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Credit Card Debt Reduction

February 19th, 2010

Debt from revolving credit (which includes credit cards) fell by 13 percent last year according to a survey by the Federal Reserve, but this credit card debt reduction could indicate a negative trend.

First of all, credit card debt reduction is an indicator that banks have tighter lending standards. Revolving debt is decreasing because credit cards for people with bad credit are harder and harder to find. Unless you have a clean credit record and a credit score of at least 720, banks might not approve you for new credit cards.

The drop in credit card debt reduction might point to something else as well: Consumers are opting to open fewer credit cards.

Though reducing personal debt is always a good thing, refusing to apply for credit can harm a person’s ability to navigate through life. If you do not have a credit card, how will you reserve a hotel room? Qualify for a cellular phone plan?

Perhaps more importantly, how will you build your credit score? Responsible use of three to five credit cards, each with low balance-to-limit ratio, is one of the best ways to build good credit. Sure, credit card debt reduction is good, but by all means, you should be willing to open new credit card accounts if you do not have at least three!

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How to Compare Good Faith Estimates

February 17th, 2010

If you are a first-time homebuyer, you may be wondering how to compare Good Faith Estimates, those documents a lender provides disclosing the interest rate, the monthly payments, and settlement and closing costs. Understanding this, will help you negotiate the best mortgage deal.

First of all, remember, I’ve been in the mortgage business for over twelve years, so I understand how difficult they can be. The bottom line is that comparing Good Faith Estimates has always been a bit difficult. For example, how can someone who does not understand mortgage terms dissect ten pages of jargon? What about all the confusing fees?

New federal rules that took effect at the beginning of January “supposedly” will make it easier to read these Good Faith Estimates… by standardizing them and simplifying the format. We’ll see. They say that the new rules will help “disclose an adjusted origination charge,” and include “all the fees the lender controls as well as any points paid to lower the interest rate.”

The biggest change is that lenders will not be allowed to increase the origination fee from what is disclosed in the Good Faith Estimate. Other fees, like title services and recording charges, cannot increase by more than 10 percent from what was disclosed. Additionally, the new form requires that borrowers be informed that they do not have to accept the title insurer suggested by their lender.

While this may sound good originally, the problem is that this will cost more for the lender and in turn their “processing fees” will go up. People always ask about the junk fees, well, many times, the junk fees are dictated by policies that don’t really serve the client base. My opinion is that this is one of those policies.

Some experts estimate that these changes will help save borrowers an average of $700 on their loan costs. I don’t believe that for one bit. At a minimum, the new rules are going to create more questions about how to compare Good Faith Estimates.

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Tips for Saving Money on Vacation

February 1st, 2010

In these scarce times, you might find yourself looking for Tips for Saving Money on Vacation. A recent article by Michelle Higgins in the New York Times offers great advice for keeping travel expenses to a minimum.

One of my favorite ideas suggested by Higgins is to use Twitter to “follow” the travel companies or travel experts that you like to use. Large Companies, like American Airlines, United Airlines, etc. etc, are beginning to tweet their best offers, deals and advice, and the first people that respond can take advantage of those rates!

Higgins also suggests websites ITASoftware.com and Kayak.com for finding the least expensive travel dates. She also reminds readers to check for nearby airports that might be less expensive than your first choice and to fly on off-peak days. And, try to use online travel sites like Yapta.com, Travelocity.com or Orbitz.com that automatically refund the difference if your fare or reservation falls in price after you buy it.

For these and other tips to learn Tips for Saving Money on Vacation, read Higgins’ article in the New York Times in full.

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Negotiate Credit Card Debt for Pennies on the Dollar!

January 29th, 2010

Last week, I posted information about a “Virtual Roundtable” I am hosting on How to Negotiate With Credit Card Companies. From all the responses I received, there was one in particular I felt needed to be shared with you immediately!

It is about a person who was able to negotiate $150,000 in credit card debt, for less than 25%! I recorded the entire call and will be posting it next week.

This information is GOLD!!!! Literally, amazing information - from the lies they told him to the actual results.

All credit card companies will be named!

Stay tuned!!

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What Should I Do If I Receive a Wrong Medical Bill?

January 29th, 2010

My wife and I have three children under the age of four, which means our mailbox is flooded with medical bills and sometimes, wrong medical bills. Obviously, the last thing you want to do is pay these bills, and, at the same time, if you don’t, your credit score will be severely impacted.

Here are some things I learned about dealing with wrong medical bills:

1. Call the provider and politely state that you do not recall the services. Perhaps you simply forgot about the doctor’s appointment. Or it may be an honest billing mistake. Give the provider time to verify the charges.

2. If the provider fails to verify the charges, challenge the charges in writing. Politely but firmly state that you do not believe you ever incurred the charges and note that the provider failed to verify the charges when you gave it an opportunity. Send the letter by certified mail and keep a copy for your records.

3. If this fails, you have a decision to make. You can pay the “wrong medical bill to preserve your credit score, and then investigate whether to bring a small claims action for return of the money. Or you can wait for the charge to appear on your credit report, and then use the credit-reporting agency’s method for dispute resolution. The agency will require the provider to prove the charges. If it cannot, the information will be removed from your report. However, if the charges are proved to the credit agency’s satisfaction, the negative information will remain on your report for up to seven years.

The moral is this: don’t ignore these wrong medical bills, even if you don’t remember getting those services.

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Will My Wages Be Garnished?

January 28th, 2010

During this time of economic turmoil debtors in distress find themselves wondering: Will my wages be garnished? In deciding how to handle mounting debt, consumers should know that it is a very possible reality.

Garnishment occurs after a creditor or debt collector has obtained a judgment against you in court for the money you owe. To make sure that you pay that judgment, the court orders your employer to pay a certain portion of your wages (sometimes as much as 25 percent) directly to your creditor every payday until your debt is paid in full. For people facing financial hardship, this can turn a bad situation into an even worse nightmare.

If your employer does not already know about your embarrassing debt problems, he will once garnishment is ordered. And making matters worse, most people cannot afford to have 25 percent of their wages garnished.

To stop wage garnishment from happening to you, do not ignore phone calls or notices you receive in the mail. Instead be proactive about dealing with the problem before you are subject to court garnishment orders. To do this, you will need to call the creditor or collector and try to work out a payment plan. Take creditor threats to sue you seriously; failure do so can result in not wondering, “Will my Wages be Garnished,” but actually experiencing it!

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Do Gift Cards Expire?

January 21st, 2010

If you are still carrying around gift cards you received this Christmas, you may be wondering, Do gift cards expire? It varies from state to state, but in many states, they can and will eventually expire. For that and other reasons, it is best to use quickly.

Unfortunately, as much as $5 billion in gift card balances will go unspent this year, potentially resulting in a windfall to the merchants who sell the cards. Although the rules vary, depending on where you live and what type of card you have, the safest course is to use the balance of the gift card or gift certificate within a year from its issuance.

Now is a particularly good time to take advantage. Many retailers have slashed prices in the wake of a Christmas season, and a struggling economy might mean even more motivation to move inventory. If you don’t enjoy shopping, check to see if you can use your gift card online.

If you really cannot see yourself using that your card, within a year, check out resale sites like plasticjungle.com, giftcardrescue.com, or swapagift.com. Plasticjungle.com, for example, allows you to sell your cards with a minimum value of $25 for up to 85 percent of the balance, exchange them for credits at other websites, like Amazon.com, or donate them to charity.

So do not forget about that gift card eating a hole in your wallet. Take advantage of sales, shop online, or exchange it for cash because yes, gift cards do expire in some states.

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Fidelity 529 Saving Plan Fees

January 8th, 2010

Philip Tirone, Fidelity 529 Saving Plan, 529 Fees, Credit

If you look at the small print, 529 Saving Plan Fees are not cheap, however, Fidelity just announced that they are cutting their 529 Saving Plan Fees by 50% in certain states. Yes, 50%!

These state include, New Hampshire, California, Massachusetts, Delaware, and Arizona. Vanguard and Upromise, which manage plans in New York and Colorado, have also cut fees, as has TIAA-CREF, which manages Vermont plan.

Keep in mind, over the long term, it’s not about investing at the right time, it’s about “investing consistently.”

If you have children, talk to your financial advisor about Fidelity’s 529 Saving Plan Fees, and see if this, or another 529 Saving Plan could be the fit for you and your family. Let’s make 2010, our best year ever!

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Department Store Credit Cards That Are Easy to Get

January 7th, 2010

Department store credit cards are typically easy to get as there is no income verification. However, there is a federal proposal requiring department stores to get the income information before a credit card could be awarded.

Now, this could help people who abuse the credit system, however this is a nightmare for the rest of America who use department store credit cards strategically. Practically, this law makes absolutely no sense – who carries around their paycheck stub or W-2 on a daily basis?

I’ve always maintained that department store credit cards are not good for a person’s finances or their credit score. However, there are times when a responsible person buying a big ticket item can save 10-20% by applying for a department store credit card - and that can add up to a lot of money.

Who knows if this new law will pass and there will no longer be department store credit cards that are easy to get, but once again, I sometimes wonder how we have elected the politicians that make absolutely no sense in their actions.

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Federal Government Salary Increase for 2010

January 6th, 2010

Philip Tirone, Federal Government Salary Increase 2010, Credit The Federal Government Salary Increase for 2010 is in, and I’m speechless…. What world does the government live in? Surely not ours!!!

Let me start with this statistic…. The average federal employee has a salary of $71,206. The average private sector employee makes nearly $31K less at $40,331. Does this sound fair to you?

According to USA Today, the number of federal workers whose salaries equaled or exceeded $100,000 jumped by 5 percent during the recession. A five percent jump! So, while the rest of the world is cutting back, the government is giving themselves salary increases.

“When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000,” USA Today reported.

The hypocrisy of this Federal Government Salary Increase for 2010, comes after 7.3 million people have lost their jobs! How about showing a little restraint? Does this make anyone else frustrated? If so, tell me about it below.

www.NoToSacramento.org

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Credit Scoring Expert speaks candidly about his personal growth and asks respected writers to share content to help others improve their life.

Personal Growth Blog for Philip Tirone – Credit Scoring Expert and Champion for the Underdog

Posts Tagged ‘Philip Tirone’

Credit Card Debt Reduction

How to Compare Good Faith Estimates

Tips for Saving Money on Vacation

Negotiate Credit Card Debt for Pennies on the Dollar!

What Should I Do If I Receive a Wrong Medical Bill?

Will My Wages Be Garnished?

Do Gift Cards Expire?

Fidelity 529 Saving Plan Fees

Department Store Credit Cards That Are Easy to Get

Federal Government Salary Increase for 2010

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