HELP! I'm wrapped in Plastic!

It is no secret that we here in America are a country of spenders. We are inundated with offers for credit card every single day. Thus having a credit card has become a status symbol of sorts. This is especially true among our country's middle class who is responsible for a majority of consumer spending nationwide.
It has become a race to see who can carry the most cards for the longest time and this destructive mindset is ruining people's lives.

So credit card debt has become a way of life for a great many people. The credit card companies make it as easy as possible to acquire a card. Some even ignore certain negative aspects of your credit score in order to issue a card to somebody.
It is common now to be able to apply online and have a response in as little as thirty seconds. I have always said that anything worth having is worth waiting for. That idiom holds true here as well.

The circumstances above have created the need for another market; namely debt settlement and debt negotiation companies. These companies offer services to get the debtor out from under the crushing weight of credit card debt.
You know when you are in over your head when your creditors call incessantly for a payment, your stomach is always upset, you start losing sleep and basically your health begins to suffer. Not to mention that those delinquencies are having a negative effect on your credit score.

Before you scream "HELP! I'm wrapped in plastic!" and call the first debt settlement company you cross paths with, here are a few things you should know.

1. Do a little homework. Pick out several debt settlement companies and call them up. Get a feel for their program and how they treat you in general. You need to feel comfortable with these folks as you will be sharing your financial information with them for some time. Be sure to pick the company that fits your needs. You can expect to settle your debts for around 50% to 60% of the original amount owed.

2. Don't let the critics sway you! Critics of debt settlement will tell you half truths that sound good, but lack credibility. Most of these critics are financial professionals in the credit business themselves. It's your debt and it's your decision so move forward.

3. You will hear that using debt settlement will hurt your credit rating. This is absolutely not true. Settling your debt will actually help your rating numbers. The fact is that the debt will be reported as "satisfied" or "paid in full" across the board. How can that hurt you? Remember, it is being consistently delinquent that hurts the credit score, not taking care of the responsibility.

4. Another thing you will hear from critics is concerning tax liabilities on settled debt. In some cases (VERY few, actually) there is a tax liability. If your settled debt is over the amount of $600, it is considered taxable and must be reported. However, the IRS has a contingency called "the insolvency rule" that covers this. Insolvency means that if your debt is greater than your assets, you wouldn't be able to satisfy your debts even if you sold everything you have. Insolvency absolves 95% of debt settlement solutions. Think about it a minute. Even if you did have a small tax liability, you are settling your debt for around 60% of what you originally owed, so you are still ahead by a long shot.

5. Debt settlement is looked upon favorably by most potential creditors. After all, you could have just filed a chapter 7 bankruptcy and liquidated your debt entirely. This solution WILL negatively impact your credit score. As a matter of fact, a bankruptcy will prevent you from getting any type of credit for a long, long time. This includes buying a car, a house or even getting a video rental card. Chapter 7 liquidation remains on your FICO score for at least 7 years and as long as 10 years. This is a huge red flag to credit issuing entities.

6. Realize that credit card companies want you to pay your balances. If you need to use debt settlement to accomplish that, they are willing to work with you and your debt settlement company. This is a better solution for them than having you just wipe the slate clean and be done. This is why debt settlement is much better than bankruptcy.

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Quick Tips to Help Reduce Debt

In the past couple of years, the times have become quite economically stressful, for many people across the United States. Of course if you have debt obligations that are ever on the rise, this can add even more stress to an already stressful time in your life. If you happen to have debt that seems to be mounting by the day and you are now depending primarily on credit cards and lines of credit, it is definitely time for you to get serious about reducing your debt. Your financial future depends on this, so you need to consider using some of the following tips to help reduce your debt.

Tip #1 – Get a Debt Consolidation Loan – One great tip to consider if you really need to reduce you debt is getting a debt consolidation loan. Sure, this probably isn’t really what you wanted to do, but it really can help. Many times you can get a debt consolidation loan against your home, or in some cases you may even be able to get an unsecured debt consolidation loan to help out as well. Getting one of these loans can help you combine several payments together so you only have one monthly payment. Just make sure that you get lower interest rates. The lowered rates will save you money each month, so you’ll be able to pay off your loan quicker. Also, it is much more convenient to deal with just one payment as well.

Tip #2 – Consolidate all of Your Credit Cards – If you have many different credit cards in your name, it may be time to consider consolidating those cards. Often you can find one good card to pay off those other credit cards. Some cards may offer you 0% APR on balance transfers, which is an excellent deal. Just make sure that you find out how long you have that APR for. Take the time to research the best credit card, then transfer your balances over to that card and do your best to avoid using the cards that are now debt free.

Tip #3 – Consider Another Job – In some cases you may have to even consider getting another job. Sure, you probably don’t want to work a second job, but if you can reduce your debt to make your financial future a bit brighter, it may be worth it in the long run. After all, getting a second job is definitely a better option than having to go through a bankruptcy in the future. If you do get a second job, make sure that you take all the income made from that job and put it right to the debt to make sure you can reduce it as quickly as possible.

Tip #4 – Sell Some Items – If you have some things around your home that you can sell, you may want to consider it. You may have a second or third card in the garage, a hot tub you don’t use, or even some jewelry that never gets worn. If you sell these items, you can take the money that you make and put it towards your debt right away. No one likes to sell their possessions, but if you really aren’t using them, they really can help you get better control of your debt.

Tip #5 – Credit Counseling – You may not be able to reduce your debt on your own, and if you can’t, you may want to consider going to credit counseling. Often these counselors can teach you how to work with money better, and they can also negotiate with creditors to get you better interest rates, and in some cases they may be able to negotiate your debt down a bit as well. So, if your debt is really getting bad, consider going to a credit counselor for some help.

Being over your head in debt can be extremely frustrating, so no doubt you’ll want to get out of debt as soon as possible. Take these tips and use them in your life, and you’ll be on your way to finally getting out of that pit of debt that you’ve been in for so long.

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Simple tips to create a budget you can maintain

The mere mention of a budget can cause many people to cringe with fear but, the truth is, a workable budget that can actually be followed is the primary key to financial security. Unfortunately, many people give up on budgeting because they can’t develop a plan that can really be maintained. At the same time, it is impossible to ever think of managing your finances and controlling your spending without some sort of plan to track your progress, while guiding you toward financial freedom.

The following tips will help you create a simple budget that is easy to understand and just as easy to follow:
#1...Before putting anything on paper, gather copies of all your bills, check stubs, and financial statements so you have accurate information to put on paper. Having everything in front of you will also make it less likely for you to leave out easily overlooked expenses like gas or monthly subscription charges.

#2...Start by dividing a piece of paper into two columns. The first will be for your income. A monthly budget works best for most households, so list all sources of money coming into your home each month.

#3...Your monthly expenses will make up the second column. To make budgeting simpler, separate your expenses into those that are fixed and those that can be changed, or are variable. Fixed expenses are the bills that stay the same each month, credit card payments, the mortgage, car notes, etc. while variable expenses can be altered, electrical and water expenses, gas, groceries, entertaining, etc.

#4...Remember to include yearly expenses like property taxes, miscellaneous expenditures including gifts and hobbies, and purchases of toiletries or other necessities.

#5...Once everything is recorded as accurately as possible, total your income as well as your expenses and compare the two figures. An ideal plan would have equal totals, meaning every penny of your income is accounted for and spent wisely. In most cases, the numbers will not be the same. This is where budgeting actually starts.

#6...If your income is greater than your expenses, you’re ahead of the game. Allocate the extra money to a savings account or adjust expenses for larger living. If your expenses are more than your income, you’re living beyond your means and you need to adjust your budget.

#7...Cutting your expenses is the hardest part of creating a manageable budget, but it is generally easier than increasing your income. Look over your variable expenses and find ways to save money that will balance your budget. In some cases, you may be able to completely eliminate an expense and use that money somewhere else but, most of the time, you will need to decrease spending in several different areas to produce a balanced plan. Consider:
- Cutting back on unnecessary habits, like smoking or alcohol.
- Pack your lunch for work rather than eating out.
- Opt for cheaper entertainment like a movie in rather than at the theater.
- Air dry clothes to save electricity.
- Join a car pool to decrease spending on gas.

#8...When you have a written plan for your finances in place, it’s time to put it in action. Each time you receive your income, spend it exactly according to your budget guidelines. Take the time to review your budget each month. If it is not working, make the adjustments needed to make it work and stick to it. You will soon be on the road to financial freedom.

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Building Business Credit triples the success of your business!

I recently received a call from a casual friend of mine inquiring into services my company offers for acquiring lines of credit for a business. So, I ask the caller how they have been in business and the response was, "well not very long". I shared with the caller that the likely hood that they could acquire business lines of credit when having been in business less than 2 years is practically impossible! The person gasped and than said, my personal credit score isn't very high and shared that their score was less than 600 FICO. I hated to crush their bubble, but I had to give it to this person straight so that an immediate decision could be made by this person. What I shared with person is very important! There is alot of hype in the marketplace about what it really takes to establish business credit lines. So here is the deal:

1) You must be in business for at a minimum of two years! Meaning licensed and incorporated, at least an LLC.

2) Have a business Checking account in your business name and address with a phone number that is listed in the 411 directory.

3) Have a copy of the rental agreement where you are located for your business. Many banks will ask for this, it creates credibility for you and your business.

4) Be prepared to potentially have to co-sign for your initial line of credit, in many instances banks may want your personal credit as a guarantee before an account will be opened.

5) Request a DUNS number from Dun and Bradstreet. You may need it, you may not.
It's free and can be requested online on the Dun and Bradstreet website. Most likely the bank that grants your company a credit line will report your relationship with the bank to D & B. It's very important that timely payments are made so that positive credit reporting is maintained.

Building business credit will help the success of any business very early. Self funding a business venture is noble, but very costly! I have personally done it and have been successful, but costs can get away from you when gearing up.

Because of the questions my office has received regarding acquiring business credit, we went to work to provide some critical services for our clients whom were contacting us to not only boost their personal score, but learn how to position themselves to acquire large lines of business credit.

We introduced the Start-up Corporation for individuals whom wanted the maximum in high end products and credit lines to create an instant corporation to gear up fast!

Get GR8T Credit's Start-up Corporation package is an amazing package that creates the corporation entity for you within 30 days with up to $200,000 in lines of credit! Qualifications are FICO of 720 or better, 3-5 personal lines of credit with personal debt percentage 40% of less, priced at $12,000! You just can't beat it!

Want more information, give us call!

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GRAB DEBT PROBLEMS BY HORNS!

You get home and the phone is ringing. You walk over and answer the call. As you greet the caller, you quickly realize that the person on the other end of the phone is your credit card company, asking when you are going to make last month's payment. Your mind is running ninety miles a minute and your heart is beating so fast you can hear it in your ear-drums. You feel like screaming at the caller and saying, "I can't take it..I can't pay..I have no more money.." You finally realize as the caller is demanding a payment date and amount, that you have a debt problem. The question then becomes “how do I solve my credit problem?”

One of the first steps in solving a debt problem is simply realizing that your debt is a problem. Often times, people believe that they have a complete grasp on their debt. When in reality, their debt has a grasp on them. After you admit that you have a credit problem, then you can take the needed steps to begin fixing the problem.

It is often easy to ignore debt. However, by ignoring it, you are quickly making it a very serious problem. It is easiest to deal with debt head on, in the early stages. The longer you ignore your debt, the harder it is to fix the situation. Therefore, after you realize you have a debt problem you will need to make a list of how much debt you have and to whom you owe the money to. This will help you have a better understanding of exactly how much you owe.

Next, you need to come up with an action plan to pay off the debt. There are a variety of different ways to do this. However, you will need to find a solution that will work best for your personal needs. One of the first steps of your plan should be to get rid of your credit cards. You can simply cut up your credit cards so that you are not tempted to use them while you are trying to pay them off. You can also stick them in a bowl of water and put them in your freezer. This will help curve those impulses to use the credit cards. One card can be kept for emergencies. However, it is important that the card only be used for a true emergency, not a sale at the mall.

Many people will turn to debt consolidation in an attempt to get their debt under control. If you have several credit cards, you can attempt to put all of your debt onto one card. If you choose to go with this route, choose the credit card with the lowest interest rate. This will help you to pay off your debt quicker and will save you money in the long run.
You can also choose a debt consolidation loan. You can obtain a personal loan and pay off all your debt. Then, you can make monthly payments to pay off the personal loan. Again, by consolidating your payments into one monthly payment, you are not only helping to pay off your debt quicker, but will most likely save you money in the long run. If you have equity in your home, instead of taking out a personal loan, you can take out a home equity loan to help consolidate your debt into one easy to make payment.

Whether you choose a personal loan or a home equity loan, be sure to shop around. There are a variety of different online companies that can help you to obtain a loan. You will want to make sure that you are getting the best possible terms of the loan as well as the best interest rates. Another solution you may want to consider is debt settlement. This is a great solution for long term debt. With debt settlement, a management company will try and negotiate to reduce your payments and or lower your interest rate. It is important to note that if you go with a debt settlement, it could have a negative impact on your credit rating.

Debt and harassing phone calls do not have to be a way of life. There are a variety of different steps you can take to help reduce your overall debt and stop the harassing phone calls. It is important that once you get your debt under control, you do not fall back into the same patterns you once had. Before you can begin paying off your credit card debt, you must quit using the cards. Otherwise, you will quickly be back to the large debt and harassing phone calls.

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Student Tips on Smart Credit Card Use

When you send your child of to college I am sure that you have sat them down and warned them about the dangerous they may face. But most parents don't even think to warn them about credit cards. See, when your child shows up to campus to get settled in it will be very hectic. There will be many people handing out different kinds of information and brochures. Some of them will be credit card applications.
The applications are very easy to fill out and if your child has not been warned about the pitfalls of getting credit cards they may look at them as free money. They are anything but free money and the damage they can cause to their credit ratings can haunt them for years after college.
Almost every student that fills out a credit card application will receive a credit card. Most will have a credit limit of between $200 and $1000. Won't they don't usually realize is that the interest rates will be very steep, unusually up around 28%.
So before your child leaves for school, sit down with them and give them tips on smart credit card use:

1) Use the card for emergencies only. You may need to explain that not having pizza on Friday night is not an emergency. Having to replace a flat tire is.
2) Never carry a balance, if you cannot afford to pay off your purchase the next time you are billed, don't use it.
3) Since many of them will not follow rule #2 explain that they can never only pay the minimum due. At 28% interest and paying the minimum balance you could actually owe more after you make the payment.
4) Never pay a bill late. Paying late fees is crazy. If you bought a CD for $20 dollars and you pay late, by the time you add the minimum late fee of $25.00 to the payment you have now bought the CD for $45.00.
5) The minute that you see that you have gotten yourself into trouble cut them up. Fix what needs to be fixed immediately, the longer you ignore the problem the more costly it gets.
6) Limit the number of cards that you have. I would suggest that they only carry two, a MasterCard or Visa, and a gas card. This allows them to purchase any thing that may come up.

They should also know that the credit card companies do not care why you cannot pay; they just want their money back. So using a credit card to try and stay afloat when your studies are overwhelming and you cannot work as many hours is not a good idea. Tell them to try and tighten their budgets and live within their means.
Make sure that your child really understands the repercussions of using credit cards irresponsibly. Getting credit to begin with is easy and so is ruining your credit score. If they ruin their credit when they are 18or 19 years old that will stay with for at least 7 years and will effect them in ways that may not seem important now but will be when they are looking for car insurance rates or apply for a job.
Even if your child uses the credit cards somewhat responsible but still carries a balance the interest rate alone with have them paying off that credit card after they have graduated and are looking for their first job.
Hopefully before they leave home you will have taken the time to explain all the pros and cons of using credit cards. Take the time and teach them to budget their money correctly so that they will their credit cards sparingly. Then when they actually need to use them the will pay them off as quickly as possible.
They should also realize that if they end up with more debt then they could ever repay that with the new laws in place it is very difficult to try and declare bankruptcy. If they do actually file bankruptcy the damage done to them will take many years to recover from it. And whether it is fair or not, a lot of employers now will not hire people with bad credit ratings.
So hopeful these tips will help your college student learn to use their new credit card is a very smart way.

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