USAinDebt

When credit cards first came into existence there was only one type, the unsecured credit card. If you had good credit and passed all of the relevant criteria, such as a specific income level and working at the same job for a number of years, then you were approved for a credit limit set by the financial institution. Unfortunately many people run into financial difficulties and do not qualify for this type of credit card. Thus the door was opened to the secured credit card.

The secured credit card is basically a credit card for individuals with poor credit (such as those who have been discharged from bankruptcy); or those who have a lower income. This type of credit card is one in which you put down your own money as collateral. You may then use the card and borrow in this manner until a time at which the credit card company is willing to consider extending you credit by way of an unsecured credit card. This will happen once you have proven that you can use credit responsibly and can pay your bills on time every month.

In most cases, the limit on a secured credit card is low, in the range of $500 to $1000. This is a small enough amount that the person who is attempting to rebuild their credit should not run into any financial problems. Most companies are willing to consider a responsible credit card holder for an unsecured card after they have been with the company for anywhere from one to two years. The request will be considered on a case-by-case basis. Once you feel you have proven yourself with responsible credit card use, do not be afraid to approach the company about switching to an unsecured credit card.

There are a number of companies that issue secured credit cards but it is important that you look for one that does not charge an application fee. Most have an annual fee as this is a standard practice, but make sure you compare the fees from company to company before you make a final decision.

Another important point of note is that before you apply to any particular credit card company, find out if they make it a habit to report their credit information to all three credit reporting agencies. After all this is a primary benefit that you should take full advantage of.

Tags: credit card | secured credit card | debt | apr | loan

Decoding and properly understanding the fine print on credit card agreements is the foundation of your financial decisions. And if you want to make the right choice, make sure that you know what you are putting your signature under.

Fees. Annual Fee, Application Fee, Balance Transfer Fee, Late Payment Fee… Some credit cards are so overwhelmed with fees, that you credit limit can be entirely consumed by them before you even get a chance to use the plastic. Watch out for those charges! It’s a good idea to make a list of all the fees which your credit card carries in order to really understand how much exactly the credit will cost you.

APR. Most credit cards offer a low or 0% APR to their customers, but that’s just your initial APR, otherwise called Introductory APR. It is usually offered for 6 or 12 months, and after that period passes, you will be paying the regular APR. Then you also have a Default APR, which comes in effect when you miss payments, go over the limit or simply when your credit score goes down (“Universal Default”). You also may have up to three different APR’s: for cash, for balance transfer and for purchases.

Billing cycle. You can be billed bi-weekly, monthly, annually and in all kinds of other time incremental. Some banks even use double-billing cycle, where you have two due dates: one for your minimum payment and one for the entire balance.

Balance Transfer Terms. That 0% on Balance Transfers may come with its own Fine Print – for example 5% fee on the balance transferred or $2 per every $100 transferred.

Binding Arbitration. The credit card issuer is giving notice that if the cardholder has a disagreement with the creditor he or she can’t sue the card issuer in court. As a substitute, they must take the case to a private arbitrator or judge.

As per the latest reports, Americans are  ’above their ears’ in debt - $48 trillion - and soaring. 9 out of 10 households in the US owe money - in mortgages, car payments, credit cards, student loans, medical bills, various payday, credit union and personal loans. And unless you are one of those lucky exceptions, you probably owe green. If so, read-on: here are your first golden steps in becoming debt - free.

When dealing with your debt, the first thing to do is to summarize your responsibilities. In another words, understand how much you owe. And in order to do this, you will need a couple of simple things: Microsoft Excel, Internet, a phone and a couple of hours of free time.

For starters, create a new Excel file and password-protect it. Go to Excel, click on “Tools” then “Options”, click on the “Security” tab and look for the box “Password to open”. This is where you are going to put your password. After you have typed the password, click on “Ok”, re-enter the password (for security) and voila, your document is protected. Save it.

Your next task to do is to type in “Creditor” into the first box (A1). Write “Owed” in B2, “Available” in B3, “APR” in B4 and “Minimum Payment” in B5. Save. Next, list the names of your creditors in the first column, one name per row. Save again. The next step is to contact each creditor that you have listed in the first column and obtain as much information as you can. Against the name of each creditor you should fill out what’s owed, what’s available, what is the APR on the credit and what is the minimum monthly payment. Save frequently to avoid loss of information!

After you have everything listed, it’s time to summarize your debt. You will be using Excel’s Auto Sum function for that. Let’s do it with the numbers in column#2, “Owed”. Click on the first number in that column, hold the “Shift” key on your keyboard, and then click on the next empty box underneath the last number in that same column. This way you should have selected all the numbers below the “Owed” column, plus one more empty box. When that’s done, click on the Auto-sum Button which looks like the Greek letter Sigma - “Σ”. This will add all the numbers that you have selected and display the result on the bottom. The great thing about Auto Sum is that if you change any of the numbers in the column, Excel will automatically re-calculate the result! Do the same for the “Available” and “Minimum Payment” columns. Save.

Let’s summarize what’s been done. You have just made the first step towards your financial freedom. You now know exactly how much you owe, what are you minimum monthly payments, how much all those credit lines cost you per month and how much credit you have available. Good job!

Tags: credit | debt | debt-free | loans | apr | autosum | excel

Making the right financial decisions can really make your life easier. When it comes to choosing credit cards these days, however, the right decision is not easy. There are many plastics out there, and they all come with all kinds of fees, APR’s, rewards and pages of terms & conditions.

The best way to pick a card can be summarized in a 3-step plan:

1. Educate.

What is APR? How do they calculate my minimum payments? How much will I have to pay per month if I owe $1000? What is a Balance Transfer? What is an Identity Theft Program Fee? It is really important to know the basics and the terms of the credit  because a smart consumer is an educated consumer. Here are a couple of articles that are going to be helpful:

- Understanding APR (Explains what really APR is, how it works and how not to get fooled by APR offers)

- 17 Hidden Credit Card Fees Revealed (Every credit card fee explained)

- What is FICO and Why Should You Care About it (Explains what FICO is and gives some advice on how to keep those score numbers high)

- Balance Transfers: Benefits & Drawbacks (Explains the possible pitfalls of Balance Transfers)

- How to Choose a Credit Card (Explains the different types of plastics)

2. Research.

There are a million websites out there that will help you with your research. You best bet is to figure out what are you looking for in a plastic: are you out there to collect point or you want to transfer balances? Write down your requirements and then compare the offers side-by-side.

- CreditCards.com (Great credit card comparison website)

- Bankrate.com (Compare The Best Credit Card Rates)

3. Negotiate.

If you have found your card online, and if you have some spare time, you may want to go one step further and call the bank. Talk to a customer care specialist and see if you can get a better deal. Very often supervisors have the ability to lower APRs and waive fees. 10-15 minutes on the phone can really get you a nice deal and save you green!

  Tags: credit | credit card | money | loans | bills | apr | balance transfer

Companies spend a lot of money on advertising their products to the public and unfortunately that good advertising often works: people tend to buy products that they have seen on TV or read about in the magazines. Sometimes, however, those products are not the best buy. They are expensive because of the brand they are sold under at the same time they are no different that the rest of the products on the shelf. Generic, or otherwise called store brands can often save shoppers lots of green.

A good example is CVS. What does a regular CVS customer buy? Cosmetics, medicine, household supplies. So let’s get two separate carts and shop. Shampoo, toothpaste, face cleanser, pain reliever, cotton swabs.

Cart 1: contains Head & Shoudler’s Dandruff Shampoo, Classic Clean; Crest Vivid White Night Toothpaste; Clean & Clear Oil-Free Daily Pore Cleanser; Advil Ibuprofen Coated Gel Caplets; Q-tips. Total for this cart: $35.00.

Cart2: CVS Dandruff Shampoo 2 In 1, CVS Bright White Whitening Toothpaste, CVS Oil Free Acne Cleanser,Pain Relief Rapid Release Gel Caps Extra Strength, CVS Cotton Swabs Flexible Plastic. Total for this cart: $13.39.

Looking at the above, it is easy to see that the CVS store brands have saved us $21.61, which is a nice piece of change. Worried about the quality of what you are buying? Compare the ingredients and you’ll see that they are 100% identical in most products! Why pay for the brand name when you can have the same for less?

Tags: cvs | save money | store brands | generic

If you happen to be in debt then the likelihood is that you consider credit card to be a dirty word! Credit cards account for the majority of debt in this country at the moment, but did you know they can also help to get you out of debt?

The latest credit card trend is towards balance transfers. Transferring your credit card balances from a high interest card to one of the many interest free credit cards that have fixed nine, twelve or eighteen month offers can knock hundreds of dollars off your bills and give you a little breathing space to get your credit card balances cleared. But if you are not sure where to look for these offers then a website like About Your Money can help.

About your money is a comparison site that has access to plenty of the latest interest free credit cards and the related offers. The site is really comprehensive, complete with a comparison table and a guide to help you choose the interest free credit cards that will best suit you. If your debt is more extensive though, you might want to take a look at the personal loans section instead.

Now is the time though. With 2008 approaching and bringing a fresh start with it, now is the time to look to clear your debt.

Here’s 12 excellent articles, combined in our Carnival of Credit Report Stories. Have fun reading!

Karen Halls presents Bankruptcy Vs Bankruptcy Alternatives posted at
A Bankruptcy Lawyer’s Blog, saying, “When you’re beginning to find it difficult to pay off your debts you might consider filing for bankruptcy as your ultimate debt solution. But have you considered other options before you finally declare personal bankruptcy?”

Aaron Wakling presents Improving Your Credit Score - Fundamental Factors posted at The Credit & Credit Card Blog, saying, “To understand how to improve your overall credit rating, it is imperative you understand what factors influence your FICO score.”

Eric Hudin presents Estate Planning Tax Advice - Why You Need It and Where to Find It posted at My Estate Planning Career Blog, saying, “Taxes are something you have to pay all of your life, and if you do not plan ahead, they will be something your estates will be paying even after you are gone. So making sure that you get quality estate planning tax advice when you are arranging your final affairs is one way to ensure that your heirs, and not the IRS, receive the bulk of your estate.”

Allen Taylor presents Investing - Determining Your Goals posted at Investing World Today, saying, “Much like an exercise program, you will want to determine your
goals before you begin to invest. Your goal might be retiring in 20-30 years, kids college funding or, if you got started a bit late, retirement in the next 5 to 10 years.”

Tim Ramsey presents 7 Steps to Debt Freedom posted at My Debt Relief Blog,
saying, “For anyone out there who has ever forgotten a payment or found themselves with more debt than their income could pay, you know how aggressive some of these creditors can be.”

Eric Stanley presents How The Recent ?Credit Crunch? Could Affect You posted at
Personal Finance Blog Articles, saying, “With banks and financial intuitions unsure on the risks involved with lending to one another, a ripple effect is being sent out
into the rest of the lending world.”

Thomas Humes presents Guidelines for Building Wealth posted at Wealth Building World, saying, “Review my guidelines for building wealth.”

JASMBA presents Getting Ahead posted at Getting Ahead.

Matthew Paulson presents The First Thing’s First: Prioritize Your Debts posted at
Getting Green.

Larry Russell presents Diversify To Avoid Investment Fraud posted at THE SKILLED INVESTOR Blog, saying, “Stories about financial fraud often seem to include the phrase
“his or her life savings.” There should never be a moment during your lifetime when your life savings are not heavily diversified across many investment vehicles and firms.”

Colin Robertson presents How Long Do Negative Items Remain on a Credit Report posted at The Truth About Credit Cards.com.

James presents Notorious Practices of Payday Loan Companies posted at ZooLaw.

That concludes this edition. Submit your blog article to the next edition of credit report stories using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Collection agencies can be a real pain in the neck. Their representatives are annoying, rude and they won’t leave you alone until you pay them. Besides that, a collection agency is capable of ruining your credit profile for up to 7 years and that can really hurt you in many ways. So if you have one of the abovementioned annoying persons calling you, read on.

Before anything else, let’s clear up what is a collection account and what is a collection agency. Simply said, a collection account is opened on a bill that you haven’t paid for a while. Like your cell phone bill, or your credit card payment – if your cell phone carrier or bank for some reason haven’t received any payments from you over an extended period of time,  they will do a couple of things. First, they will try to call you. Second, they will mail you. And third, if they still haven’t heard from you, they will sell your bill to a collection agency. What happens is that the collection agency pays the money you owe for you, and takes over your bill. So now you owe that money to a collection agency. They will open a collection account under your name, get your credit reports and post a collection record on usually all three of them. Then they will get your contact information and start harassing you by phone and mail.

Read the rest of this entry »

Here we have 40(!) great  articles on everything Finance. Welcome to the Blog Carnival of Twentysomething Finances! Thanks to everybody who participated!

Steve Faber presents - How to Avoid Foreclosure posted at DebtBlog.

ChristianPF presents How to budget with ING direct posted at Money in the Bible | Christian Personal Finance Blog, saying, “ING Direct is my secret budgeting tool. Here are a few steps to start budgeting using ING Direct.”

Silicon Valley Blogger presents Stop Overspending Now! 14 Ways To Conquer Binge Buying posted at The Digerati Life.

Sara Goldstein presents How to choose better-quality clothes posted at The Bargain Queen on Fashion and Beauty, saying, “On limited collage finances, it’s essential to stretch your clothing budget as far as possible — and that means buying things that won’t fall apart after the first wear. Here’s how to pick better-quality clothes.”

Michael Cohen presents Why You Shouldn?t Buy Classmates Stock posted at Classmates.com Sucks.

KCLau presents Should you focus on Increasing income or reducing expenses? posted at KCLau’s Money Tips, saying, “Cash flow chart involves simple mathematic calculation: Saving = Income - Expenses. Savings is the priority since it appears first in the equation. To increase saving, we can either increase income, reduce expenses, or doing both at the same time. Which option requires your most attention?”

Frugal Panda presents Fly or Drive: Which is Cheaper? (A Definitive Answer, Once and For All) posted at Frugal Panda.

Ryan Russell presents Is Debt Consolidation A Good Idea? posted at Care on Credit, saying, “Debt consolidation comes in several forms, including credit counseling, balance transfers, and debt consolidation loans, so review your options carefully before making a decision.”

Joy Miller presents 10 Online colleges offering credit for life experience posted at Online College Blog, saying, “Several reputable, regionally-accredited colleges and universities allow you to earn credit for life experience.”

Sagar Satapathy presents The Amero: An Introduction, A Short History, and What it Would Mean for Our Economy | Currency Trading.net posted at Currency Trading.net.

Roshawn Watson presents Do Your Friends Keep You Broke? posted at Watson Inc, saying, “I was shocked to learn that your income will often mirror that of your five closest friends. I had to ask myself who is in my inner circle. Learn from billionaire J Paul Getty. He said that if he were down to his last five dollars, you wouldn’t find him in some cheap restaurant trying to eat all he could. He would rather be in a nice hotel lobby drinking coffee with visionaries and leaders. His rationale was that the people he wanted to be a part of his future were at the hotel not the restaurant. Believe him.”

Matthew Paulson presents Be on the Lookout: Con Artists Stealing Guardianship of Senior Parents posted at Getting Green.

Larry Russell presents Understand the confusing securities market motion picture posted at THE SKILLED INVESTOR Blog, saying, “Securities markets are usually very quick to adjust prices to reflect new information. However, this price adjustment process may take longer and be more volatile, if the new information is ambiguous.”

Juan Millon (1mil) presents Creating My Own Website: Step 3 Registering A Domain Name posted at Millionster.com.

Sam presents How to Save on a Home Mortgage Loan, Mortgage Refinancing, Second Mortgage Loan. posted at Surfer Sam and Friends, saying, “How to Save Money on a Home Mortgage Loan All Interest Rate Quotes Are Not Alike Don’t Let Closing Costs Scalp You”

Roshawn Watson presents Two Financial Questions You SHOULD Ask Your Friends posted at Watson Inc, saying, “Strife over money has severed many good relationships. When it comes to discussing finances, avoidance is understandably our medicine of choice, especially when friends are involved. However, perhaps avoidance is not the best strategy”

Mike Lazear presents The Great Office Escape posted at The Great Office Escape, saying, “A great way to save in your 20s is to resist the temptation of car ownership! Reap the benefits by seeing your savings rise and experience some other bonuses along the way to being car-free.”

John Crenshaw presents Pay Off Mortgage, Lose Tax Deduction? posted at Truthful Lending dot Com, saying, “The home ownership tax deduction is one of the most commonly misunderstood aspects of home ownership. Find out why it’s ok to lose that deduction when you pay off your home.”

The Free Geek presents Broke? Alcoholic? How to Drink on a Dime: 10 Surefire Tips posted at Free Geekery.

Dax Desai presents 4 China Stock Picks posted at Dax Desai, saying, “4 Great Chinese Stock Picks & 1 Day Trading Pick”

the baglady presents Early Retirement May Not be Optional for Twentysomethings posted at xynny.

FIRE Getters presents Live Rent Free and Earn as a Caretaker posted at FIRE Finance.

Logan Flatt, CFA presents How to Get Ahead In America (2nd of a 12-Part Series) posted at PowerWealth.com, saying, “If there is one refusal that has been central to my financial success in America, I would say this is it.”

ChristianPF presents Do I need an Emergency Fund? posted at Money in the Bible | Christian Personal Finance Blog, saying, “How an emergency fund can make or break you financially.”

Super Saver presents Time To Plan for 2007 IRA Contributions posted at My Wealth Builder.

Dianne M. Buxton presents Global Impact Charity Engages With a Broader Vision posted at manifestingsuccess, saying, “How early do you want to start? Now? Get wealthy, help others and join the system that is going to do it. No cost to you or anyone you refer.”

Shawn Edwards presents Video — 5 Simple Steps to Get Your Finances Under Control | Desty Online — Online and Offline Businesses posted at Desty Online.

KCLau presents Build your Financial Dream House with a Financial Consultant posted at KCLau’s Money Tips, saying, “Architects design and build real houses. Similarly, financial planners design and build your financial house.”

Mr Credit Card presents Overstock.com Credit Card | Overstock Credit Card Review posted at Ask Mr Credit Card’s Blog.

Jason Elder presents Personal Loans With Bankruptcy posted at A Bankruptcy Lawyer’s Blog, saying, “Here I discuss a few things you may not know when dismissing personal loans in your bankruptcy”

James presents Payday Loan Tips and Tricks posted at Payday Loan Cheapskate.

Shelby Crutchley presents Appliance Insurance - Security, or a Rip Off? posted at Island Girl’s Money, saying, “This entry is about the benefits vs. cost of over-insuring yourself for certain things, like appliances.”

Jimmy Atkinson presents 25 Ways to Earn More and Work Less posted at Ask the Advisor.

Michael@TSM presents Fall TSM Travel Writing Contest: Win $125! posted at Traveling Stories Magazine.

Aaron Wakling presents Credit Checks - What They Are And What You Need To Know posted at The Credit & Credit Card Blog, saying, “Credit checks involve sensitive personal data. Therefore, many people are concerned about precisely who they’ve entrusted with their records. Fortunately, the Fair Credit Reporting Act has established unambiguous rules governing credit checks.”

Millionster presents How Rich Dad Changed My Thoughts About Money posted at Millionster.com, saying, “I was first introduced to Robert Kiyosaki’s books by a good friend of mine — a CEO from Las Vegas. His parents were both business owners so he pretty much had a good head start in his financial education — suffice it to say I took his recommendations in full confidence.”

poetloverrebelspy presents Comparing Foreign Websites for Deals posted at Less Than a Shoestring, saying, “Wasn’t sure if the above post or this one http://nobudgettravel.wordpress.com/2007/10/11/baring-my-budget-london/ would be more your speed. I write about thrifty travel options.”

Michael Bass presents Escaping credit card debt without filing bankruptcy. posted at Debt Prison, saying, “Escape credit card debt without filing bankruptcy or debt settlement.”

Wenchypoo presents Holiday Dinner Rip-offs posted at Wisdom From Wenchypoo’s Mental Wastebasket.

Silicon Valley Blogger presents How Much Credit Have You Turned Down? Maybe Half A Million Dollars Worth posted at The Digerati Life, saying, “Thanks!”

That concludes this edition. Submit your blog article to the next edition of twenty something finances using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Tags: credit | debt | insurance | investment | retirement | savings | blog carnival

I was just complaining about Citibank’s bad customer service a couple of days ago. Yesterday I have noticed that they have bumped up my interest on one of my cards to 32.32%! I called to see what happened and they said that I was late on a payment back in August and that’s when the APR went up. So I argued a bit and then asked to speak with a supervisor. She deserves to have her name mentioned here - Jennie lowered my APR to initially 17.4%, then, without me even asking her for a lower one, she lowered it to 10.4% and then once again, before I could say “Thanks” she said that she will give me a 0% APR for 4 months and 10.4% thereafter. I just couldn’t believe I felt like it was my birthday!

Tags: citibank | apr | charges | reversal | supervisor