Lowering the interest rates on credit cards is a big first step to reducing your debt. The problem is - most people don't do it or don't know that they can do lower the credit card rate with a simple phone call.

Scared! - Don't be that phone call could you save you a lot of money.
 
Carrying a high interest rate on the balance of your credit card is extremely expensive.  You hold a lot of buying power with that little piece of plastic. The credit card companies know that, so take the power you hold to lower your interest rate.  

All you need to do is pick up the phone and ask to have your rate reduced. If the company refuses to give you a lower rate, don't be afraid to take your money and business elsewhere.

Oprah had a great little series called the "Debt Diet" on the show Jean Chatzky gave a sample script

Here is Jean Chatzky's sample script:

"I have [name of card] with you and my interest rate is [X] percent. I received another offer in the mail from [other bank's name] for [X] percent, but before I take it, I want to see if you can lower my interest rate instead."

If the representative says they're not authorized to do that, you say:

"Look, you and I both know that if I transfer my balance today, next week your bank is going to send me an offer to come back at an even lower rate. Why don't you just save the bank the cost of that effort by giving me several points today?"

If the rep says it's not possible because your credit card is at a fixed interest rate, you say:

"Actually, that doesn't have anything to do with whether or not you have the ability to lower my interest rate. A fixed interest rate only means that my rate doesn't vary with fluctuations in the prime rate. In fact, the bank can raise it on my account at any time by just giving me 15 days written notice. And the bank can, if it chooses, lower the rate today."

If the rep still says they're not authorized to do that, you say:

"I'd like to speak to your supervisor."

Then repeat the script

One quick call may be all that is keeping you from reducing your debt with a lower interest rate! Do it today!

Consumers across the US, Canada and in Europe continue on their pace to rack up debt on their credit cards. The result of this uncontrolled spending keeps pushing consumers further fall behind on making the monthly payments creating an all-time high in credit card debt. 

The mortgage lending pop and building slow down, coupled with eroding household budgets and out of control spending habits telegraphs a clear sign of trouble ahead IF consumers do not stop and take action on their money habits.

Some consumer like to hide behind the “latest news” pointing the finger at interest rates and slow mortgages as the problem behind their increase credit card debt. The truth comes from bad buying habits learned over years, they pay little attention to what they can really afford.

How Bad Is The Paying Credit Card Problem?

The AP (Associated Press) recently analyzed data pulled together from 17 of the largest issuers or credit cards. The analysis show how behind payments and defaults are across the US.

Total up all the credit card accounts that are a minimum of 30 days late and you’ll be starring at over $17 billion dollars and that was in October of 2007. The number shows a 25% increase in late accounts over 2006.  

The rise of accounts that are 90 days behind also grow sharply by 50% or more when compared to the previous year. Defaults has grow also by 18% over 2006. Defaulting is when the credit card company basically gives up on ever seeing their money.

The money professionals fully expect the numbers of those “late to pay consumers” and defaults to grow after the dust has settled from this years’ holiday shopping spree often “financed” with credit card buys.

When money gets tight lenders are less willing to extend credit with home equity loans or take on a debt consolidation loan when a potential loan walks in the door and finds itself stamped with a consumers poor credit history. This is usually a good sign of their spending habits!

The New Year is usually the time people make promises to themselves, but anytime is a good time for families, couples and individuals to take a serious hard, detailed look at the status of their debt.

Here’s a few ways to Begin Attacking Credit Card Debt:

• Start looking for ways to reduce the number of credit cards
• Take steps to consolidate credit card balances
• Reduce the use of credit cards
• Make payments on  time
• Plan your purchases
• Use a budget

The consumers in the US are sending a clear message in my opinion – rocky times lie ahead! Mortgage rates and the housing slow down does play a part in a healthy economy, but so does the consumers use of managing their own debt – and that includes credit cards.

Start today taking control of your finances! It’s Never Too Late!

Our lifestyle usually determines for many of us our debt position. If you step back an examine your current financial state you’ll most likely see that your mountain of debt or hole you’re digging of getting deeper into debt comes down to pleasure or pain.

Pleasure or pain sound as if they are very different items or worlds – yet the two find themselves as close relatives. Let me explain!

Trying to “please” ourselves or loved ones with items which cripple our finances and flat cannot afford many times makes us feel better for a short moment.

Sure the exhilaration of showing off the new LCD 50 inch TV when friends come over for a BBQ makes you grin from ear to ear. The friends leave thinking you have it all together financially.

The “pleasure” soon fades away when the credit card bill shows up each month and the “good deal” you bragged about to the friends at the BBQ is eaten away with finance charges.

Having things is not bad. Buying them with planning is smart.

After the “pleasure” center has faded the “pain” begins. The pain of paying for months on end for a purchase that you should not have made!

Debt “Pain” comes in other ways. The “pain” of wanting to give to others but knowing you cannot afford it. We already mentioned the pain of monthly bills you face and cannot really pay for without some area of your life suffering.

Step back and look at your financial lifestyle. I’m sure (from my own experience) you can flip the pleasure/pain of debt upside down and enjoy it from a whole new perspective. Stopped for a moment and think about how much “pleasure” you and your family would experience by paying for items you really need and want in cash.

Imagine the “pleasure” you’ll experience when your head hits the pillow at night without the “pain” of waking up to mounting bills.

Over the pass few years I’ve worked on eliminating the “pain” in my life. This “pain” is not all about money. It’s been about changing my lifestyle by simplifying things. Eliminating the clutter in my life.

Clutter may be less bills, reduced paper, less commitments and a host of other things. This gives me more time to focus and enjoy the “pleasures” in my life.

The old saying of “How do you eat an elephant? It starts with one bite at a time” holds true for us all. Start today looking at the “pain” in your life and the steps you can take to get rid of that “pain” or the clutter that causes the pain.

Here’s Some Action Steps for Less Pain and More Pleasure

• Call the credit card company to reduce the interest on your credit card
• Consolidate all your credit cards onto one card that gives you benefits like the Chase Flexible Rewards Platinum Visa® Card
• Clean out the garage of all the items you don’t use or really need and take them to Goodwill
• Organize your bills

Here’s one I did just the other day. I contacted a credit union where I had an account and closed it out. The account was one my parents opened for me as a kid years ago. The account had approximately $100 in it. The money will go into an account I actively use for saving.

Now I no longer face the “pain” of opening put another piece of mail, filing it, need to change addresses if I move and I experience the “pleasure” of consolidating one more thing in my life.

How about you? Start eating that elephant today!

The New Year is a time many people talk about starting over. Usually it’s lose weight, exercise and spend more time with the kids.

How about your money, the coin, your personal financial health?

Planning is key to reach any goal. Here is a quick list of places to start for you to begin to get your life with money in order.

• Review What You Did Right!
  Instead of looking to make total sweeping changes, step back and take a look at what you did right. Then look for ways to improve in those areas.
• Get Financial Information Organized
  January 1, is the perfect time to get started keeping your financial records in order. Get yourself a good, easy to use financial accounting program like Quicken, set up you accounts and start the year off by keeping expenses catagorized and up to date.
• Improve At Work
  If the job market tightens or the economy takes a turn for the worse, make sure your job performance is noticed within your company in a positive way.  
• Multiple Income Streams
  Look for additional ways you can bring in income. Ebay, internet marketing, computer repair or setup, local handyman, shopper or child care. Beware of going for the buck. Do something you like and are good at or you will soon grow tired of the task. Make the process of a second income fun!
• Start An Emergency Fund!
  Begin a cash fund to cover those emergencies. Having the money already set aside makes those emergencies only bumps in the road and not mountains.
• Develop a Plan
  Without a plan you are destined to be at the same place you are now. Make a plan with dates to accomplish the plan. Then break it down into small steps to make the plan work.
• Back Up Your Computer
  Computers crash! Make sure you have a back up of the data on your hard drive. Store the data at another location. There are several online places to store data.
• Organize Important Papers
• Even in today’s digital world you will still have paper for insurance policies, warranties, legal documents. Keep them all in a save place, organized so you can get to them quickly in case of an emergency.  
• Check Your Credit / Clean Up Your Credit
  As lenders deal with the mortgage slowdown, take the time to check your personal credit and make sure it is as clean as possible. Pay bills on time, even if you need to maintain a balance. Get a free credit report from www.annualcreditreport.com.
• Grow Your Knowledge
  Continue to learn! The most important asset you have is your brain! Feed it regularly by learning more.
• Enjoy Life
  The hectic pace of today can slowly grind away at people. Take and make time to enjoy your life each day.

 

Credit reporting bureaus are allowing consumers to fight back in the war on identity theft by letting them “freeze” their credit histories.

According to ID Watchdog a service which monitors identity theft,    “freezing” credit history is a good first step but not an end all solution. The victims of ID theft has risen from about 100,000 in the year 2000, to over 10 million in 2006.

New companies like ID watchdog and LifeLock specialize in identity theft monitoring and prevention.
 
When you freeze the data on your credit report the information becomes “locked” until you authorize the data to be released. As in everything there is a fee to lock and unlock your credit information.

As a consumer you need to be aware that if a thief wants to steal your identity they can do it! Protecting your credit report may in fact be a worthless exercise. The fact is, over 70 percent of identity theft crimes will have nothing to do with your credit report.

A theft could open a Post Office Box, get a pre-paid cell phone, commit a crime or use your name. All which does has nothing to do with credit. 

The FTC - United States Federal Trade Commission claims identity theft as the fastest growing crime in the country. Most victims do not find out about their information being compromised until approximately 12 monhs after a thief makes their first transaction.

It’s estimated in 2005, the cost to businesses and consumers was approximately $56 billion dollars. The sad part is that few than 1 in 700 identity theft crimes ever lead to a conviction.

With no foolproof method or way to guarantee you will not fall victim to ID theft you need to keep on the look out for potential signs that someone may be using your identity.

• Credit cards begin you show up – Cards you never applied for!
• Missing Bills or mail – If bills don’t show up when expected or other item in the mail contact the sender. Identity thieves could change the mailing address and taken over your account.
• Debt collectors begin to call you for items you never purchased
• When you look to finance you find your credit is denied or the credit terms are not as good as they once were. Credit limits may be lower or inter rates could be higher

How important is it for you to keep your eyes open for identity thieft? The estimates or statistics show that the average time needed to repair the problems associated with victims of identty theft to be in the 400-600 hour range.

Ask yourself now… have any of the above items happened to you? Has your identity been stolden?

Many consumer close the holiday season and ring in the New Year with credit cards maxed out, and bills they hope will have a less shocking smaller balance.

The holiday rush of unplanned and unwise spending will be haunting them for months and months. When the bills are finally opened a true reality check with hit. It makes for a vey unhappy start of the year.

Consumers can start taking steps to establish better financial health during the year by taking a few key steps – budgeting and savings.

One big mistake people is neglect. They neglect to do budget planning or seek any financial counsel before the holiday’s start. Without this key planning they find themselves overspending. This overspending comes from using credit cards instead of cash for purchasing of gifts.

The extras also play havoc – travel expenses and gifts for co-workers. With fuel prices rising and weak housing market paychecks don’t go as far as they use to.

With parties and food to attend to, getting ones financial house in order is not usually at the top of people to-do list and finds its way push down the “importance” postision.

Don’t wait until after the holidays. Stop building a budget long before the New Year’s ball drops.

The news of a pregnant Jamie Lynn Spears and her need for any kind of an emergency fund probably does not bother you. If she needs a few bucks I’m sure her sister Britney can help her in any financial crisis.

However, what about you? Are you prepared for those money emergencies that come up? The car repair, time to replace the washer or dryer, maybe a quick out of town trip for an unexpected family issue, or down sizing in your job.

Jamie Lynn may not… but many others reach for their credit card as their emergency fund and continue to dig a deeper pit of debt.

Financial gurus recommend that you need to maintain a 3 to 6 month cash reserve. This will cover all of the household expenses during this period of time.

The concept of an emergency fund is a great, but in order to build a fund for emergencies you’ll need to put in some work. The first step is to figure out what you spend each month. Those working and living within a budget will be able to make quick work out of this exercise.

In 2003, the cash reserve needed to fill these requirements for a three month period was $10,204 or $20,408 for a six month time frame. Your number may be higher or lower but however you look at it, that three month number is big! Most react with – “That number is too big, I could never have that kind of money sitting in a fund!”

In today’s uncertain economic times, job security being only a passing thought and emergenices da reality – one must be prepared.

Compared to the money you’ll need when you say goodbye to your job forever (retire), 3 – 6 months of money doesn’t seem like much.

Once you know the amount needed to fully fund your account, you can begin to create a plan to make it happen. To save $10,000 in 5 years means you’ll have to put $166.67 per month away for 60 months. Now $166.67 may sound like an impossible amount to come up with, yet that amount is less than many people spend on a cell phone bill every month!

It’s all a matter of perspective! The key is to treat your emergency fund as a regular monthly bill and put the money away. Let’s see if we can make that $166.67 look smaller. On a 30 day month that works out to approximately $5.56 per day. Check with your employer to see if you can set things up to automatically take it out of your paycheck.

Do you realize that giving up the coffee and muffin or brown bagging your lunch may be all that is needed to fund your account!

There is no time like today to get started on building your emergency fund.

This morning I saw the headline - "Debt Consoildation - Save Money Every Month."  In the article they made this statement "By consolidating their debts, some people are also able to save money."  Now that statement is a much truer statement. SOME PEOPLE can save money.

This "saving money" phrase is a topic I often debate with those facing financial problems.

When someone "saves money" I interpret the phrase to mean they have taken the money and put it away in a savings account or invested the difference.

For example, let's assume all your consumer debt totals $1900 per month. Through a debt consolidation loan all the bills are consolidated into a lower payment with a lower overall interest rate to $1300 per month. This would reduce your  monthly money outflow by $600.

However, if the $600 does not go into savings, investing or paying down the consolidation loan and is only spent - No Money is Saved!

You must focus on debt reduction and not consolidating debt to lower the payment.

The save holds true for items on sale. If you plan on something costing $40 and you can purchase it for $32 the $8 "saving" needs to be saved. This again is where budgets play a major part in everyday money management.

 

 

Managing your money, planning your finances and making hard spending choices can be a joy or a battle with couples.

Getting your budget into fighting shape can take months. Each day, week and month as you begin to tweak your budget and its categories you'll be faced with choices.

What goes where and how much to allocate.

My wife is great, she is very organized and works well from a list. So each time we walk into the store she knows what she wants - it's on the list.

While at the grocery store today my wife and I were buying items for this week's breakfast, lunch and dinner, plus extras for our holiday guest which will be showing up.

She worked from her shopping list. I don't know why but today I looked around as we walked up and down the isles to catch a glimpse of "who" was using a list for their buying descisions.

It was somewhat amusing, yet at the same time sad. I'll bet you could easily pick out the families with financial problems. They were the ones pushing a cart up and down the isle with no idea what they want ( young adults fall into this category). Or it's the mom with kids in the basket asking for this and that. Mom fills up the cart paying no attention to a list.

Do you shop from a list? Buying at the grocery store may be an indicator of the way you manage the other financial aspects of your life.

To get a financial control by using a budget you must fight impulse spending. Try it. Next time you go to the grocery start write down all the items you want and ONLY BUY what is on the list.

Doing that can get you started on two things. Planning purchases and shopping from a list. Now stop the urge spend without planning and stick to a budget.

Credit scores and ratings are not for only personal credit but business as well as small business owners are finding out.

Entrepenuers need know of the credit rating of their company before seeking loans, contracts or purchasing materials even without loans and self financing their start up.

Small business owners may be surprised with the fact of doing it all right:

• Forming a company
• Incorporating
• Protecting Personal Assets and Credit
• Acquiring insurance

The "deal" or contract could come down to the credit history of the company.

A "commercial credit score" works like a personal credit score. Small business owners may be surprised to discover that their spending habits are being watched by the credit reporting companies.

Tracking small business spending is a growing area in the world of financial health.  

When you open a business a new Visa card may arive so why check a small business credit score? Larger companies what to know when placing an order or signing a contract the company will be around and not be gone next week.

No longer is the Dun and Bradstreet report good enough. The Major credit reporting companies like Experian and Equifax have jumped into the small-business credit arena.

Experian, got into business credit arena in the 1970s. However, technology has made the collection of data so much easier to put together the credit history of a small business.

Face it, small business is a giant market. In fact, Experian launched a site - http://www.businesscreditfacts.com - dedicated to teach and info small business about the topic of credit reports and scores.

A study released by Experian showed how the credit reporting took into account ther small business owners credit hostory as a part of determining the finanical strength of the company. I guess the figure spending habits on a personal level will translate to the business.

This "new" market for credit reporting sends a signal to small business to keep their financial house in order.