This article is in relation to Australian credit card providers. I’m sure you will find that the same or similar information will be true for credit providers in your country/region. Why is it that these types of business are all about ‘Buyer beware” especially when even our respective governments teach us that these same companies are to be trusted…(Banks, Financial Institutions)?
An Australian consumer advocate group, Choice, has released information from a study carried out on 20 credit card companies here in Australia.
It showed that the amount of interest charged on credit cards varies greatly between providers, (when the provider starts and stops charging interest and how fairly they apply the interest free days as actually advertised interest rate).
The fairer credit providers were shown to be Heritage building society, Bendigo Bank, Certain GE cards, and Teachers Credit Union, while the most unfair credit card providers mentioned in the study were, American Express (no surprises here), Commonwealth Bank, Bankwest, ANZ, and also Westpac.
The tricks of the Banking trade make it very difficult, if not nearly downright impossible for the consumer to compare the merits and relative benefits of competing card providers’ as the headline interest rate is only part of the story.Most card companies backdate the interest rate to the purchase date, if your repayment on the credit card is late (this means that if your one day late you will pay the whole interest amount on the preceding 55 days) or even if you might under pay by a slight amount (ie:- if you make any shortfall, even as low as $5.00) and if this happens on an amount of, say, $2500.00 that is really going to hurt. Consumers would be very surprised to know that if they had 2 credit cards with exactly the same interest rates and used them in the same way, (similar purchase amounts and repayments of interest etc) they could be charged twice as much interest on one credit card for overdue interest than on the other.
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Basically, consumer credit counseling services will assist you with budgeting and offering debt repayment options. It aims to avoid from having you to file for bankruptcy as the numbers of bankruptcy claims are on the rise. Bankruptcy should always be a last resort as you credit score will never fully recover from such a step. Most consumer credit counseling services (CCCS) will offer you ways on creating and maintaining a budget and debt management programs. These services are normally available online, over the phone or in person and are subjected to a fee.
With so many CCCS agencies it is nearly impossible to specify what each and every agency will or will not do for you. Basically, their services encompass the following:
· Lower or waive off interest rates
· Stop the late fees
· Lower the monthly payment amount
· Provide money management education
· Negotiate debt repayment plans
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It is perfectly normal with wanting to spend money buying presents for our loved ones during the festivities or going out and paying dinner for everyone. However, it is a problem when the spending gets out of control and you end up spending more than you should or intended in the first place. That is when all the problems start and you are unable to pay back your credit card debt which will only keep growing over time. To help you with your expenditure this season, I have compiled some ideas that might work for you.
1. Do a budget. It really helps to know how much you can spend before going out and spending it. You could also look online for presents within your budget range and get an address of where you can get the item. Pre-shopping online and doing the calculations in advance will better help your budget.
2. When possible, use cash. When you use cash, you will actually feel the money leaving you and you will be more alert on your spending patterns. You do not need to buy stuff for yourself. Buy for others, stick to your budget. Someone will buy you a gift. If you have to buy something for yourself, use cash.
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When you consider enlisting the help of a debt settlement company, there are quite a few things you need to know and ask. These questions that you need to know will also help you to decide whether this company is suitable for you or not. You can start evaluating a debt settlement company by asking the following questions:
1. Have you been around for long?
The longer the company is established, the more stable it should be.
2. Do you currently have many clients?
If they do, then it eliminates a degree of worry because what they are doing would be helping people. Ask them what their success rate is.
3. Are you registered with the BBB (Better Business Bureau)?
This means that they have good business practices. Ask them for proof of their registration.
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The loss of a loved one is very hard on anyone. The fact that you have to carry on without them is bad, but inheriting their debt is even worse. Unfortunately, under some situations you can inherit their debt, especially if you were the joint account holder. However, if you are just an authorized user and you did not sign the application, you are not liable for the bills and all you only have the charging privileges, then you are not responsible in paying the bills.
Upon the death of a loved one and you start being harassed by creditors, then you should first get legal help. Talk to a lawyer, get the credit card details and agreements that belong to your loved one so that they can determine if you are liable or not. Just because you were married, and you inherited your spouse’s 401(k) does not mean you inherited his credit card debt. Just because your parents died and you got their house, does not mean you got their credit card debt too. There are a few things you need to determine in the event of a loved one’s death:
1. The validity of the debt.
2. Is the debt within the statute of limitations?
3. Are you responsible for the debt?
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Debt is a problem when you are alive and it is still a problem when you die. A number of factors such as where you live and who applied for card can affect whether or not the debt follows you to the grave or if one of the living will have to pay for it. The sentence “Till death do us part” might not apply here, so if you do not want to put your family through a hard time after you die, then you should always be on top of your credit card payments. As if losing you was not painful enough, now they would have to deal with the harassment from collection agencies too.
When you owe money to a business, they will do anything to get it back, so here is where you must be careful. Rather than absorbing the debt and writing it off as a loss, credit card companies will go after who ever are listed on the card. If you had opened a joint account with your spouse, then upon your death they will be responsible in paying back the debt. If you and your company jointly owned the account, then your company will have to make payments upon your death. So as long as the account was co-signed (is a joint account) with a (still) living person, then they will have to pay on your behalf.
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Are you desperate to solve all your credit card debts? Many people thought that this type of debt can’t be solved using debt settlement. In fact, this solution is actually possible, even without the help of any professional debt relief company. However, there is ONE important point you must really bear in mind if you decide to arrange a settlement with your creditors. You need to understand one fact, i.e. no matter how successful the negotiation process is, your credit score will be affected.
Why is that so? In order to start negotiating with your creditors, the very first thing you must do is to stop making payments. When you are doing so, your credit score is actually being hurt. You can’t avoid this because your creditors will not entertain you if you still continue making your monthly payments. They will only deal with you when they find out that you can’t afford to pay back your debt. In general, the best time for you to manage the debt reduction is between 3-6 months after you stop paying your outstanding. But please pay attention. NEVER ever drag the payment more than 6 months because most of the creditors will sell their debtors’ accounts to debt collection agencies after half year. If that is the case, you don’t stand a chance to obtain good deal.
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Self help is always important to eliminate credit card debt. When you can not find any other means to reduce or pay back your loan you must plan your budget and focus on savings. There are numerous options which can eliminate this debt. The debt consolidation loans are increasingly becoming popular in this regard. Debt consolidation loan is a form of loan which meant to pay off the previous loans. It has relatively lower interest rates and fixed terms and conditions.
The debtors of credit card usually seek this kind of loan to pay the mounting debts of credit cards. But this is suitable for the people who have fixed assets like house of their own. Debt consolidation loan is provided only if a house or a property is given to the lender as a guarantee of loan returning. The property is sold if the borrower fails to return the money in time. So an element of risk is involved in it. Sometimes, the bad credit individuals make new credit cards with which they pay off prior credit cards.
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If you feel that debt management is impossible and you will not be able to pay back huge loan of your credit card, you must attempt to reduce credit card debt by negotiating with your creditor. It is not necessary that you involve a third party in it to get reduction. You can do it yourself if you have clear idea of the money you can offer at once and a property which you can give the creditor as a guarantee in case you are paying in installments the reduced debt.
If you ask how can you reduce credit card debt! The answer would suggest you many ways. The negotiation with the creditor can be the best option when you can not wait for monthly budget plans and savings to pay the debt. Reducing the debt by the payment of savings done by cutting the personal expenditures is difficult. So you must negotiate with your creditor. The creditors always welcome claims and requests from their credit card holders. So you can take the benefit of this opportunity. Make settlement of your debt without hiring the professional services.
But before you go for a credit card debt negotiation, you must keep in mind that the settlement for reduction will lower your credit score in future. Here you can decide to give up the use of credit card in future if once you are out of the debt. When you will stop payment of your debt, which a prerequisite of reducing and negotiating with your creditor, you will have to face a low credit score in future. To reduce credit card debt, you will have to stop your submission of payments. When you are an on time payer previously, the creditor will negotiate with you. Do not delay more than 3 months in contacting your creditor for seeking reduction in loans.
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With Christmas approaching many shoppers will hit the High Street armed with their plastic, determined to bust the economic gloom with a spending spree. In the debt solution business, we gear ourselves for a flood of calls in January to March from people who have spent too much on credit over the festive period, who suddenly realise that they cannot make repayments.
The UK economy grew in the 2000’s on credit inspired purchases. The credit card companies now want their money back, and are going to increasing levels to make their customers pay. At present it is almost impossible to get new credit and so those who have taken credit are stuck withy having to pay it off, rather than transfer it to another interest free card. The moment of truth is here.
Finally many people who have been able to juggle their finances are finding that they cannot meet repayments. In part this problem has been exacerbated by the card companies themselves who seem to have raised interest rates to in excess of 30%, whilst the cost of borrowing on the Bank of England rate is at an all time low of 0.5%. This is blatant profiteering by the card companies as they know that a debtor has no where else to turn to pay off the debt and so can merely service the interest.
Even servicing interest is now too hard for some people and we are helping some of these out by placing them with an IVA provider.
An IVA or Individual Voluntary Arrangement is (usually) a fixed term (60 month) arrangement between a debtor and his creditors to pay back an agreed amount every month for the specified period, following which any portion of the debt still outstanding and unpaid, is written off and is not due.
- This has the effect in many cases of cutting debts by up to 75%. It is not an easy option to take as it involves a long term commitment but for the right type of individual, it is a great way to deal with a credit card debt problem.
About the Author:
Contact Steve Thatcher of Help With Debt (UK) Limited a total debt solutions company.
For all further reading see http://www.helpwithdebtuk.com
For personal contact email sthatcher@helpwithdebtuk.com
If you have any debt problem whatsover either personal or corporate make Steve your first call all advice is free. Finally if in the UK and you need a friend to speak to call 01162171406
Visit http://www.helpwithdebtuk.com
