Debt Settlement vs. Credit Counseling
October 29th, 2007 
If you’re in debt and you’ve done some searching for solutions, you’ve probably heard of these terms before: Debt Settlement and Credit Counseling (Debt Repayment Plan). While these two terms may have similar connotations, there are major differences.
Debt settlement is also referred to as debt negotation. It is the act of hiring a debt settlement company to negotiate with a creditor to achieve a lower pay off balance. This option can seem attractive because you’d have a smaller amount to pay off, but in the long run, you may find that it does more harm than good.
Before you can settle any debt, your account with the creditor(s) must get Charged-Off. In order to reach a Charge-Off status, a debt settlement company may require you to miss up to 6 months of payments. During this time, you may accrue late charges and be subject to harassing phone calls from creditors. Delinquent accounts can be reported for seven years from the date you were first delinquent. This means that a debt settlement will re-start the reporting clock on your credit report.
Once an agreement has been reached by your debt settlement company and the creditor, the delinquent information does not drop off your credit report. Instead, your account is labeled with a “Charged-Off Settled” Or “Paid-Settled”, neither of which is as good as a “Paid in Full” account. After debt settlement, it may be a few years before you see any unsecured credit approvals.
Debt repayment plans are typically offered through credit counseling organizations. In my opinion, this is the better alternative to eliminating your debt. While credit counselors do not negotiate for lower pay off amounts, they can however, help lower your interest rates, eliminate late and over-the-limit fees, and get you set up on an easy repayment plan. Through a debt repayment plan, a credit counseling agency would essentially be making monthly payments on your behalf to all your creditors. The only payment you need to make is one lump sum to the credit counseling service.
As long as you make on-time payments through your credit counselor, you should not incur any late charges or over-the-limit fees. Also, once you’ve completed the repayment plan, your account will be updated as “Paid In Full.” Some creditors may look at credit counseling as being negative on your credit report, but ultimately, it is easier to recover from a debt repayment plan than a debt settlement.
Ways to Save Money on Gas
October 25th, 2007 
As you may have noticed, gas prices have been on rise lately, and with the price of crude oil going up to a record $90 per barrel, it doesn’t help matters at the gas pump.
With that said, here are some tips on ways to save money on gas:
- Apply for a gas credit card such as Chevron or 76. Most gas credit cards offer discounts; typically raning from $0.02 to $0.10 per gallon.
- Apply for a credit card that offers gas rewards. Issuers like Citi and Chase offer various credit cards which give cashback on gas purchases.
- Fill up each time you’re at the gas pump. Trips to the gas station takes time and gas especially if you live far from one.
- Buy an energy efficient vehicle. Vehicles such as hybrids and diesels can help stretch your dollar while putting less stress on our environment.
- Carpool if you have co-workers that live near you.
- Use public transportation systems like Metrolink, the bus, or the subway.
Home Sales Continue to Plunge
October 24th, 2007According to housing market analysts, home sales have continued to drop well through the month of September. This marks 7 consecutive months in the decline of home sales. For the month of September, there was an 8% drop in home sales. This is 19% below the pace from a year ago. To make matters worse, prices of homes have been steadily declining as well.
When should I buy a home? I think it would be smart to buy now or some time within the next year or so. You should buy while home prices and rates are competitively low.
When should I sell my home? I don’t suggest selling your home right now unless you get a decent offer. Otherwise, you may end up losing money. When my condo was up for sale about 6 months ago, home values were higher than now, but the marketplace was already starting to see some saturation. I had visitors every other day, but they weren’t interested in the price tag. How could you blame them? There were new offers springing up every week in the same neighborhood.
I do realize that where you live makes a difference. Certain areas may not be as badly affected as others. You really should do some research on the area you live in before making any decisions to sell or buy.
Blog Action Day - Preserving our Environment
October 15th, 2007 
Today is Blog Action Day. If you’ve never heard of it, it’s an initiative that tries to bring awareness and discussion about important subjects. Today, thousands of bloggers will blog about something that can positively impact the world. Today’s topic is the environment. Since my blog focuses on personal finance, I will give some ideas on how to save money while being environmentally friendly.
- Reduce paper waste, and buy recycled paper.
- Reduce purchases. Remember that many products are manufactured in a factory that uses energy and creates waste.
- Purchase re-useable shopping bags for groceries. I think they cost like $1 at Vons.
- Recycle. There are many things you can recycle, such as plastic bags, junk mail, bottles and cans. The less we throw away, the less trash in our landfills.
- Donate your unused items to charity. Organizations like Goodwill and Salvation Army have locations nationwide where you can drop off your unwanted items. Not only will you be helping a good cause, but these donations are tax-deductible as well.
- Conserve energy. There are many things we can do at the homefront to conserve energy and minimize pollution. Buy energy efficient appliances. Lessen the use of water. Buy compact fluorescent light bulbs. You get the idea.
- Buy low emissions vehicles. You’ll save on gas and also help conserve the environment.
These are just a few simple ideas that came to mind. If you’d like more ideas on how you can contribute to our planet, visit this site: http://www.globalstewards.org/ecotips.htm
Bogus Lawsuits on the Rise
October 4th, 2007I don’t know about you, but I am getting tired of hearing about all these new lawsuits against big and small businesses. It’s not the lawsuits that are bothering me, but the fact that so many of them are bogus.
Is this where our society has come to? People trying to make a quick buck by exploiting our justice system. I know these bogus lawsuits have existed since the beginning, but it seems to be getting out of hand. I think there should be some legal repercussions against people who file these bogus lawsuits.
Here are two that I recently read about:
- A New York woman sues Apple, Inc. for increasing the price of the iPhone. Give me a freakin’ break! Price reductions happen all the time in every industry. Deal with it! (Article)
- A Pennsylvania man is suing Google because he claims that when the term ”Google®.” is flipped upside-down, it somehow spells out his social security number. He goes on to say that Google is comprising the safety of his identity and not doing enough to fight terrorism. Why stop there?…He should sue Google for that crack addiction too. (Article)
I’ll leave it at that.
American Debt Isn’t So Bad!
September 28th, 2007There seems to be a common misconception floating around - the idea that American households have an average credit card debt of $8,000.
Reality tells a different story. The truth is, most Americans owe nothing to credit card companies, and a majority of the households that do, actually owe $2,000 or less. According to the Federal Reserves, only about 1 in 20 American households owe more than $8,000 in credit card debt.
So, where did this “$8,000″ figure come from? This number has some validity to it. It is the average debt of the American household that does possess at least one credit card. According to stats, about 80% of U.S. households has at least one credit card. Of this 80%, most owe $2,000 or less to their credit cards.
These stats still don’t negate the fact that many Americans are still facing huge debt problems. There seems to be some truth to the saying, “The Rich become Richer, while the Poor become Poorer.” In other words, the middle class is shrinking while the rich and poor classes are growing.
Giving Back
September 25th, 2007 
I was flipping through the channels yesterday, and came across CBN. CBN stands for the Christian Broadcasting Network. I watched it for about 30 minutes, and really felt good about the work they were doing all over the world. They are not only spreading hope, but they are also doing God’s work, such as feeding the hungry, giving shelter for the homeless, and providing medical assistance where needed.
By watching the show, I was motivated to give, at least a little bit. So, I went to CBN’s website and signed up for the 700 Club Membership. I signed up for the minimal amount of $20 per month because I am still heavy in debt. However, you can give more if you can afford it.
I encourage all of you to give at least a little bit. Remember that God will bless you for your good heart.
Give here: CBN or World Vision
The Credit Card Balance Transfer Game
September 24th, 2007My definition of this game would be: The act of transferring the balance from a credit card to a bank account with the intent to invest or borrow interest-free money. It is also referred to as “0% credit card arbitrage.”
There’s been some debate on how safe “The Credit Card Balance Transfer Game” is. Some people have called it irresponsible and dangerous. While others have called it smart and profitable. I am somewhat open-minded about this subject because I think it can work if done properly and with discipline. However if you’re an over-spender like me, you may end up piling on more debt.
Here’s how it basically works:
1. Apply for a 0% intro credit card.
2. Transfer the available credit from the credit card to your bank account.
3. Now that you have interest-free money in the bank, you can either invest it or spend it however you want.
4. Before the 0% intro offer expires, pay off your credit card in full, or transfer the balance to a new credit card with 0% intro rate. By doing this this, you’ll avoid paying any interest on the money you used.
“The Credit Card Balance Transfer Game” shouldn’t be played by everyone. It generally works best for disciplined people with good credit and substansial liquid assets.
Remember that banks aren’t nice. They exist to make money. Do they want to give you a 0% rate? No, it is their way of attracting new customers. To avoid fees, make sure to pay your bills on-time and don’t go over the credit limit. Defaulting on your credit card, will mostlikely, terminate the promotional intro rate.
The Benefit of having Bad Credit?
September 21st, 2007A couple of days ago, I went to a comedy club, and a comedian said something that was quite funny, yet also very true. He said he recently filed bankruptcy and had terrible credit, but he was glad because he didn’t have to worry about identity theft.
That cracked me up! Even if a criminal had possession of your private information, they still wouldn’t be able to qualify for any credit in your name. They would end up with nothing but rejection letters.
He went on to joke that the identity thief would have a better chance of improving his credit than destroying it.
GuessNow.com - Make Predictions and Get Paid for it
August 10th, 2007 
I recently came across a new site which may interest you. It’s called GuessNow.com. To sum it up in my own words: It’s a free entertainment site where members can earn cash from making correct predictions about real future events.
For example, you may see a question like “Which celebrity will spend the most time in jail?” And, the choices may be “Paris Hilton,” “Nicole Richie,” and “Jessica Elba.” Once the truth unfolds, members who guessed the correct answer wins the designated points for that question. The more difficult a question is, the more points are assigned.
The process is quite simple. Sign up for free membership, pick a category, and start answering questions. They have quite a few categories to choose from, and a ton of questions in each category. Every correct guess about future events earns you points ranging from 10 to 130+. Some questions give you points instantly. As you accumulate points, you can redeem them for cash.
By no means will you become rich from this site, but again, it’s more for the entertainment value. The front page is pretty enticing. It shows a picture of a member holding a check for $980.88!
If you have some free time, go check out their site: GuessNow.com
