keep in contact with your creditors, contact a skillful financial counselor or lawyer and reach formalised agreements with your creditors to not solely lower your payments and interest rates but to protect assests such as your dwelling and give you peace of mind that you won't be opening the front door to a debt collector.

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