Pierre Money Mart Blog

Although the image is that people getting into debt is the result of poor credit card use, this is far from the case. While credit card missuse is one factor that gets some people into debt, there are many other reason you may find yourself currently in debt. For example, it is estimated that half of all people that file for banruptcy are doing so due to debt resulting from medical expenses.

Whatever the reason, the ultimate goal is to get out of debt and back into the black.

There are a few questions you can ask yourself regarding your current credit card use to determine if you are creating a credit card debt problem. Do you have outstanding monthly balances on more than one credit card? Do you only make the minimum monthly payment on your credit card? Have you had debt on your credit card for more than three consecutive months? If you answer “Yes” to any of these questions, then your credit card is probably more of a liability to your financial well being than an asset and, you should consider a plan to reduce your debt.

Although there are many types of debt, credit card debt is by the far the most menacing form for most people. Although many sites have debt reduction plans, we have put together one that will not only eliminate your credit card debt, but ALL your debt (credit card, car payments, student loans, medical bills, legal bills, taxes and even the mortgage of your house) in less than 10 years. That’s not a misprint. Depending on the depth of the debt and how motivated you are, it is quite possible to be debt free much quicker!

Before you write us off as crackpots – take the time to look at the system. There are no tricks, easy ways out or magic cures. It’s all straight forward common sense and anyone can do it if they have the will. We do take an approach that is probably different than you have seen elsewhere, but that is the goal of all the writing on our site. Off to step #1.

With ever increasing consumer debt more of us are finding ourselves robbing Peter to pay Paul each month.

We go through our bills and find that the money just won’t stretch far enough to cover all of the bills and expenses. It’s hard to decide who you should pay when you have one bill that is stamped with “Final Notice” and you are behind on several of your other bills.

If you don’t pay the credit cards you know that you are going to start getting those harassing phone calls. If you don’t pay the house payment you are looking at foreclosure. If you don’t pay the utilities they will shut them off. How do you decide?

When you get to this point it’s time to get down to basic survival and work from there.

I have actually talked to people that stated their credit cards were up to date but their mortgage was two months behind. This is one of the biggest mistakes we can make when we don’t have the money to pay everything.

Another mistake I see on a regular basis is that some people pay their bills at the expense of their food budget.

If you have the money to pay some of your bills you have to start with groceries first and necessary health items. You can try to save as much as possible on your food but that money has to be set aside before anything else.

The next bill you must pay is your mortgage or rent. While credit cards companies will drag out their collection process, mortgage companies and landlords will start the process of foreclosure or eviction within just a couple of months.

Your next priority is your utilities. In many cases utility companies will turn off your utilities if the bill isn’t paid within a few days of receiving the bill.

Once you are sure you have enough to eat and a roof over your head you can start thinking about your other bills. The secured loans, like your car payment, should come before your unsecured loans, like your credit cards.

The reason for this is simple. Creditors that have secured property will sue or repossess much quicker than the credit card companies.

If you find yourself in this situation it is a sign that you need to do something drastic and fast. By not paying all of your bills each month they are going to add up quickly and you are going to accumulate a lot of late fees.

The best place to start is to find out exactly where you stand and what is causing the problem. This is as simple as listing your income on one side of a piece of paper and your bills on the other. Total each and subtract your bills from your income.

Whether you use my budget system or another it is very important that you start one as soon as possible. For those of you that believe a budget is to restrictive, just the opposite is true. The only way you can get what you want and know you can afford it is to have a budget in place.

It is important that you pay all of your bills on time each month. When you don’t have the money to pay everything it is vital to your survival that you pay the most important bills first.

If you have ever fallen behind on your debts you already know that dealing with your creditors can be a hassle. Sometimes it can be downright humiliating. It doesn’t have to be that way.

With millions of people experiencing financial problems it is absolutely necessary for everyone to know and understand their rights as a consumer.

Federal law requires that you receive fair and equal treatment from businesses issuing credit. This law applies when they evaluate your applications for credit, insurance, employment, and even leases.

The one area where I receive the most complaints are from individuals that are being harassed by debt collectors. These complaints range from debt collectors contacting their work and family members to being called names. All of these are a direct violation of the Fair Debt Collection Practices Act (FDCPA). This article spells out exactly what your rights are as a consumer.

I have copied some areas of this article directly from the Federal Trade Commission’s web site to ensure that the information is explained exactly as the law applies. These areas are identified.

The FDCPA lists the following guidelines that must be followed by all debt collectors:

(Copied from the Federal Trade Commission web site)

———————————————–

~~Debt collectors may contact you only between 8 a.m. and 9 p.m.

~~Debt collectors may not contact you at work if they know your employer disapproves.

~~Debt collectors may not harass, oppress, or abuse you.

~~Debt collectors may not lie when collecting debts, such as falsely implying that you have committed a crime.

~~Debt collectors must identify themselves to you on the phone.

~~Debt collectors must stop contacting you if you ask them to in writing.

It also prohibits debt collectors from engaging in unfair, deceptive, or abusive practices while collecting these debts.

———————————————–

It is very important to keep a record of any contact you make with your creditors especially when there is a dispute or misunderstanding regarding your account. You should list the name and address of the company, date and time of the call, the name of the person you spoke with and the content of the call.

Another important aspect of your consumer rights is Credit Reporting. Derogatory information in your Credit Report can have serious consequences. It is ultimately your responsibility to ensure that the information in your credit report is accurate and up to date.

There are numerous companies that offer “Free Credit Reports”, however, you are obligated to sign up for their “Debt Monitoring Service” which usually costs about $80. You will receive a free credit report and if you cancel your monitoring service within 30 days it will cost you nothing. Your best bet is to order your credit report directly from a Credit Reporting Agency. It will only cost you about $9. Below is a list of the three main companies:

Equifax

PO Box 740241

Atlanta , GA 03074-0241

(800) 685-1111

Experian

PO Box 2104

Allen , TX 75013-2104

(888) EXPERIAN (888-397-3742)

Trans Union

PO Box 1000

Chester , PA 19022

(800) 916-8800

I would advise you to visit the below link to find out exactly how to obtain your credit report:

http://www.pueblo.gsa.gov/cic_text/money/fair-credit/fair-crd.htm

Having knowledge of your rights under the Fair Credit Reporting Act (FCRA)can save you a lot of time and trouble when you apply for credit. The following explains these rights.

(Copied from the Federal Trade Commission web site)

———————————————–

Your Credit Report

Your credit payment history is recorded in a file or report. These files or reports are maintained and sold by “consumer reporting agencies” (CRAs). One type of CRA is commonly known as a credit bureau. You have a credit record on file at a credit bureau if you have ever applied for a credit or charge account, a personal loan, insurance, or a job. Your credit record contains information about your income, debts, and credit payment history. It also indicates whether you have been sued, arrested, or have filed for bankruptcy.

The Fair Credit Reporting Act (FCRA) is designed to help ensure that CRAs furnish correct and complete information to businesses to use when evaluating your application.

Your rights under the Fair Credit Reporting Act:

~~You have the right to receive a copy of your credit report. The copy of your report must contain all of the information in your file at the time of your request.

~~You have the right to know the name of anyone who received your credit report in the last ~~year for most purposes or in the last two years for employment purposes.

~~Any company that denies your application must supply the name and address of the CRA they contacted, provided the denial was based on information given by the CRA.

~~You have the right to a free copy of your credit report when your application is denied because of information supplied by the CRA. Your request must be made within 60 days of receiving your denial notice.

~~If you contest the completeness or accuracy of information in your report, you should file a dispute with the CRA and with the company that furnished the information to the CRA. Both the CRA and the furnisher of information are legally obligated to reinvestigate your dispute.

~~You have a right to add a summary explanation to your credit report if your dispute is not resolved to your satisfaction.

——————————————–

If you believe that your rights have been violated under one of these laws you can file a complaint with the Federal Trade Commission online at:

While these laws won’t eliminate your obligation to pay your just debts they can prevent debt collectors and others from taking advantage of you.

• A debtor or a guarantor can petition for debt adjustment from the District Court in whose jurisdiction he or she resides.
• The petitioner for debt adjustment should first contact a municipal Money and Debt Advisor.
• The District Court may set a payment schedule for the debtor, laying down how he or she is to service the debts during the following years.
• The duration of the payment schedule is normally five years; during this period the debtor must assign all possible non-essential funds for servicing the debts.
• Once the debtor has serviced the debts to the extent prescribed in the payment schedule, he or she is released from liability regarding the remainder of the debts.
• The payment schedule may be altered upon petition, if the circumstances of the debtor undergo essential changes while the schedule is in effect. If the income of the debtor increases or his or her payment capability is otherwise improved, he or she must increase the amount by which the debts are serviced, as prescribed in the payment schedule.
• If the debtor fails to follow the payment schedule, it may be declared lapsed.

When you want to buy a car you should take a moment to think about some questions such as:
What do you use your car for?
How many people do you need to transport?
What kind of driving do you most often do?
How long is your commute?
Meanwhile keep your budget in mind or you’ll have to go car shopping again soon.

Research the car models: do you prefer manual or automatic transmission?
Need four-wheel drive or all-wheel drive?
What safety features do you want?
Do you require a lot of cargo-carrying capacity?
Will you be doing any towing?
Will the car easily fit in your garage or parking area?
Regardless of whether you decide to buy or lease your next car, establishing a realistic monthly payment that will fit into your budget is a crucial first step. How much should this be? A rule of thumb is that your total monthly car payments — whether you own one car or more than one — shouldn’t exceed 20 percent of your monthly take-home pay.

Check your financial status to help you estimate what your monthly payment will be based on purchase price, down payment, interest rate and length of loan. Take the time to run the numbers now, before you go car shopping, print out the result and put this information into your car-buying folder. It will not only show you what you can afford, it will also help you control the numbers when you negotiate with a car salesman.

By completing these steps, you should now have a good idea about what car will work for you. Maybe there are a few cars that fit your criteria. It’s time to narrow it down.

Car buyers have been trained to visit local dealerships to find the car they want. In the Internet age, this is a waste of time and money. You can quickly cover more ground by shopping on-line. Car dealers are waking up to this new breed of shopper and have created Internet departments within their dealerships to serve the educated buyer who already knows what he wants and what he’s willing to pay. The only thing you have to do in person are test drive the car and sign the contract. And in some cases, you can even have the car “delivered” to you by the salesperson
he goal of a test drive is to experience — as closely as possible — the same type of driving conditions the car will be used for after purchase. If you commute, drive the car in both stop-and-go traffic and at freeway speeds. If you frequently drive into the mountains, try to find some steep grades to climb. Drive over bumps, take tight corners at aggressive (but not dangerous) speeds and test the brakes in a safe location, such as a deserted parking lot. Get in and out of the car several times and be sure to sit in the backseat, especially if you plan on carrying passengers. In short, ask yourself what it will be like to live with this car for a number of years.

While you are evaluating the car, don’t be distracted by the salesperson’s pitch. Don’t drive with the radio on — you can evaluate that later. A new car is a big investment; make sure you spend enough time really looking at it. And then, consider one last thing: your intuition. If you are uneasy about this car, follow your instincts. A vehicle purchase decision is too important (and expensive) to undertake without total confidence.

At this point you should have considered all the cars in the class that interest you. You should have a good idea what you can afford. You should know if you want to buy or lease your next car. You should have test driven your top choices.

Now it’s time to narrow your choices down to one car and make a deal. In either case, take a moment to congratulate yourself. You have done your homework to find the right car for you. Now you can move forward with confidence.

You’ve just opened your credit card bill and attached to your statement you find a “convenience check” included. It may already be filled out with a dollar amount such as $300, $500, or even $1,000. Your mind fills with ideas of what you could buy with this “instant” money. A new summer wardrobe, a nice dinner and tickets to a concert, a weekend getaway.

But before you go off on a shopping spree, you should be aware that your “convenience check” is nothing more than a cash advance on your credit card. Cash advances on credit cards carry many extra fees, often overlooked or misunderstood by consumers.

Here’s a quick look at the types of fees most card issuers charge for a cash advance:

1) Upfront fee of 2-4% of the amount advanced. On a $1,000 cash advance your fee will range from $20-$40 in addition to the interest charges.

2) Higher interest rate than on purchases. Many credit card companies charge 18% or more on cash advances. In addition, most companies apply only a small percentage of your monthly minimum payment toward the cash advance.

Some require that you pay down the balance on your purchases first before applying payments to the higher-interest advance. In other words, you’ll be paying fees and interest on your cash advance for a long time, especially if you only pay the minimum payment.

3) Cash advances normally carry no grace period. This means interest charges accrue as soon as you withdraw money or cash the convenience check.

By law your credit card company must disclose any fees associated with a cash advance. The easiest way to find out what fees are charged is to carefully read your credit card statement or to call your credit issuer’s toll-free customer service number and ask questions.

Credit card companies charge these fees for two main reasons. One, to cover the costs to process this transaction which are often higher than a regular credit card purchase. And secondly because of the percentage of defaults among credit advance users. These costs are then passed along to you the consumer in the fees and interest rates associated with a cash advance.

The next time you are tempted to cash that convenience check or withdraw money from an ATM using your credit card, be sure you understand the fees and long term effects of using a credit card cash advance.