My job everyday is helping people in credit card debt and I hate to see the vicious cycle happen again each year.  Times are tough for everyone at all income levels right now and extra debts on credit cards are not in anybody’s budget. 

• So what do we do?
• Do we spend anyway, like we always do and worry about it later?
• Do we not buy anything for anyone?

I can hear some people already saying, “I can’t not buy anything for people on Christmas”!  That even goes through my head as I say it.  But I have had hard times years ago and could not buy anything for family and friends before.  I got a package of Plain Christmas cards and wrote a personal note and brought over side dishes or baked goods to each home I visited over the holidays.  Your family and friends will understand if things are tough and probably will wish they did what you did also.  The comforting feeling is after the holidays, you did not increase your debt.  Chances are they may remember your personal note and food more than another gift they got for Christmas.

For those who are going to spend anyway:

I know most will at least buy gifts for close family and friends and this is ok if you have a budget and payment plan figured out in advance.

• Set a budget for yourself on each gift
• Try and pay with cash and not credit cards
• Do not go over your budget and even try to find the lowest price for your item online
• Keeps gifts to a minimum and bring food, side dish or baked goodies to add to holiday meals

If you do pull out your credit card for holiday shopping:

Never, never do a cash advance! The cash advance category starts collecting interest the very first day at a high interest rate.   If you only make minimum payments on your cards the cash advance category will never get touched with a minimum payment.  Only when you pay over the minimum payment the extra money goes to the next highest interest rate on your account, which would be a cash advance in this example.

The better option:

Check with your bank for promotional offers for new purchases or balance transfers offers ( You can use balance transfer offers to get money sent to you in a promotional check or even direct deposited into your checking account)  Call your bank and ask if there is a promotion for new purchases or balance transfer promotion available on your account.  It will be something like a 0% interest rate for 12 months.  This way you can do your shopping at a 0% interest rate instead of your normal purchase rate or worse a cash advance rate.  Also, you should be getting promotional checks in the mails from your creditors for the holidays.  Use the checks and deposit them into your personal checking account and stay in your budget.

Next is to check with the credit cards that you have and check your rewards programs.  Some cards have great perks for holiday shopping and cash back rewards at certain stores.  If this is you, try to use only those credit cards with perks and use them at the stores that give you the benefits.  Also, do what I wrote above and see about any promotions for balance transfers or new purchases.

I hope these tips have help out or maybe have you thinking more about how you’re going to shop this season.   For additional help with credit cards and lowering high interest rates visit us at www.CreditCardNegotiations.com

Best Regards

SDFinch

www.CreditCardNegotiations.com

Today and Last Monday kids all across to United States started school.  Some parents may be really happy to get back to normal schedule again.  According to the many parents posts on www.Facebook.com some are sad that their summer is over and don’t want it to end. 

So if you’re a parent, you most likely have been spending your spare time recently shopping and getting school supplies.  Most kids do a lot of growing over the summer and have to get new clothes, shoes, school supplies and must have gadgets.

You may be like most people and pulled out the plastic card again and started swiping away to pay for everything.  Many retailers have incentives for using their credit card to shop with 10-20% savings on your retail purchases.  Any savings is smart as a consumer and it’s always great benefit when you have to make the purchases anyway. 

But are you really saving money?

If you make a purchase on your retail credit card and do not pay off the balance the next month then you did not actually save anything at all. 

Example:  If you used your (Sears, Kohl’s, Wal-Mart, JC Penny’s or any other retail card) and started with a $0.00 balance before your shopping adventures and made all your purchases for your kids school needs on your credit card.  Then you will need to pay off the entire balance in full when you get your next statement for savings.  Your retail store discount for using your card is benefiting you over paying in cash. 

Now if you do not pay off your balance in full, you will not benefit at all from the retail store discount for using their credit card for shopping.  Hopefully you know what your interest rates are on your retail purchases and the finance charges that you will be paying.  Your finance charges will more than out way your 10-20% discount you got at the retail stores cash register.

Let’s say you charged $1000.00 on your credit card and pay it off on your nest statement. It is considered almost like, same as cash.  You pay no interest and no finance charges as long as you started with a $0.00 balance.    

“Or”

If you only make the minimum payments, it would take about $2,500.00 to pay off your prior $1000.00 balance.  So does your $100-$200.00 discounted in store saving seem now when comparing it to a possible $2,500.00 in finance charges.  It’s not as great of a deal for you as you thought. 

TIP – What if you do not pay off your retail card right away?

One way to avoid these hefty finance charges is to take advantage of balance transfer promotions on bank credit cards.  I often advise my clients to go this route to save money.  Check with your current creditors and call to check if they have any balance transfer promotions available for your account.  Call all your credit cards and see who has the best promotional offer.  If you do not have any offers, applying for a new credit card can help also.  Check with current bank offers on their websites to check on balance transfer promotions on new cards.  Just apply with a bank you are comfortable with and check their promotion for balance transfer offers.  The best promotional offer I know of is with Citibank right now.  There Citibank Platinum Select Visa/Mastercard offers a new card holder a 0% for 21 months on balance transfer and purchases.  0% for almost 2 years is wonderful.  If you took your $1000.00 retail balance and moved it to Citibank at 0% for 21months you would save about $2,300.00 in finance charges on that balance.  Also a $48.00 payment over 21 months would pay off the balance in full with no interest or finance charges. 

TIP – Something fun for your kids

To do something fun with your kids start saving your spare change.  You can use this for a school fund every year. All year long help your kids by keeping all your spare change in a piggybank or big jar to hold the change.   You and your kids can watch your change grow into a lot of cash by the next year.  During the next summer you and your kids can go the any local grocery store and turn that loose change into cash.  Now you have cash to pay for next year’s school supplies and clothes.  To keep things fun for your kids, allow them to have 10-25% of that cash for something that they want.  They may appreciate more if they saved up it all year and bought it with their own money.  This is a great teaching tool for kids to learn to save money.

I hope my tips have help out in some way or you just got a good read!

If you need additional help with banking, credit card issues or better interest rates, visit us at www.CreditCardNegotiations.com

Best Regards,

SDFinch

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Recently the Federal Trade Commission and the Federal Reserve Board are now requiring that creditors must disclose credit scores used for financing and obtaining credit.  Also additional information related to your credit score will be available to an applicant, or if you’re an existing customer.   In addition to, if you are denied or declined for new credit or loans you will receive information explaining why in more detail.

What can you expect in your credit score disclosure?

1. 1.     APR (annual percentage rate)
2. 2.     Credit score
3. 3.     Wide range of credit scores based on the scoring model
4. 4.     Key factors that hurt your score
5. 5.     Number of inquires
6. 6.     Date of when your credit was pulled

 Banks are not giving away credit as freely as they were in the past, so this will really help to show you how to make any needed improvements.   In the past we were giving very generic reasons for not being approved without any extra information on how to make improvements.   

 When can you expect to see your credit score from a lender or bank?

 Auto loans, Personal loan and Mortgages you can expect to see your credit score with the loan. With Credit Cards and Insurance companies, they are not required to give out scores.  You will naturally receive the best rate based on your credit score.

 To get more information on credit cards, we provide to most up to date information on banks, credit issues and credit card negotiations. Visit us today at www.CreditCardNegotiations.com

 In your report you have a credit score. That number is used by lending institutions, banks, finance companies and loan departments to measure your credit worthiness.

 All the credit scoring categories are used mathematically based on your credit report to come up with you credit score.

 You can have different credit scores based on the reporting agency.  The 3 major reporting agencies, TransUnion, Equifax, Experion most likely will all have different scores for you. 

 Based on your scores, they are used by companies to help make decisions about approving you for loans, credit cards, vehicles or home mortgages.

 The higher your score, the better of your chance for being approved!  Also, your income and expenses, or debt to income ratio is a factor as well.

 The credit scale goes between 300-850 points.   

 If your goal is to get a good credit score, or to keep a good credit score you have to maintain the same habits.  Here is what you must do!

 Make sure you make on time payments and do not ever be late.  Banks are not forgiving late payments anymore and will raise your interest rate at the first chance they get.  It will take from 6-12 months before you can get a lower interest rate again and it will never go back to where it was originally.  So, if you’re one day late you will be penalized for 6-12 months and it will never reset back to where it was before.

• Get a copy of your credit report and make sure all the information is correct.  One piece of bad information can ruin your chance of having good credit score.
• Keep your credit line under 30% or less. When you use all or most of your credit line it decreases your score, lessons your chances for new credit and can raise your interest rates.

 If you could only focus on one thing I would say, PAY YOUR BILLS ON TIME!  This alone makes up 35% of your credit score. 

 The best way to make on time payments is to set up an automatic payment schedule with your bank. This will unsure all your payments are never late and nothing negative will happen to your account. 

•  Try to make more than your minimum payments with auto-pay
• Keep enough funds in your checking account to cover the payment

 Once you have this set up or have a system in place to allow you to keep your payments on time, you will need to work on KEEPING YOUR AVAILABLE CREDIT LINE UNDER 30% AND LESS.

 This also makes up 30% of your credit score.  Between your on time payments and credit line usage makes up 65% of your credit score.

 The scoring system will evaluate how much of each available credit line you currently use.  The closer you get towards your credit limit can have multiple negative affects to your score. Including increase interest rate, difficulty to receive new credit and repaying back the monthly payment.

 Tip: Closing credit card accounts, applying for a lot of credit cards at the same time and having too many creditors can/will lower your credit score also.

 Tip2: When applying for a new loan like a car or home. Make sure not to apply for credit cards or anything until your loan clears and you have a closed on that loan first.  This can affect your score negatively right before you try to close on a big loan and possibly kill the deal for you.

 Your credit history is the next big factor of your credit score.  This makes up for 15% of your total credit score.  When you include this to the other two factors, it will make up for 80% of your credit score.

The longer you have credit history on an account, the better for you.  This helps to insure a new creditor that you are reliable, experience with having credit and paying it back and making you a good risk for them.

 The other 20% of your score is based on new credit lines 10% and different types of credit lines for the last 10% to equal the full 100% score. 

•  New credit line or new inquires do make a small hit on your score temporally.   
•  Different types of credit lines will let creditors know you can handle a diversity of different types of loans.

 To insure the best credit score success, make sure to get your free copy from 3 credit reporting agencies at www.annualcreditreport.com

How your credit score is determined

The number ranges from 300 to 850. Although the exact formula for calculating the score is proprietary information and owned by Fair Isaac, here’s an approximate breakdown of how it is determined:

• 35 percent of the score is based on your payment history. This makes sense since one of the primary reasons a lender wants to see the score is to find out if (and how promptly) you pay your bills. The score is affected by how many bills have been paid late, how many were sent out for collection and any bankruptcies. When these things happened also comes into play. The more recent, the worse it will be for your overall score.
• 30 percent of the score is based on outstanding debt. How much do you owe on car or home loans? How many credit cards do you have that are at their credit limits? The more cards you have at their limits, the lower your score will be. The rule of thumb is to keep your card balances at 25 percent or less of their limits.
• 15 percent of the score is based on the length of time you’ve had credit. The longer you’ve had established credit, the better it is for your overall credit score. Why? Because more information about your past payment history gives a more accurate prediction of your future actions.
• 10 percent of the score is based on new credit. Opening new credit accounts will negatively affect your score for a short time. This category also penalizes hard inquiries on your credit in the past year. Hard inquiries are those you’ve given lenders permission for, as opposed to soft inquiries, which include looking at your own score and have no effect on the score. However, the score interprets several hard inquiries within a short amount of time as one to account for the way people shop around for the best deals on a loan.
• 10 percent of the score is based on the types of credit you currently have. It will help your score to show that you have had experience with several different kinds of credit accounts, such as revolving credit accounts and installment loans.

To get more information about how to lower credit card interest rates visit us at www.CreditCardNegotiations.com

Best Regards,

SDFinch

Often these two terms are confused by the general public. Part of my consulting job is to help out our clients with credit card interest rates and issues. Many times people talk about consolidating their credit cards and paying the cards off. What many do not realize is the word consolidation means something different in the banking and financial world. When people talk to me about consolidation; they typically mean to balance transfer their debt from multiple credit cards to one card only. For the sake of argument, this is a type of consolidation but it’s still a balance transfer. Maybe we can call this a “balance transfer consolidation”.

Below are the basic definitions of both terms.

From Wikipedia

 • A credit card balance transfer is the transfer of the balance (the money) in a credit card account to an account held at another credit card company.[1]

• Credit Card 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.

As you can see they are two totally different things all together. My services do handle both of these topics. Credit Card Debt consolidation is usually a last resort for my clients if we decide to go that direction. I hope this helps to explain the difference between the two terms. To get more information about how to lower high credit card interest rates go to www.CreditCardNegotiations.com

Debit cards have their own strengths and weaknesses, just like a credit card does.  Each bank can have different rules and regulations for using a debit card.  The newest changes are fee’s now charged for using debit cards and ATM’s.  This was a new tactic rolled out by a few banks to test the market recently.  I was a victim to this change myself.   I had to change the type of checking account I had, so I would not be charged a monthly service fee anymore.  Mind you, I have had the same checking account since 1992. 

7 Debit Card Rules that you may not know about !

1. 1.     The balance may appear smaller than it show on your account.

Transactions do not always appear on your statement right away. Sometimes it can take 1-2 days before it posts to your account.  So if you run your checking account balance low and an old transaction from 1-2 days ago clears.  It will put your account in the negative, asses fee’s and move the over the limit balance to an overdraft account if it is set up.

1. 2.     Your debit card likes the same routine.

Most people have normal shopping patterns and the banks pick up on it.  When you shop at the same places over and over your approvals go through great as long as you have the funds.  Sometimes a transaction will be declined if you use your card for abnormal purchase that is not in your normal routine.  Online purchases and out of state transactions can cause a debit card transaction to be declined.    Notify your bank if you are going out of town!

1. 3.     It could deduct money from your savings account or overdraft credit card.

Some people have an overdraft protection plan attached to their debit card.  Meaning if you go over your available funds, you can link it to a separate credit card or saving account to draw from.

1. 4.     You may have a fixed spending limit per every 24 hours.

You may have a cap on the amount you can spend per day on your debit card.  Check with your current account to see what your limit is.  Also for ATM usage there are limits to what you can withdraw in 24 hours.

1. 5.     The order of your transactions can be misleading.

Your cards transaction can come in particular order.  It all depends on each vendors or stores merchant account.  The merchant account processes the transaction before it makes it way to the bank.  So the timing can be difficult to predict.

1. 6.     Fraud and theft protection is great protection for you.

Zero-liability protection against fraud and theft is highly recommended for your account. Make sure to check your account for this personal protection of your card and personal information.

1. 7.     Do you lose receipts often or maybe you’re trying to remember what you bought last month or last year?

Your statements can help you kind missing information or to remember items you purchased in the past.  This sometimes can save you during income tax time when you’re scrambling for receipts.

How To Lower Your Credit Card Interest Rates

Lately high interest rates on credit cards are pretty normal.  Most all my clients I talk to have interest rate between 20-30%.  Very rarely does someone have a single digit interest rate these days!  The national average for interest rates is between 14-16% right now.  So if you are one of those people that do have an above average interest rate, there are things you can do.  To do this you will need to make some phone calls to your banks.  Use your customer service number on the back of your credit card or credit card statement.  

First things first, make sure to round up any new card offers you may have got in the mail recently.  Also go your banks website to see what the current interest rates are on the credit card you currently have. 

Example: If you have a CitiBank Platinum Select Credit Card your interest rates can be between 11.99%-21.99% based on your credit worthiness.   So if you are sitting at a higher rate, you must have either had a late payment, maxed out your credit line, have gone over the limit or maybe did a cash advance at some time.  All these factors can trigger a higher than average interest rate.  If you have not had any of these factors before, you need to find out why you have such a high rate and ask for something lower. 

Call your customer service number and get a customer service representative on the line. Let the CSR know you checked out their website and you’re above the interest rate rage quoted for your credit card.  Then ask if there is a better interest rate available for your account.  Take whatever lower rate they give you for now.  If the CSR cannot do any for you, let them know about your new credit card offers you received in the mail.  Also, tell the CSR you are considering moving the balance somewhere else if they cannot help if needed.

Still if all this fails, ask to speak with a supervisor.  This is not to say anything bad about the CSR, but to speak to someone at a higher level.  The supervisor can do things that a CSR cannot do.  You may have your best luck this way.   Repeat the same thing to the supervisor that you just did with the CSR. 

Take whatever deal they give you for now.  Even if they only drop it 1 point, take it!  This is a starting point for you and you can call back every month until you get it closer to where you would like it to be. 

Tip1: Do not be afraid to move your balance somewhere else and do business with another bank.  If your current bank is not meeting your needs, find someone who will.  You do not have to close any accounts; just move the balance to another bank. Take advantage of a 0% promotion offer to pay down account faster. 

Tip2: If you do the balance transfer and pay off the high rate card completely, here is what you do!  Call back your bank you have the high interest rate with once you get the next bank statement.  The statement should show a $0.00 balance or close to it.  Then call back the CSR and Supervisor if need to ask for a better rate.  You tell them you want to use this credit card again “BUT”, the interest rate is too high and higher than all your other cards.  With your balance being paid off, you’re in control now because you don’t owe the bank anything now.   The bank generally wants your business and they do not make money from you with a paid off account.  So they should do something for you at that time.

Now if your bank does not cooperate with you and your request, you might want to do business with someone else.    Do you really want to stay with that bank anymore?

Bank of America is changing cash advance amounts effective June 26, 2011.  

If you are a BofA customer you may have received a change in terms letter recently.   Your new statement will have some new changes on it, so make sure to pay attention to your next statements.  The new statement will have 4 categories of transactions now.  You will see your Purchases, Balance transfers, Direct Deposits and now Check Cash Advances.  Make sure to read up on the new terms and conditions on your next statement.

There is a limit of 30% on your cash advance transactions of your total credit line.  Example:  So if you have a $1000.00 credit line, the most you can withdraw is going to be $300.00. 

You may also notice a change in your total credit limit also.  BofA has been lowering credit limits since the Credit Card Act was passed back in February 2010.  Most of my clients report to me that BofA has reduced their limits to just a few hundred dollars over the current balance they had. Example: If you had a 10k credit limit and you have $5k on your credit card.  You might have seen your limit reduced to the $5400.00 area. 

There are some negatives that go with BofA’s decision to make that change on your account.

1.  Now you have lost all your available credit you once had

2.    Your account now will be maxed out or very close to it

3.    This reflects negatively on your credit report for your credit usage and can lower your score

4.    When other banks review your accounts that are now required by law, they can increase your APR

Finally, if you have to use a cash advance, make sure you have your repayment strategy in place before you do it.  Also, check to see if your bank has promotional checks that you can use instead.  Your last attempted should be to use the credit card for the purchase and not use the cash advance offer.   Cash advances accrue interest as soon as you get the money.  Where as a credit card charge will not.   

To get more information Credit Card, Interest Rates and Finance Charges go to www.CreditCardNegotiations.com and learn about how to reduce your interest rates and payments.

Utah legislators have now legally made silver and gold as good as cash. With hopes of seeing the U.S dollar regains some of its old glory.  They are now the first state in the country to legalize the gold and silver currency.  Also, the state is exempt from state capital gains taxes that are placed on the currencies.  This is almost a good enough reason to move there now!

The states goal is to have you store your gold and silver coins in a vault and you will be issued a debit card to make your purchases.  Since nobody takes gold and silver coins as payment, you can turn your coins into cash.  All your purchases are backed by your holdings.  It sounds like how a secured credit card works to me. 

This started on June 1^st 2011 and open for business now.  The idea was started by Republican, Brad Galvez who sponsored the bill to serve as a protest against the Federal Reserve.  He’s aware of our nation’s faith in the U.S dollar and feels if you’re mad about our Government debt, ditch your cash and spend your gold and silver instead.   I’m not sure who Brad Galvez is, but I like him already!  Anyone who stands up against the Federal Reserve is a hero in my book. 

Currently there are about 12 other states looking into this bill and setting up special committee’s now to move us towards an alternative currency.  

Right now there has been a huge trend of Americans transferring their cash into currencies.  For people that follow U.S currency, most do not feel good about our current debt, Govt. spending habits and the decreased value of government backed money.  The rest of the people have blinders on and have no idea what is going on and feel the government will fix thing eventually.  Good Luck with that !

My Thoughts!

So if you are holding on to some extra cash, turn it into a commodity of some sort.  I have been buying silver myself.  Some do this for investments purposes and some do it for, “If shit hits the fan”!   I’m on “the fan side” myself  because our debt numbers don’t lie. 

2^nd Thought !

Why would the states want to do this?  Meaning, hold your currency and give you cash credit for it! 

My business mindset say’s something different.  Here’s how I see it!

If you turn your currencies in for credit you will get spot price for your deposit.  You now have debit card to use as cash now.  As you spend more and more of your deposited currency on items, your value decreases until you hit $0.00 balance in your account.   You will have to turn more coins in to credit that account or close that line of credit.  The bank keeps your coins and you got your money for it.

Example: You turn in 1oz of gold and I give you $1500.00 line of credit for it.  Next month you make your mortgage and car payment and now that money is gone.  Now I have your gold in my vault and it held its value if not gained value in its 30 days.  So as more and more Gold and Silver sit my vault and gains value and your credit/money is gone and spent.  It’s a non risky investment for the bank and the money they lend you is not theirs anyway. 

So the banks have now figured out a way to try and fill up its coin currency reserves.  They give you the devalued dollar for it to pay for everything you need to.