PLASTIC Money !!!

If you see no positive solution to get out of your debt trap related to credit card spending, you might be overlooking a credit card debt consolidation program. Since interest rates of credit cards are likely to be much higher than regular loans, these types of debts get piled up higher and sooner than other loans. If plastic money is not meticulously used, then users may end up paying higher dollar bills than the amount that was actually spent. If you find yourself trapped in a similar situation, discover your way out through effective program to consolidate all your loan and dues in one simple loan or card.

Leverage Credit Card Debts To Reduce With Debt Consolidation.

People with higher credit card debts generally have a poor credit history. This makes them ineligible to get a loan approval. Even if they get a loan, it is at a higher rate because such loans are considered high risk lending. However, you should not lose heart because many companies offer bad credit debt consolidation programs to help you get rid of harassing collection call and steep delayed payment and other charges because of credit card dues. When you take a bad credit loan to consolidate credit card debt, you not only ease the debt burden but also improve your credit rating.

A consolidation program to combine dues from multiple credit cards into one convenient loan is an extremely effective tool in alleviating the pressure of never ending losses that you are incurring every month and still getting no reprieve from the total amount showing as outstanding. The companies that offer loans and or cards for consolidation charge much lower rate of interest that the existing loans and dues and you save substantially on interest payments and charges. Moreover, since these loans for the purpose of consolidating debt are long term, you have to pay an affordable monthly repayment. Thus a credit card debt consolidation plan is all set to help you take a sigh of relief, ease your debt burden and eventually become debt free.

Before you use a program for consolidating plastic money related dues, make sure you have carefully chosen your company.

• Companies charge you for their services even before seeing your papers and debt structure. Experts consider these companies a sham.
• Not all operators are unscrupulous and you can easily find a genuine debt consolidation company that can help you to take control of the situation and get out of the debt trap.
• Genuine companies begin with seeing your papers, current debt status, then, assess your debt situation to offer you an appropriate program which might consist of a debt consolidation loan, counseling, financial management or a combination of all.

The companies would offer you a free online debt consolidation quote and then after assessing your case, they talk and negotiate with your creditors to relieve you from taking harassing calls from creditors. These companies hire representatives and managers to negotiate minimum payments, interests, late fees and penalties with your creditors. These companies might succeed to get some discount on the total amount due.

Numerous companies are operating in the market providing such free and efficient services. Conduct research on these companies and select a good card debt consolidation program that can deliver visible results in a satisfactory manner, have efficient customer support services, at offer you the most competitive rates.

Debt SnowBall Effect...

Here's how the debt snowball idea works. A debt snowball (or similar arrangement) is simply a debt repayment plan that specifies the order in which you should pay off your debts. Typically, there is some logic in the order - in Dave Ramsey's original debt snowball, the debts were ordered from smallest to largest, for example. You then add up the minimum payments for this snowball, add an additional amount to that total, and then treat that dollar amount as your "debt bill" for the month.

From this "debt bill," you make the minimum payments on all of your debts, then use the remainder to make extra payment on whichever debt is on top of the list. When that one is paid off, you don't reduce the total of your "debt bill" - instead, you just have a larger remainder to tackle whatever debt is now on top of the list. Eventually, you'll be using the whole "debt bill" amount to tackle that final debt - and it will melt away quite quickly.

If you're spending less than you make but you still have a lot of debt to tackle, a debt snowball is a great thing to start. It commits you to actually getting rid of your debts - and debt freedom is a beautiful place to be.

How do you set this up? It's pretty easy - all you need is either a piece of paper or a spreadsheet. Here's the game plan.

First, find the interest rate, minimum payment, and outstanding balance of every outstanding debt you have. You should be able to get this information from the last statement of each of these bills.

Next, sort these bills. I recommend sorting them by interest rate, with the highest one on top. Another method is to sort them by the outstanding balance, with the smallest one on top. What you're doing here is figuring out the order you'd like to see these debts gone.

Now, list the debts along with their minimum payment in the order you sorted them. You're going to add up the minimum payments, so keep them in a nice column so you can easily add them up.

When you have them all listed, add up the minimum payments. This should give you a nice fat number - that's how much of your income each month goes to paying off stuff you had to have before you could afford it. It's a number that you want to knock down to zero.

At this point, you need to take a look at how much you spend overall each month. How much extra can you squeeze out? If you've been doing the one hour projects, you'll probably be able to squeeze out at least a little. Commit yourself to spending a certain extra amount each month to getting yourself debt free.

Add this number to your minimum payments. This is how much you're going to commit to your debt each month. I found it psychologically useful to find that number I was comfortable with, then rounding it up to a larger number, a nice even target for each month.

When you figure up your bills, use this total number instead of the individual minimum payments. Your "debt bill" is now this number.

When you sit down to pay the bills, make minimum payments on all but the top bill on your list. Then, for that one remaining bill, write a check for the remainder of the money you put aside for debt that month.

Repeat this exact bill paying procedure without changing the total amount you're putting aside each month until your debts are gone. Obviously, you may want to refigure things if a major life change occurs, but unless something really big happens, stick to the snowball. It will get you out of debt.

How To Negotiate A Lower Credit Card Interest Rate?

The interest rate on your credit card affects how much you pay in finance charges when you carry a balance. The higher your interest rate, the higher your finance charges will be. You may be able to talk your creditors into lowering your interest rate.

Call one of your creditors and say something like, "Hello. This is your name here. The interest rate on my credit card is much higher than the rates on credit card offers I've received. Can you do something about that?"

A more aggressive approach: "Hello. This is your name here. I'd like a lower interest rate. I have lower rate offers from other credit cards and will switch if I can't get a lower rate from you.

To further strengthen your argument, you might consider using the number of years you've been a customer, the most recent number of consecutive on-time payments, your credit score (if it's good), and actual (lower) interest rates of other credit cards and offers.

Don't try to bluff the creditor by saying you have a lower rate credit card offer when you really don't.

You might get called on your bluff.

In the end, you must to be willing to follow through on the threat to move to a lower interst rate credit card if the creditor doesn't budge.

Credit Card: Dos and Don’ts

As now a days in most of us wallet credit card could be found, it is important to learn how to use credit card most effectively – preferably before one starts playing with it. I am pointing out here few do’s and don’ts of credit card, that I learned from my personal and friend’s experience.

Don’t:

• Use credit card for everyday purchase like: food, gas, grocery etc. As using credit card as a substitute for cash is a habit that can quickly lead to debt (bad debt).
• Get into the habit of making minimum only payment. Making minimum only payment every time unnecessary increases the debt burden. Moreover the rate of interest charged on credit card debt is also very high in comparison to normal rate of interest.
• Use your card to buy stuffs, which one cannot afford. As the probability of not able to clear the debt for these is high. This is because, the thing which one cannot afford today, it is difficult for one to afford it in a very short period of time (Credit Card debt are for very short period, on an average 15 – 45 days) . Never try to show off you are what you are.
• Opt out of a credit card, without analyzing, its impact on one’s credit score. One should avoid closing cards, still having any due balance or those that had a significant share in one’s credit history

Do’s

• Take rational decision before purchasing. Go for the needs rather than wants.
• Utilize not more than 25% .of credit limit. The amount of debt one has, plays an important role in determining one’s credit score. Moreover, lower balances are easy to manage.
• Always negotiate for lower interest rates, as due to huge competition in credit card market, credit card companies keep on revising the rate in new offers. One should keep a track on market practice and be sure of getting the best deal.

Too Many Debts? Take help of Debt Consolidation

Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan. It is the process in which all one’s debts are combined into one. As a result, one has to pay only one company once every month for all one’s bills. This method is way more convenient than making countless trips to the bank every time a credit card bill or a mortgage payment is due.

There are many debt consolidation companies, who can help people with their bill payment problems. Debt consolidation comes in the form of a loan. The company whom one contracted for the service usually pays all of the other bills of one in full. Then one pays them instead. Interest rate of these debt consolidation companies may vary then rest of one’s bill, but that is always in proportion to the rate that one was already paying.

Now the question arises, where to get debt consolidation quotes?

There are many ways of finding good debt consolidation agents/organization, some of these are mentioned below:

1. Online. The internet is filled with different firms offering this service. Some even provide a free quote. Others give trainings and informational materials to guide you with your decision.

2. Banks. Some banks also offer debt consolidation services nowadays. Debt consolidation is actually a good investment on the part of banks.

3. Financial Organizations. If one try to check a list of financial associations within one’s locality, one could easily deduce by their names, which firm specifically caters to debt consolidation services. That way, one can personally go to their office address or call them immediately to request a quote.

4. Local government. Many local governments have a full listing of different companies holding office within their territory. One can call the public information service and get a list of debt consolidation companies operating in the locality.

5. Business Directories. During this time, the yellow pages can really help. All one has to do is to open the book to the heading of debt consolidation.

These are the common places where one can get a debt consolidation quote. Try one of these places and you are sure to get a quote in your hands in just a few days. So what are you waiting for? Go ahead. Call them. And get rid of unnecessary burden of so many debt collectors chasing you…

Settling Debts: Easy Way

Debt settlement occurs when a creditor agrees to settle for a dollar amount that is lower than the actual amount owed. It is the process of contacting creditors directly or through a third party and negotiating for a lump sum payoff of your debts is known as debt settlement.

Benefits of debt settlement:

• One’s principal debt amount can be reduced to approximately 40 – 60%.

• Not only it reduces one’s APR (Annual Percentage Rate - The true rate of interest you are paying on a finance agreement.) but also eliminate late fee.

• One is able to repay debts within one’s chosen time span

At the time of going for Debt Settlement, it is advisable to settle higher interest rate charging debts first. Doing this will bring most dramatic change is one’s monthly budget.. Generally a credit card debt settlement case might take up to 3-9 months which can be shortened to 1-3 months if someone wants to speed up the process of settling debts. On an average charges of debt reduction firms varies between 8%-15% of the total outstanding debt but one should do a thorough verification of the company before going for the service.

A certain time period is allowed by a debt settlement company for settling one’s debt which is generally 36 months and during this time the creditor needs to agree to, on a total amount for negotiation. To get debt settlement help for settling debt one need to qualify for the program. Process of getting qualified is consulting a debt settlement consultant with details of personal debt to see whether one qualify for the program or not. If one do qualify, a financial program is set up to meet one needs, this will help to determine how much money is required to put aside each month to start paying off one’s debts.

Debt settlement is one of the best ways for:

Ø Improving one’s credit report.

Ø Avoiding harassment by debt collectors / creditors.

Ø Saving time by making a single payment each month.

Ø And, also helping to save while paying off debt.

Are debt Collectors Harrasing You by Unfair and Unethical Practices?

Do Not Worry Steps Could Be Taken To Come Out of It...

If, by any chance one was not able to pay a credit card payment, loan installment or any utility bill, there is high probability of one received a call from debt collector. In case, the default was for a longer period one cannot rule out a chase by debt collector. Though, debt collector’s bread and butter is to collect debt, sometimes they get carried away and start using unethical ways to collect debt. If, one feel like that one is getting harassed by debt collector, steps could be taken to come out of this baffled situation.

There are some guidelines that have been established by The Fair Debt Collection Practices Act. These guidelines must be followed by debt collectors and are established to protect debtors from Unfair and Unethical practices of Debt Collection.

Some of the important facts in the guidelines are mentioned here as under:

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (aka FDCPA), 15 U.S.C. § 1692 et seq., is a United States statute added in 1978 as Title VIII of the Consumer Credit Protection Act. Its purposes are to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information's accuracy. The Act creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the Act. It is sometimes used in conjunction with the Fair Credit Reporting Act.

People and Entities covered by FDCPA

The FDCPA broadly defines a debt collector as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." ^[1] While the FDCPA generally only applies to third party debt collectors--not internal collectors for an "original creditor" -- some states, such as California, have similar state consumer protection laws which mirror the FDCPA, and regulate original creditors. In addition, courts have generally found debt buyers to be covered by the FDCPA even though they are collecting their own debts. The definitions and coverage have changed over time. The FDCPA itself contains numerous exceptions to the definition of a "debt collector," particularly after the October 13, 2006, passage of the Financial Services Regulatory Relief Act of 2006. Attorneys, originally explicitly excepted from the definition of a debt collector, have been included (to the extent that they otherwise meet the definition) since 1986.

The FDCPA's definitions of "consumers" and "debt" specifically restricts the coverage of the act to personal, family or household transactions.^[clarify] Thus, debts owed by businesses (or by individuals for business purposes) are not subject to the FDCPA.

Prohibited Conduct

The Act prohibits certain types of "abusive and deceptive" conduct when attempting to collect debts, including the following:

• Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time^[2]
• Contact after being asked to stop: contacting consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further contact or refuses to pay the alleged debt, with certain exceptions, including advising that collection efforts are being terminated or that the collector intends to file a lawsuit or pursue other remedies where permitted^[3]
• Contacting consumers at their place of employment after having been told verbally or in writing that this is not acceptable^[4]
• Contacting consumer known to be represented by an attorney^[5]
• Contacting consumer after request for validation: contacting the consumer or the pursuing collection efforts by the debt collector after receipt of a consumer's written request for verification of a debt (or for the name and address of the original creditor on a debt) and before the debt collector mails the consumer the requested verification or original creditor's name and address^[6]
• Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt, including a debt collector's misrepresentation that he or she is an attorney or law enforcement officer^[7]
• Publishing the consumer's name or address on a "bad debt" list^[8]
• Seeking unjustified amounts, which would include demanding any amounts not permitted under an applicable contract or as provided under applicable law^[9]
• Threatening arrest or legal action that is either not permitted or not actually contemplated^[10]
• Abusive or profane language used in the course of communication related to the debt^[11]
• Contact with third parties: revealing or discussing the nature of debts with third parties (other than the consumer's spouse or attorney) or threatening such action^[12]
• Contact by embarrassing media, such as communicating with a consumer regarding a debt by post card, or using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business ^[13][14]
• Reporting false information on a consumer's credit report or threatening to do so in the process of collection^[15]

Required Conduct

Further, the FDCPA requires debt collectors to:

• Identify themselves and notify the consumer, in every communication, that the communication is from a debt collector, and that information received will be used to effect collection of the debt^[16]
• Give the name and address of the original creditor (company to which the debt was originally payable) upon the consumer's written request made within 30 days of receipt of the §1692g validation notice;^[17]
• Notify the consumer of their right to dispute the debt, in part or in full, with the debt collector. This so-called 30-day "§1692g" validation notice is required to be sent by debt collectors within five days of the initial communication with the consumer, though in 2006 the definition of "initial communication" was amended to exclude "a formal pleading in a civil action" for purposes of triggering the §1692g validation notice, ^[18] complicating the matter where the debt collector is an attorney or law firm. The consumer's receipt of this notice starts the clock running on the 30-day right to demand validation of the debt from the debt collector. ^[19]
• Provide verification of the debt If a consumer sends a written dispute or request for verification within 30 days of receiving the §1692g validation notice, then the debt collector must either mail the consumer the requested validation information or cease collection efforts altogether. Such asserted disputes must also be reported by the creditor to any credit bureau that reports the debt. Consumers may still dispute a debt verbally or after the thirty-day period has elapsed, but doing so waives the right to compel the debt collector to produce verification of the debt. Verification should include at a minimum the amount owed and the name and address of the original creditor. ^[20]
• File a lawsuit in a proper venue - a debt collector may file a lawsuit, if at all, only in a place where the consumer lives or signed the contract^[21]

This should not be understood to be an exhaustive list either of prohibited or required conduct.

Enforcement of The FDCPA

The Federal Trade Commission has the authority to administratively enforce the FDCPA using its powers under the Federal Trade Commission Act.^[22]

Aggrieved consumers may also file a private lawsuit in a state or federal court to collect damages (actual, statutory, attorney's fee and court-costs) from third-party debt collectors. The FDCPA is a strict liability law, which means that a consumer need not prove actual damages in order to claim statutory damages of up to $1,000 plus reasonable attorney fees if a debt collector is proven to have violated the FDCPA.^[23] The collector may, however, escape penalty if it shows that the violation (or violations) was the result of a "bona fide error."^[24]

Alternately, if the consumer loses the lawsuit and the court determines that the consumer filed the case in bad faith and for the purposes of harassment, the court may then award attorney's fees to the debt collector.

References

1. ^ 15 U.S.C. § 1692a
2. ^ 15 U.S.C. § 1692c(a)(1)
3. ^ 15 U.S.C. § 1692c(c)
4. ^ 15 U.S.C. § 1692c(a)(3)
5. ^ 15 U.S.C. § 1692c(a)(2)
6. ^ 15 U.S.C. § 1692g(b)
7. ^ 15 U.S.C. § 1692e
8. ^ 15 U.S.C. § 1692(d)
9. ^ 15 U.S.C. § 1692f(1); Hodges v. Sasil Corp., 915 A.2d 1 (N.J. 2007)
10. ^ 15 U.S.C. § 1692e
11. ^ 15 U.S.C. § 1692d
12. ^ 15 U.S.C. § 1692d and 15 U.S.C. § 1692e
13. ^ 15 U.S.C. § 1692f(8)
14. ^ 15 U.S.C. § 1692f(7)
15. ^ 15 U.S.C. § 1692e(8)
16. ^ 15 U.S.C. § 1692e(11)
17. ^ 15 U.S.C. § 1692g(b)
18. ^ 15 U.S.C. § 1692g(d)
19. ^ 15 U.S.C. § 1692g(b)
20. ^ 15 U.S.C. § 1692g(b)
21. ^ 15 U.S.C. § 1692i
22. ^ 15 U.S.C. § 1692l
23. ^ 15 U.S.C. § 1692k(a)(2)
24. ^ 15 U.S.C. § 1692k(c)

N.B. Entire details about this act has been copied from http://en.wikipedia.org/wiki/Fair_Debt_Collection_Practices_Act at 4:30 am PST on Tuesday, March 04, 2008. readers are requested to check the current version of Act, it was most recently amended in 2006