Debt Management http://www.wisebread.com/taxonomy/term/7681/all en-US 5 Times Personal Loans May Be Better Than Credit Cards http://www.wisebread.com/5-times-personal-loans-may-be-better-than-credit-cards <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-times-personal-loans-may-be-better-than-credit-cards" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_62580866_LARGE.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Certain life events require more cash than we have on hand. It is easy to just grab a credit card, charge those expenses, and forget about them until it&rsquo;s time to make a payment. Although sometimes more convenient, credit cards aren&rsquo;t always the best answer. Depending on your credit rating and your needs, a personal loan can be the less expensive option.</p> <p>If you need long-term option financing, you can likely get a lower interest rate and possibly higher limit with a personal loan than you would with a credit card. Here are a few instances in which a personal loan can be better than a credit card. (See also: <a href="http://www.wisebread.com/best-lenders-for-personal-loans?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">Best Personal Loan Companies</a>)</p> <h2>Weddings and Important Life Events</h2> <p>Because events like weddings and other big celebrations are not the types of purchases that benefit from rewards programs or the extra benefits that credit cards provide, you aren&rsquo;t losing anything by using a personal loan to pay for them. You can choose the loan amount, based on your budget and according to the installments you can pay each month. Personal loans also allow a longer period to pay off the wedding expenses, at a lower interest rate than most credit cards offer. Companies like <a href="http://promisefinancial.evyy.net/c/27771/245132/4106">Promise Financial</a> specialize in financing for life events.</p> <h2>Health Expenses</h2> <p>Whether you end up with a bill for an emergency visit or have unexpected medical expenses, unless you can pay the entire balance in full right away, it isn&rsquo;t a good idea to charge it to a credit card. You can often qualify for much higher amounts with a personal loan than many credit cards will offer. In fact, personal loan providers such as <a href="http://lendingclub.pxf.io/c/27771/322506/4962">Lending Club</a> offer an exclusive Lending Club Patient Solutions loan specifically for medical expenses. Loans for as much as $50,000 are available with terms from 2 to 7 years, and interest rates as low as 3.99%. Lending Club Patient Solutions loans also offer a 0% promotional period for up to 24 months, in which you can save quite a bit of money if you pay your balance in full during that time.</p> <h2>Business Startup Expenses</h2> <p>Although a plethora of <a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">small business credit cards</a> exist designed to reward business purchases, credit cards aren&rsquo;t great for startup capital. Companies such as <a href="http://www.kqzyfj.com/click-2822544-11145625-1452787774000">Kabbage</a> specialize in <a href="http://www.wisebread.com/10-smart-ways-to-get-a-small-business-loan?ref=internal">small business loans</a> and can help get your business going. Loans with Kabbage can be from $2,000 to $100,000 with fees ranging from 1% to 12% of the loan the first two months and 1% the remaining four months.</p> <h2>Debt Consolidation</h2> <p>If you have acquired an enormous amount of debt that includes credit card debt, there&rsquo;s a good chance you won&rsquo;t be able to consolidate it all with another credit card. Even if you get a credit card that offers a <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">0% introductory APR for balance transfers</a>, you might not get a credit limit high enough. Using a <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">balance transfer to pay off credit card debt</a> only works if you can pay it all off within the promotional period. Otherwise it&rsquo;s not worth it, because credit card APRs are generally very high.</p> <p>An alternative option for consolidating large debts is personal loans. Loan providers such as <a href="http://www.kqzyfj.com/click-2822544-11789034-1427835327000">Avant</a> specialize in providing personal loans to consumers with bad credit that not only consolidate your debt but also help you build your credit in the process.</p> <h2>Home Improvement</h2> <p>Although there are credit cards for home improvement projects that award supplies and materials with special cash back and discount offers, many only award these purchases at certain times of the year and charge much higher interest rates. <a href="http://www.wisebread.com/store-credit-cards-that-dont-suck?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">Store cards</a> specific to home improvement may offer cash back and deferred interest. However, after the promotional period the APRs are very high. In addition to personal loans offering higher credit limits that are more likely to cover the costs of your home improvement project, interest rates are available with various lenders for as low as 3%.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/christina-majaski">Christina Majaski</a> of <a href="http://www.wisebread.com/5-times-personal-loans-may-be-better-than-credit-cards">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/credit-cards-vs-debit-cards-a-comprehensive-comparison">Credit Cards vs. Debit Cards: A Comprehensive Comparison</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The 5 Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards">The Best Low Interest Rate Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">How to Rebuild Your Credit in 8 Simple Steps</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score">10 Surprising Ways to Negatively Affect Your Credit Score</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking Credit Cards Debt Management best personal loans Mon, 06 Feb 2017 20:52:46 +0000 Christina Majaski 1776218 at http://www.wisebread.com 6 Secrets to Mastering the Debt Snowball http://www.wisebread.com/6-secrets-to-mastering-the-debt-snowball <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-secrets-to-mastering-the-debt-snowball" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-109722901.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You probably already know it makes more financial sense to pay off debts with the highest interest rates first, a payment method known as the debt avalanche.</p> <p>But here's a surprise: A study published last year in the Journal of Consumer Research found that people were more likely to actually pay off their debts if they relied on the <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-debt-snowball-method-0" target="_blank">debt snowball method</a>, instead. In this approach, you pay off your smallest debt first, followed by your next smallest, and so on &mdash; until you've paid off all of them. You take this approach without worrying about which debts have the highest interest rates.</p> <p>Why does this method seem to work better? Researchers say it's about that all-important feeling of accomplishment. You'll get a rush of good feelings when you pay off a credit card, even if the debt on that card isn't that high. Yes, you'll pay more in the long run by not targeting debt with the highest interest rates first. But if the snowball method works better, and if you've long struggled with your credit card and other debts, you might be better off taking this approach.</p> <p>So, if you're ready to give the debt snowball method a chance, here are some tricks to boost your chances of success.</p> <h2>1. Draft a Household Budget</h2> <p><a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps" target="_blank">Creating a budget</a> doesn't sound like fun, but it's critical if you're ready to get serious about paying down your debt. Your household budget should include the money that flows into your home each month and the money you spend, including estimates for such discretionary expenses as eating out and entertainment.</p> <p>Once you have a budget, you'll better know how much money you can allocate to paying down that smallest debt each month. Without a budget? You might be paying too much, putting yourself at financial risk. Or you might pay too little, dragging out the process of paying down your debts.</p> <h2>2. Don't Use the Card You're Trying to Pay Off</h2> <p>It might sound obvious, but don't add to the debt you're trying to pay off first. Don't use your credit cards to pay for anything. Follow your budget and pay cash or check for your allocated expenses. If you have a balance already on the card from the previous month, using it will immediately start interest charges on that amount. Nothing stalls your <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">debt elimination process</a> more than adding additional interest.</p> <h2>3. In Fact, Don't Purchase Anything You Can't Afford to Pay Off</h2> <p>You're going to have to get used to a different sort of lifestyle, and that means no longer buying things you can't pay off at the end of the month.</p> <h2>4. Automate It</h2> <p>When you're concentrating on paying off one debt quickly, it can be easy to overlook some of your other bills. You can avoid this, though, by turning to automated bill payment. If you find yourself overlooking your cellphone bill, create an automatic payment from your bank account to cover that bill each month. You can do the same thing with car payments, student loan payments, or utility bills. Do this, and you'll dramatically reduce the odds of paying one bill late while you're whittling down another.</p> <h2>5. Don't Waste Bonuses or Promotions</h2> <p>Are you in line for a bonus at work? Don't blow that money on a new laptop. Instead, funnel it toward the debt you are trying to pay off. There's no better feeling than lopping off a huge chunk of debt.</p> <p>Or, maybe you've earned a promotion and a nice pay raise. Don't think that this gives you more spending money each month. No &mdash; until you pay off your debts, spending extra on fun shouldn't be a consideration. Instead, take the extra money you earn each month and use it to pay down your debt even faster. And then when you eliminate a student loan, credit card bill, or car loan, keep using that extra money to help pay down your next largest debt.</p> <h2>6. Consider a Balance Transfer Carefully</h2> <p>This strategy is only for those who are diligent and committed to paying off a certain amount of debt within a specific period of time. Credit cards offer new cardholders various balance transfer offers. Some have <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=internal" target="_blank">longer promotional periods (18-21 months)</a>, while others will <a href="http://www.wisebread.com/5-best-credit-cards-with-no-balance-transfer-fees?ref=internal" target="_blank">waive the balance transfer fee</a> (usually 3%-5%). Using a <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=internal" target="_blank">balance transfer to pay down credit card debt</a> can save you a lot of money in interest. However, if instead you misuse this opportunity, by not paying off the debt during the 0% promotional period, and continuing to rack up debt on the cards you transferred balances from, you will find yourself in a crisis dealing with more accumulated debt than you started with, and at an even higher APR. (See also: <a href="http://www.wisebread.com/7-important-things-you-should-know-about-balance-transfer-cards?ref=seealso" target="_blank">7 Important Things You Should Know About Balance Transfers</a>)</p> <p>Paying down debt is never easy. But if you remain committed, and you need a series of smaller, but quicker, victories, the debt snowball method can work. Just make sure to remain focused on that goal of eliminating each debt one at a time.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/6-secrets-to-mastering-the-debt-snowball">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off">5-Day Debt Reduction Plan: Pay It Off</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-stop-student-loans-from-ruining-your-life">How to Stop Student Loans From Ruining Your Life</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-get-back-on-track-when-youre-behind-on-your-bills">How to Get Back on Track When You&#039;re Behind on Your Bills</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-simple-way-to-decide-which-credit-card-to-pay-off-first">The Simple Way to Decide Which Credit Card to Pay Off First</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-common-debt-reduction-roadblocks-and-how-to-beat-them">6 Common Debt Reduction Roadblocks — And How to Beat Them</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management automatic payments bills bonuses budgeting promotions repayment plans snowball method strategies Tue, 31 Jan 2017 10:00:08 +0000 Dan Rafter 1877971 at http://www.wisebread.com The Best Credit Cards to Wipe Out Holiday Debt http://www.wisebread.com/the-best-credit-cards-to-wipe-out-holiday-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-best-credit-cards-to-wipe-out-holiday-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/614640554.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you leaned heavily on credit over the course of the holidays, you&rsquo;re probably not alone. Forbes reported that families added <a href="http://www.forbes.com/sites/nickclements/2016/12/27/already-feeling-regret-how-to-deal-with-holiday-credit-card-debt/#1856307e3b0e">$1,073 of credit card debt</a> for gifts, holiday parties, and other seasonal treats.</p> <p>With the new year in full swing, it&rsquo;s time to put debt behind you and start anew. If you&rsquo;re committed to paying off your holiday debt, these credit cards can help. Wait, what?</p> <p>Yes, that&rsquo;s right. Certain credit cards were created to help people pay down debt over time. These balance transfer credit cards offer 0% APR for anywhere from 12 &ndash; 21 months, making it easier to save on interest and <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal">pay off debt faster</a>.</p> <p>If you&rsquo;re struggling with holiday debt and tired of forking over hefty interest payments, a balance transfer card could help. Here are the best cards to solve your holiday debt woes &ndash; once and for all.</p> <h3>Chase Slate&reg;</h3> <p><img style="float:right;margin:0 5px 5px 10px;" class="img-exempt" alt="" src="http://www.imgsynergy.com/191x120/chase-slate-060216.png" border="0" height="97" width="154" /><a style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;" target="_blank" alt="Chase Slate&reg;" title="Chase Slate&reg;" rel="nofollow" href="http://ct.wisebread.com/click.php?pg=248&amp;pid=39&amp;pp=1&amp;uv=xcardbutton"><img alt="" class="img-exempt img-button" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" /></a>If holiday debt has you down, the <a href="http://ct.wisebread.com/click.php?pg=248&amp;pid=39&amp;pp=1&amp;uv=xname">Chase Slate&reg;</a> might be exactly what you need. You&rsquo;ll get 0% intro APR on purchases and balance transfers for 15 billing cycles. After that, a variable APR of 15.49%-24.24% will apply. That&rsquo;s well over a year to pay down your holiday debt without forking over a dime in interest payments.</p> <p>To sweeten the pot, the Chase Slate&reg; doesn&rsquo;t charge an annual fee. It also comes <strong>with no balance transfer fees for the first 60 days </strong>&ndash; a perk almost unheard of among competing cards.</p> <p>The only caveat here is that <em>your transferred balance cannot come from another Chase product</em>. If your holiday debts are lingering on another Chase credit card, you&rsquo;ll need to consider one of the other balance transfer cards on this list.</p> <p><a href="http://ct.wisebread.com/click.php?pg=248&amp;pid=39&amp;pp=1&amp;uv=xend"><strong>Click here to learn more and apply for the&nbsp;</strong><strong>Chase Slate&reg; card</strong><strong> today!</strong></a></p> <h3>BankAmericard&reg; Credit Card</h3> <p><img style="float:right;margin:0 5px 5px 10px;" class="img-exempt" alt="" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u784/bankamericard-0523.jpg" border="0" height="97" width="154" /><a style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;" target=" rel=" href="http://ct.wisebread.com/click.php?pg=248&amp;pid=107&amp;pp=2&amp;uv=xcardbutton"><img alt="" class="img-exempt img-button" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" /></a>The <a href="http://ct.wisebread.com/click.php?pg=248&amp;pid=107&amp;pp=2&amp;uv=xname">BankAmericard&reg; Credit Card</a> gives you 0% intro APR on purchases and balance transfers for a full 18 billing cycles. After that, a variable APR of 11.49% - 21.49% will apply.</p> <p>This card also has the advantage of having a low APR, so even if you can&rsquo;t pay off your entire balance, its APR is most likely much lower than the APR on your current card. Keep in mind that this introductory offer only applies to balance transfers made within the first 60 days and that a 3% balance transfer fee ($10 minimum) applies.</p> <p>The BankAmericard&reg; Credit Card comes free of annual fees as well, making it a smart option for paying down holiday bills.</p> <p><a href="http://ct.wisebread.com/click.php?pg=248&amp;pid=107&amp;pp=2&amp;uv=xend"><strong>Click here to learn more and apply for the&nbsp;BankAmericard&reg; Credit Card today!</strong></a></p> <h3>Citi Simplicity&reg; Card - No Late Fees Ever</h3> <p><img style="float:right;margin:0 5px 5px 10px;" class="img-exempt" alt="" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u784/CitiSimplicityCard-0601.jpg" border="0" height="97" width="154" /><a style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;" target=" rel=" href="http://ct.wisebread.com/click.php?pg=248&amp;pid=54&amp;pp=3&amp;uv=xcardbutton"><img alt="" class="img-exempt img-button" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" /></a>If you need as much time as possible to pay down your debts at 0% APR, look no further than the <a href="http://ct.wisebread.com/click.php?pg=248&amp;pid=54&amp;pp=3&amp;uv=xname">Citi Simplicity&reg; Card - No Late Fees Ever</a> from our partner Citi. With this card, you&rsquo;ll get 0% intro APR on balance transfers made within four months of account opening&nbsp;<em>and purchases</em> for a full 21 months &ndash; that&rsquo;s almost two years! After that, a variable APR of 13.99%-23.99% will apply.</p> <p>A 3% balance transfer fee (minimum $5) applies to transferred balances, but this card does come without an annual fee. As a bonus, it doesn&rsquo;t charge late fees or penalty interest rates for late payments. You&rsquo;ll also score access to exclusive benefits like Citi Price Rewind and EMV chip technology that is compatible with Apple Pay.</p> <p><a href="http://ct.wisebread.com/click.php?pg=248&amp;pid=54&amp;pp=3&amp;uv=xend"><strong>Click here to learn more and apply for the&nbsp;Citi Simplicity&reg; Card - No Late Fees Ever today!</strong></a></p> <h3>BankAmericard Cash Rewards&trade; Credit Card</h3> <p><img style="float:right;margin:0 5px 5px 10px;" class="img-exempt" alt="" src=" http://www.wisebread.com/files/fruganomics/BoA_Cash_Rewards-154.jpg" border="0" height="97" width="154" /><a style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;" target="_blank" alt="BankAmericard Cash Rewards&trade; Credit Card" title="BankAmericard Cash Rewards&trade; Credit Card" rel="nofollow" href="http://ct.wisebread.com/click.php?pg=248&amp;pid=106&amp;pp=4&amp;uv=xcardbutton"><img alt="" class="img-exempt img-button" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" /></a>If you&rsquo;re looking for the right combination of balance transfer offers and rewards, you should also consider the <a href="http://ct.wisebread.com/click.php?pg=248&amp;pid=106&amp;pp=4&amp;uv=xname">BankAmericard Cash Rewards&trade; Credit Card</a>. Once you sign up, you&rsquo;ll get 0% intro APR for purchases and qualified balance transfers made in the first 60 days for a full 12 billing cycles. After that, a variable APR of 13.49% - 23.49% applies. Depending on how much you owe, 12 months could be plenty of time to destroy those holiday bills. A 3% balance transfer fee ($10 minimum) does apply. There is no annual fee.</p> <p>On the rewards side of the equation, the <strong>BankAmericard Cash Rewards&trade; Credit Card</strong> offers a sweet $100 bonus after you use your card for $500 in purchases within the first three months. You&rsquo;ll also get ongoing rewards with 1% cash back on all purchases plus 2% at grocery stores and wholesale clubs and 3% on gas for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter.</p> <p><strong><a href="http://ct.wisebread.com/click.php?pg=248&amp;pid=106&amp;pp=4&amp;uv=xend">Click here to learn more and apply for the&nbsp;BankAmericard Cash Rewards&trade; Credit Card today!</a></strong></p> <h3>Chase Freedom Unlimited℠</h3> <p><img style="float:right;margin:0 5px 5px 10px;" class="img-exempt" alt="" src="http://www.imgsynergy.com/191x120/chase-freedom-unlimited-072116.png" border="0" height="97" width="154" /><a style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;" target=" rel=" href="http://ct.wisebread.com/click.php?pg=248&amp;pid=130&amp;pp=5&amp;uv=xcardbutton"><img alt="" class="img-exempt img-button" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" /></a>Another card for paying down holiday debt and earning cash back on all your purchases is the&nbsp;<a href="http://ct.wisebread.com/click.php?pg=248&amp;pid=130&amp;pp=5&amp;uv=xname">Chase Freedom Unlimited℠ card</a>. There is a 0% intro APR for 15 months from account opening on purchases and balance transfers. Then, a variable APR of 15.49%-24.24% applies. The balance transfer fee is 5% of the amount of each transfer ($5 minimum). There is no annual fee.</p> <p><span style="font-size: 13px;">This card awards unlimited 1.5% cash back automatically on every purchase you make with the card, which is ideal if you don't like rotating categories or rewards categories that focus on just one or two types of purchases. Also, new cardholders can earn a $150 bonus after you spend $500 on purchases in the first 3 months of opening the account.</span></p> <p><strong><a href="http://ct.wisebread.com/click.php?pg=248&amp;pid=130&amp;pp=5&amp;uv=xend">Click here to learn more and apply for the&nbsp;Chase Freedom Unlimited℠ card today!</a></strong></p> <h2>Using a Balance Transfer Card to Your Advantage</h2> <p>While any one of these cards could make paying down lingering holiday debt a lot less painful, you need to know how to play the game. To get the most out of any balance transfer offer, it&rsquo;s crucial to use your 0% APR introductory offer to its fullest advantage; in other words, you should strive to pay as much debt off as possible while you can. If you don&rsquo;t think you can pay it all off, choose a card with a low APR after the 0% intro rate, so you won&rsquo;t be killed with interest after. You should <em>never</em>, use a card with a balance on it, to get rewards. Interest will obliterate any rewards, every time.</p> <p>Remember, credit cards are in the business of making money. If you fail to meet your card&rsquo;s terms and conditions, don&rsquo;t pay your debt down before your 0% APR offer expires, or use your card to rack up more debt, you may end up worse off than when you started.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/holly-johnson">Holly Johnson</a> of <a href="http://www.wisebread.com/the-best-credit-cards-to-wipe-out-holiday-debt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The 5 Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-5-credit-cards-for-groceries">The 5 Best Credit Cards for Groceries</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards">The Best Low Interest Rate Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-best-credit-cards-with-no-balance-transfer-fees">5 Best Credit Cards with No Balance Transfer Fees</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-with-airline-companion-tickets-and-3-bad-ones">The 5 Best Credit Cards With Airline Companion Tickets</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Debt Management Shopping best credit cards holiday debt Fri, 20 Jan 2017 15:38:35 +0000 Holly Johnson 1875970 at http://www.wisebread.com 4 Ways Pessimism Can Actually Improve Your Finances http://www.wisebread.com/4-ways-pessimism-can-actually-improve-your-finances <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-ways-pessimism-can-actually-improve-your-finances" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_rain_umbrella_498559502.jpg" alt="Man learning ways pessimism can improve finances" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>While I've never had bluebirds help me clean my house or anything, I tend to be a pretty optimistic person. I have faith that people are mostly kind, the world tends to be a good place, and life in general will get better.</p> <p>The one major exception to my optimism is my attitude toward finances. I always plan for the worst when it comes to money, and I proudly embrace my paranoia.</p> <p>As it turns out, my doom-and-gloom view of money is probably responsible for some of my healthiest financial choices. That's because optimism and positive thinking can lead you astray when it comes to your financial goals.</p> <h2>Why Optimism Can Backfire</h2> <p>According to a study by Heather Barry Kappes and Gabriele Oettingen, imagining a desired future actually makes you <a href="http://psych.nyu.edu/oettingen/Barry%20Kappes,%20H.,%20&amp;%20Oettingen,%20G.%20(2011).%20JESP.pdf" target="_blank">less likely to achieve it</a>. That's because your fantasy future wherein you have built up a multimillion-dollar empire is missing the obstacles, frustrations, setbacks, and effort that are necessary to make it happen in the real world. So you are more likely to give up upon reaching any of those obstacles.</p> <p>In addition, telling people about your major financial goals can also backfire. According to career coach Shana Montesol Johnson, &quot;when we tell someone that we are going to do something big &hellip; the <a href="http://developmentcrossroads.com/2010/12/enough-already-about-your-new-year%E2%80%99s-resolutions/" target="_blank">praise and positive reaction</a> we get from our audience gives us a part of the experience of having already accomplished these things &hellip; And so we are less motivated to actually work toward these goals.&quot;</p> <p>So quit it with the positive thinking about your money. Embrace your pessimism, since it can help your finances in many ways.</p> <h2>1. Financial Pessimism Prompts You to Save Money</h2> <p>When you live with the viewpoint that there is nothing but blue skies ahead, then it won't occur to you to save up for a rainy day. A pessimistic outlook about the likelihood that you may lose your job (or that your car may need an expensive repair, or that you may get sick) spurs you to save money so you can be prepared for such contingencies. Optimists are often caught flat-footed in those situations because they had been so focused on the pie in the sky.</p> <p>Thinking through the worst that could happen on your current path might seem like a good way to discourage yourself from taking that path. But taking the time to really think through what could happen if X, Y, or Z in your plan goes wrong gives you the necessary framework to deal with such problems. You'll have already put in the thinking time to come up with a solution when the problem crops up, so you'll be in a better position to fix it.</p> <h2>2. Financial Pessimists Recognize Their Own Money Weaknesses</h2> <p>A financial optimist isn't just optimistic about the lack of coming emergencies &mdash; they are also optimistic about their ability to handle a problem. This is a symptom of the cognitive bias known as the <em>restraint bias</em>. (A cognitive bias is an error in logical thinking that is very difficult for people to recognize in themselves.)</p> <p>With the restraint bias, people tend to seriously overestimate their own impulse control. We all tend to believe that we will be able to show more restraint in the face of temptation than is realistic. The restraint bias is a hallmark of financial optimism. Such an optimist might think &quot;I'll spend less this month and bank the savings at the end of the month.&quot;</p> <p>But it's likely that the optimist will be paying for things with sofa-cushion change at the end of the month. The pessimist, on the other hand, set his savings aside at the beginning of the month, since he knows he is not to be trusted with money in his checking account.</p> <h2>3. Debt Relies on Optimism</h2> <p>Whenever you take on debt, there is a risk that you may not be able to pay it back. But feeling optimistic about your finances, your job, your health, and your family makes you less likely to recognize such a risk. Positive thinking about how well your life is going may put you in danger of over-relying on debt.</p> <p>Barbara Ehrenheich, author of <a href="http://amzn.to/2iJKYfo" target="_blank">Bright-Sided: How Positive Thinking Is Undermining America</a>, suggests that the Great Recession of 2008 may have some of its roots in positive thinking. In an interview with The Telegraph, she states, &quot;Many, many people got way <a href="http://www.telegraph.co.uk/news/worldnews/northamerica/usa/6952353/Positive-thinking-making-us-miserable-says-author.html" target="_blank">over their heads in debt</a> &mdash; ordinary people. And in what frame of mind do you assume large amounts of debt? Well, a positive frame of mind. You think that you're not going to get sick, your car's not going to break down, you're not going to lose your job and you're going to be able to pay it off.&quot;</p> <p>Pessimistic people are more likely to avoid debt because of the possible things that could go wrong &mdash; and that means they are less likely to get into financial trouble or waste money on interest.</p> <h2>4. Pessimists Are Less Likely to Fall for Scams</h2> <p>My first thought, whenever I hear someone offer me a solution to any kind of financial problem, is to wonder &quot;What's in it for them?&quot; Though I believe in the goodness of people, I am incredibly paranoid about sales pitches, &quot;free&quot; lunches, door-to-door solicitors, insurance agents, salespeople, Nigerian princes, or anyone else who wants me to take advantage of a &quot;once-in-a-lifetime&quot; offer. I don't trust anyone's motives when it comes to money.</p> <p>Scams tend to rely on people's greed, fear, and discomfort. Pessimists are no less likely than optimists to feel greedy, fearful, or uncomfortable, but their overriding distrust of people's motives tends to be stronger than any of the emotions scam artists play on.</p> <p>Distrusting people when it comes to money is generally not a bad thing. It forces you to do your own homework and become your own financial advocate, which is what everyone needs to do. Because even if you do have a trustworthy financial adviser/broker/bookie/insurance agent/Nigerian prince, it is ultimately your responsibility to understand what is happening with your money.</p> <h2>Embrace the Darkness</h2> <p>Instead of thinking and talking positively about your financial future, take a page from a pessimist's book and imagine some worst-case financial scenarios. You'll find that seeing the glass as half-empty (at least sometimes) will help ensure your financial future spilleth over.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/4-ways-pessimism-can-actually-improve-your-finances">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-golden-rules-of-personal-finance-everyone-should-know">10 Golden Rules of Personal Finance Everyone Should Know</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-mental-habits-that-make-the-rich-richer">5 Mental Habits That Make the Rich Richer</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-resolutions-anyone-can-master">8 Personal Finance Resolutions Anyone Can Master</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-to-use-savings-to-pay-off-debt">When to Use Savings to Pay Off Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/self-sufficiency-self-reliance-and-freedom">Self-sufficiency, self-reliance, and freedom</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Debt Management debt financial weakness optimism outlook pessimism saving money Wed, 11 Jan 2017 10:30:32 +0000 Emily Guy Birken 1870056 at http://www.wisebread.com 7 Unique Ways Millennials Are Dealing With Student Loan Debt http://www.wisebread.com/7-unique-ways-millennials-are-dealing-with-student-loan-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-unique-ways-millennials-are-dealing-with-student-loan-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_graduate_debt-450067439.jpg" alt="Millennials dealing with student loan debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Many Millennials are wracked with student loan debt and don't see a way out anytime soon. Fortunately, there are some unique opportunities available to you &mdash; both while you are in school and after you graduate &mdash; that can help you deal with this obligation. (See also: <a href="http://www.wisebread.com/why-you-shouldnt-panic-about-your-federal-student-loans?ref=seealso">Why You Shouldn't Panic About Your Federal Student Loans</a>)</p> <p>According to Debt.org, student loans account for <a href="https://www.debt.org/students/" target="_blank">over $1 trillion in debt</a> in America, and among those who borrow, the average debt load is about $30,000. However, with the right plan of action, you can tackle this debt in less time and with a smaller overall effect on your life and financial well-being.</p> <p>See also: <a href="http://www.wisebread.com/which-student-loan-repayment-plan-saves-you-the-most?ref=seealso2">Which Student Loan Repayment Plan Saves You the Most?</a></p> <h2>1. Take Advantage of Income Share Agreements</h2> <p>Purdue University was the first to offer such a program (theirs is called &quot;<a href="http://purdue.edu/backaboiler/" target="_blank">Back a Boiler</a>&quot;), which provides funding to students who are willing to repay the foundation a portion of their salaries for up to10 years following graduation. These are often referred to as Income Share Agreements or ISAs.</p> <p>With an Income Share Agreement, there is less risk for the student because payments are based on a percentage of your income. (If you earn less, you pay less; when your income increases, you pay more, up to a defined maximum.) Conversely, with a traditional loan, there is a set loan repayment amount that you must find a way to pay every month, even if you don't have a job (although you may be eligible for a variety of deferments or other payment plans; check with your lender).</p> <p>See also: <a href="http://www.wisebread.com/the-definitive-guide-to-pay-as-you-earn-a-great-student-loan-repayment-plan?ref=seealso2">The Definitive Guide to Pay As You Earn</a></p> <h2>2. Find an Investor</h2> <p>Some schools offer programs where an &quot;investor&quot; buys &quot;shares&quot; in a student's future. This is similar to an ISA, but can also be agreed upon privately. If the student does well financially after graduation, then the investor profits, but the student may end up paying even more than they would have on a private loan. On the other hand, if the student doesn't make much money during the repayment period, then the investor loses. As an added bonus, by selling stock in themselves, students may have even more motivation to do well after graduation. (See also: <a href="http://www.wisebread.com/8-surprising-ways-to-pay-off-your-student-loans?ref=seealso">Surprising Ways to Pay Off Your Student Loans</a>)</p> <h2>3. Plug Your Venmo Account</h2> <p>Once you've opened a Venmo account, you can begin accepting payments from friends, family members, and concerned strangers who want to help you pay off your student loan. Ask for money to be deposited into your Venmo account for your birthday, graduation present, and during the holidays. Loved ones may be willing to contribute even more if they know the money is going toward your student loan.</p> <p>You can share your Venmo account via email or social media. Better yet, you can even make signs with your Venmo account on them, which you can hold in front of the camera at large events or in the background of your favorite news shows. There have been two successful instances where someone <a href="http://www.abc-7.com/story/33099003/what-the-tech-money-app-and-student-make-money-after-stunt" target="_blank">holding a sign</a> with their Venmo account received more than $20,000 in payments from amused viewers. While these feats pulled in 2013 and 2016 weren't for noble purposes, it just goes to show that this quick stunt can really pay off.</p> <h2>4. Volunteer More</h2> <p>With organizations like <a href="http://www.sponsorchange.org/" target="_blank">SponsorChange</a> and <a href="http://www.zerobound.com/" target="_blank">Zerobound</a>, you can volunteer your time and skills to meaningful organizations and your student loans will also reap the benefits. While you accumulate good karma from volunteering your time, the organizations will contribute toward your student loan debt as repayment. Organizations like <a href="http://www.nationalservice.gov/programs/americorps" target="_blank">AmeriCorps</a> and <a href="https://www.peacecorps.gov/" target="_blank">Peace Corps</a> also offer partial loan cancellation incentives to volunteers.&nbsp;</p> <h2>5. Find the Right Employer</h2> <p>More companies are now offering student loan payoff programs as a perk to new employees. This is becoming especially common with new startups. When you are meeting with a potential employer, you may want to ask if their benefits program offers student loan repayment options.</p> <h2>6. Consider Student Loan Forgiveness Programs</h2> <p>There are various <a href="http://www.wisebread.com/8-ways-to-get-student-loan-debt-forgiveness?ref=internal" target="_blank">student loan forgiveness programs</a> available, but only to select people. While most borrowers won't qualify for these programs, it is worth looking into.</p> <p>For instance, with the <a href="https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service" target="_blank">Public Service Loan Forgiveness Program</a>, people working in public service can have their loans forgiven after 10 years of payment. There are also income-driven repayment plans, which can forgive your loans after 20&mdash;25 years of repayment. You may also qualify for special federal student loan forgiveness programs if you work in low-income schools or in public service jobs, such as for a nonprofit or the government.</p> <h2>7. Explore Traditional Methods</h2> <p>Traditional means of student loan repayment are always a great option. <a href="http://www.wisebread.com/4-times-student-loan-refinancing-can-save-you-big?ref=internal">Debt refinancing</a> or debt consolidation can help lower the interest you pay in the long-run. You can also take advantage of automatic debt payments, make payments twice per month, or trim your budget so there's more left over for repayment. These methods will all help you to pay off your student loan faster and can save you a great deal of money in the long-run. (See also: <a href="http://www.wisebread.com/15-ways-to-pay-back-student-loans-faster?ref=seealso">15 Ways to Pay Back Student Loans Faster</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-cannon">Andrea Cannon</a> of <a href="http://www.wisebread.com/7-unique-ways-millennials-are-dealing-with-student-loan-debt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-get-student-loan-debt-forgiveness">8 Ways to Get Student Loan Debt Forgiveness</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-sobering-facts-about-student-loan-debt">5 Sobering Facts About Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-moves-to-make-the-moment-you-graduate">5 Money Moves to Make the Moment You Graduate</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-student-loans-impact-your-taxes">4 Ways Student Loans Impact Your Taxes</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-tax-tricks-to-try-if-youre-stuck-with-student-loans">8 Tax Tricks to Try if You&#039;re Stuck With Student Loans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Debt Management Education & Training college income share agreements investors loan forgiveness millennials repayment student debt student loans tuition volunteering Thu, 15 Dec 2016 10:30:31 +0000 Andrea Cannon 1853983 at http://www.wisebread.com 4 Ways to Negotiate Credit Card Debt http://www.wisebread.com/4-ways-to-negotiate-credit-card-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-ways-to-negotiate-credit-card-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_holding_credit_card_507799950.jpg" alt="Woman learning ways to negotiate credit card debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Are you having trouble keeping up with credit card payments? Do you wonder if you'll ever pay off your balances? (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso">Fastest Way to Pay Off 10K in Credit Card Debt</a>)</p> <p>Perhaps you've heard you can negotiate and settle your credit card debt. But how does that work? Do you need professional help or can you manage it all on your own?</p> <p>Learn about four ways to negotiate and settle credit card debt.</p> <h2>1. Enter a Credit Card Hardship Program</h2> <p>If your debt woes are attributable to a significant change in your life's circumstances, you may be able to qualify for a hardship repayment or forbearance program.</p> <p>Donna Holmes, financial counselor with <a href="https://www.safefed.org/">SAFE Federal Credit Union</a> says, &quot;Financial hardship can be caused by several unfortunate life events, such as a divorce, job loss, furloughs, layoffs, moving, or a death of a loved one. Positive events such as the birth of a child can also create financial hardships at times too, especially if there are unexpected medical complications.&quot;</p> <p>In addition, &quot;simply being financially overextended&quot; could classify you as experiencing hardship, says Thomas Nitzsche, credit educator with <a href="http://www.clearpoint.org/">Clearpoint</a>, a nonprofit agency that provides credit counseling.</p> <p>Entering a hardship program could give you a lower APR and fee reductions. Nitzsche says &quot;With credit card hardship programs, you are typically given a reduced interest rate at a fixed payment and term.&quot; As a result, you may pay less in interest. In addition, you may be able to get fees waived.</p> <p>To pursue this course of action, Holmes says to ask your lender if it has a program to assist with financial hardship. In addition, you may be able to locate your card issuer's hardship department on your card company's website or your monthly statement.</p> <h2>2. Negotiate a Modified Payment Plan</h2> <p>The types of programs available to a credit card borrower in trouble may vary by personal situation and financial institution. If you're unable to qualify for a hardship program, you may be able to <a href="https://www.consumer.ftc.gov/articles/0145-settling-credit-card-debt">negotiate a modified payment plan</a> or work out an arrangement with your credit card company.</p> <p>Such a plan could reduce your monthly payment. A lower monthly payment could enable you to make payments on time without becoming overextended in other areas.</p> <p>Before making a call, consider reviewing your finances, developing a budget, and determining how much you can pay monthly on your card balance. You may be able to prepare yourself to negotiate a lower monthly payment along with possible concessions, such as fee waivers similar to those available through a hardship program.</p> <p>Find the phone number to call on your credit card or card statement. Be aware that you may need to make several calls before finding a representative or manager who is agreeable and authorized to assist you.</p> <p>With a modified payment program, Holmes says that sometimes the rate is increased &quot;even though the payment has been reduced.&quot; Nitzsche says a delinquent amount may be tacked onto the balance or the repayment period. As a result, though a modified payment may mesh better with your budget, you could <a href="https://www.fdic.gov/regulations/examinations/credit_card/ch9.html#3sub23">pay more overall</a>, depending on how the deal is structured.</p> <h2>3. Settle Debts for Less Than You Owe</h2> <p>Debt settlement involves offering a lump-sum payment to receive forgiveness of your outstanding credit card balances.</p> <p>With this approach, you offer this lump-sum to the card company in exchange for erasing or settling your debt. Building this balance may involve setting aside money in a dedicated savings account over a long period of time; selling items that you no longer need, or using a windfall from an employment bonus, tax refund, inheritance, or other source.</p> <p>To explore the possibility of settling debt, you may plead your case to your credit card company on your own, or you might hire a debt settlement company to negotiate on your behalf. The FTC offers guidelines on <a href="https://www.consumer.ftc.gov/articles/0145-settling-credit-card-debt">choosing a debt settlement company</a>.</p> <p>If you work with a debt settlement company, you may be asked to stop making credit card payments and default on your debt. This process could allow you to accumulate funds and, at the same time, induce the card company to accept a settlement.</p> <p>Generally, your debt must have been charged off as a loss before you can negotiate a settlement with your credit card company. Nitzsche says that creditors are not motivated to cut a deal if they are still receiving a minimum monthly payment.</p> <p>However, defaulting on credit card debt can cause problems. Failing to make payments could have a negative impact on your credit report, lead to calls from creditors and debt collectors, and result in late fees and penalties that increase your indebtedness.</p> <p>Nitzsche says an exception to getting a settlement only after debt has been written off may occur &quot;if you can prove to the creditor that you are at a high risk of default, but have a lump sum available to settle the debt for less than is owed.&quot; For example, if you have a severance check from a recent layoff, you may be able to settle without going into default.</p> <h2>4. Enroll in a Debt Management Plan</h2> <p>Credit counseling agencies offer debt management plans (DMPs) to help consumers pay off credit card balances. With a DMP, you make monthly payments to the counseling organization, which in turn pays your credit card bills. The agency may also negotiate more favorable terms such as a lower APR, more manageable payment schedule, or fee waivers with your credit card issuer.</p> <p>A certified credit counselor should review your financial situation and offer customized money-management advice before enrolling you in a DMP. For example, Nitzsche says Clearpoint identifies and addresses reasons for financial difficulties first. Counselors may help clients create a household budget, outline financial goals, and address financial concerns in addition to developing a DMP to deal with debt.</p> <p>Consider examining the DMP to make sure you understand and agree to its details. You may want to confirm that credit card payments are scheduled according to your due dates in order to avoid late fees. Nitzsche says you can contact creditors to adjust due dates if needed.</p> <p>The FTC offers guidance on checking the credentials of <a href="https://www.consumer.ftc.gov/articles/0153-choosing-credit-counselor">credit counseling agencies</a> and verifying that a DMP may work for you. In addition, consider asking for a schedule of fees so you'll know what services you may receive and how much they cost.</p> <p>Consider getting documentation of any deals in writing. In this way, you'll be able to confirm your understanding of agreements.</p> <h2>The Downsides of Negotiating and Settling Credit Card Debt</h2> <p>Having a plan to eliminate credit card debt can be rewarding. But there can be downsides to negotiating and settling this debt. They may include:</p> <ul> <li>Your credit card accounts may be closed. As a result, you won't be able to continue using your cards.<br /> &nbsp;</li> <li>Your <a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score?ref=internal">credit score may drop</a>. This drop may result from <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal">increased credit utilization</a> or other reasons.<br /> &nbsp;</li> <li>You may owe taxes on debt that's forgiven.<br /> &nbsp;</li> <li>You may pay more than originally scheduled. While you could save money on fees and interest, there's also the possibility that you'll pay more interest over a longer time frame.<br /> &nbsp;</li> <li>You could incur costs from fees to companies that help you with debt management and debt settlement. These expenses could increase your debt load, rather than eliminating balances.</li> </ul> <p>If you're overwhelmed by credit card debt, negotiating a new agreement or settling your balances for less than you owe may sound attractive. Determine the best course of action by evaluating your finances on your own or finding qualified counselors who can help you. Understand the benefits and consequences of negotiating or settling your debt before getting started.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/4-ways-to-negotiate-credit-card-debt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The 5 Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt">The Fastest Way to Pay Off $10,000 in Credit Card Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dealing-with-post-holiday-credit-card-debt">Dealing with Post-Holiday Credit Card Debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-debt-settlement-can-leave-you-deeper-in-debt-even-with-trustworthy-companies">6 Ways Debt Settlement Can Leave You Deeper in Debt (Even With Trustworthy Companies)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards">The Best Low Interest Rate Credit Cards</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Debt Management credit card debt debt management plan dmp hardship programs modified payment plan negotiating Mon, 12 Dec 2016 11:30:07 +0000 Julie Rains 1849993 at http://www.wisebread.com 6 Ways to Invest When You're In Debt http://www.wisebread.com/6-ways-to-invest-when-youre-in-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-to-invest-when-youre-in-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/plant_tree_stump_462868653_0.jpg" alt="Learning ways to invest when you&#039;re in debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know you need to begin investing to save for the future, but you still have some debt to pay off. It is possible to take care of both at the same time?</p> <p>The short answer is that yes, you can pay down debt and invest at the same time. In many ways, this is a personal choice. If you despise debt and sleep better at night knowing that you're paying it off as quickly as possible, that's fine. But if you can tolerate paying off debt at a slower rate and investing some money, you may end up ahead of the game financially over the long-term.</p> <p>Here are some things to consider when deciding how much to invest and how much debt to pay off.</p> <h2>1. Minimum Payments First, Then Invest</h2> <p>While it's certainly possible to pay down debt and invest at the same time, it's never a good idea to invest if you can't make your minimum payments first. If you don't make minimum payments, you'll be on the hook for higher interest, late fees, and penalties. Not to mention that your credit score will take a big hit. Consider investing your money only if you know you can set money aside and still make at least the minimum payments on debt.</p> <h2>2. Tackle the High Interest Debt</h2> <p>If your debt is tied up in credit cards and other things that come with high interest rates, you may want to hold off on investing until that's under control. Credit cards have interest rates in the double digits, and you're unlikely to generate an investment return that outpaces that. Once that high-interest debt is down to zero, then investing becomes much more possible. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso">Fastest Way to Pay Off 10K in Credit Card Debt</a>)</p> <h2>3. Use Your 401K Plan</h2> <p>If you work for an employer that offers a 401K plan or something similar, it's worth taking part even if you have some debt. That's because most employers will match contributions up to a certain amount. So it's like getting free money. Any contributions you make to a 401K are deducted from your taxable income, so there are great tax advantages for taking part. Invest what you can while still paying down your debt. Then, when your debt is paid off, increase your contributions.</p> <h2>4. Look at Low-Cost Mutual Funds and ETFs</h2> <p>If most of your debt is tied up in low-interest things like student loans or mortgages, it's okay to set aside some money to invest in things that will generate a good return. In fact, there are many financial planners that argue against paying off low-interest loans early if market returns are higher than interest rates. Over time, stocks have averaged returns of about 7%, which is much higher than interest rates these days. To get this type of return, consider looking at mutual funds and exchange-traded funds that have low fees and are designed to track the performance of the overall stock market.</p> <h2>5. Find Investments That Trade Without a Commission</h2> <p>If you're trying to invest and pay down debt at the same time, there's a good chance you may only be able to invest a little at a time. That's okay, but it's important to be aware of the fees and commissions you pay every time you buy and sell. If you're only buying a few shares of a stock but paying $8 in a commission, for example, that fee is cutting into a sizable percentage of your investment. Fortunately, many discount brokerages allow you to trade certain types of investments without paying a commission. Fidelity offers fee-free investing on all iShares ETFs, ETrade offers many commission-free ETFs from WisdomTree and Global X, and TD Ameritrade offers more than 100 ETFs with no transaction fees.</p> <h2>6. Automate as Much as Possible</h2> <p>Finding the balance between investing and paying off debt requires some discipline. If you have some debt but are considering investing, determine in advance what your ideal balance is. Then, set up automatic monthly transfers of money into an investment account, and automate your bills as well. If you get extra money or a raise, consider tweaking the balance accordingly. When you automate, it takes the guesswork out, allows you to stay consistent, and makes it easier to do other financial planning.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/6-ways-to-invest-when-youre-in-debt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-prevent-a-debt-spiral">5 Ways to Prevent a Debt Spiral</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/beware-of-these-common-debt-consolidation-traps">Beware of These Common Debt Consolidation Traps</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-an-etf-isnt-right-for-you">8 Signs an ETF Isn&#039;t Right for You</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-investment-accounts-all-30-somethings-should-have">7 Investment Accounts All 30-Somethings Should Have</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Investment 401k ETFs fees interest rates market returns mutual funds saving money Wed, 23 Nov 2016 11:30:07 +0000 Tim Lemke 1838645 at http://www.wisebread.com Your Brain Is Keeping You in Debt (And How to Fix It) http://www.wisebread.com/your-brain-is-keeping-you-in-debt-and-how-to-fix-it <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/your-brain-is-keeping-you-in-debt-and-how-to-fix-it" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_stressed_thinking_84125877.jpg" alt="Woman learning how her brain is keeping her in debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Your debt never seems to shrink. Each month you resolve to ditch your credit cards, spend less, and devote more money to paying down your outstanding debts. When next month rolls around? You're staring at even more debt.</p> <p>What's the problem? Blame your brain.</p> <p>Recent research from Scientific American suggests that our brains are wired so that when we do decide to pay off our debt, we tend to focus on our smallest ones first. But it'd make much more sense to pay off highest-interest debt first.</p> <h2>Your Brain on Debt</h2> <p>Scientific American, which published the results of its <a href="https://blogs.scientificamerican.com/mind-guest-blog/why-don-t-people-manage-debt-better/">debt study</a> in February of this year, started its research by concluding that the most effective way to battle debt is to pay off those debts that come with the highest interest rates first. Usually, that'd be the debt piling up on one of your credit cards.</p> <p>The reason that this makes the most sense is that higher-interest-rate debt grows more quickly. If you pay that debt down first, your overall debt load will not rise as fast.</p> <p>But instead of attacking higher-interest-rate debt first, consumers usually focus on paying down what they consider the most manageable of their debts, generally the smallest ones they face. They do this even if the interest rates attached to these smaller debts are lower.</p> <p>How did Scientific American determine this? They performed an experiment in which participants were asked to pay multiple debts, all of which came with varying interest rates. Researchers gave these participants a paycheck at the beginning of each round of this game, asking them to use it to pay off their imaginary debts in whatever way they deemed best.</p> <p>According to the study, only 3% of the participants &mdash; just five out of 162 &mdash; focused on paying down the debt with higher interest rates. Scientific American reported that the majority of participants paid off their smaller debts, instead.</p> <p>This isn't just bad money management. It's psychological. Your brain does you no favors when you're battling multiple debts.</p> <p>The Scientific American story says that people are naturally averse to debt accounts. This means that consumers with many different debts naturally want to reduce the total number of these accounts. This pull is so strong, it overwhelms the more rational approach of first paying down those debts that cost the most.</p> <h2>Teach Your Brain to Battle Debt</h2> <p>Can you fight your brain? Can you resist the natural temptation to close out those smaller debt accounts first? Sure, if you focus.</p> <p>Consider the avalanche approach to debt repayment: Consumers pay off those debts with the highest interest rates first, making only the minimum monthly payments on the rest. Once they pay off the debt with the highest interest rate, they then move on to the debt with the second-highest rate. (See also: <a href="http://www.wisebread.com/snowballs-or-avalanches-which-debt-reduction-strategy-is-best-for-you?ref=seealso">Snowballs or Avalanches: Which Debt Reduction Strategy Is Best for You?</a>)</p> <p>The benefit here is obvious: Debt with higher interest rates cost consumers more. Eliminating it first saves lots of money in the long run.</p> <p>And if you want to outwit your brain's natural tendency to steer you in the wrong direction? You'll go with the avalanche method, too.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/your-brain-is-keeping-you-in-debt-and-how-to-fix-it">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off">5-Day Debt Reduction Plan: Pay It Off</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-prevent-a-debt-spiral">5 Ways to Prevent a Debt Spiral</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-unique-ways-millennials-are-dealing-with-student-loan-debt">7 Unique Ways Millennials Are Dealing With Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-use-peer-to-peer-lending-to-pay-down-credit-card-debt">Should You Use Peer-to-Peer Lending to Pay Down Credit Card Debt?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-reasons-your-debt-isnt-diminishing">12 Reasons Your Debt Isn&#039;t Diminishing</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management avalanche method brain psychology repayment research science thought process Mon, 21 Nov 2016 11:00:06 +0000 Dan Rafter 1835352 at http://www.wisebread.com 5 Things You Should Know About Debt Relief Lawyers http://www.wisebread.com/5-things-you-should-know-about-debt-relief-lawyers <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-things-you-should-know-about-debt-relief-lawyers" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/lawyer_justice_gavel_57824452.jpg" alt="What you should know about debt relief lawyers" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Is your combined monthly debt so high that you can't afford to pay your mortgage, utility bills, and car payment?</p> <p>If so, a debt relief lawyer might help. These legal professionals specialize in relieving the debt problems of their clients. And while hiring one won't make your money problems magically disappear, it could be the first step to easing your financial pain.</p> <p>Hiring a debt relief lawyer should not be a quick decision, though. These attorneys usually don't work cheap. Here are five facts you need to know about debt relief lawyers, how they operate and how much working with one will cost you.</p> <h2>1. What They Do</h2> <p>Debt relief lawyers take on a number of tasks for their clients &mdash; tasks that will vary depending on how much debt these clients face.</p> <p>An attorney might negotiate with credit card companies, auto lenders, and other creditors, hoping that these creditors will forgive some of the debt their clients owe. They might work with creditors to set up a payment plan in which their clients only pays an amount that they can realistically afford each month.</p> <p>In more severe cases, debt relief lawyers will help their clients negotiate the bankruptcy process, helping them close either a Chapter 13 or Chapter 7 bankruptcy filing.</p> <h2>2. Chapter 7 versus Chapter 13</h2> <p>If you and your debt relief attorney determine that bankruptcy is the best solution to your debt woes, you'll then have to decide whether to file for Chapter 7 or Chapter 13 bankruptcy.</p> <p>In a Chapter 7 bankruptcy filing, most of your unsecured debt is simply eliminated. Because most debts disappear, many consumers facing debt problems prefer this type of bankruptcy. But a Chapter 7 bankruptcy isn't pain-free. You might lose some of your most valuable assets. Say you have a car, the bankruptcy trustee &mdash; the individual who is overseeing your bankruptcy on behalf of the court in which you file &mdash; might order that car sold. The profits from the sale would then be passed out to your creditors.</p> <p>In a Chapter 13 bankruptcy, a judge sets up a repayment plan that allows you pay back your creditors at a pace and payment level that you can afford. Depending on your bankruptcy agreement, you might have to pay back less than what you owe, but your debts won't be eliminated. You'll have to pay at least a portion of them back.</p> <p>On the positive side, you will be able to keep your possessions &mdash; such as a home and car &mdash; during a Chapter 13 bankruptcy filing.</p> <h2>3. Bankruptcy Won't Resolve All Your Debts</h2> <p>Debt relief attorneys can provide you with a way to ease the burden you face because of your debt. But even if you work with one to file for bankruptcy, they can't magically make all of your debts disappear.</p> <p>The National Association of Consumer Bankruptcy Attorneys says that bankruptcy, even Chapter 7, won't eliminate student loan debts, alimony debt, tax debt, and any debt obtained through fraudulent activities.</p> <h2>4. Debt Relief Lawyers Don't Negate Bankruptcy Consequences</h2> <p>Working with a debt relief attorney to file for bankruptcy could leave you with a fresh financial start. But it won't come without consequences.</p> <p>Both Chapter 13 and Chapter 7 bankruptcy filings will cause your three-digit FICO credit score to plummet, often by more than 100 points. This is significant because lenders rely on this score to determine who qualifies for mortgage, auto, and personal loans. They also rely on the score to determine the interest rates they charge to borrowers.</p> <p>If you have a low score, you'll be stuck with a far higher interest rate, which will make your monthly payment higher, too. The negative pull that bankruptcies have on your credit score will lessen over time. If you pay your bills on time each month, your credit score will gradually recover. Doing so, though, can take years.</p> <p>Even worse, bankruptcy filings remain on your credit report for a long time. A Chapter 13 bankruptcy filing will remain on your credit report for seven years. A Chapter 7 filing will stay there for 10. Every time a lender pulls your report during this time, it will see your bankruptcy filing.</p> <h2>5. Debt Relief Attorneys Aren't Cheap</h2> <p>How much a debt relief attorney charges you depends on the amount of money you owe and what services this lawyer tackles on your behalf. The legal website Nolo says that you might spend from $700 to $2,500 if your debt relief attorney files Chapter 7 for you, but $2,500 to $6,000 if your attorney instead has to file a Chapter 13 bankruptcy on your behalf.</p> <p>If you are paying an hourly fee for the services of a debt relief attorney, you can expect to pay from $125 to $350 an hour, according to Nolo.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-things-you-should-know-about-debt-relief-lawyers">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-times-bankruptcy-is-the-right-move">3 Times Bankruptcy Is the Right Move</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-steps-to-take-when-bankruptcy-is-your-only-option">11 Steps to Take When Bankruptcy Is Your Only Option</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-debt-management-questions-youre-too-embarrassed-to-ask">5 Debt Management Questions You&#039;re Too Embarrassed to Ask</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-you-need-to-know-about-writing-a-will">What You Need to Know About Writing a Will</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">5 Surprising Ways Revolving Debt Helps You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Debt Management assets attorneys bankruptcy chapter 13 chapter 7 court credit score debt relief lawyers legal help Tue, 25 Oct 2016 10:00:13 +0000 Dan Rafter 1819828 at http://www.wisebread.com How to Stop Student Loans From Ruining Your Life http://www.wisebread.com/how-to-stop-student-loans-from-ruining-your-life <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-stop-student-loans-from-ruining-your-life" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/debt_piggy_bank_71881857.jpg" alt="Finding ways to stop student loans from ruining your life" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Student loans have become a huge problem. According to an analysis of government data from Edvisors, some 70% of recent college grads have education debt, and the total amount borrowed works out to an average of more than $37,000 per borrower. So burdensome is this debt that more than 40% of borrowers are behind on their payments or have stopped making them altogether, according to the U.S. Education Department.</p> <p>What can you do to avoid that fate? Here are four ideas &mdash; two geared toward families of high school students who haven't taken out student loans yet, and two aimed at college students who <em>have</em> borrowed.</p> <h2>Before You Borrow</h2> <p>Of course, the best way to keep student loans from ruining your life is to avoid borrowing in the first place. Here are two steps that can help.</p> <h3>1. Get Clear About What You're Going to Study</h3> <p>One reason why college costs so much for so many students is that so few graduate in four years. According to &quot;Four-Year Myth,&quot; a report from Complete College America, the four-year graduation rate at public universities ranges from 19% to 36%. Some who fail to graduate in four years drop out, others flunk out, but many others end up with extended stays on campus because they change majors.</p> <p>College is a very expensive place to &quot;find yourself.&quot; It's far better to enter school with as much clarity as possible about what you want to study.</p> <p>For high school juniors and seniors, there are numerous online assessments designed to help connect their skills, interests, and temperament to a number of possible careers. Some to consider include:</p> <ul> <li><a href="http://www.youscience.com/">YouScience</a>;</li> <li><a href="https://careerdirect-ge.org/">Career Direct;</a></li> <li><a href="https://www.mymajors.com/">MyMajors.</a></li> </ul> <p>Knowing what you want to study can help you avoid the five or six-year college plan and its associated costs.</p> <h3>2. Take a Gap Year</h3> <p>Taking a year off in between high school and college has been a popular practice in Europe for many years and is rapidly growing in popularity in the U.S. So much so that there is now a <a href="http://www.americangap.org/index.php">gap year association</a> as well as <a href="http://www.interimprograms.com/">consulting organizations</a> that help families (for a fee) determine whether a gap year makes sense for their children, and if so, how to best structure the gap year. Some schools will accept students and then allow them to defer enrollment for a year. The University of North Carolina even offers a <a href="http://admissions.unc.edu/explore/enrich-your-education/global-gap-year-fellowship/">global gap year fellowship</a>.</p> <p>A gap year can be used to earn money for college or explore career interests. Either way, it can help lessen the need for loans. (See also: <a href="http://www.wisebread.com/8-money-moves-students-should-make-during-a-gap-year?ref=seealso">8 Money Moves Students Should Make During a Gap Year</a>)</p> <h2>After You Borrow</h2> <p>If you have already taken out loans to pay for college, here are two practical steps for minimizing the burden of such borrowing.</p> <h3>3. Create a Post-College Budget</h3> <p>Numerous surveys have found that students with education loans have little idea what they've gotten themselves into.</p> <p>A recent survey by Lendedu, a company that helps students refinance their education loans, found less than 10% of student borrowers understood how long it would take to pay off their loans or what interest rate they were being charged. Less than 30% understood that if they fail to repay on time, the government could garnish their wages or withhold their tax refunds.</p> <p>A couple of years ago, a study by the Brookings Institute found that among first-year students who had students loans, 17% said they didn't realize they even <em>had</em> loans.</p> <p>If you're going to borrow, you need to know <em>that </em>you owe, <em>what</em> you owe, and what it's going to take to repay. One of the best reality checks is to calculate the monthly cost of your loan payment while you're still in school. Then create a detailed post-college budget using a monthly <a href="http://www.mattaboutmoney.com/resources/">Cash Flow Plan</a> form.</p> <p>Creating a budget that includes student loan payments may motivate you to avoid taking on more debt. At very least, it'll help you understand how much you can afford for housing and other expenses after you graduate and may persuade you to avoid taking on other debts, such as a car loan.</p> <h3>4. Prioritize Accelerated Repayment</h3> <p>Under a standard loan contract, a student loan is to be paid off in 10 years. But you don't have to take that long, and the sooner you can be done with debt, the better. Especially since there are no penalties for paying off a student loan early, commit now putting your debt on an accelerated payoff schedule.</p> <p>The monthly cost calculator mentioned above enables you to run some what-if scenarios based on adding different amounts on top of your required payments. Seeing how much more quickly you could be out of debt may motivate you to live well beneath your means after graduating in order to prioritize accelerated debt repayment.</p> <p>Today, the burden of student loans is causing many young people to delay getting married, put off starting a family, and give up on buying a home. But it doesn't have to be that way for you.</p> <p>Whether you're a high-school student who's just thinking about college financing options or a college student who has already taken on debt, these simple steps should help you keep student loans from taking over your life.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/how-to-stop-student-loans-from-ruining-your-life">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-to-make-the-most-of-your-student-loan-grace-period">4 Ways to Make the Most of Your Student Loan Grace Period</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-unique-ways-millennials-are-dealing-with-student-loan-debt">7 Unique Ways Millennials Are Dealing With Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-trumps-presidency-might-change-student-loans">How Trump&#039;s Presidency Might Change Student Loans</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-every-parent-should-know-about-the-new-college-financial-aid-rules">What Every Parent Should Know About the New College Financial Aid Rules</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-easy-ways-to-avoid-student-loan-debt">12 Easy Ways to Avoid Student Loan Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Education & Training bills borrowing budgeting college degree gap year loan repayment planning school student loans Tue, 11 Oct 2016 09:30:21 +0000 Matt Bell 1810486 at http://www.wisebread.com Refinance These 4 Common Debts Before Year Ends http://www.wisebread.com/refinance-these-4-common-debts-before-year-ends <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/refinance-these-4-common-debts-before-year-ends" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/calculator_pencil_math_82097885.jpg" alt="You should refinance 4 common debts before year end" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The year is almost over, which gets many people thinking about New Year's resolutions. Perhaps you are recalling the resolutions you made at the beginning of this year and getting down on yourself for not saving more money and paying off more debt. &quot;Next year,&quot; you promise yourself.</p> <p>But if you refinance these four loans, you can get a head start on your financial goals and even sail into the New Year with a little less financial burden on your shoulders. Here are the top loans you should refinance, as well as a few tips to decrease your debt burden altogether.</p> <h2>Credit Cards</h2> <p>Does your credit card debt seem like it never goes down, even when you throw extra money at it each month? It's the interest rate. There are two ways that you can refinance your credit card balance and save money each month. The first is to <a href="http://www.wisebread.com/best-lenders-for-personal-loans">refinance your debt</a> with a low interest personal loan, like one through<a href="https://sofi.com/wisebreadpl">SoFi</a> or<a href="http://prosper.evyy.net/c/27771/27132/994"> Prosper</a>.</p> <p>This works well for individuals that have <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt">high interest credit card debt</a>. A low-interest personal loan will allow you to pay off your credit card debt faster, but be aware that your monthly payments will be higher. This is because credit cards only require a minimum payment each month, which can be very low, depending on the debt. Keep in mind, however, that those low monthly minimum payments are what keep you in debt for so long. Therefore, when you switch the debt to a three- or five-year personal loan, you will be required to pay more each month.</p> <p>Another popular way to refinance credit card debt is to transfer it to a promotional <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">0% balance transfer card</a>. This will allow you to transfer your debt to a card that does not charge interest for the promotional period. To use this transfer to your advantage, divide the amount of debt you have by the number of promotional interest free months offered. For example, if you are transferring <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt">$10,000 of debt</a> on a card that offers 15 months of 0% interest, then be prepared to pay about $667 each month to avoid interest charges at the end of the promotion. Do not use this card to accumulate new debt.</p> <p>(See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt">When Should You Transfer a Balance to Pay Off Debt</a>)</p> <h2>Mortgages</h2> <p>Mortgage rates remain historically low, but recent news shows that <a href="http://www.marketwatch.com/story/us-mortgage-rates-climb-to-post-brexit-high-2016-09-15">rates are slowly rising</a>. If you are still battling with a mortgage rate higher than 5% or are paying PMI, now is the time to refinance.</p> <p>Refinancing your mortgage can extend the life of your home loan, but it can also save you dramatically each year, especially if you are paying<a href="http://www.wisebread.com/what-is-private-mortgage-insurance-anyway">pesky PMI fees</a>. Research the cost to benefit ratio, knowing how much money you will save each month. Also research to know if a 15-year mortgage makes financial sense. In many cases, switching to a 15-year loan is riskier for your budget, but other times it can be a small monthly increase that will pay off big time in reduced interest payments.</p> <h2>Car Loans</h2> <p>Americans owe a lot on their car loans. USA Today reports, &quot;The total balance of all outstanding auto loans <a href="http://www.usatoday.com/story/money/cars/2016/09/06/car-loans-now-top-1-trillion-delinquency-rates-rise/89911210/">reached $1.027 trillion</a> between April 1 and June 30.&quot; If you secured your auto loan through a dealer, there is a good chance you are overpaying for your car loan. Contact your local credit union for rates, and don't forget to research online for the best rates.</p> <p>I have used two credit unions in the past to successfully secure an auto loan for less than 2.50%, and those credit unions did not have an actual building within 100 miles of me.</p> <h2>Student Loans</h2> <p>The burden of student loan debt is crippling millions of Americans. You don't need to live with your student loan forever. As long as you have good credit and are not in default with your loans, you have options. If you have federal student loans, then I strongly recommend looking into the <a href="http://www.wisebread.com/5-careers-that-offer-student-loan-forgiveness">forgiveness programs</a> available. It might mean taking a less than desirable job for a few years, but if that job forgives a large portion of your student debt, then it could be worth more to you than a higher paying job. Other options include income-sensitive repayment programs, such as <a href="http://www.wisebread.com/the-definitive-guide-to-pay-as-you-earn-a-great-student-loan-repayment-plan">PAYE and IBR</a>, which peg your monthly payments to your income level. Thus, if you're struggling to make a standard monthly payment, these programs set your monthly outlays at a more affordable level.</p> <p>If you are not eligible (or a fan) of the forgiveness programs, <a href="http://www.wisebread.com/should-you-refinance-your-student-loan">refinancing your student loans</a> is your next best option. Note that if you refinance your loans, you will be switching them over to a private lender. This means that if you have federal student loans, you will no longer be protected for federal loan repayment programs if you suddenly lose your job or face financial hardships.</p> <p>(See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-your-student-debt-faster">5 Ways to Pay Off Your Student Loans Faster</a>)</p> <p><a href="http://sofi.com/wisebread">SoFi</a> is one company that offers student loan refinancing and also offers unemployment protection for borrowers that lose their job at no fault of their own. The company says, &quot;In fact, members who refinance with us save an average of $316 a month &mdash; and $17,208 total.&quot; Other notable companies to consider include:</p> <ul> <li><a href="https://www.earnest.com/">Earnest</a></li> <li><a href="https://commonbond.co/choose-your-loan?referrer=b75172e7076c5472bed5baec5e28309c&amp;referred">CommonBond</a></li> <li><a href="http://lendkey.7eer.net/c/27771/187810/3276">LendKey</a></li> </ul> <p>Refinancing these common debts can help you pay less each month, as well as less overall. Use these refinancing strategies to get out of debt faster and take control of your finances.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/refinance-these-4-common-debts-before-year-ends">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-11"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-calculators-everyone-should-use">15 Personal Finance Calculators Everyone Should Use</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-happens-to-your-debt-after-you-die">What Happens to Your Debt After You Die?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-ignore-these-4-things-before-refinancing-your-student-loans">Don&#039;t Ignore These 4 Things Before Refinancing Your Student Loans</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/prioritize-these-5-bills-when-youre-short-on-cash">Prioritize These 5 Bills When You&#039;re Short on Cash</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management car loans interest rates lenders loans mortgages new year's resolutions personal loans refinancing repayment programs student loans Mon, 26 Sep 2016 10:30:07 +0000 Ashley Eneriz 1798863 at http://www.wisebread.com 6 Scary Facts About Credit Card Debt http://www.wisebread.com/6-scary-facts-about-credit-card-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-scary-facts-about-credit-card-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_shocked_face_74060557.jpg" alt="Man learning scary facts about credit card debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We all know that credit card debt is the worst type of debt that you can carry. That's because of the high interest rates attached. If you don't pay off your credit cards in full each month, the debt you owe can quickly skyrocket.</p> <p>But even though credit card debt is scary, this hasn't stopped many consumers from racking up thousands of dollars of it.</p> <p>As fall arrives and Halloween looms, are you ready for a real scare &mdash; at least of the financial variety? Here are six facts about credit card debt that should spook consumers who don't pay off their card balances every month:</p> <h2>1. There's Too Much Credit Card Debt Out There</h2> <p>Credit card debt is like one of those unstoppable slashers from 1980s horror movies: It's hard to get rid of. That explains why, according to a report on consumer credit by the Federal Reserve, the total amount of revolving debt owed by U.S. consumers stood at a staggering $953.3 billion as of May of 2016.</p> <p>The Federal Reserve predicts that this debt, which is made up mostly of credit card debt, could hit $1 trillion by the end of the year &mdash; the highest this figure has ever been.</p> <h2>2. We're Not Paying Off Our Credit Card Debt as Quickly as We're Adding to It</h2> <p>Credit card website CardHub reported that during the first quarter of 2016, U.S. consumers paid off a total of $26.8 billion in credit card debt. That sounds impressive, right? Unfortunately, it's not. According to the report, that represents only 38% of the $71 billion in credit card debt that U.S. consumers added to their cards in 2015.</p> <p>In other words, American consumers as a whole are paying off far less of the new credit card debt that they are adding.</p> <h2>3. Too Many of Us Owe Thousands of Dollars in Credit Card Debt</h2> <p>That figure above is scary. But what's more frightening is the average amount of credit card debt that Americans owe. This figure is hard to pin down, because how high it is depends on whether you include consumers who use credit cards but don't carry a balance each month.</p> <p>But here are two particularly chilling credit card statistics: In July of 2016, CreditCards.com reported that the average U.S. household that has credit card debt owes $9,600. The average credit card that usually carries a balance has $7,494 on it as of July of this year.</p> <h2>4. Credit Card Interest Rates Are Still Far Too High</h2> <p>Credit card interest rates remain downright scary. According to Bankrate, the average variable interest rate on U.S. credit cards stood at 16.10% as of August 17 of this year. Even scarier are the penalty interest rates that credit card companies can charge you if you're late on paying your bill. Your interest rate could soar to 28% or higher.</p> <h2>5. It Can Take a Frighteningly Long Time to Pay Off Credit Card Debt</h2> <p>As anyone who has struggled with credit card debt knows, eliminating that debt takes plenty of patience. If you make only the minimum payment each month, it can take you a decade or more to pay off your debt. Consider these numbers provided by Bankrate: Say you owe $6,000 on a credit card with an interest rate of 18%. If your minimum payment is 4% of your monthly balance, it will take you 11 years and nine months to pay off that debt making only this required minimum monthly payment. You'll pay a total $9,474 to pay off that $6,000 debt. And this assumes that you won't add any new debt to your card during this time.</p> <h2>6. Making a Late Payment Will Haunt You</h2> <p>Paying your credit card bills late can have a frightening impact on your FICO credit score, the number lenders rely on to determine whether you qualify for loans and at what interest rate.</p> <p>If you are 30 days or more late on your credit card payments, your card provider can report your late payment to the three national credit bureaus of Experian, Equifax, and TransUnion. A single late payment will stay on your credit reports for seven years. It can also cause your credit score to fall by 100 points or more.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/6-scary-facts-about-credit-card-debt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-12"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-dirty-secrets-of-credit-cards">The Dirty Secrets of Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-sobering-facts-about-credit-card-debt">5 Sobering Facts About Credit Card Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The 5 Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt">The Fastest Method to Eliminate Credit Card Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-7-best-credit-card-debt-elimination-strategies">The 7 Best Credit Card Debt Elimination Strategies</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Debt Management balances debt interest rates minimum payments overspending scary facts Wed, 21 Sep 2016 09:01:03 +0000 Dan Rafter 1796578 at http://www.wisebread.com 5 Surprising Ways Revolving Debt Helps You http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-surprising-ways-revolving-debt-helps-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_happy_credit_card_49216544.jpg" alt="Woman learning surprising ways revolving debt helps you" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Debt can be good or bad, depending on how you use it. Different types of debt serve different purposes. We use installment loans like mortgages, car loans, and student loans to purchase homes, cars, and to get an education &mdash; but these aren't the only types of debt.</p> <p>There's also revolving debt, such as a credit card or a home equity line of credit. This type of debt can be more dangerous because it lacks a fixed payment amount, and minimum payments are based on how much you utilize the line of credit. Despite the unpredictable nature of revolving debt, however, it can be surprisingly helpful. Here's how:</p> <h2>1. It's Available When You Need It</h2> <p>Life is unpredictable. Even when you're financially responsible with money, an emergency can pull the rug out from under you. Sometimes, there isn't enough cash in your account to handle the unexpected. Or maybe you have cash, but don't want to drain your savings. Revolving debt lets you pay off purchases over time, so that you can keep more cash in your wallet.</p> <p>Revolving debt is also convenient because you have immediate access to funds when you need it. This is different from an installment loan. You can apply for a loan when you need money for an unexpected expense, but it's not immediate. You have to submit an application and wait for an approval, which can take days. Plus, there's no guarantee the bank will approve the amount you need.</p> <h2>2. It Helps Build Creditworthiness</h2> <p>Whether you're looking to establish your credit history or rebuild your credit after a blunder, you have to use credit to improve your FICO score. Revolving debt can help in this regard.</p> <p>Several factors make up your credit score, including the types of credit accounts in your name. Some people only have one type of credit account, perhaps an installment loan like a mortgage or car loan. Making timely payments on these accounts help their credit scores, but they need other types of account to increase credibility and creditworthiness.</p> <p>Credit mix makes up approximately 10% of your credit score, so it's worth adding a revolving account if you don't already have one. What's surprising is that revolving debt can be a good thing on your credit report. If you have a revolving account and you manage this account well, other creditors and lenders will take notice. This builds their trust in you, which makes it easier for you to qualify for other types of accounts in the future.</p> <p>For revolving debt to be helpful, however, you have to pay your bills on time, and you shouldn't utilize too much of your available credit. Payment history makes up 35% of your credit score, and the amount you owe makes up 30% of your credit score.</p> <h2>3. It Protects Your Credit Score</h2> <p>If you're self-employed or an employee who gets paid once a month, a revolving account can keep your head above water until you receive a paycheck. Ideally, you should have a savings account for situations like this, but if you're in the process of growing your emergency cushion, using a credit card to tide you over and acquiring short-term revolving debt is the lesser of two evils. In this case, revolving debt can protect your credit &mdash; and you'll avoid late fees.</p> <p>If your creditors don't receive a payment after 30 days, they'll report the lateness to the credit bureaus. A single late payment can reduce your credit score by 50 to 100 points, depending on the type of account. Using a credit card and increasing your revolving debt can cause a slight decrease in your credit score, but your credit score will rebound as soon as you pay down the balance. On the other hand, a late payment can stay on your credit report for up to seven years, and it takes years to regain lost points.</p> <h2>4. You Have Flexibility of Use</h2> <p>Revolving debt is also helpful because there's flexibility of use. When you apply for an installment loan, you have to use funds for a specific purpose. For example, a mortgage loan can only be used to buy a house, and a student loan can only be used for educational purposes. Revolving debt can be used for any purpose, such as renovating your home, paying tuition, taking a vacation, etc.</p> <h2>5. You May Experience a Lower Interest Rate</h2> <p>The interest rate on your revolving debt could be lower than the interest rate on personal loans offered by banks, but only if you have good credit. If so, you'll pay less in interest charges over the life of the debt, and you can enjoy lower minimum payments.</p> <p>Make sure you shop around and compare rates. Some <a href="http://www.wisebread.com/5-best-credit-cards-with-0-apr-for-purchases?ref=internal">credit cards offer 0% interest</a> on balance transfers and purchases for the first six to 18 months, and then a low permanent APR after the introductory rate period.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-13"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-shouldnt-panic-if-your-credit-score-drops">Why You Shouldn&#039;t Panic If Your Credit Score Drops</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/never-borrow-money-for-these-5-buys">Never Borrow Money for These 5 Buys</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-credit-scores-and-reports-are-not-the-same">Here&#039;s Why Credit Scores and Reports Are Not the Same</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/best-of-personal-finance-credit-where-credit-is-due-edition">Best of Personal Finance: Credit Where Credit Is Due Edition</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Debt Management borrowing money credit history credit score home equity line of credit interest rates loans revolving debt Tue, 20 Sep 2016 09:00:05 +0000 Mikey Rox 1794234 at http://www.wisebread.com 5 Signs It’s Time to See a Credit Counselor http://www.wisebread.com/5-signs-it-s-time-to-see-a-credit-counselor <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-signs-it-s-time-to-see-a-credit-counselor" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_stressed_money_80048959.jpg" alt="Man wondering if it&#039;s time to see a credit counselor" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>About 62% of Americans have <a href="http://www.marketwatch.com/story/most-americans-have-less-than-1000-in-savings-2015-10-06">less than $1,000</a> in their savings accounts, and one in every three Americans has <a href="http://time.com/money/4258451/retirement-savings-survey/">saved $0 for retirement</a>. One of the main culprits behind our inability to save is debt. Whether it's in the form of student loans, credit card balances, or home lines of equity, debt can snowball into a problem too big to handle on your own. Fortunately, credit counselors can be of help when you have trouble navigating the depths of debt yourself. Here are five warning signs that you might need a credit counselor, what will a counselor do for you, and how to choose one.</p> <h2>5 Warning Signs That You Need a Credit Counselor</h2> <p>Here are the telltale signs that you have taken on more debt than you can handle.</p> <h3>1. Living Paycheck to Paycheck</h3> <p>This is a big one. It's one thing to take on a loan, but another entirely for the loan to take on you! If you're consistently spending more than you make &mdash; month after month &mdash; to pay back debt, then an unexpected emergency expense could wreak havoc on your personal finances. Imagine if right now your water heater were to break, or your car suddenly needed a new transmission. Could you come up with the necessary hundreds of dollars to meet these expenses when you're living paycheck to paycheck? (See also: <a href="http://www.wisebread.com/where-to-turn-for-help-when-you-dont-have-an-emergency-fund?ref=seealso">Where to Turn for Help When You Don't Have an Emergency Fund</a>)</p> <h3>2. Making Too Many Late Payments</h3> <p>Paying a high APR on your credit card debt is bad. Paying a higher APR and a penalty fee many times out of the year is even worse. When you make a late payment in 2016, credit card issuers can charge you $27 for the first late payment and up to $37 for subsequent lapses within six months of the first one. Falling 60 days behind a payment would worsen your chances of paying back your credit card debt: A survey of 100 major U.S. credit cards found that the average APR for those falling 60 days behind payments was over 28% in recent years. Assuming that you have a card with a balance of $3,000 and a regular APR of 14.99%, you would pay an extra $403.80 in interest in a year with the higher 28.45% APR.</p> <p>Not too mention that making too many late payments also wreaks havoc on your credit rating as your payment history accounts for 35% of your credit score.</p> <h3>3. Fearing Debt Collectors</h3> <p>Of course, you have to work to make money. However, you'll have a hard time concentrating when you're constantly afraid to pick up the phone or check your mailbox fearing that debt collectors are trying to contact you. While the <a href="https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text">Fair Debt Collection Practices Act</a> limits the times and places that a debt collector can reach you, don't be surprised if unscrupulous ones still try to reach you at work or call you before 8 a.m. in your local time! (See also: <a href="http://www.wisebread.com/4-annoying-things-bill-collectors-cant-do-and-how-to-stop-them?ref=seealso">4 Annoying Things Bill Collectors Can't Do &mdash; And How to Stop Them</a>)</p> <h3>4. Not Contributing to Retirement Accounts</h3> <p>Consider this example: If you were to put away $400 every single month for 35 years in your retirement account with a 7% rate of annual return, you would have a total of $709,985 at the end of the 35-year period. If you were to start 20 years later saving on the same account, you would need to amp your savings to the tune of $2,200 per month to end up with a similar total balance ($709,985) at the end of the same 35-year period.</p> <h3>5. Having No Budget</h3> <p>Last but not least, having no clue about where your money is going is a clear signal that you need help with your finances. Whether you're intentionally or unintentionally refusing to map out your cash flow, you are just hoping that your debt monster will somehow go away. The harsh reality is that it won't and you need a credit counselor to help you figure out the damage &mdash; and the solution.</p> <h2>What Will a Credit Counselor Do for You?</h2> <p>The main objective of a credit counselor is to help you avoid bankruptcy by advising you on a series of financial issues, including money management, debt management, and budgeting. Even in the event that you were planning to file a Chapter 7 or Chapter 13 bankruptcy, you're legally required to obtain credit counseling before filing bankruptcy.</p> <p>A reputable credit counseling agency offers a wide range of services, including budget counseling, savings and debt management education, and debt management plan development. In a DMP, you deposit money every month into an account from a credit counseling agency, which will use the funds to pay your unsecured debts according to an agreed schedule between your creditors and the agency.</p> <p>The U.S. Trustee Program maintains a list of <a href="https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111">approved credit counseling agencies</a>, providing nonprofit budget and credit counseling services to individuals eligible to file for bankruptcy protection. Depending on the services that you require, the agency may provide them in-person, online, or over the phone. While a credit counseling agency may qualify for nonprofit status, be aware that services may not be free.</p> <h2>How to Choose a Credit Counselor</h2> <p>Here is a useful checklist on how to find the right credit counselor for your unique financial situation.</p> <h3>Look for Additional Lists</h3> <p>Besides the list from the U.S. Trustee Program, look for additional local candidates with credit counseling agencies affiliated with the <a href="http://www.nfcc.org">National Foundation for Credit Counseling</a> (NFCC) or the <a href="http://www.aiccca.org">Association of Independent Consumer Credit Counseling Agencies</a> (AICCCA). Make sure that the agency is licensed to offer services in your state.</p> <h3>Check for Consumer Complaints</h3> <p>To vet agencies for potential consumer complaints, check each one of your choices with the office of your <a href="http://www.naag.org/naag/attorneys-general/whos-my-ag.php">state Attorney Genera</a>l and <a href="https://www.usa.gov/state-consumer">state consumer protection agency</a>. Also, check for the rating, list of filed complaints, and list of customer reviews of any credit counseling agency with the <a href="http://www.bbb.org">Better Business Bureau</a>.</p> <h3>Request Initial Information</h3> <p>Requiring a fee for providing information or requesting details about your financial information at this point are two red flags. Also, you should be the one first requesting information, not receiving any unsolicited mailers, calls, or, even worse, spammy emails.</p> <h3>Inquire About Fees and Financial Aid</h3> <p>Credit counseling should be free or cost nearly nothing. Ask about setup fees and recurring monthly fees. Avoid companies that aren't willing to provide a quote in writing or refuse to help you if you can't pay those fees in full. Reputable credit counseling agencies offer at least some debt and money management workshops or educational materials at no cost. And if you can't afford a credit counselor &mdash; meaning, if it isn't basically free &mdash; avoid them altogether. Plenty offer free or extremely low-cost services, and the last thing you need is more expenses when you're trying to get out of debt.</p> <h3>Verify Credentials and Remuneration of Counselors</h3> <p>Look for certifications through external organizations, such as the NFCC or the AICCCA. Credit counselors receiving kickbacks for you signing up for additional services or making contributions to the agency are indications that the counselors won't put your interest before theirs.</p> <h3>Look Beyond DMP</h3> <p>A DMP is just one of the many services offered by a credit counselor and should only be presented after an extensive review of your financial situation. Avoid agencies that push a DMP from the start. Even when evaluating a DMP, a serious credit counselor would still help you develop better budgeting and money management skills.</p> <h3>Request a Formal Written Agreement</h3> <p>Any verbal promises that aren't captured on paper are just empty promises. For example, promises from a counselor to lower or eliminate interest, finance, or late fees should be in writing. This will help you in case your creditors indicate that none of those promises actually happened.</p> <p>Also, be wary of agencies pressuring you to sign a contractual agreement right away, particularly when it's a DMP. Take your time to review the document and seek additional help in case you can't understand some of the clauses. Don't sign anything unless you fully understand the contract and are satisfied with its terms.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/5-signs-it-s-time-to-see-a-credit-counselor">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-14"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/retirement-on-the-installment-plan">Retirement on the installment plan</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-debt-collectors-dont-want-you-to-know">5 Things Debt Collectors Don&#039;t Want You to Know</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-your-assets-costing-you-too-much">Are Your Assets Costing You Too Much?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/beware-of-these-common-debt-consolidation-traps">Beware of These Common Debt Consolidation Traps</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-your-financial-planner-isnt-telling-you-about-retirement">5 Things Your Financial Planner Isn&#039;t Telling You About Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Debt Management Retirement credit counselor debt collectors dmp fees financial aid professional help warnings signs Fri, 16 Sep 2016 09:00:11 +0000 Damian Davila 1793877 at http://www.wisebread.com Student Loan Debt in Collections? Try These 5 Steps http://www.wisebread.com/student-loan-debt-in-collections-try-these-5-steps <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/student-loan-debt-in-collections-try-these-5-steps" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_stressed_bills_87593851.jpg" alt="Woman using 5 steps with student loan debt in collections" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We are all too familiar with the stats when it comes to student loan debt. American borrowers owe more than <a href="http://www.wisebread.com/5-sobering-facts-about-student-loan-debt">1.2 trillion in student loan debt</a>, and more than 70% of U.S. college graduates have student loans of some sort. This staggering amount of student loans has far surpassed credit card debt, which now stands firmly in second place behind mortgage debt as the largest source of U.S. debt.</p> <p>But the less-mentioned student loan debt problem is the rising default rate. According to the National Student Loan Data System, 12% of subsidized loans, and 25% of Family Federal Education Loans (FFEL), were in default in 2015.</p> <p>If you're in this situation, and your student loan is on the brink of default, here are five steps to handle student loan debt in collections.</p> <h2>1. Check Your Credit</h2> <p>If you haven't bothered to open up your student loan statement recently, it might be time to check your credit report. Many people don't realize that their student loans are actually in default and spend years thinking the loan must've magically disappeared, or the student loan fairy came and paid off the debt.</p> <p>Once your loan goes into default, it is handed over to a <a href="http://www.wisebread.com/account-in-collections-heres-how-to-fix-it">collection agency</a>. An account in collection significantly <a href="http://www.wisebread.com/the-5-things-with-the-biggest-impact-on-your-credit-score">affects your credit score</a>. While this might not matter to you now, if you're thinking about buying a house or a car or applying for a credit card, you might find yourself out of luck with a low credit score.</p> <p>It's easier than ever to check your credit fast and easy. There are loads of apps you can use, like <a href="http://www.dpbolvw.net/click-2822544-10809829-1284618439000">Credit Karma</a> and <a href="http://www.tkqlhce.com/click-2822544-12336153-1455123184000">Credit Sesame</a>, that will show your credit score and give you tips on how to better your score. You can also check your credit for free at <a href="https://www.annualcreditreport.com/index.action">AnnualCreditReport.com</a> &mdash; you'll receive your credit report, but will need to pay a small fee if you want to get your actual score.</p> <p>Also, many credit card companies now include your credit score on your monthly statement with some detail about your score.</p> <h2>2. Rehab Your Loan</h2> <p>The next step is to get your loan in a rehabilitation program. Contact the collection agency handling your loan and ask them how to enter the rehabilitation program.</p> <p>Rehabbing a loan is critical because once your student loan is in collections, there are many adverse consequences that extend beyond your credit score. Some collection agencies will garnish your wages to recoup the balance that is owed. Not only can your paychecks be tapped, but also your highly-coveted tax return money.</p> <p>Rehabbing a student loan is just like any other form of rehab &mdash; you've got to get super committed to the process to see results. Rehab brings your loan safely out of default, which will help repair your credit score. It's a process, so make sure you understand exactly what you need to do with each collection agency to bring your loan back to life.</p> <h2>3. Always Pay on Time</h2> <p>Once your loan is in rehab, paying on time will be your best ally in winning the war against student loan default. Rehab offers you a chance to get right with your loan, often through small monthly payments based on your income.</p> <p>The key to loan rehab is to make nine consecutive monthly payments on-time while in the program before your loan can be taken out of collections and sent to a new loan servicing company. At that point, your default status will be removed, and you'll also have access to programs like deferment and <a href="http://www.wisebread.com/what-is-student-loan-forbearance-anyway">forbearance</a>.</p> <h2>4. Get It in Writing</h2> <p>As with most things in life, getting something in writing is your best defense. The same goes for student loan rehabilitation. Once you've made your nine monthly on-time payments and your loan rehab is complete, kindly ask the collection agency for a nice letter stating that all related negative marks from your student loan record have vanished.</p> <p>Now, this is the tricky part. Collection agencies aren't known for their excitement over supplying a letter in writing, which again is why you need to ask in your nicest voice and use a lot of &quot;pretty pleases.&quot;</p> <p>This letter is worth its weight in gold to you, though. It is what you will send to the three main credit bureaus &mdash; Experian, TransUnion, and Equifax &mdash; to ensure that the marks are removed. Make sure that the letter includes your name, the name of the collection agency, the account number that the letter is referencing, and the date the loan rehabilitation process was completed.</p> <h2>5. Stay on Track</h2> <p>The last step may seem like an obvious one, but staying on track is the best way to keep your student loans out of collections. Once you've gone through all the work of rehabbing your loan, the last thing you want to do is undo that process by neglecting your student loan.</p> <p>Here are a few steps to stay on track:</p> <ul> <li>Select a new payment plan that works with your budget. There are countless payment plan options like <a href="http://www.wisebread.com/the-definitive-guide-to-pay-as-you-earn-a-great-student-loan-repayment-plan">Pay As You Earn</a>, which adjusts with your salary.<br /> &nbsp;</li> <li>Put your new student loan payments on auto-debit each month so that you make sure it's getting paid.<br /> &nbsp;</li> <li>Create a new monthly budget that includes your student loan payment and scrub through your bank statements to find ways to save money each month. There are lots of <a href="http://www.wisebread.com/7-apps-that-make-budgeting-fun-no-really">mobile apps</a> to help you.<br /> &nbsp;</li> <li>Regularly check your credit score to ensure that you're not missing any payments and that your credit score is improving.</li> </ul> <p>If your student loan debt is in collections, it's not the end of the world. It happens to thousands of people each year, so you're not alone. However, you'll want to make sure that you follow these steps, rehab your student loan, and find ways to make your student loan payments work in your budget.</p> <p><em>How are you doing with your student loans?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/shannah-game">Shannah Game</a> of <a href="http://www.wisebread.com/student-loan-debt-in-collections-try-these-5-steps">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-15"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-times-student-loan-refinancing-can-save-you-big">4 Times Student Loan Refinancing Can Save You Big</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/avoid-these-5-common-mistakes-while-rebuilding-your-credit">Avoid These 5 Common Mistakes While Rebuilding Your Credit</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/prioritize-these-5-bills-when-youre-short-on-cash">Prioritize These 5 Bills When You&#039;re Short on Cash</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-unique-ways-millennials-are-dealing-with-student-loan-debt">7 Unique Ways Millennials Are Dealing With Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-surprising-ways-to-pay-off-your-student-loans">8 Surprising Ways to Pay Off Your Student Loans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Education & Training collections credit score forbearance past due paying bills rehab student loans Mon, 12 Sep 2016 10:00:12 +0000 Shannah Game 1788933 at http://www.wisebread.com