Tips to Handle Higher Minimum Credit Card Payments

Follow these tips by Lynnette Khalfani - The Money Coach to get your credit card debt under control

A new federal law requires credit card companies to make sure that consumers start to make at least a tiny dent in their debts, by making sure that minimum payments on credit cards at least cover interest charges, fees and some of the principal on your outstanding debt. Because of this new law, many banks and other financial institutions are raising the minimum due on your cards – from 2% of the outstanding balance to 4% of the outstanding balance. This new law couldn’t have come at a worse time. Scores of individuals and families have a “debt hangover” from their holiday shopping in December. Higher energy prices nationwide are driving up home heating costs, as well as gas prices at the pump. And to top it all off, a safety net has been removed for millions of Americans because of recently-enacted bankruptcy reform legislation that makes it tougher to wipe out your consumer debt in bankruptcy court.

If those higher minimum credit card payments have you wondering how you’ll make it, try implementing these tips:

Put everything in writing … and keep a list of all your credit cards
Create a written list or a spreadsheet itemizing each creditor you owe. For some people, this step will be a big eye-opener. You may find out that you have way more debt than you thought. For others, putting all your obligations in black and white will be a relief ... you’ll discover things aren’t as bad as you’d imagined. Either way, having everything in writing gives you a realistic look at where you stand, and let’s you start a plan of attack to pay off your debts.

Don’t add to your debts
Some of you may get so depressed at seeing those holiday bills rolling in – along with the higher minimum payments due – that you may be tempted to go out and spend some more, just to make yourself feel better. Don’t give in to that temptation. You’ll only create additional problems for yourself down the road.

Start building up your cash cushion
Ideally, you should have three months’ expenses set aside for emergencies — like job loss, disability or divorce. For example, if your bills are $3,000 a month, you should have a $9,000 cash cushion. I know that’s a lot of money. You won’t accumulate it over night. Just go ahead and start saving a little bit of money each month, and consider that money untouchable.

Get financial help
Consider retaining a financial planner to help you strategize about the best ways to improve your finances. Hiring financial help isn’t just for the rich, and it doesn't have to be that expensive. Go to the Financial Planning Association (FPA) for a certified financial planner in your neighborhood. The FPA can be reached toll-free at (800) 647-6340 or on the Web at http://www.fpanet.org. You can also receive affordable group coaching or one-on-one individualized financial coaching from The Money Coach (http://www.themoneycoach.net).

Call up your creditors and negotiate.
Many consumers don’t realize that they can call up their creditors and ask for lower interest rates, or request that late charges or annual fees be waived. Often, credit card companies will lower your rate on the spot, simply because they don't want to lose your business. It’s a competitive market — credit card companies send out nearly five billion offers to consumers each year — and most credit card issuers know that customers will switch cards if their interest rate is too high. So using your list of bills you created in the previous step, call up each creditor and start negotiating. If you can knock down the interest rate on a card with a 21% interest rate, and get it down to 12% or so, you’ll be saving yourself a lot of money. Your minimum payments will also be less each month.

Consider borrowing money from an insurance policy.
Many of you have life insurance policies that allow you to borrow from them if you’ve accumulated a certain cash value. While I wouldn’t recommend this as a first step in eliminating your debt, it can certainly help you deal with a cash crunch if you find that you can’t make your new minimum payments.

Adjust your W-2 withholdings at work
For those of you who routinely receive tax refunds, instead of giving the government an interest-free loan, get your money now. You can walk into your Human Resources office at work and adjust your W-2 withholdings so that your employer takes less money out of your paycheck. This way, you’ll have more money coming in every pay period, and you can use that extra money to knock down your debts.

Even though higher credit card payments will make many of you more financially-strapped than ever, just try to remember: It’s kind of like you’re taking castor oil or some nasty medicine. Doling out more money to your creditors sure tastes bad going down, but by taking your medicine now and paying off a larger amount of your debts each month, you’ll feel much better off in the long run – because that debt “monkey” will be off your back sooner, rather than later.


Thanks Lynette - your advice is always worth following!
Credit Guide
www.badcreditovercome.com

Bad Credit Mortgage Lending - Choosing a Sub-Prime Lender

by Carrie Reeder of http://www.abcloanguide.com/

In the early nineties subprime mortgages accounted for about five percent of all mortgages. Today the subprime mortgage loan sector comprises more than twenty percent of the mortgage market. With this explosion of subprime mortgage lenders and brokers, it is important to know what to look for when choosing your lender. Not only do you want to be sure that you are getting the best deal possible for your subprime mortgage, you also want to know how to avoid falling prey to a predatory lender.

What makes a person a candidate for a subprime mortgage? Bad credit is the predominant reason but there are others. Fluctuating income and even the type of property being purchased can also necessitate an unconventional mortgage. If your unique situation requires a subprime mortgage do the following when choosing your loan agent or broker.

Know your credit history, particularly your FICO score. A score lower than 620 generally means that you will be offered a subprime mortgage. Do not take for granted that you must seek a subprime mortgage. Ask what products are available for you. Also, make sure you have your employment, income and payment histories readily available.

Do not assume that getting the lowest interest rate also means you are getting the best loan. Most subprime mortgage loans will be two percentage points higher than a conventional loan and may have additional fees. All of the prospective subprime mortgage lenders should submit their loan packages to you in writing. Take the time to carefully analyze all of the mortgage offers. Compare not just the interest rates but also the fees you are being charged.

Be wary of prepayment penalties. A subprime mortgage is a vehicle for repairing your credit or responding to a specific applicant situation and usually is a short term solution. Hefty prepayment penalties may lock you into a subprime mortgage for a longer term than is necessary or cause you to pay a substantial price for refinancing to a conventional mortgage at a later date. You may have to accept some sort of prepayment penalty but negotiate with the various lenders to guarantee you have the least burdensome penalty possible.

Even though you are looking for a subprime mortgage lender you still have many options. After comparing the loan offers from the different lenders, negotiate the terms. Do not feel that a lender is doing you a favor by offering you a subprime mortgage. Many times the compensation a lender receives for a subprime mortgage is greater than that which is received for a conventional mortgage.

Most subprime mortgage lenders are honest and responsible business people. Still, the regulation of subprime loans varies widely and you should be careful not to fall victim to a predatory lender.

1. Don't respond to telephone or direct mail offers from subprime mortgage lenders. Do your own research. The Better Business Bureau, the telephone book and the Internet are all good resources. Ask friends for referrals.

2. Don't allow yourself to be pressured. Ask for offers in writing and use plenty of time to compare them.

3. Don't sign any documents that have blank spaces or incorrect dates.

4. Don't be convinced to inflate your income or net worth.

5. Don't skip reading any portion of your loan documents because your lender tells you "that part isn't important".

Choosing a subprime mortgage lender is like any other purchase. The more knowledge you have and the more research and analysis you do, the better your decision will be.

More bad Credit information at http://www.badcreditovercome.com

Refinancing your mortgage has the potential to save you a lot of money – unless you get taken by a scam. Refinancing scams prey on your desire to refi at a low rate. Once they get you hooked by having you put money down or using delay tactics, you have little time to back out. To protect yourself from losing money on your next refinance, watch out for these signs of fraud.

1. Failure To Disclose Rates, Terms, And Closing Costs

Information is your greatest tool when making financial decisions. With online lenders you can rapidly compare rates, fees, and terms. Many lenders also offer loan estimates, disclosing pertinent information before you begin an application.

Anytime a lender delays or refuses to provide information, you should be cautious. By law, financial company have to tell you the rate, fees, and closing fees of any loan product. You should also know how much time you have to close the deal before rates are subject to reevaluation.

The most common scam involves not telling you when locked in rates run out. Then at closing, the lender will quote you a new rate a point or two higher.

2. Requests To Sign False Or Blank Loan Forms

Whenever a lender asks you to falsify information or sign blank forms, run away. If you knowingly give false information, you risk legal and financial problems. While you can still go to the authorities, you will have little recourse.

Blank forms provide frauds a license to draw up any kind of loan terms they want. You may end up with higher rates, balloon payments, or signing away your home’s title.

3. Pushes You To Agree To High Balances Or Payments

Be aware when lenders try to push you to agree to a high balance or payment. While all lenders will encourage you to borrow more in order to increase their profits, the good lenders aren’t trying to force you into foreclosure. Legitimate lenders want to collect interest. Scammers want to take your home. View our recommended and trustworthy refinance lenders at www.abcloanguide.com

The best protection from scammers is information. Check out lenders’ sites, ask questions, and don’t be afraid of backing out of a deal. Good rates and good terms are out there for those willing to do a little research.

Take a moment to research how to Refinance Your Property, or obtain an ABC Loan Guide list of reputable Home Loan Financing.

Article Source: http://EzineArticles.com/?expert=Carrie_Reeder