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Monthly Archives: September 2018

Collection Agencies

  1.  A flat fee.
  2.  A percentage of what is collected.
  3.  Through a direct sale of the delinquent accounts.

If you are trying to collect a small or medium sized debt, using collection agencies that charge a flat fee are probably your best option – collection agencies that charge a flat fee work just as hard to collect a small debt as they do to collect a large debt.

If you have just a few large unpaid receivables, working with collection agencies that charge a percent of the total debt collected is a wise choice. (usually 25 to 50 percent).

The third option, selling your uncollected receivables at a discount to certain collection agencies is advisable only if you have a very large amount of debt – usually $1 million or more. The selling price is typically a minuscule 2 to 8 cents on the dollar.

Most collection agencies use one of three tactics to collect debt:

  1.  Letters.
  2.  Direct contact via the telephone.
  3.  Litigation.

Typically, collection agencies begin the collection process by sending a series of notification letters, often called demand letters. The final notification letter generally warns the debt dodger that if the past-due account is not paid by a certain date, his or her name or company will passed on to more intensive collections.

Economic Payday Loans

First it is absolutely necessary to find out about the lending institution and how long they have been in business. It is wise to begin with the better known lenders. You will need to consider the fees and terms of this loan and just compare the rates among several lenders. The fees charged for these loans is usually a percentage of the amount you borrow, which is why you need to get the best one you can find. This fee has to by law be disclosed to you ahead of time. If a lender isn`t up front about either the fees or the terms, rule them out right away. This applies to whether you are looking online or in person. Before you sign or agree to anything, find out if the interest rate would change should you want to or be able to pay the loan back early. Some firms offer rebates for paying the loan back before the due date. Another important fact to find out about are any additional fees should you require an extension for the loan. The typical term for payday loans ranges from 5 to 30 days and usually coincides with your next payday. It`s best to borrow the least amount you possibly can to save on fees and to make repayment easier. Shopping and applying for these loans online makes the whole process a bit faster.

As a smart shopper, you should also know that payday loans aren`t the only way to get quick needed cash advances. There are salary advances, credit card advances (though theses tend to have very high fees), and working out some kind of repayment plan for the bills you owe on is also an option. Secured credit cards can be a good way to go. They are tied to your savings account and so they usually have a much lower interest rate than regular credit card cash advances.You might also consider religious institutions or social service agencies. They are there to help and might be a good resource to tap into. It will just take a little research on your part. Also, most creditors will negotiate partial payments once you establish a repayment plan with them. This will allow you some extra time to pay off your bills without the stress of having to come up with a lump sum. There are also emergency assistance programs and community organizations which are sometimes partnered with social service or state agencies. They have programs set up to help with home heating and cooling costs for households that qualify. Life is expensive and no family should have to be cold in their own home, nor should they suffer during the hottest summer months without any relief. Another possible resource are military loans. If you have ever been in the military, you could tap into the option of applying for a payday loan through the branch of the military in which you are or were connected. These rates typically have a much lower rate than regular payday loans. The repayment terms are flexible, so that is another plus. Some companies that specialize in military loans also provide disaster relief loans with no interest at all for 3 months if requested, or rates that are market competitive.

Credit Scoring Works

Your credit score is a number that reflects on the likelihood at which you will pay back a loan. Scores range from 350 (high risk) to 950 (low risk). Credit scores do not take into consideration your income, how much savings you have or demographic factors such as gender, race or nationality. Your credit score is affected by your current debt level, your past delinquencies, your credit history and how many times your credit report is pulled up by various agencies. Your score considers both positive and negative information in your credit report. For instance, recorded late payments will lower your credit score while a good track record of making payments on time will raise your credit score. Timely payment of your bills is important to ensure you maintain a good credit score. The amount of balance you have left on your credit card, how many credit card accounts you hold and your use of revolving credit also affect your credit score to a great extent.

Your credit score and credit report is formed on the basis of your credit history and you need to have at least one account which has been open or updated in the past six months to get a credit score. If you do not meet the minimum criteria for getting a score, you may need to establish a credit history prior to applying for a mortgage.

Principles For Debt Management

  1. Create an accurate assessment of your debt situation.
    Make a list, chart or whatever you’re most comfortable with, of all your debts. Be sure and include the amounts, interest rates, and expiration dates (especially on any no-interest for ## days type loans). Be sure and note any old accounts that you’ve got “laying around”, such as that department store credit account that you opened to get the 15% discount. You can now get a free credit report online. You should make sure that you’ve got a credit report and FICO score from each of the 3 national credit bureaus: Experian, Equifax, and TransUnion. The FTC advises monitoring your CREDIT REPORT activity ON ALL 3 BUREAUS. Under a new Federal law, you have the right to receive a free copy of your credit report once every 12 months from each of the three nationwide consumer reporting companies. AnnualCreditReport.com allows you to request a free credit file disclosure (ie. Credit Report) once every 12 months from each of the nationwide consumer credit reporting companies. This free credit report won’t include your credit score, but it does give you a consolidated list of your debts, a record of requests for your credit history, and a summary of your rights under the Fair Credit Reporting Act. Once you’ve gotten your free credit report, you also need to get your Credit Score. You can get your Credit Score, along with daily 3 bureau credit monitoring and other great services from FreeCreditScore.com.
  2. Make a budget and stick to it!
    Making a budget helps keep from increasing your debt, while you’re trying to pay it down. Be specific and detailed in your budgeting. Except for emergencies, you should only be spending what is accounted for in your budget. Some people have found it helpful to keep a 30 day log of their spending. Carry a little notebook, or some index cards with you, and write down everything you spend each day. You’ll probably be amazed at how much money you spend on things you want, and don’t really need. The smallest things, such as that $3 cup of coffee every day, can slowly eat away at your finances. This will help keep you from getting further in debt. Your budget should define how much money you’ll send to each of your creditors monthly and how much you need for bills, and how much is left for discretionary spending. Try limiting your discretionary spending to things you can buy with “pocket cash”. This may be hardest thing you’ve ever done, but you won’t get further in debt if you only spend what you have.
  3. Pay off the debts one by one.
    Maintain minimum payments to the rest of the debts, but pick the debt with the highest interest rate, and send extra payments to pay it off. There is a proven psychological benefit to being able to take a debt off of your list.

Low Interest Credit Cards

Contact Your Current Provider. Chances are the interest rate with your current credit card provider has been inching up for the better part of the past year. Whereas previously you could have had a 5% rate, the card may now be up to 8, 9, or even 10%. What can you do? Contact your credit card provider and ask for a lower rate. They can tell you no, at the risk of you going elsewhere, or give you a fixed lower rate. If your provider refuses to budge, see if they would consider a lower rate for a certain period of time, let’s say for six or twelve months. The added savings of the temporary lower rate can be beneficial especially if you have a big purchase coming up that you plan on paying off within 6 to 12 months.

Shop Around. Like most Americans, you probably are receiving solicitations in the mail for credit cards. If that is the case, find the plan that works the best for you and apply. Usually, a low introductory rate is offered as well as balance transfer options. If the card has no annual fees and no additional fees are assessed for transferring funds, go with the new company especially if the rate is lower.

Consolidate Your Debt. If your current credit card provider won’t lower their rate and the new card company’s rate isn’t quite as low as you expected, consider obtaining a debt consolidation loan through a lending institution. To get the lowest rate possible you may have to offer up something as security – for example, the equity in your house – to obtain the lowest rate. Do this only if you have sufficient equity and can reasonably expect to pay the loan or line of credit off.

Discharging Your Loan

The Obvious:

· If the student dies (death certificate required).

· If the student becomes permanently disabled.

Disability.

In the case of a loan discharge, the student involved must be permanently and completely disabled. This is also defined as being not able to work and earn an income due to an illness/injury that will most likely end in death.

It will pay you to check the laws in your state as these rules are continually being updated.

In some cases, only a conditional cancellation may be issued, this may last up to three years from when the student became disabled.

Another thing to consider is that if the conditions of the loan are not met, then the loan will revert back to its original state.

In either case, a doctor’s certification will also be required that will state the nature and details of the students illness/injury.

Closure

It may be possible to receive a discharge if the educational institution actually closes.

Other

It may be possible to also obtain a discharge if the loan was approved in spite of the fact that the student did not meet the requirements of the loan conditions.

Also, f the school does not meet the necessary requirements to provide adequate training or lessons to meet the student’s educational requirements.

Discharges can also be given for teachers working in low income educational facilities or who work in public schools.

Doctors working in low income areas may also be able to receive a discharge.

Another situation would be if the Student becomes bankrupt, then they may be eligible for a discharge, this would be dependent on a court ruling that would state that the student will be subjected to unfair hardship.

About Avoiding Credit Card Traps

First and foremost you must understand that using your credit card after you’ve received this notification results in your automatic “agreement” to the new terms in the notice. To prevent these new terms from affecting your account you must stop using that credit card immediately or by the date given in the notification statement.

The most common modifications to credit card agreements include new APR’s (annual percentage rates), new fees and/or changes to existing fees, or a change to the grace period on your account. The grace period is the number of days during which any credit used for purchases may be repaid in full without incurring a finance charge.

Not knowing or not keeping track of the dollar amount limit on your card is another trap you should avoid. Credit card issuers will allow you to charge a small amount over the limit set on your account. However, don’t be surprised when you get hit with an “over limit fee”, usually around $35.00 or higher, on your next statement. Also, be prepared for your APR to be increased if you go over your credit limit.

You’ll also trigger an increase to your interest rate if you miss your payment due date. Some companies consider your payment late if not received by noon or 1 p.m. on the date due. Along with the higher rate, you’ll also pay a “late fee” of $29 on up. Be sure to use the company’s preprinted envelope when sending your payment. These envelopes allow the pre-printed bar code to be scanned by the post office so that it can be delivered more efficiently.

If you’ve counted on those few extra days from the time you mail your check and the time the check clears your bank, beware! Many credit card issuers have switched from the traditional method of processing checks to a new electronic process. This new system shaves off a day or more from the traditional method it normally takes for your check to clear by electronically debiting your account.

If you’re considering paying your credit card bills online, check to see if any additional fees will be charged for using this type of payment. I recently received an e-mail message from one of my credit card companies announcing how easy it would be to make my payments online. Included in fine print at the bottom of the e-mail was this note – “A fee of up to $14.95 may be charged for this service and will be deducted from your checking account”. Hmmm, spend 37 cents on postage and mail my payment five days before the due date or pay now and get charged an additional $14.95 fee? I’ll bet you can guess which choice I made.

Dirty Tricks Credit Card Companies Play

The first one out of the some dirty tricks credit card companies play is also the worst of them: not posting your payment the day it was received. This is the oldest known trick: the company receives your payment in time but it doesn’t process it immediately; this delay will bring to the company a late payment fee. This is often due to legitimate reasons, but the policies of many credit card companies support a processing time that is not beneficial to you. A second trick is to make you pay late by changing the due date for your credit card payment. For being late the company will charge again a late payment fee and if the situation repeats for few months in a row they can legally increase your interest rate. The third trick played by the credit card companies is a ridiculous one: you can be charged a penalty fee for not using your credit card a certain period of time. As unbelievable as it might seem, this is a new tactic of the credit card companies to take your money. Another two tricks used are in connection with the client’s peace of mind. Both of them are connected with credit card protection and the fees that must be paid. One of them is protecting you in case your credit card is stolen, lost or used fraudulently. Almost all credit card companies do not charge a fee for this service, but there are others that do. The best thing you can do would be to avoid the latter ones. The second credit card protection fee is for protecting you in case you loose your job or die. For this protection, usually, the fees are too high for the benefit received, but many customers purchase it out of fear.

We are getting now to the last 5 of the dirty tricks credit card companies play to their clients. The sixth trick is designed to work on the psychological plan: the company is increasing your credit limit. You didn’t ask for a limit increase of your credit but the company gave you the possibility to spend more money. This is a psychological trick to make you spend more money on your credit card trick. Another bad surprise is to come back from your vacation and find out that you have been charged more for the amounts spent during your foreign trip. The commission charged for the amount spent outside the country is much higher than usual.

One of the new scams that have appeared in the last years is the card cancellation fee. This fee was adopted because a large number of the clients of a certain bank discovered the extra charges and they rushed all to cancel their accounts. The bank responded immediately by adopting a policy of charging a fee for closing an account. This practice was also adopted by other companies. There are also other scams like penalization for having a big balance or charging credit insurance fees. It is important to know these procedures so you don’t get taken advantage of and you can help put an end to these tricks by giving your business to companies who do not employ them.

Points to Evaluate Online Lenders

Privacy

In the modern world of ecommerce, it is essential that all respectable businesses honor your right to privacy:

  • Check for a posted PRIVACY POLICY, prominently displayed on the homepage of your prospective lenders site. Read it. Does it make sense to you? Does it address how they will use your email address, your name, and your private information?
  • Do they ask for things that may seem unreasonable at this stage of the game? Be wary of requests for credit card numbers, social security numbers, and similar information that may not be appropriate early on, for example, when you are filling out the initial, short form. Naturally, your lender will need that information down the road, but certainly not right out of the gate, when initiating the first steps towards a relationship with you.
  • Is the lender a member of a posted, third party, privacy program? For example, TRUSTe is one such independent company that will designate a member site. You can look for their emblem, and similar third-party companies. This is not a requirement for securing a good privacy policy; however, it is worth noting.

Design

The storefront of the online world, is the website. Therefore, it is important that you examine the sites design, and evaluate it, much the same way that you evaluate an office or store as you walk in the front door. Let me give you a couple things to consider:

  •  Is it a fast-loading site, or are you waiting forever?
  • Is it straightforward or elusive? Can you glean important, direct information from the homepage, or does the site appear to coax you in deeper?
  • Are you inundated with pop-ups, pop-unders, and other in-your-face ads, or does the site seem helpful?

Remember, how the lender presents themselves online, is a reflection of their business philosophy, and it tells you a lot about what kind of lender they may be, after you sign on the bottom line.

Popularity and Reputation

I’m sure you learned in high-school, that popularity and reputation aren’t everything. However, just like in the real world, it is important to gather information on these two key points, and use them as a gauge.

  • aBy typing your lenders URL into http://www.alexa.com, you will be able to ascertain how popular your lenders site is, because Alexa will tell you how much visitor traffic the site gets. This isn’t a science, and popularity isn’t everything. For example, an extremely popular website could treat you like a number, and a relatively new lender or smaller institution, might not be frequently visited, but still be a perfectly viable choice. So, review popularity alongside rock-solid common sense.
  • Say, why not check out your prospective lenders reputation, by going to the online Better Business Bureau, http://bbbonline.com and checking the Reliability Report? This report will provide you with corporate information (such as name, address, phone number), BBB membership information, whether or not the lender is a participant of the “BBB Online” program, along with a complaint history, and each complaints final resolution.
  • These aren’t the only methods for gauging popularity and reputation, of course. You can talk to people, go to chatrooms, conduct search-engine research, etc. Again, popularity and reputation aren’t everything, but keep them in mind while exploring lenders, both online and in the real world of course.