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Archive for June, 2009

How To Grow Your Savings Quickly And Easily

Written by Toi Williams on Jun 30th, 2009 | Filed under: Uncategorized

Many people across the nation find it difficult to grow their savings because the temptation to spend money is everywhere.  People are spending on all of the items that television and radio commercials are telling us that we need on a constant basis, draining savings accounts across the country as people try to keep up with the purchases of their friends and neighbors.  Because of this, many people have trouble saving for the future but the easiest way to make sure you are saving part of your salary every month is by putting the money away before you can spend it.

Automatic Savings Account Deposits

The most efficient way for many people to grow their savings is to transfer money into a savings account as soon as the person receives their paycheck.  This takes the money out of their checking account or their pocket before they spend it on items that are unnecessary.  With this technique, the person will take 10% of their pay and transfer the money to a savings account that accumulates interest, leaving it there until the money is needed for an emergency situation. 

By taking the money out of the paycheck as soon as the person gets paid, the risk that the person will spend it instead of saving it is dramatically reduced.  Everyone has had an experience where they have walked into a store intending to grab one item and ended up buying much more than they intended.   Passing up a bargain may be hard, but most of these people will not spend money that they do not have and the person will not count on the money intended for savings if it is not showing in the balance of their checking account.

Setting Spending Limits

One of the greatest causes of individuals falling into debt is their habit of spending beyond their means each month.  Nobody should spend all of the money that they bring home each month, even if the person is working for minimum wage or work on commission.  Living paycheck to paycheck and having all of your money spent before you get your paycheck means that a reevaluation of your lifestyle is needed quickly before you find yourself in a situation that is hard to extract yourself from.  Once you have determined your spending trends and eliminated wasteful spending, you should able to save at least 10% of the money that you earn in an interest bearing savings account.

Tips For Finding The Best Credit Cards

Written by Toi Williams on Jun 28th, 2009 | Filed under: credit cards

There are many different credit card companies that are available for credit card holders to choose from.  Many credit card holders are unaware of what the credit card companies offer and therefore do not take advantage of what is available at the credit card company.  By obtaining your credit cards directly from these credit card companies, you may be able to get a better deal and a better interest rate for your credit cards.

Finding A Good Credit Card Company
Finding a good credit card company is not difficult for people that have a good credit history and use their credit responsibly.  Many people choose to deal with a credit card company that they already have a business relationship with, such as a credit card or other type of financial arrangement with the company.  Other people search for the best deals and the best credit card companies online, where they can easily compare the offerings of a number of different companies.

Choosing The Best Credit Cards
The credit cards offered by the companies may differ from place to place, even though all of the companies are looking at the same credit information for the person.  The amount of the interest rate can vary as much as 10% for the credit cards that you are interested in, depending on which credit card companies you choose to search.  This is one of the reasons why it is so important to compare credit cards from several different credit card companies before deciding which one you should apply for.

Credit Card Rewards
Different credit card companies also offer their credit card holders different perks for using their credit cards and other financial instruments.  The most popular perks that many companies are currently offering is a cash-back reward for using the credit card.  With this program, people receive a portion of qualifying purchases as a cash reward for using the credit card, typically 1%-5% of qualifying purchases.

Another perk that many credit card companies are offering to their customers is a points reward program.  These types of rewards programs allow the credit card holder to earn points when they make a purchase with their credit card and the card holder can redeem these points for cash or merchandise that they like.  There is typically no limit to the amount of points that the person can earn, although the points that are earned typically have an expiration date.

Debt Collection Rules Under The Fair Debt Collection Practices Act

Written by Toi Williams on Jun 27th, 2009 | Filed under: Uncategorized

Many people across the nation have had to deal with a debt collection company at some point in their lives.  The debt collection industry has been reprimanded numerous times in recent years for forceful collection practices and many people are now aware that they can report aggressive collectors and companies to the Better Business Bureau for actions that qualify as harassment.  The Federal Trade Commission of the United States Government has passed the Fair Debt Collection Practices Act that details the rights of people that are contacted by a debt collection company and lists what constitutes aggressive actions.

Debtor Contact

The hours in which the debt collection company is allowed to contact a debtor are spelled out in the document.  Debt collection companies are not allowed to contact debtors after 9 o’clock at night or before 8 o’clock in the morning.  Debt collection companies must adhere to these time constraints unless they receive permission from the debtor to contact them outside of these times.

Employment Interference

The actions of the debt collection company are not allowed to interfere with the debtor’s employment and this includes calling the debtor at work when their boss disapproves of the contact.  If collection company repeatedly contacts the debtor at work knowing that it could affect their employment, they could face sanctions from the Federal Trade Commission.  Other actions that are prohibited include using obscene or profane language when talking to the debtor, threatening violence or harm, or state that the debtor will be arrested for not paying the debt.

Written Notification

If a debt collector contacts the debtor to tell the debtor that the debtor owe money to the company, within five days of the initial contact, the debt collector must send a written notice describing the debt, listing the amount owed, and disclosing the steps that can be taken by the debtor if they believe that they do not owe the debt.  The company is forbidden to misrepresent who they are by claiming to be an attorney or from the credit bureau and cannot misrepresent documents sent to the debtor as legal documents if they are not.

Cease And Desist Requests

People that are being contacted by aggressive debt collectors repeatedly can have the calls stopped by submitting a written request to the debt collection company requesting that they stop all contact.  Once the request has been received by the debt collection company, they cannot contact the debtor for any reason other than to tell the debtor that their letter has been received and they will no longer contact the debtor.  Stopping the collection company from contacting the debtor does not erase the debt that is owed and the collection company may decide to sue in court.

Everything You Need To Know About Credit Cards

Written by Toi Williams on Jun 24th, 2009 | Filed under: credit cards

Over the last twenty years, credit cards have become one of the most common ways to purchase items.  No longer just for financially established people, now almost anyone can obtain a credit card as soon as they become an adult.  This easy access to credit cards has become a problem for many people that have failed to learn the basic rules for using a credit card and consumer debt has reached an all time high.

Using a credit card unwisely has the ability to affect your financial future for years to come, resulting in higher interest rates, a lowered credit score, and the denial of credit in some instances.  It is important that people learn how to use credit cards correctly before they are expected to handle a credit card on their own.  There are a number of things that should be understood about credit cards before a person begins to use them. 

Read The Terms And Conditions Carefully
All of the important disclosures for the credit card will be found in the terms and conditions of the credit card agreement, often found in a separate booklet contained within the credit card offer envelope.  The terms and conditions will spell out the associated fees, interest rates, and finance charges associated with using the credit card and if you decide to apply for the credit card, you are agreeing to abide by the terms and conditions of the credit card whatever they may be.  People that do not read all of the information carefully often find themselves on the hook for a credit card with a low limit and outrageous fees.

Purchases Made On Credit Cost More
Purchases made on a credit card and not paid off within a certain time period will always be subject to finance charges and interest payments.  The longer you take to pay off the balance of the credit card, the more money it will cost you in finance charges, fees, and interest.

Interest Rates Can Rise Unpredictably
In most credit card agreements, there is a clause that states that the interest rate that you are being charged for using the credit card could change at any moment for numerous reasons or no reason at all.  Many companies will raise the interest rate on the card if they find that you have missed other debt payments or your credit score dips below a certain amount.  Carrying a large balance on the card can mean financial devastation when the interest rate rises if the person does not have enough money to meet the increased payment amounts.  

Credit Cards Should Be Used For Major Purchases Only
One of the easiest ways for a person to ruin their credit is to use credit cards for many of their regular purchases without setting aside money to pay off the credit card at the end of the month.  In a very short while, the person will find themselves in financial difficulty as they approach their credit limit and do not have enough money to pay down the amount on the credit card.  By limiting your credit card purchases to major items and emergencies, you will ensure that you will not spend your credit limit on frivolous purchases.

Pay Off The Balance Quickly
Every day that a balance remains on your credit card is another day that the credit card company can charge you interest and finance charges on that balance.  Credit cards should never be used with the intention of taking a long time to pay off the balance as this is a recipe for debt disaster.  If you must use a credit card to make a purchase, budget your monthly finances wisely so that you are able to pay off the balance of the card within a few months.

How Can I Figure Out My Credit Score?

Written by Toi Williams on Jun 22nd, 2009 | Filed under: credit score

Many people know that their credit score can affect their lives in many ways, but a lot of the people are unaware of what their credit score is.  A personal credit score is something that people see on a regular basis, so it is difficult for many people to determine what credit category they fall into.  There are a couple of different methods that a person can use to determine their credit score and see where they fall on the credit scale.

Estimating Your Credit Score

The first way to determine a person’s credit score is credit estimation.  Using this method, the person takes the amount of debt that they are carrying and their financial actions over the last several years to determine whether their credit score has been increasing or decreasing.  For example, a person that has been able to pay off their credit cards, put some money in a savings account, and have not been late on any of their bills for the past several years can expect to have their credit score increase while people that have missed some payments and have used more than 50% of their available credit can expect their credit score to decrease.

Although this method of determining a person’s credit score is imprecise, it will give them a reasonable estimate of what their credit score may be.  As long as the person is honest about their actions over the past few years and accurately remembers how much of their available credit they are using, they should be able to correctly judge the credit category that they currently fall into.  There are even some credit score calculators available on the internet that will take your information and calculate your credit score range.

Requesting The Information

Another method of determining a person’s credit score is to obtain the person’s actual credit history and score from one of the three major credit rating companies.  This can be difficult because the person will need to verify their identity to the company before their personal credit information can be released.  In some cases, it can take up to two weeks to obtain the information that the person is looking for because of the number of requests that these companies handle each day from businesses and individuals alike and if there is a problem with the information that is submitted, it can take even longer for the person to find out their credit score.

When Is The Time Right To Refinance?

Written by Toi Williams on Jun 21st, 2009 | Filed under: Uncategorized

Deciding whether to refinance a home is a big decision that could have significant effects on the household finances for many years to come.  Refinancing at the right time can save the homeowner a large amount of money, but refinancing at the wrong time can cause a financial disaster that may be impossible to solve short of declaring bankruptcy.  So how does a homeowner know when the time is right to refinance?

Choose Your Timing Carefully
The right time for refinancing for one person might not be the right time for someone in a different situation, so it is important to consider the decision carefully and make the decision according to the homeowner’s particular financial circumstances.  There are a number of different signals that will indicate to the homeowner that the timing is right for refinancing their home.  When several of these signals are present at the same time or a single signal is present that has the ability to save the homeowner a large amount of money, then that is a good indication that the time is right for the homeowner to refinance their home.

Significant Credit Score Improvement
It is no surprise that a person’s credit score and the interest rate that they receive for loans are connected inversely, so that when a person’s credit score goes up the interest rates that they are offered by lenders goes down.  Many homeowners obtained their current home loan when their credit was less than perfect, but if they have been able to increase their credit score in the years since they obtained their original home loan, then they may be able to save thousands of dollars in interest payments if they refinance their home.

Considerable Decrease In Average Interest Rates
In recent years, home loan lenders have been slashing the interest rates on the loans that they offer to homeowners in order to write more loans to more people across the nation.  These actions, coupled with the actions of the Federal Reserve, have pushed interest rates for home loans to historic lows in many areas of the country.  If the homeowner obtained their home loan when interest rates were high, they may be able to obtain a better interest rate from a lender by refinancing, even if their credit score has not changed significantly.

Extracting Equity From The Home
Some homeowners choose to refinance their home because they would like to cash out equity to pay for other items that they desire.  Some homeowners extract equity to pay for major purchases, like college tuition, remodeling their home, or buying a vacation home, while others cash out equity to pay down high interest bills, such as large credit card balances, or to obtain cash for their living expenses.  Extracting equity could mean that the homeowner will be making payments for a longer period of time so it is important to take this into consideration when deciding whether to refinance.

How To Create A Money Management Plan

Written by Toi Williams on Jun 19th, 2009 | Filed under: saving

The number of people that find themselves spending more money than they make each month is steadily increasing as prices rise and the number of people that find themselves in this situation will only continue to grow as the economy continues to slow.  Many people depended on credit cards and loans to maintain their lifestyle and now owe a large amount of money to numerous creditors.  In the past, a person may have been able to obtain a home equity loan to pay down their credit cards but with home values plummeting, this is now longer an option for many. 

People are finding that they must live on what they are paid, which results in a large reduction in the amount that they have to spend each month.  The only way that these people will be able to correctly apportion their money is to create a money management plan to ensure that they are able to begin saving money and to stop spending more than they can afford.

Document Your Spending
The first step in creating a money management plan is determining how much the person actually spends each month.  For eight weeks, the person should keep track of everything that they spend their money on.  This will show the person what they spend money on each month and will help them eliminate unnecessary expenses in order to save more of their money.

Create The Plan
Once spending trends have been determined, it is time to create the money management plan.  The goal is to spend less money each month than is received from a paycheck or any other sources of income.  Over time, the gap between what has been earned and what is spent should grow wider as more money is saved for the person’s future.  By detailing each expense and the amount of money needed, a person can create a complete money management plan that accounts for all of their necessary monthly spending.

Stick To The Plan
The most important part of creating a money management plan is sticking to the plan and applying any money that is saved to paying of loans and credit cards so that the person can eliminate their debt.  Completing the entire process will be hard, especially for people that have never been taught financial responsibility due to the easy credit of the past decade, but it is possible to create a money management plan and follow it until the person is debt free.

What Benefits Can Debt Settlement Offer?

Written by Toi Williams on Jun 16th, 2009 | Filed under: debt relief

Many people do not understand how important debt settlement can be to their future happiness.  Debt settlement has the ability to affect many different things, including those that are rarely thought of as being related to financial security.  There are many benefits that can be realized by using debt settlement and many of these benefits can have a dramatic impact on your life.

Approval For Credit Products
Debt settlement will allow you to get approval for additional credit or loan products in the future.  Having a high enough credit score to get approval for different types of credit is very important if you want to purchase a new vehicle or buy a house in the future. Debt settlement companies can increase your chances of getting approval from the lender or the credit card company that you are interested in doing business with.

Higher Credit Limits
Debt settlement may also encourage lenders to approve you for a higher credit limit in the future than possible if you were still carrying a large amount of debt.  This allows the person to be able to handle any financial emergencies that may arise or make large purchases without hassle.  People that have been successful at eliminating their debt using debt settlement are often approved for personal credit at reasonable rates within a few years of repairing their credit and demonstrating good financial responsibility.

Lower Interest Rates
People that have used debt settlement to get out of debt will typically qualify for a reasonable interest rate on different types of financial products after their debt elimination has been completed.   People that can improve their credit score, get help with debt, and have proven their financial responsibility are not considered to be a credit risk by many creditors.  This allows the creditor to offer the person a lower interest rate because there is a low risk of the person defaulting on the loan.  A lower interest rate on financial products can save you hundreds of dollars in interest payments each year.

Debt settlement has the ability to affect many different areas of your life and create better opportunities in the future once you have gotten out of debt.  Debt settlement can help you restore your credit worthiness quickly and can help you get the things that you want in life.  Whether you are interested in saving more of your money each month, obtaining greater purchasing power, or just want to increase your financial stability, debt settlement leads may be the answer for you.

How To Find The Right Mortgage Company

Written by Toi Williams on Jun 13th, 2009 | Filed under: Uncategorized

For the people that are interested in obtaining a mortgage loan to obtain a home, finding the right mortgage company can be a complicated undertaking.  By having a guide on how to choose the right mortgage company, a person will be less likely to be taken advantage of by scam artists or a phony mortgage company that is designed to take your money.  The choice of which mortgage company to go with will depend on a number of different aspects and only by considering the many requirements of the mortgage company should the person come to a decision on which mortgage company fits their needs the best.

Take Your Time And Choose Carefully
It is important that the person takes the time to find the right mortgage company for their needs.  If the people representing the mortgage company are not willing to listen to your concerns or they treat you like you are unimportant, then you really need to find another mortgage company to obtain your mortgage loan from.  Remember, you are the client and the mortgage company is working to secure your business, so you have the right to ask questions to try and determine the best mortgage loan for your needs.

Know The Common Terms Used In The Mortgage Industry
One of the biggest mistakes that many people make when applying for a mortgage is not being able to understand what is included in their mortgage agreement because they do not know the common terms used in the mortgage industry.  If a person does not understand what these common terms mean, then they may not realize what they are agreeing to when they sign the mortgage agreement.  One of the most common things heard today from people that are facing foreclosure on their home is that they did not realize what they were signing up for when they agreed to their mortgage agreement.

Know Your Credit Score And Credit History
It is much harder for a mortgage lender to take advantage of someone that is well informed about how the process should work and have a good idea of what they should be able to qualify for.  One of the best things that a person can do before applying for a mortgage loan is to obtain their credit score and credit history so that they know where they stand before contacting a mortgage company.  Knowing your credit score will help you determine what type of interest rate you should be able to qualify for on a mortgage loan.

What Are The Benefits Of Refinancing My Home?

Written by Toi Williams on Jun 12th, 2009 | Filed under: loans

In recent years, a large number of homeowners across the nation have refinanced their homes to reap the benefits of refinancing.  Mortgage lenders have made refinancing a home an attractive option for most homeowners because of the great financial benefits that can be realized by refinancing the original mortgage at the right time.  There are a variety of benefits associated with refinancing a mortgage and each benefit has the ability to greatly impact the homeowner’s personal finances.

Obtaining A Lower Interest Rate

One of the most common reasons for refinancing a mortgage is to take advantage of a lower interest rate offered by the lender.  Some homeowners obtained their original mortgages when their credit score and credit history was less than stellar so they had to accept a higher interest rate on the loan than they would have qualified for if their credit was nearly perfect.  If the homeowner has been able to raise their credit score by a significant amount in the intervening years, then they will probably qualify for a lower interest rate when they refinance their home.

The interest rates being offered by mortgage lenders are at a historically low rate, so even homeowners that qualified for a good interest rate when they took out their original mortgage may qualify for a lower interest rate today if they refinance their home.  A lower interest rate of a single percentage can save the homeowner thousands of dollars over the life of the loan.  It is important to remember that the lower interest rate offer is only a good deal if it applies to a fixed interest rate because an adjustable interest rate has the ability to rise over time and the homeowner may find themselves with a higher interest rate in the future than what they originally began with.

Obtaining A Lower Monthly Payment

Another benefit to refinancing a mortgage is lowering the monthly payments made to the lender to pay off the loan.  By refinancing the loan to a lower amount, the homeowner is also effectively lowering the amount of interest that they will be paying on the loan in the future.  This also allows the equity that is in the home to remain in the home while reducing the out of pocket monthly expense to the homeowner.

Extracting Equity From The Home

Some homeowners refinance their homes in order to extract the equity in the home to be used for other purposes.  Although this may mean that they are paying a mortgage for a longer period of time, it allows the person to obtain cash to be used for other purposes, such as putting a child through college or paying for remodeling their home.  The amount of equity extracted from the home will be equal to or lesser than the amount of equity that has built up in the home over the years, so the longer the person has had the home without extracting equity, the more equity they will be able to extract from the home when the time comes to refinance.

When a homeowner refinances a mortgage to extract equity from the home, the process is very simple.  The homeowner takes out a new mortgage on the home for a predetermined amount of money, more than they still owe on the original mortgage but less than the home is worth.  Once the new loan has been obtained, the homeowner uses part of the money obtained by the new loan to pay off the old loan and places any money left over into their bank account to be used as cash.