Personal Debt Statistics

More and more Americans are attempting to reign in their debt levels. This is what a recession will do. The fact of the matter is simple: tough economic times show many people just how important their money is. So instead of continuing to spend, they began to pay off debt. In 2007, personal debt increased at a rate of 10 percent. For 2009 this number has fallen off dramatically and is now at three percent. It will be interesting to see if this percentage declines even further over the next couple of years.

Here are some interesting USA personal debt level statistics:

Approximately 43 percent of Americans spend more money than they earn in a year.

The average United States household carries roughly $8,000 in credit card debt.

In the past decade the number of personal bankruptcies has more than doubled. Often bankruptcy is used as a financial tool (almost like a credit cards) by American consumers to handle their debt.

In October 2003, only six years ago, Americans owed a total of $1.9773 trillion. This number has risen significantly since that date. Believe it or not, this number does not include mortgage debt.

The number of Americans facing tax debt is increasing. The reason for this? When the tax bill comes due they do not have the money to pay it, along with other expenses. This forces them to put the IRS on the backburner. The interest charged by the IRS causes this type of debt to increase exponentially over time.

Who is profiting from America’s debt habit? A simple comparison of the rise in consumer debt with the rise in credit card profits is very interesting. Here are some statistics from 2008:

Major USA Credit Card Issuers in 2008:

Chase: $780 million in profits

Bank of America: $520 million in profits

Citi: $530 million overall loss

American Express: $850 million in profits

Capital One: $1 billion in profits

Discover: $710 million in profits

Wells Fargo: $990 million in profits

HSBC: $520 million in profits

US Bank: $1.07 billion in profits

Here are five ways to keep debt collectors from calling or contacting you in any way:

Call and talk to them first. Most people run from debt collectors instead of taking the initiative and calling them from the get-go. Believe it or not, when you show that you are willing to cooperate, it will stop debt collectors from tailing you.

Offer a settlement. One of the best things you can do to get rid of debt collectors is offer a settlement. Not only will this get rid of them for good, but you may be able to pay off your debt for less than what you actually owe. Before you ever pay in full, you should at least think about making a settlement offer.

Don’t let it get this far. Okay, this may not be a fair point, but it is one that has to be made. If you don’t want to keep debt collectors away you should avoid getting behind in your bills. In other words, don’t give debt collectors a reason to call and you will never have to worry about them giving you a hard time. This may be too late right now, but you will have another chance in the future.

Write a letter telling the debt collector to stop. When you do this, they have to legally stop contacting you. The only thing they are allowed to do is send one last letter stating that there will be no further contact. They can also send a notice stating that they or the original creditor is planning on taking further action.

Do you have the money to pay your debt in full?  In this case, you may want to pay your debt in full and say goodbye to the collectors forever. This may not be ideal for some people, but those who know they owe the debt and have the money to pay should consider doing so.

If you are currently dealing with debt collectors you know how difficult it can be. The five tips above are great ways to keep debt collectors out of your life.

How to Use Pre-Paid Credit Cards

A prepaid credit card is not the same as a more traditional credit card. There are details that you need to be aware of such as how to setup, what a prepaid card can be used for, how to use it, and much more. Just like anything else to do with your finances, it is better to get some basic information before you make a final decision.

Here are a few tips that will show you how to use a prepaid credit card:

Setting up a prepaid credit card is simple. You will deposit money into your credit card. However much you deposit will establish your spending limit at that time. If you think about it, a prepaid credit card is more or less a debit card that is not attached to a particular bank account. Instead, you load it with the proper amount of money and when it is gone it is gone. Of course, you don’t have to get rid of your prepaid credit card after the balance hits zero. You can always add more money so you can continue to use it.

Fees do exist. Some people forget that setting up a prepaid credit card can cost a little bit of money. To start, there will be a setup fee which usually does not exceed $10. Find out what the set up fees will be before you begin to setup your card.

But how do I use a prepaid credit card? This is something that many people find themselves asking. Generally speaking, you don’t have to do anything special to use one of these cards. It is used just like a regular credit card. You can use a prepaid card for any kind of useful purchase, such as everything from daily purchases to reserving hotel rooms and rental cars.

Bad credit does not matter. Some people never attempt to setup a prepaid credit card because they feel that their bad credit will hold them back. This is not the case because you are putting money on the card as opposed to relying on credit from the credit card company. This means that you are essentially using your own money. For this reason, your credit score has no bearing on your ability to get started.

No finance charges and no bills. You are using your own money and when it is gone you don’t have the ability to charge anymore. This means that you never have to worry about carrying a balance and getting hit with a finance charge, which can be up to 19% in some cases. Additionally, monthly statements are not sent out for prepaid credit cards; there is no reason for them. Though some prepaid cards will offer this service along with other helpful credit card services.

If you need to use a prepaid card due to a bad credit history, then it is possible to gradually build up a credit history with a prepaid card. You need to read the terms and conditions of the card you wish to sign up for in order to clarify the specific financial institutions conditions and terms for such a possibility in the future. If you have a $1000 spending limit on the card the lending institution will gradually increase your ability to increase the limit.

If you are a parent and would like for your child to have the security of a credit card at college then a prepaid credit card is a good option. You can then have some control over how much money the child is spending and can increase the spending limit or decrease the spending limit depending on how much you put into the card.

Now that you know how to use a prepaid credit card you should ask yourself this question: would this be in my best financial interest?  Here is a selection of some of the best prepaid credit card offers.

Advantages of a Student Credit Card

Have you ever wondered about the benefits of carrying a student credit card? There are many reasons why students should consider applying for a credit card. If used correctly it can be a great advantage.

Here are several of the major reasons:

1. Everyone has to start building credit at some point in their life. A student credit card is a great place to start. This gives young people the chance to begin their credit history while they are still in college. As long as you are responsible you can be rest assured that your credit score is going to increase, and that you will be in good position when you graduate to apply for a car loan, mortgage, etc.
2. Usually a new full time college student would not be able to qualify for a credit card because they are new to the credit market, but banks and lending institutions offer special introductory rates and programs to full time students. It is good to take advantage of these offers. They can include lower interest rates, a reasonably high credit limit and special rewards programs.
3. A student credit card is good for emergencies. As a student you probably know all too well how unexpected expenses can pop up out of the blue. For instance, what would you do if your car were to break down on the way home for spring break? This is a situation that has thrown a curve ball at many unexpecting students. But those with a student credit card can pay for the repairs and continue forward.
4. Managing your credit account teaches responsibility. Every student needs to learn financial responsibility; and the sooner this happens the better. There is no better way to get your financial life on track than to learn how to responsibly carry, use, and pay off a credit card.
5. Can be used for important purchases. How are you going to pay for your books? How about some school fees? It is great to use cash for everything, but this is not possible in today’s day and age. A credit card can help students pay for things they need during their years in college.
6. Don’t have to rely so much on mom and dad. Perhaps the biggest benefit in the student’s eyes is that they don’t have to call their parents anymore when they need money. Instead, they can rely on their credit card to get them through for the time being. Not only does this teach responsibility, but it also teaches the student self sufficiency.

As you can see, there are many great benefits of a student credit card. These are five that should get you thinking about filling out an application.

Personal Finance Blogs

Personal finance blogs are popping up day after day. More people than ever before are interested in sharing advice with others and in the process helping one another to face the challenges of living in our current depressed financial circumstances. As a consumer, no matter your situation, you should consider occasionally reading a few personal finance blogs. Even if you think you know a lot you can still learn quite a bit more, while also meeting other people with similar interests and concerns.

Here are a few ways that personal finance blogs can help you save money and increase your financial knowledge during a bad economic climate:

1. 1. Hear how others are succeeding. You may be able to pick up some great first hand advice from others who are succeeding in ways that you may have never considered. Personal finance blogs offer good information on not only surviving, but perhaps also thriving during a recession.
2. These suggestions and helpful tips are often based on personal experience and therefore bear some weight of authority. In addition, you may wish to ask the writer questions on their experiences in certain areas and thereby improve your understanding of financial opportunities or issues. For example, you may not realize it but your credit score has a lot to do with your personal financial success. If you are lacking knowledge in this area it would be helpful to search for personal finance blogs that touch on this subject matter. There are ways and means to achieve your best credit score, and in turn save money on interest rate expenses in the future and open new loan possibilities.
3. The recession has been and will continue to be tough on many Americans. It will be interesting to learn how others are saving and getting by even when the economy is struggling. Remember the old saying: a penny saved is a penny earned. Financial blogs are full of information on how you can save in all areas.
4. In addition, many personal finance blogs offer tips on where and how you can make a good and useful purchases at great savings. These often include everyday items such as saving on energy use or gasoline use.

If you are interested in learning more from personal finance blogs you can search for this term via Google. Some of the most popular blogs in this niche include: Consumerist, Wise Bread, The Simple Dollar, Get Rich Slowly, and Saving Advice. For a full list of some of the top personal finance blogs check out http://www.wisebread.com/top-100-most-popular-personal-finance-blogs/.

All in all, personal finance blogs can help you in yet unknown ways save money as well as offer helpful tips on how to invest and progress in a tough economy. Take a few minutes each week to catch up on the latest personal financial news!

student credit cards

Are you searching for a student credit card? This can be the case if you are a college student or the parent of a child in this age group. Either way, you need to know that there are many credit card offers for students and teens. Here is some important information about some options. Look for the benefits that most suite your needs

Discover more or less dominates this niche of the credit card industry. They offer many cards that are perfect for students. But even then, you need to narrow down the choices that are offered by Discover. It can be quite difficult to apply for the right offer when you do not take the time to learn the pros and cons of each one.

Here are some of the most popular Discover credit cards for students and teens: Discover Student Card, Discover Student Card Clear, Discover Student Card Monogram Collection, Discover Student Card Tropical Beach, and Discover Open Road Card for Students.  In addition there is Current by Discover, which is a prepaid credit card designed specifically for teens. Which one of these great offers are you going to take advantage of?

When choosing which Discover card is best for you or your teen, you need to know which details are most important. Here are a few tips for choosing the right student credit card:

1. The rewards program. Every Discover card has a rewards program that allows you to earn points towards gifts or cash back. For instance, the Discover Student Card features an unlimited cash rewards program.
2. Interest rate. This is an important detail no matter how old you are. Every Discover student card comes with a zero percent interest rate for the first six months.
3. Set-up and annual fees. Unlike many student credit cards, Discover never charges fees for setting up an account or keeping it active. This can save you a lot of money!
4. Credit needed. As you know, you can only receive a credit card if your credit score is in good shape. The Discover Student Card requires a good to excellent credit rating. All others require only average credit.

There are a lot of credit cards out there for students and teens and you want to make sure you are looking at the best options. You want the best of the best! This is why you should take a close look at what Discover has to offer in terms of student and teen credit cards. You will not be disappointed with the choices and the number of top level features that are available.

See the whole range of Discover Credit Cards.

Student Credit Cards

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Business Credit Cards

If you are like most business owners your career is one of the most important things in your life. For this reason, you want to do whatever you can to make sure you succeed as much as possible. One way you can do this is to take advantage of the benefits of a business credit card. Many companies, big and small, use credit cards to their advantage. If you are not yet doing so you may want to make a change.

Here are a five good reasons a business credit card can help your business:

1. You can build good credit for your business just like you do for yourself. This may not sound like a big deal, but over time it can definitely bring perks to you and your company. Start slow and build your credit over time.
2. With a good credit report on your side you can get lines of credit from partners, manufacturers, etc. This is a huge accomplishment because it allows you to get the products you need when you need them.
3. Access to more cash. What business doesn’t want access to more cash? Money is needed to grow, and sometimes the cash that you have on hand is not enough. Fortunately, with a business credit card you are gaining access to more cash. How much depends on the credit history of your business, and of course, what card you opt for.
4. Your business credit card can earn you cash back and/or rewards points. Do you travel a lot for your business? Do you have salesmen who are always on the road? If so, stockpiling points that can be redeemed for travel perks is a great idea. By paying for plane tickets, hotels, and rental cars with business credit card points instead of cash you can save a lot of money through the year.
5. It is good for your ego! Okay, so maybe this isn’t the best reason to apply for a business credit card. But if you have a small business that is just getting going there is nothing more important than feeling good about yourself. When you have a business credit card you will feel like you are moving in the right direction. And this is a big step in actually making progress. You have to be confident in what you are doing, and a business credit card can help you to do just that.

Business Credit Cards

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On April 23 President Obama met with top ranking officials from 14 credit card companies to let them know that their days of preying on consumers are over. At this time, he is working fast with other members of his party to push legislation that will prevent credit card companies from increasing interest rates for no reason.

Of course, there are some who feel that this is not the best thing to do at this time. With the weak economy some experts feel that cracking down on credit card companies is only going to make things worse. The pros and cons are sure to be discussed many times over as the next few months unfold.

National Economic Council Director Lawrence Summers has been doing a lot of talking on the president’s behalf. Recently, he said Obama was “going to be very focused, in a very near term, on a whole set of issues having to do with credit card abuses, having to do with the way people have been deceived into paying extraordinarily high interest rates that they wouldn’t have paid if they knew what that they were getting themselves into.”

The Financial Services Committee has already approved the legislation, 48 to 19, which Obama spoke about on April 23 with credit card officials.

It shouldn’t be a surprise to anyone, including the credit card companies, that this is happening. For many years they have been taking advantage of consumers by disguising the amount of interest they were paying or suddenly increasing interest rates without proper notification. It appears that Obama and his team is taking the side of the American people in this battle. Keep an eye on the news for further updates.

What to Think about:

1. Who is responsible? The primary name on the credit card is the person who is responsible for paying the bill. So if you are going to add a co-borrower you need to make sure you trust them 100 percent. If something was to happen and you no longer want your co-borrower to have access to the credit card, you need to get in touch with your credit card company. After all, you don’t want an ex taking out their bad mood on you by racking up a huge credit card bill.
2. The main benefit of adding a co-borrower on your credit card is that you can help them increase their credit score. For instance, is your child looking for a way to increase their score so they can eventually move out and obtain their own loans? If so, adding them as a co-borrower can help. This will not do anything to your credit score, while helping the co-borrower better their credit report and score. Of course, this only holds true if you pay your bill on time.
3. If you are the primary credit card holder you are putting your personal finance history on the line by adding a co-borrower. Even if you trust the person you are dealing with it should be noted that you are still taking a risk. What if your co-borrower was to lose their job and is now unable to pay what they owe? Again, this would fall back on you. Even though their credit score and report would be dinged as well, since your name is the primary one on the account you are on the hook. Are you willing to take this risk?

When it comes to dealing with a co-borrower on a credit card there is a lot to think about. You may feel that this is nothing more than a financial decision, but you would be wrong. If something goes bad you could easily find yourself in a spat with your co-borrower. Are you willing to put your relationship on the line?

There is nothing wrong with adding a co-borrower on your credit card as long as you know the pros, cons, and risk you are taking. If you feel comfortable moving forward, you can contact your credit card company today.

Cash Advance Advantages

1. Fast Cash. If you have an immediate need for cash, using this option could be the answer you are looking for. Before you opt for this make sure you are aware of how much cash your credit card plan can offer , as well as what your current overall credit card spending limit.
2. Ease. It is more convenient to opt for a cash advance as opposed to applying for a loan. Your credit card company can get you the cash you need within a couple of days. Not to mention the fact that you already do business with them so you know they are trustworthy. This is fast cash without a lot of effort or delays.
3. Emergencies. Believe it or not, there are still some places that do not accept credit cards. Having a credit card with a cash advance option can make it easy to get the money you need so you can take care of your emergency without delay.

Cash Advance Disadvantages

1. High APR. Generally speaking, your cash advance APR interest rate is going to be much higher than the APR interest rate on your regular credit card debt. Are you willing to pay more in finance charges just so you can have cash in your hand? This is a question that you need to think about before starting the cash advance process.
2. Fees. Does your credit card company charge fees on top of a higher APR? Since most credit card companies do charge fees, this is something that you want to check into.
3. Fast and Easy to get what you need. This is both a pro and con. It is nice to be able to secure a cash advance almost instantly when you need one. But on the other hand, this convenience can also work against you. Fast cash means you may jump the gun and pull out cash quickly without first thinking of the consequences.

As you can see, you need to think about what you are doing before you opt for a credit card cash advance. There are definite benefits of a cash advance, but on the other side there are drawbacks as well. Once you compare the pros and cons you can then decide if a cash advance on your credit card is worth the time, effort, and added fees and finance charges.

The best place to find the information you need is to look at your credit card offers “terms and conditions”. In the fine print you will find the terms for a cash advance option with details on the interest rate you will pay on the cash advance as well as the amount of cash you will be able to get on the card and additional fee charges.