Credit Card Fee's Increases

This month on our two credit card statements are notices informing us that as of Oct. 1st we may be charged "more than two" late fees or over the limit fees" per month. What's going on?
Gwen

It's estimated that Americans charged $1.8 trillion in 2005 on the 690 million credit cards outstanding. According to a Government Accountability Office study released in September, 2006, 13% of credit card users were assessed over-limit fees and 35% were assessed late fees in 2005. So Gwen has a lot of company.

Let's try to do three things. First, understand what these fees are. Next, see how fees are changing. And, finally, what Gwen can do to keep from being hurt.

Credit cards have always had fees. Some, like for a late payment, are understandable. Others came along as credit cards took on new capabilities. Think cash advance and balance transfer fees. Still others, like over-limit fees, seem like they shouldn't be possible. You would think that they wouldn't allow you to borrow more than your limit.

There are also 'penalty interest rates'. If you're late with a payment or go over your credit limit you could see your rate bumped to 30% or more.

The 2006 GAO study looked at fees and penalties. It said that not only were fees increasing, but the credit card companies were doing a lousy job of informing consumers about those fees.

The credit card companies are obligated to tell you about any fees or penalties and how they're triggered. Some fees, like paying your credit card bill by phone, are sometimes not clearly disclosed. What Gwen received with her statement was a notice of a change in how fees would be charged. And, as long as she's notified they can get by with almost anything.

Late fees have nearly tripled in the last 11 years. And many cards have adopted a 'universal default clause' that says a late payment on any card will trigger the penalty interest rate.

Credit card companies say that the higher interest rates and fees are appropriate based on risk factors. If it weren't for the higher fees, they claim that they wouldn't be able to offer credit to riskier consumers.

In fairness, the GAO's survey found that (at least among 6 of the largest card issuers) 80% of accounts paid interest rates of less than 20%. So the vast majority of card users are not paying penalty rates.

But the study also found that the disclosures were written well above the eighth grade reading level and (surprise!) featured small print. They recommended that the Federal Reserve Board revise rules on credit card disclosures.

Now that we understand what's going on we can try to help Gwen avoid problems. The first thing is to recognize that the card issuers get to make most of the rules. And, whether those rules are fair or not isn't relevant. The best she can do is to avoid getting hurt by those rules.

Get familiar with each account. The only way to know exactly what's allowed is to read and understand the "Card Member Agreement." Tough duty. But necessary.

Watch out for unexpected fees. Like for balance transfers or increasing your credit limit. Know what could trigger fees or penalty rates.

Know exactly when your payment is due. Keep a list of due dates for your credit card accounts. If you don't get the bill, it's your responsibility to contact the company and still make a timely payment.

If possible, the best thing to do is to join nearly half of the cardholders who paid little or no interest. That's because they do not carry a balance.

Obviously, for many people that's not immediately possible. Then it's important to send in your payment as soon as possible. Being seven days early is better than being one day late.

If you find it difficult to get your payment in on time, you might want to authorize the credit card company to automatically debit your checking account for the minimum payment each month. You'll probably pay for the service, but that way the payment can't be late.

Talk to your card issuer. If your due date falls at a bad time of the month, they'll move it.

If Gwen is near or over the limit on any card, she should try to shift part of the debt to a different card. Some fees are even being assessed when an account is merely getting too close to the limit. Your best bet is to keep balances to less than half the available credit.

Although the higher late fees are infuriating, they do minimal damage. The real problem is in the universal default clause. Most credit card accounts now have a universal default clause.

Suppose your rate went from 15% to 30% on every open credit account. For every $1,000 you owe, an extra $150 interest would be charged each year. So if you're the type of person carrying a $10,000 balance, that one late payment could cost you $1,500 per year. For as long as you have the balance!

Gwen is right to pay close attention to her credit card accounts. With newer fees and penalty rates in place, it becomes more important to manage your credit. In fact, it's critical to your financial wellbeing.
The Dollar Stretcher
by Gary Foreman
gary@stretcher.com

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Gary Foreman is a former financial planner who currently edits The Dollar Stretcher website . If you'd like to stretch your day or your dollar visit today! You'll find hundreds of articles to help you "live better...for less".

Business Debt Help: Counseling at Your Feet

Many different things can lead to you to end up in debt; among those are taxes, excessive payroll, credit lines, credit card expenses, and others. Once your company has fallen in the strong binds of debt, is not an easy task to free your business from the financial difficulties that debt means and do it successfully.

Using professional counselors is the best way to go once you have decided to look for business debt help. By getting counseling, the manager or the owner can understand the true nature of the debt problem. Sometimes, managers and owners do not like getting business debt help because they feel they no longer have the control of the company. This is the main reason why businesses remain trapped in debt for a long time.

- How can counseling help you achieve business debt help? -

A professional counselor, expert on bringing business debt help, starts by analyzing each part of the business and its finances. By using business debt help and the professional help that it brings along with it, you are moving towards better allocating your money to the various departments of your business, which will help clear up your current business debt. These days, thanks to the Internet, it is an easy task to find a good online financial recovery service which can provide helpful information on business debt help, credit repair, bank levy, foreclosure avoidance, debt negotiation, and several mechanisms that can help free your business from debt; or at least can help you understand the depth of your business current situation.

- Business debt help recommends: commercial debt counseling -

With business debt help, people need to understand that they will receive more than just counseling, and their current business situation will be handled, at the latest, in a few weeks time. Business debt help provides counseling, but to really start repairing the damage caused by the business debt, it is really necessary to accept the help of a business debt settlement company; some can offer both types of services: Business Debt Help and Commercial Debt Counseling. The difference between both services lies in the activity. When someone searches for business debt help, he/she gets counseling from a specialized group and with commercial debt counseling, they get business debt help and commercial debt settlement. This is all with the purpose of you helping you understand your current business situation and also getting debt settlement in order to start repairing your business debt once and for all.

- How does Business Debt Help process start? -

After you apply for the business debt help service, a professional counselor starts gathering information from your business and after taking a looking at everything thoroughly, he will give you some advice on what you should start doing and/or stop doing. The counselor, based on the gathered information, will determine which factors are currently increasing the debt such as credit cards, interest on credit cards, credit lines and their interest and taxes. Once this is done, the counselor will suggest different ways of getting a hold of some extra cash, say, allowing external investors or getting a secured loan on a property or even your house.

Remember this: when a business is surviving today's market, it cannot start dealing with yesterday's debts because that will cause the business serious trouble, and the problems will make it weak in front of its competitors. When a business has debts of more than 60 days old, and pressure from collectors and/or lawsuits are your main concern day and night, or if you borrow from one place to pay another, you are definitely in need of business debt help.
We have different articles on interesting topics and current and former clients experiences with our programs. Take a look at the different situations on Business Debt Help and related topics that people can fall into and how to keep yourself a debt free person.

Check these links to learn more:
http://www.commercialdebtcounseling.com/business/business-y/business-index.shtml
http://www.commercialdebtcounseling.com/
James Banks is a contributing writer to http://www.commercialdebtcounseling.com and is currently writing some special articles to guide business on how to manage debt and avoid bankruptcy.
For Free Information on Business Debt Help and Debt Help Consultation, call toll-free 1-877-850-3328

Debt Help Services - Is it the Superior System?

If you are struggling with debt you will most likely want the services of a paid debt settlement expert. Frequently they may be capable to discuss a lesser interest charge if your situation warrants it. Debt solution is suitable for anyone who has debt problems. Take action but don't rush is a good rule when you are already in a mess do not to make it worse by a bad choice on who is going to solutions you.

Here are some of the choices available to you:

Debt Settlement / Negotiation works well for most people:

If you have a big amount ready (for example a mortgage from a parent or relative) you can frequently have an even better payout on your mortgage - but authorize it to the specialist to deal for you, they are aware of the ropes you don't. There have been a case where the consumer paid off their debt in a one time payment as agreed and the lender still came after them for the entire debt amount. This will not occur if you have the right kind of help on your group.

Debt settlement companies can perform on your behalf to arrange a reduction in your debt by up to 60% by talking with your lenders. These companies are more possible to get you a good settlement as a contradiction. The recently created bankruptcy laws were introduced in fall 2005 and lots more people have turned to debt settlement as a excellent solution since then.

Specialized debt settlement companies will rate a good fee for their services but most of it will be based on their accomplishment- the more they charge you the more they should hold you. These types of services let you to move on with your life, stop the lender harassment and be debt free reasonably quickly. When you accomplish it don't drop back into the same setup again.

You could try for a Loan:

In some circumstance people with debt problems can arrange for either loans or refinancing of their debt load. On the other hand, you should also be aware that not all of these arrangements are good ones. In case, most of it is not an exact thought to adapt unsecured debt into secured debt - no matter what the creditor tells you! If you do this you have fairly escalated the chances of you bringing up your assets because if you evade on it they can now take it. Not a better action - except for the creditor. When you are in a distracted situation do not make it worse by making reckless moves.

You could try Debt Counseling:

Please be aware of online scams from some of these debt of companies. Examine them out prior to giving over any amount. You must consider this knowing that you do desire to hold action to determine your problems. Don't give them any amount until you are contented they are sterile. There are lots of scam companies and individuals out there that will not perform any worthwhile function for you.

Debt counseling is a widely known debt service but only works well for a reasonably small number of individuals. Your lenders would very much favor you to try to find credit counseling before you come to a decision to declare bankruptcy. Reflect about it - I am surprised why they choose it? I presume maybe its because you end up still giving them the entire amount and some interest. They are also frequent in part funded by the credit companies.

Why Most Debt Elimination Programs Are a Waste of Money

Perhaps you've seen ads for "total debt elimination" and wondered what it is. Well, never forget the old saw: "If it sounds too good to be true, it probably is." That's certainly the case here the kind of debt elimination where slick sales copy or a fast-talking salesman contends you don't really owe your credit card debts is quite simply a scam designed to part unwary, gullible consumers from their hard-earned cash.

Credit card debt is paralyzing millions of Americans today and sadly, thousands fall prey annually to scammers promising they possess a "secret legal loophole" that forces creditors to forgive their debts without repayment. The so-called secret is special wording used in letters that consumers send to their credit card banks disputing their bills. Of course, the price of these "secret words" is often quite steep, with fees up to $5,000 or more.

Before you trust anyone but a bankruptcy lawyer to help you erase your debts, please do a little research. You will find this "no money lent" method not only doesn't work, it backfires badly. Creditors have all seen these letters before and react swiftly and harshly to this ridiculous tactic. Think about it for a moment the economy would collapse if this "secret" were legitimate!

So instead of using what little money you had to pay off your debts, you've thrown away hundreds or thousands of dollars to learn a bogus "secret," and now all of your creditors are suing you. You've only made a very bad situation worse, requiring legal representation for repeated court appearances with your various creditors' attorneys. This translates into potential wage garnishment, repossession of vehicles, foreclosure, i.e., a laundry list of financial disasters for the desperate debtor. Great results, right? Then why do so many people fall prey to this scam?

Probably one of the main reasons is a popular method used to promote it MLM, or multi-level marketing. Often a friend, neighbor or relative will approach you with a sensational-sounding "amazing discovery of a foolproof method of totally eliminating their debts" and want to share it with you before the price goes up/the Feds crack down/etc., etc. The only amazing aspect of this is how many normally intelligent people fall for the outrageous hype.

Here's the plain truth. Legitimate debt elimination involves payment in full (on your own or via credit counseling and debt consolidation programs), bankruptcy (increasingly difficult since new bankruptcy legislation was passed in October 2005), or haggling with your creditors to reduce the balances due by 50% or more (debt settlement). Which option is best for you depends on your financial situation. In other words, true debt elimination IS possible. You just have to use the right approach. Don't be fooled by the scams and be sure to thoroughly research any company you do business with before signing a contract or paying any fees.

Charles J. Phelan has been helping consumers become debt-free without bankruptcy since 1997. A former senior executive with one of the nation's largest debt settlement firms, he is the author of the Debt Elimination Success Seminar, a five-hour audio-CD course that teaches consumers how to choose between debt program options based on their financial situation. The course focuses on comprehensive instruction in do-it-yourself debt negotiation & settlement designed to save $1,000s. Personal coaching and follow-up support is included. Achieves the same results as professional firms for a tiny fraction of the cost. Visit http://www.zipdebt.com/debt-settlement-coaching.php for more information.

Payday Mayday! The Hidden Danger Of Payday Loans

Copyright 2006 Ranci Endo (UK) Investments

Paydays are the most eagerly looked forward to days in the entire month. It's the day our coffers fill up and a general sense of wellbeing pervades the atmosphere. The long awaited personal gift can be bought, dinner at the fancy restaurant is a possibility and some wise folks even add up to their savings faithfully at the end of that day.

There are however quite many people for whom the joy of the payday lasts no more than a few seconds. These would generally be those who have payday loans to repay. Even before they can feel the money, it's gone!

What is a payday loan and why exactly is it so monstrous? A payday loan is a loan of small amounts taken with an acknowledgement to pay back the same when the next earliest paycheck is received. The loans are usually for small amounts not more than $1000. These loans are easy to obtain, as the lenders do not require a credit check or collateral.

Such loans are also seen as emergency money that may be required by anyone at any time and such that can't be covered by existing funds or due to inaccessibility of the same.

For example, a breakdown of the heating system in winter requires immediate attention. If you do not have the immediate funds you take a payday loan to have the same rectified.

There are however certain problems related to such loans that many overlook.

One of the most important problem is the high rate of interest that is charged on such loans. It comes across as grossly unfair when you compare the rates with those of the other loans and discover that the annual percentage rate (APR) of a normal loan would be 7% while that of a payday loan averages 400 % and even higher.

Then there are also charges applicable for the service. For example, on a loan of $100 you may have to pay $20 thereby bringing the total payable on payday to $120.

Moreover if you fail to settle the amount on payday you can roll over the same but for which you will be charged the applicable rate of interest. You may also be charged fees for your inability to settle the same on the due date.

As these loans are usually taken for short periods, about 14 days approximately this means that any rollovers claim increasing rates of interest. The borrower then gets into a never-ending credit cycle that is very hard to break.

If a payday loan is taken from unlicensed or unregulated lenders it only makes the matter worse. Moreover if you have not received the terms and conditions of the loan in writing prior to commencement, then it becomes even more difficult to assimilate the total charges due. This can only cause more confusion and problems for the borrower.

At the end of the day you realize that these payday loans, so alluringly called cash loans are nothing but monsters that can never be satisfied.
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Francis Mwendo is an Internet consultant, publisher and marketer focusing on Debt/Loans items. To FIND cutting-edge products on Debt Consolidation Services, primarily, Payday Loans, and Student Loans Consolidation, VISIT THIS SITE: --
http://www.loans-2day.com

5 Reasons Why You Can Get To A Bad Credit Rating

It's a fact.

The moral of the statement, in short, is that however bleak your conditions at start appear, be sure to ask your chosen particular finance specialists to help you shop around.

Thousands of Australian consumers are struggling with the weight bad credit ratings as a conclusion of complex own or job situations, a bad run of luck, bankcruptcy or adverse law court conclusions.

Many will quickly be able to see if you qualify for a loan by asking you some uncomplicated things. Make sure you're honest and don't be attracted to keep some fiscal frames locked away in the bookcase.

More and more mortgage lenders are coming to see that this oversight often sits at the heart of the trouble, and that it often doesn't mean that human beings with bad credit assessments can't afford to make bank loan expenses.

The positive news is that debt lenders are beginning to realise that this isn't fair and are extending post-law court decision loans to individuals at reasonable rates.

And to make things even more bleak, there are told to be masses of people who have low debt payments as a result of court of law decisions but who don't even understand they're in a bad loan spiral until they have their application for a usual loan twisted down.

Surveys disclose that in many circumstances, court conclusion black signs are established because the individual changed house without notifying loan or store card companies, and successively missed a few spending.

Since court judgements stay on a perpetual debt file for five years, a person can be required to suffer the consequences of making minor mistakes for years afterwards.

Thanks to these more soft credit requirements - connected with an situation of usually low relevance rates - demanding for a bad debt loan is now more affordable than ever before.

However infrequent you may suppose your circumstances are, take comfort from the fact that most professionals in this area will have heard statements far more bleak than yours!

How I Negotiated My Own Debt Reduction By Over 50%!

What you are about to read will shock many people and will be information that the professional debt companies do not want you to know! This is my story of my experiences of how I was able to negotiate a reduction in my overall debt by just over 50% without having to pay a cent to any professional debt settlement company!

My troubles began just over about 5 years ago. I got myself in some pretty serious debt problems. It wasn't that I was being overly stupid about my finances it was just that I truly believed that I would be able to pay for my purchases because I was making good money. Well the fact is, I was making good money and would have been able to handle the purchases had I not run into some unexpected financial burdens including an injury that I sustained which meant that I had to take a lesser job that paid less than half what I was making. Yes, I was smart enough to have some insurance that helped cover some of the medical expenses but the insurance policy only paid a nominal wage and did not take into account the commissions I was making on my sales job. Soon it got to the stage where I was just making minimum payments on my 5 credit cards, three of which were maxed out. I also had to sell my car as I wasn't able to make the lease payments any longer and since it was only the second year of a 5 year lease, I didn't get as much on the sale as I owed the finance company. I had to take out a personal loan to cover the difference.

It wasn't long before I started not being able to make the minimum payments. I was able to borrow some money from some relatives to help whilst my injury healed but I'm not the kind of guy to want to burden my family and so was committed to take care of things myself. It soon got to the stage where I knew I was in serious trouble. The interest and late fees on my cards were adding up and I started getting some nasty calls from the credit card companies as well as the bank about my personal loan. I tried to take out another loan to cover the credit cards but I was rejected by every bank I went to. They didn't seem to even care that I was making good money at one stage, they just looked at the fact that I was struggling with debt at that moment and said no.

bunch of stuff on eBay, which helped for a couple of months, I had no where else to go. I knew that I had to look at some other way to help myself. I started looking at my options with my worst fear being that I would have to file for bankruptcy. I was determined not to go down this path as I knew this would impact me in the long run. I conducted some research on the internet and found a big range of options including debt consolidation, debt settlement, debt reduction plans and so on. There was also a huge range of different professional companies offering their services to help me with my debt problems. All the companies announced loud and clear that debt wasn't something that an individual could get out of by themselves, and that I needed to use their services in order to get real debt help. So I researched a few companies and chose one that was in my area that claimed that they could give me a written guarantee of what they could do for me. They stated that they would reduce my monthly interest rates and would reduce my overall debt by up to 70%. I thought wow, that would be great, and so sought their advice. I met with a certified debt consultant and went through my sordid details. At the time my debt overall debt had grown to a shocking $86,675! After a week or so, the consultant came back to me with some advice and told me that I had reached a stage where the only option was a program of debt settlement or debt negotation, whereby the agency would act on my behalf and negotiate with my credit card companies and bank to reduce my loan and reduce my interest rates. They said that I would then pay the agency one amount each month and they would then distribute that amount to the various creditors. I asked the consultant whether or not I could do this myself without having to engage the services of the company. The consultant basically told me no - stating that it would be a waste of time as credit card companies and banks did not want to deal with the individual - that they didn't trust an individual as they were a risk and that their agency knew what to say to get me the best deal. I thought to myself, that's odd, what great power do these companies really have? I then enquired about the charges and they advised me that it would be a percentage of what they are able to save me plus an initial set up charge and some ongoing administration charges. I did the calculation and the total amount it would cost me would be somewhere around the $10,000 mark. I thought that this was a bit excessive so I decided to look at other options. Surely there was something that I could do by myself that would have some impact on my situation.

After searching around the internet I stumbled upon a program that guaranteed that I would save thousands of dollars with creditors by negotiating with them myself or I would get my money back in full. The program would cost me about $400 and I would also receive coaching from an expert. I thought to myself $400 versus $10,000 & with a money back guarantee, what do I have to lose.

I'm not going to go into great deal about what that program is about as its actually copyrighted so I will just tell you briefly that debt settlement is essentially like good old fashion haggling with your creditors. Just like you may haggle with a 2nd hand car dealer to give you a better price, you can haggle with your creditors to reduce your debt. At the end of the day, creditors know that bankruptcy has become an "easy" option for many consumers in serious debt. And they know that this means they can kiss their money good bye. So they would rather negotiate with you for a lower amount if they get some sort of level of confidence that they will get this money. What I learnt from this program was how the collection process works and therefore the right time to put through your settlement offers. I also got to understand what creditors would settle for and I worked hard to get the maximum reduction. The creditors will want you to sign some documents and they will hit you with a settlement letter. The program gave me some professional advice about what was in the letters and showed me how to even negotiate these. At the end of the day, I was able to dig my heels in with some of my creditors and was really surprised when they accepted an amount that was just over 50% of what I owed them in total.

Some words of warning before you think to do this yourselves. The process is not a pleasant one and creditors can become very nasty especially when they turn their debt over to a collection agency. The process is fraught with emotions and can get your blood pressure levels up! The collection agencies try to catch you out with their tactics as they are motivated to try to get the very most out of you. You need to be the type of person that can stay focussed on your goal to reduce your debt and it helps to have the coaching advice of an expert to help you.

At the end of the day, if you think you can do this, you can save yourself a lot of money both from not having to engage a professional debt company, as well as reduce your overall debt. The happy ending to my story is that I am now back in control of my debt. It is down to manageable levels and I am now in the process of repairing my credit report (which is a very important step in the process).

For more information about the above debt settlement program and other possible debt solutions, visit Debt Solutions Portal.

Debt Relief Solutions - Get the Way for Financial Relief

Is your debt going out of control? If your monthly debt payments, excluding mortgage or rent, exceed 20% of your income, it means your debts you have a serious debt problem and you need to get rid of debt . The best solution is to go for debt relief solutions offered by debt settlement programs.

Debt relief solutions are for people who are behind on their bills. It's a program that you can join for convenience or just to attain a lower monthly payment or reduced interest rate. Borrowing money to pay off old debts is never a solution. Though it may reduce your burden for a short time, the actual problem of debt never goes away. If you want to pay off your debt, it's always better to seek professional debt reduction service.

But, how to select a debt settlement program? There are numerous debt consolidation companies offering varied debt settlement programs. Which of them suits your purpose the best? The solution - research and more research. The financial service industry is really murky and you need to be on your guard to safeguard your interests. Try to verify that the debt reduction company has dealt with a multitude of creditors and would be apt for your case.
For example an unsecured debt consolidator will deal only with unsecured debt: the IRS, credit card firms, hospitals, or banks. So selection of appropriate debt consolidator is a pre-requisite.

But, the truth is - you still need to make monthly payments to the consolidator, who will pay the creditors on your behalf.
Getting debt relief solutions from professional debt settlement programs has many advantages. Debt relief solutions gives you the power to get rid of debt with the help of professional negotiating team. A debt settlement company will take care of all your debt issues - from negotiation, litigation to settlement. They will talk to your creditors on your behalf, and arrange for the best debt relief solutions for your financial situation. They may even be able to have your late fees and penalties reduced. But remember that each case is different and so the process of debt reduction for each case also differs. The faster you make the funds available, the faster you will be able to get debt relief.

Finally, you will enjoy their industry experience on your side that will negotiate with your creditors and stop harassing collections agencies. They company restructures your debt after thoroughly studying your debt history. Most debt reduction programs are based on working out customer specific debt reduction programs depending upon the debt situation of the customer. Debt reduction specialists negotiate with your creditor in which results in eliminating a significant amount of the interest and principal.

Debt relief solutions will be beneficial if you are seriously planning for a debt free life. You need change your spending habits. So building wealth is essential for a debt free living. Avoid credit cards and try purchasing with cash.
Debt relief solutions make you free from debts in earliest possible time. You do not have to face creditor harassment. The debt reduction company talks to your creditors. They also eliminate the risk of bankruptcy. The negotiating team will do negotiations in your favor. Debt relief solutions are the best way to get finances back on track. You can get rid of debt and that too with full security and peace of mind.

But remember, your credit history, interest rates, and current account balance matter a lot in debt consolidation and debt settlement. The better your financial circumstances are, the better is the deal you'll get. Summary: The expertise describes how professional debt settlement company helps you in negotiating debt related issues with your creditors. About Author: Michael Clark is an ex-Wall Street broker who advises people on the legal intricacies of mortgage refinancing and Debt relief solutions. He also helps to get rid of debt for clients through her network on debt settlement experts.