Christian Credit Counselors Weblog

Mortgage payment got you down?  Has your payment recently increased due to an adjustable-rate or maybe mortgage interest rates are lower now than when you initially took out your loan.  Whatever the reason, it’s well worth your time and effort to look into how refinancing could possibly benefit you and let you breathe easier in terms of your budget.

Consider these four reasons to refinance:

1.      Lower Interest Rate—Obtaining a lower interest rate is one of the main reasons to refinance.  A lower interest rate can make a huge difference in your monthly payment as well as allow you to save money on financing fees over time.

2.      Change Your Loan Program—Homeowners who started with an adjustable rate mortgage may want to consider changing to a fixed rate mortgage for more security over time.  The adjustable rate may have been the best deal at the time, but it may be less appealing now because of the economy.  If you’ve been watching your rate go up and your payments go up, you may have more peace of mind with a fixed rate.

3.      Build Equity Faster—If you can handle a higher payment, you may want to consider a 15 or 20-year loan.  You can build equity faster as well as save big money on financing fees.

4.      Better Credit Score—Many consumers are now much more aware of that mysterious number which industry professionals guarded so dearly years ago.  Through education, consumers know what it takes to improve their score, thus, positively influencing their own financial future.  If your credit score has improved, you may be in a position to take advantage of it and translate it into a lower payment.

About Christian Credit Counselors:

Christian Credit Counselors is a national, non-profit organization dedicated to helping consumers achieve financial wellness through counseling and education. Established in 1994, Christian Credit Counselors has provided Christian credit counseling to over two million individuals nationwide. Christian Credit Counselors is one of the top members of the American Association of Debt Management Organizations (AADMO), Christian Credit Counselors provides personalized and confidential consultations in person, by phone or online. Visit Christian Credit Counselors or call 800-557-1985.

Click Here to Schedule an Online Consultation with Christian Credit Counselors for Christian Credit Counseling

It happens to everyone—you’re sitting down for dinner with your family, the telephone rings and you reluctantly answer it only to hear some telemarketer ask you how old your windows are, or worse, a pre-recorded message rambles on.  These unwanted and uninvited calls can be so annoying, as well as confusing to elderly people who may not always understand what they could be agreeing to over the phone.  The bottom line is that the telemarketer’s goal is to get you to buy something that you probably don’t need.

As you may recall, in 2002, the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) teamed up to create the National Do-Not-Call Registry which allowed anyone with a phone number or wireless number to register in order to reduce the number of unwanted telemarketing calls.  The catch is, it’s only good for five years, so if you registered in November of 2002 when it first became available, it’s time to re-register or your phone number will be fair game again.

How to Register or Re-Register

Consumers can register either by telephone or on-line, free of charge.  Call 1-888-382-1222 or for TTY, call 1866-290-4236.  You need to call from the phone number you intend to register.  To register on-line, go to www.donotcall.gov.  Remember, if you registered in 2002, your number will be removed from the list in November of 2007, so re-register!  For more detailed information, go to the Do Not Call website, or to file a complaint go to www.fcc.gov.

About Christian Credit Counselors:

Christian Credit Counselors is a national, non-profit organization dedicated to helping consumers achieve financial wellness through counseling and education. Established in 1994, Christian Credit Counselors has provided Christian credit counseling to over two million individuals nationwide. Christian Credit Counselors is one of the top members of the American Association of Debt Management Organizations (AADMO), Christian Credit Counselors provides personalized and confidential consultations in person, by phone or online. Visit Christian Credit Counselors or call 800-557-1985.

Click Here to Schedule an Online Consultation with Christian Credit Counselors for Christian Credit Counseling

Credit unions are becoming more and more popular for people seeking a place to stash their cash.  Although you have to qualify to join a credit union, their accessibility is growing.  They’re typically based around a specific market—employer or church, for example.  But today, many have extended their membership to include residents of a specific city or town plus family members.

One of the most significant advantages credit unions have over traditional banks is that, historically, they can offer better rates and fewer fees because of their not-for-profit status.   They don’t need to inflate the rates to satisfy investors.   It includes everything from CD’s and money market accounts to credit cards and loans.  As you may already know, this translates into more money in your pocket!

Take a quick look at some of the major differences:

Some of the pitfalls of “banking” at a credit union include:  limited ATM networks and possible smaller range of products.  For example, not all credit unions offer on-line bill pay.  As with any financial decision, it’s up to the consumer to weigh the pros and cons to make the best decision based on personal circumstances.

About Christian Credit Counselors:

Christian Credit Counselors is a national, non-profit organization dedicated to helping consumers achieve financial wellness through counseling and education. Established in 1994, Christian Credit Counselors has provided Christian credit counseling to over two million individuals nationwide. Christian Credit Counselors is one of the top members of the American Association of Debt Management Organizations (AADMO), Christian Credit Counselors provides personalized and confidential consultations in person, by phone or online. Visit Christian Credit Counselors or call 800-557-1985.

Click Here to Schedule an Online Consultation with Christian Credit Counselors for Christian Credit Counseling

Debt is a real stressful reality for many American consumers.  No matter the reasons for your debt—unemployment, illness, or overspending—it can make you desperate.  Unfortunately, there are companies out there that prey on this desperation and try to lead you down the wrong path under the guise of providing a service to help people.  As you embark on your journey to become debt free, be aware of advertisements offering “quick fixes” or “easy debt relief.”  Although these ads may be tempting, they rarely disclose the type of debt relief they’re offering—bankruptcy.  Bankruptcy is only one option to deal with certain financial problems, and it is always considered a last resort because of the long-term negative consequences it will have on your credit.

Buyer Beware

The Federal Trade Commission urges consumers to be aware of misleading advertisements.  Remember, if it sounds too good to be true, it probably is.  When you see this type of language, a red flag should go up:

“Stop credit harassment, foreclosures, repossessions, and tax levies”

“Keep your property”

“Wipe out your debts! Consolidate your bills!  How? By using the protection and assistance provided by federal law.  For once, let the law work for you!”

If you’re having trouble with your bills, it’s wiser to do the following before even thinking about bankruptcy:

·        Call your creditors.  They will probably rather work out a modified payment plan than not get their money at all.

·        Consult a reputable, non-profit credit counseling agency.  They can negotiate a modified payment plan for you, yet charge little or no money for their services.

For more information, visit the Federal Trade Commission website at www.ftc.org.  The FTC works to prevent fraudulent, deceptive and unfair business practices.

About Christian Credit Counselors:

Christian Credit Counselors is a national, non-profit organization dedicated to helping consumers achieve financial wellness through counseling and education. Established in 1994, Christian Credit Counselors has provided Christian credit counseling to over two million individuals nationwide. Christian Credit Counselors is one of the top members of the American Association of Debt Management Organizations (AADMO), Christian Credit Counselors provides personalized and confidential consultations in person, by phone or online. Visit Christian Credit Counselors or call 800-557-1985.

Click Here to Schedule an Online Consultation with Christian Credit Counselors for Christian Credit Counseling

If you’re making plans to begin or expand your family, you’ve got a lot to do. Of course, expecting a baby is one of life’s greatest joys, but it can also bring on big financial changes.  Unfortunately, not enough parents financially prepare before the baby comes and then end up struggling with their budget. Being prepared can make all the difference.

The cost of raising a child to age 17 is on the rise. Everything from food, clothing, housing, and childcare, to medical care, insurance, and education have to be considered. Without a doubt, having a baby will increase your monthly expenses. To head-off a financial struggle, it’s well worth the time to plan ahead. Try focusing on these eight ideas before your baby arrives:

1.      Get to know your maternity leave options:  If you’re working, find out details about your company’s maternity leave benefits.  Many offer six weeks leave plus options to add short term disability or paid leave. Company benefits will enable you to minimize the impact on your income.

2.      Research childcare choices:  This being a very emotional decision, many moms plan on staying home for a certain period of time and then seek child care services.  Whether it’s with a family member, home-based childcare, or day care center, being well prepared can help you anticipate your budget as well as eliminate a lot of stress.  It’s a good idea to visit some day care centers and network with other parents.  Remember, many childcare centers have long waiting lists.

3.      Get ready for the new addition:  If it’s your first baby, you’ll probably have a baby shower, but you’ll still need to purchase some essentials—crib, stroller, car seat, rocking chair, and other big-ticket items.  It can be very worth your while and economical to check out garage sales for slightly used baby items that you may only need for a short period of time.

4.      Check into your medical benefits:  It’s a good idea to review your healthcare insurance for adding a child.  If you’re expecting your first child, there may be a change in your premium or co-pay for adding a dependent.  If both parents have insurance, compare costs and benefits to determine which one offers the best program for a family.

5.      Look into life insurance:  Once you have children, the desire to secure their future needs is on every parent’s mind.  Term life is the least expensive, but you’ll need to find out what is best for your family.  Look into any employee benefits that may be available.

6.      Get a will, or revise an existing one:  Although you may not like this subject, it is extremely important to have your wishes known and implemented in a legal fashion without being tied up in court.  You will also be able to name a guardian for your minor children.  While there are do-it-yourself kits, it’s better to hire an attorney so your specific needs can be addressed and conforms to the laws in your state.

7.      Review your monthly budget:  Spending more on baby is a given, but don’t panic!  Money in other areas of your budget will probably be freed up, such as going out to dinner, movies, and other entertainment.  You’ll probably be spending more time at home.

8.      Start saving!  Save your bonuses and vacation pay, or increase the amount you typically save.  There will definitely be some unexpected expenses popping up when the baby comes.  Also, look into college savings plans—it’s best to start saving early.

Remember, don’t wait until the baby comes, prepare ahead of time. The key is to know how your money is being spent and how that will change when your baby arrives.

About Christian Credit Counselors:

Christian Credit Counselors is a national, non-profit organization dedicated to helping consumers achieve financial wellness through counseling and education. Established in 1994, Christian Credit Counselors has provided Christian credit counseling to over two million individuals nationwide. Christian Credit Counselors is one of the top members of the American Association of Debt Management Organizations (AADMO), Christian Credit Counselors provides personalized and confidential consultations in person, by phone or online. Visit Christian Credit Counselors or call 800-557-1985.

Click Here to Schedule an Online Consultation with Christian Credit Counselors for Christian Credit Counseling

A lot of people avoid budgeting at all costs. It does take commitment, persistence, and organization. Budget can be overwhelming for a lot of people so approaching it in phases can take the frustration out of it. Begin with one aspect, such as figuring out what you spend on all the little everyday snacks and extra things you pick up on the way to work or school. Practically everyone has heard of what is now referred to as the “late factor.”

Categories:

• Coffee/Tea                                         $ ____________
• Soda                                                   $ ____________
• Bottled Water                                    $ ____________
• Candy                                                 $ ____________
• Gum                                                    $ ____________
• Vending Machine Snacks                $ ____________
• Other Snacks                                     $ ____________
• Cigarettes                                          $ ____________
• Magazines                                         $ ____________
• Newspapers                                      $ ____________
• Cell Phone; long distance                $ ____________
• Dining Out – dinner                           $ ____________
• Dining Out – lunch                             $ ____________
• Other _______________                $ ____________
• Other _______________                $ ____________

TOTAL           $ ____________

You may have already calculated in your head how much you spend on a weekly basis on fancy coffees or teas at the drive-thru. However, this type of drain on your cash encompasses much more than just a cup of coffee. Here is a simple chart to consider as you go about your life, job, and activities to really pin down what you spend on all the extras that most everyone can do without. 

To come up with an accurate total, it’s necessary to track your spending for 2-3 weeks. 0The easiest way is to keep an envelop in your purse to collect receipts, or put them in your wallet.  If necessary, write notes on them so you can remember what they’re for.  Also, be sure to write down things that you don’t have a receipt for, such as vending machine snacks.  At the end of the day or week (whatever you choose), go through the receipts and notes to fill in the amounts and calculate the total.

Now that you have your total, you can clearly see how much you could actually be using to pay down debt or save.  Whether it’s $10, $20, or even $30 per week, it adds up.

About Christian Credit Counselors:

Christian Credit Counselors is a national, non-profit organization dedicated to helping consumers achieve financial wellness through counseling and education. Established in 1994, Christian Credit Counselors has provided Christian credit counseling to over two million individuals nationwide. Christian Credit Counselors is one of the top members of the American Association of Debt Management Organizations (AADMO), Christian Credit Counselors provides personalized and confidential consultations in person, by phone or online. Visit Christian Credit Counselors or call 800-557-1985.

Click Here to Schedule an Online Consultation with Christian Credit Counselors for Christian Credit Counseling

The days when banks lent money to people they were confident would be able to pay them back are gone.  In particular, secured loans, in the form of credit cards, are widely available, and even targeted to young people, students, the jobless, the elderly, and those on fixed incomes.  Banks and credit card companies are willing to take the risk on just about anyone who breathes, all in the hopes of boosting their profits by getting more of your money and getting you into debt.  Once you’ve signed a contract, the tricks begin—all the legal loopholes their financial experts designed, found in the fine print on the application, come into play. 

While we’re all familiar with the obvious fees such as APR, annual fee, late fee, over the limit charges, and balance transfer fees, there are also less common fees consumers need to be aware of that go above and beyond reasonable business practices.  Some credit card companies will go the distance to squeeze the most vulnerable customers.

Excessive Fees

The best way to illustrate this is with a real world example as presented by Alys Cohen to the Senate Subcommittee on Investigations regarding credit card practices, on March 7, 2007.  A sailor opened a credit card account with a credit limit of $250 and a 9.9% APR.  Immediately he was charged a program fee of $95 and an account set-up fee of $29.  The following day he was charged a participation fee of $6 and then three days later, an annual fee of $48.  His first bill was for $178 and he hadn’t even purchased anything!  The story doesn’t end here.  A week later, he made four purchases, totaling $84.95 and then he was charged another participation fee of $6 for the next billing cycle.  With all the fees, he was over the limit, therefore, he was charged $25, plus a late fee of $25.  He now had a grand total of $320.81, which included a finance charge of $1.69.  The next billing cycle, the sailor did not make any new purchases, but with interest, the participation fee, over the limit fee, and a late fee again, his balance was $379.45.  You can see how quickly the fees can mount, and how quickly the debt grows.  This is not an isolated case; thousands of credit card holders are subjected to excessive fee structures that they probably didn’t know about when they signed on.

What you can do

Clearly, it’s best to avoid any card with mysterious fees.  There’s no way around it—consumers need to read the fine print.  If you don’t understand it, call the issuer and ask.  If you already have a card with a growing balance because of an excessive fee schedule, stop using the card!  Set up automatic payments to ensure it gets paid on time every month.  Also, track your account online if possible.  At the same time, it doesn’t hurt to ask them to waive the fees, they just might comply.

About Christian Credit Counselors:

Christian Credit Counselors is a national, non-profit organization dedicated to helping consumers achieve financial wellness through counseling and education. Established in 1994, Christian Credit Counselors has provided Christian credit counseling to over two million individuals nationwide. Christian Credit Counselors is one of the top members of the American Association of Debt Management Organizations (AADMO), Christian Credit Counselors provides personalized and confidential consultations in person, by phone or online. Visit Christian Credit Counselors or call 800-557-1985.

Click Here to Schedule an Online Consultation with Christian Credit Counselors for Christian Credit Counseling

We all expect the companies we deal with to be professional, reasonably priced, and pleasant.  It’s not too much to ask for when you think about it.  However, when it comes to the credit card industry, we have come to accept the mediocre to actually substandard business practices.  Some of us even expect it!  You may believe the higher interest rates and fees are your fault because your credit history and credit score aren’t perfect.  While reasonable interest rates, certain fees, and other policies may be justifiable—after all, the credit companies are the ones taking on the financial risk—many are excessive and go way beyond what most consumers would call fair business practices.  One good example is two-cycle billing.

Two-Cycle Billing

Two-cycle billing is a method used by the credit card industry to make more profits, via interest charges.  Many card issuers use the standard one-month billing cycle to calculate interest charges, but some actually calculate the interest on the previous two months’ balances.  Essentially, it wipes out the grace period for new purchases for customers who carry a balance.  Unless you pay off your balance two months in a row, the two-cycle billing method will include the previous cycle’s average balance for calculating the finance charges, even if you paid off that cycle’s balance in full.  It can be confusing, but the bottom line is that you end up paying more because they use the average daily balance over the last two billing periods, instead of one.

What you can do

Being knowledgeable about this is the first step in order to combat it.  When considering a new credit card, read the terms and conditions thoroughly, especially the section on how interest rates are calculated so you will know whether they employ two-cycle billing or one.  Considering how competitive the credit card companies are and how saturated the market is with offers, it pays to shop around for a better card.

About Christian Credit Counselors:

Christian Credit Counselors is a national, non-profit organization dedicated to helping consumers achieve financial wellness through counseling and education. Established in 1994, Christian Credit Counselors has provided Christian credit counseling to over two million individuals nationwide. Christian Credit Counselors is one of the top members of the American Association of Debt Management Organizations (AADMO), Christian Credit Counselors provides personalized and confidential consultations in person, by phone or online. Visit Christian Credit Counselors or call 800-557-1985.

Click Here to Schedule an Online Consultation with Christian Credit Counselors for Christian Credit Counseling

Feel like your credit card company is ripping you off—or, to put it more precisely, trying to get you into debt?  It’s probably more than just a feeling.  Trust your instinct.  Credit card companies are in the business of making money, your money.  They’re not happy with customers who pay off their balance each month because they don’t make any profits.  They even have a name for customers like that—“freeloaders.”  Employees are paid to develop ways to boost their profits at your expense, and it’s all legal.  One trick they use to get more of your money is to increase your annual percentage rate (APR), and they hope you won’t notice.

Universal Default Penalties

“… if the card holder is reported as delinquent on an account with any other creditor, we may increase the APR’s on your account up to the maximum Default APR.”  This is referred to as the universal default clause and supplies a loophole for the issuer to raise your APR based on delinquencies on other accounts.  Credit card issuers can and will periodically review your credit report, hoping to find any excuse to raise your APR.  The rationale is that they assume if you’re making late payments on other accounts, you pose a higher risk for all your accounts. 

According to Consumer Action, a non-profit organization dedicated to advancing consumer rights, major issuers deny their use of a universal default policy.  However, in their 2007 Credit Card Survey, Consumer Action surveyed twenty banks and found that more than half of the customer service representatives admitted to raising cardholder APR’s based on information in their credit reports. The inconsistency may be based on how “universal default” is defined.  They’re just splitting hairs to mislead consumers.  It is an unfair policy because credit reporting agencies aren’t perfect and they do make mistakes—credit reports can contain errors.

What you can do

First of all, avoid a card with a universal default clause if at all possible.  Read over the terms and conditions of your contract so you know if it’s an option for the issuer.  Know that most credit card issuers reserve the right to change the terms of the credit agreement at any time, for any reason.  One black mark could cause you to pay hundreds in interest over time.  Keep these points in mind:

·        Be vigilant about your credit report and score—check it every year for accuracy

·        Be selective when applying for credit

·        Pay your bills on time, every time

·        Don’t max out your credit cards

·        Be aware of your APR’s

About Christian Credit Counselors:

Christian Credit Counselors is a national, non-profit organization dedicated to helping consumers achieve financial wellness through counseling and education. Established in 1994, Christian Credit Counselors has provided Christian credit counseling to over two million individuals nationwide. Christian Credit Counselors is one of the top members of the American Association of Debt Management Organizations (AADMO), Christian Credit Counselors provides personalized and confidential consultations in person, by phone or online. Visit Christian Credit Counselors or call 800-557-1985.

Click Here to Schedule an Online Consultation with Christian Credit Counselors for Christian Credit Counseling

Credit card companies are notorious for having all sorts of sneaky tricks so they can make more money off of you.  It can all be so complicated and confusing with all the legal jargon they use to “inform” their customers and potential customers.  But if you’re young or unfamiliar with how the terms of use work, it’s never been a better time to find out because it can cost you a bundle.  One good, old-fashioned marketing technique used in many industries is widely used by credit card issuers.

Bait and Switch

Essentially, this trick is used to lure in more customers by offering an “attractive” deal.  Once they have your interest, and hopefully, a signature, you end up with a different product than what you thought you were getting, and it’s all legal! Here’s an example:  You receive in the mail a fabulous, pre-approved credit card offer—no annual fee with and an incredibly low interest rate.  Plus, it has some nice rewards. Sounds like one of those premium cards and you can have it! You figure, “what’s the harm?” The card you’re using now has a really high interest rate and it’s time to dump it.  So you check off the boxes on the acceptance application and send it off.  In no time at all, you receive your new card and stick it in your wallet. A month later and several charges later, the statement arrives in the mail, and much to your surprise, you notice an annual fee of $40. Looking closer at the statement, you pick up on the annual percentage rate that is much higher than what you thought you were getting.

 After the initial anger wears off, you call the credit card company, only to find out that they determined you qualified for a different card than what was originally advertised. They also pointed out that this information was all described in the pre-approved application (in the fine print, of course!).

What you can do

There’s no way around it—consumers have to read the terms carefully.  It may be boring and hard to understand, but it can save you a lot of money.  The fine print will always work to the lender’s advantage.   For customers they deem to be a higher risk, they can issue a more costly card with a higher annual percentage rate.  If it isn’t what you want, don’t activate the card—cancel it instead.

About Christian Credit Counselors:

Christian Credit Counselors is a national, non-profit organization dedicated to helping consumers achieve financial wellness through counseling and education. Established in 1994, Christian Credit Counselors has provided Christian credit counseling to over two million individuals nationwide. Christian Credit Counselors is one of the top members of the American Association of Debt Management Organizations (AADMO), Christian Credit Counselors provides personalized and confidential consultations in person, by phone or online. Visit Christian Credit Counselors or call 800-557-1985.

Click Here to Schedule an Online Consultation with Christian Credit Counselors for Christian Credit Counseling