While you are probably familiar with interest fees, and how you can lower your interest rate with the help of a simple phone call, you might not realize that your other credit card fees are negotiable as well (and some can be waived). Some of the other fees you might be subject to include:

• Annual fee: An increasing number of credit card issuers are adding annual fees. This is a fee you pay each year, often when the issuer automatically adds it to your balance.
• Late fee: If your payment is even one day late – or even an hour late in some cases – you can be charged a late fee. Remember that your late fee is based on the fact that your due date is when the payment is receive, and not when you sent the payment.
• Over the limit fee: When you exceed the limit on your credit card, you can experience a fee as the result.
• Balance transfer fee: Often, when you transfer a balance, you will be charged a fee, often between 3% and 5% of the total amount transferred. The larger your balance, the bigger your fee.
• Foreign transaction fee: When make transactions in another country, you can be charged a fee. Some credit cards also charge currency conversion fees when you make purchases in another currency.

All of these fees are negotiable if you are willing to pick up the phone and make a call.

Ask to Have Your Fee Waived

Believe it or not, it’s often possible to have a credit card fee waived just for asking. However, it helps to be a customer in good standing. Before you call, prepare yourself by rehearsing the fact that you are a loyal customer who normally makes on-time payments. Look up the appropriate customer service number as well, to ensure that you are speaking with someone who is more likely to be able to help you.

Depending on the fee, you might be able to take care of the situation in a matter of minutes. Most late fees and over the limit fees can be waived quickly, especially if you are a good customer who generally doesn’t have problems. Other fees, like balance transfer fees and annual fees, may require more negotiation. However, it doesn’t hurt to call and ask for a fee reversal.

You can also get the credit card issuer’s attention with the help of social media. Politely tweet your displeasure with an annual fee, being sure to include the issuer’s “@” in the message, and you might be pleasantly surprised to have someone contact you in order to work with you. This worked for me when one of my credit cards tried to add an annual fee.

Negotiate a Fee Reversal

Even though it’s not as simple as asking, you can often negotiate other fee reversals. It’s possible to ask for a cap on a balance transfer fee. If the fee is 3% on a $10,000 balance transfer, that’s $300. You can call and ask to have the fee waived, or negotiate a $75 cap, or ask if you can pay a lower amount.

It’s also possible to ask for a cap on foreign transaction and currency conversion fees. Asking for a lower fee can provide you with significant savings, even if you can’t have the fee entirely waived. Here are some things to remember as you speak with a representative:

1. Speak politely: Try to remain calm, and polite. Practicing ahead of time, and knowing what you plan to ask for, and what you are willing to give up, can help you keep your cool while on the phone.
2. Ask for someone who can help: If the rep you are talking to can’t help you, ask that he or she give you recommendation for who can negotiate with you.
3. Know whether or not you can walk: Threatening to walk can be an effective negotiation strategy, but only put it out there if you can actually go through with it.
4. Take good notes: Make sure to note everyone you talked to, and what you talked about. Include the date and time. This can help you remember what happened if you need to call back for some reason.

With a little preparation and time, you should be able to reverse a number of your credit card fees. Just realize that if you are constantly calling to ask for fee reversals, eventually you will no longer be in a position to negotiate.

To help you out, here are customer service phone numbers and contact pages for many of the most common credit card issuers:

American Express
1-800-528-4800
American Express Customer Service

Capital One
1-800-955-7070
Capital One Customer Service

Chase
1-800-432-3117
Chase Customer Service

Citi Credit Cards
1-800-347-4934
Citi Customer Service

Discover Card
1-800-347-2683
Discover Card Customer Service

Bank of America
1-800-552-7302
Bank of America Contact Us

Next time you get dinged and want to get your credit card late fee, annual fee, or other fee reduced or waived entirely, use the contact info above and remember the tips included in this blog post. Best of luck!

This is a guest post by Miranda Marquit, a professional freelance writer who specializes in personal finance topics and runs PlantingMoneySeed.com. She lives in Logan, Utah. 

Try a staycation
A staycation is a much more budget friendly vacation idea, where individuals or families stay at home or nearby and enjoy some local fun. It’s a great way to get out, explore and have a little adventure without spending a ton of money on traveling costs. Some common staycation ideas include; camping in your backyard, having a movie or game night at home, or attending local festivals and exhibits.

Go on a cruise
Believe it or not, you can save a good chunk of change by booking a cruise, compared to a traditional vacation. The price of the ticket is all inclusive, which means your meals, lodging and entertainment are all wrapped into one discounted price. I’ve been on several cruises, and normally only pay about $250 for the weekend. There’s unlimited access to food, drinks, snacks and all sorts of entertainment – day or night, at no additional cost.

Extend a business trip
Most business trips are already paid for by the company, so since you’re already getting a “free” trip, invite your family to come along too. Extend your stay, or have them meet up with you a few days later, to enjoy an inexpensive vacation. My family used to do this while my dad was traveling around the country. At night he would have meetings and seminars, but during the day we all went out and explored the city together.

Book a weekend getaway
If you only have a limited amount of time off work, a weekend getaway is the perfect solution. I like to book weekend trips using Groupon Getaways. Of course, you might not have as much control over what deals are available, but that’s the fun part. Many destinations, offer amazing deals for travelers who book at the last minute. Sometimes they offer specials for day spas, family water parks and a cabin on the lake, for 55% or more off the original price.

Go on a short road trip
Who doesn’t love a road trip? But with the price of gas climbing higher and higher, it can easily bust your budget. Try a short road trip instead and plan everything ahead of time. Consider staying with friends and family to save money on lodging, or using a mobile app like Priceline to negotiate and compare hotel prices. Utilize other apps like GasBuddy to find the cheapest gas near you and Yelp to locate the nearest coffee shop with free Wi-Fi.

Try roughing it
Most lakes and parks nearby, have campgrounds available for public use during the summer months. It’s easy and often inexpensive to rent a space, where you can set up camp for the night. Although you might be roughing it, with so many activities like fishing, swimming, barbecuing and roasting marshmallows, you and your kids are bound to have a blast!

Visit a national park for free
Every year the U.S. National Park Service hosts National Park week. This is when all 397 American state parks offer free admission, for an entire week in April. But in case you missed it this year, they still offer several other Fee-Free Entrance Days throughout 2012.

Mark your calendars for all the free admission dates:

• January 14-16 (Martin Luther King Jr. weekend)
• April 21-29 (National Park Week)
• June 9 (Get Outdoors Day)
• September 29 (National Public Lands Day)
• November 10-12 (Veterans Day weekend)

This is a great way to get outdoors with your family and enjoy the beauty of nature, all without spending much money. To find the national park nearest you, check out the full list of free entrance parks by state.

Become an “insider” tourist for a day
Equipped with the knowledge of a local, you probably already know all the hot spots and insider tourist secrets. Avoid the areas that thrive on tourism, since you’re likely to pay a premium price for everything. Opt for the “road less taken” and explore what else your city has to offer. Go ahead and try that new little restaurant everyone’s been raving about, or visit a local market or gallery. Use a resource like Free-Attractions.com to find entertaining but free things to do in your area. There are literally thousands of free activities available, all over the United States.

With all of these options available, you no longer have an excuse not to plan a vacation that’s both budget-friendly and fun! The next time you’re tempted to book a lavish trip, try one of these ideas instead. I promise you will have just as much fun (if not more) and you’ll come home with more cash in your pocket.

Image 1 by Pink Sherbet Photography; Image 2 by Jo Levine

And that’s why today, we’re very excited to say … You can now do all those things with the brand new ReadyForZero iPhone App!

One of our fundamental principles has been to give you better control over your debt. Up until now, you’ve had that control whenever you’re sitting in front of your computer, but not when you’re on the move. We know that many financial decisions take place outside your home or workplace, so we wanted to make your information available right at your fingertips – wherever you happen to be. And now it is.

With our new iPhone app, you can:

• Track the progress you’ve made toward paying off your debt
• View each of your accounts (loans, credit cards, etc.)
• Get mobile alerts so you never miss a payment or savings opportunity

As with our web software, the app is completely secure and your information is password protected, so it will only be visible to you.

In this first version, the app allows you to review your progress, payments, and account balances on the go. In the future we’ll keep adding functionality that you request, so let us know what you want to see most in the next version!

If you don’t have an iPhone, we’d like to hear your opinion about which mobile platform we should develop on next. Android? Blackberry? Windows? Nokia? Please take our survey and let us know what you think.

For those who download the new iPhone app, you’ll be able to track your progress on each credit card, student loan, auto loan, or mortgage while you’re on the go. Each of your accounts will be easy to see at a glance:

We’re also excited that your payment information will be available right at your fingertips at all times.

That means if you need remember when your next credit card payment is due, or if you can’t remember how much you paid toward your student loan last month, you can just open the app and review your (past and future) payments. Your recent and upcoming payments for each account will be listed so that you can get the information you need immediately:

Like what you see?

If you want to start using the app on your iPhone right now, just click on the link below and go to the App Store, where you can download the app (for free). Then you’ll be on your way to getting out of debt … from anywhere.

Available on the App Store

The 18 Best Jobs for 18-Year-Olds (Christian PF)
Hey high school graduates, want to make some extra money before heading off to college? Check out this article to find out what jobs you can work while still having a fun, relaxing summer. There might be some things on this list you haven’t thought of before.

The College Freshman’s Guide to Money Management (The College Investor)
Don’t let a whole summer of work go to waste when you get to college this fall! Keep this guide handy all year long to stay one step ahead on your finances. You’ll be glad you did.

Student Loans: Repayment Options (My Dollar Plan)
Okay college grads, you’ve finally finished four (or maybe five) long years of studying and are ready for the real world. But soon the student loan bills will start coming in. Whether you’ve landed your first job or you’re still looking for one, you can arrange your payments in a way that won’t break your bank. Read this article to learn all of your options.

5 Credit Card Rules for College Grads (Credit.com)
Now that you’ve got your student loan repayment terms figured out, you might think now is a good time to get a credit card and start building credit. Here are some tips that will help you find and use your credit card wisely so you don’t have to worry about diving into more debt.

6 Mistakes of New Earners and How to Fix Them (My Dollar Plan)
Been hired for your first job out of school? Congratulations! Your first paycheck may seem like A LOT of money after what you may have been earning in college, but with it comes new responsibilities. So before you plan how to spend that first paycheck, check out this article and learn how you can make that money grow.

While we’re mentioning articles we liked, check out My University Money who was kind enough to feature ReadyForZero recently.

In the years since the infamous Lehman Brothers collapse and the ensuing financial crisis, scrutiny of banks has only grown worse. It’s enough to make some people want to go back to the old days of stuffing cash under their mattress! However, in order to protect your money it is important that you put it into a bank. In a bank your money is insured and has the ability to grow. If left at home your money could get lost, stolen, or damaged if there’s a fire or flood. Plus, let’s not forget about the convenience of online banking, debit cards, and overdraft protection.

The real question is, which banks should you trust? As resentment towards big banks simmers, people are flocking towards their local credit unions for their banking needs. How can you decide which is right for you?

To start, let’s go over the differences between banks and credit unions. A traditional bank is a for-profit public financial institution. A credit union is a non-profit financial cooperative. In order to join a credit union, you need to share a “common bond” with them. Typically this takes the shape of a professional association (i.e. a teacher’s credit union) or a geographic community (meaning you have to live in a certain town or city to join). In a credit union, each member is not simply a customer, but a part-owner that has a vote in the leadership of the union.

Now that you understand the basic differences between a bank and a credit union, let’s talk about some of the highest priorities for most bank customers and see how each type of institution adds up.

Credit Unions vs. Banks: Convenience & Customer Service

Branch Locations & ATMs
Traditional banks, especially the nationwide banks, tend to have many branch locations and ATMs. That means they are automatically more convenient, right? Not necessarily. Did you know that if you bank at one credit union, you can also use other credit union’s branches through CU Service Centers or CO-OP Financial Services Network? All you have to do is check the websites and see if the credit union you’re interested in is listed. Please note, if you are a member of a credit union and you are visiting another branch in either network, you’ll need to know your account number and have your ID, or else they likely won’t be able to serve you.

Another thing to note is how large a presence your bank or credit union of choice has in your city. Think about where you live, work, hang out, and how often you travel. Then look up the locations of each of these financial institutions and compare them to see who truly has a stronger presence in your area. Just because a bank has ATMs across the country doesn’t mean they’ll have any in your neighborhood!

Availability & Helpfulness of Customer Service
Think about your priorities. Are you looking for a bank you can reach at all hours of the day, any day of the week? If so, traditional banks are the way to go. Or, do you prefer to have less access to customer service, but want to receive personal attention every time? You probably want a credit union. Credit unions consistently rank higher in customer service satisfaction than banks. Since a credit union is essentially being run by its members, it is very important for them to ensure that the members are satisfied.

So what if you’re a mix of the two? You want personal attention but you really need it to be available at all hours and on weekends. You can still choose a traditional bank – but you’ll have to do your homework. Banks may be corporations, but each branch is slightly different. I used to work for a large, national bank in a slower branch where I had the time to give stellar customer service every day. However, my good friend worked at a much higher traffic branch. Although she still gave stellar customer service, there were some things that were out of her control – like wait time, how much time she could spend with each customer, etc. So if you find a bank you like, look for a branch that has slower traffic.

In terms of evaluating customer service on the phone, give them a call! I recently wrote a blog post about trying to lower my credit card interest rates. I called three banks and two credit unions. One of the three traditional banks gave me fantastic service and went over and above to meet my needs! One of the two credit unions also gave me great customer service,  but they did not offer the same solution as the traditional bank. So although everyone will tell you that you’re guaranteed to have better customer service at a credit union, don’t be so sure. It all depends on which credit union you choose and whether you prioritize in-person customer service over all-hours availability.

Credit Unions vs. Banks: Products

Traditional banks and credit unions tend to offer the same products, such as: checking and savings accounts, credit cards, auto loans, home loans, home equity lines of credit, CDs, and investment accounts. The main difference you’ll see on these accounts is interest charged or earned, fees charged, and the customer service you will receive on the account. Warning: it has come to light that some banks and credit unions are offering payday loans but covering it up by calling them something else. Payday loans are a dangerous and expensive form of credit that should be avoided at all costs. So if your financial institution is offering you a short-term line of credit that has an application fee or high interest rate, stay away.

Credit Unions vs. Banks: Fees

What They Charge for Deposit Accounts
There are still many banks and credit unions that offer free checking, although it is common thought that this is disappearing. Read the terms with your personal banker when signing up for an account to make sure it is truly free and doesn’t include any hidden charges. Credit unions and banks will require you to make a deposit when you open an account. However, with some credit unions, the required deposit must stay in your account to maintain your membership. Most savings accounts at any financial institution do require a minimum balance and, if they don’t, will at least charge a fee after a certain amount of withdrawals.

What They Charge for Overdrafts
If you don’t have overdraft protection set up with a traditional bank, you will pay large fees for transactions that go through while you’re negative. Credit unions may also charge overdraft fees, but most often at a lower price. Either way, you should never lose money to these fees! No matter what type of financial institution you join, inquire about overdraft protection. It is often free and can come in the form of a credit card, a line of credit, or can be attached to your savings account. You may think this type of situation would never happen to you, but you can never be too sure!

What They Charge for Loans
On average, credit unions charge lower interest rates on loans. Since credit unions are not-for-profit they funnel money earned back to their members, which enables them to charge lower interest rates on loans and yield higher interest rates on savings accounts. However, you still need to compare the interest rates of the credit union and bank you’re interested in because they can vary from institution to institution and based on loan type. For example, many credit unions charge a higher interest rate on mortgages than traditional banks. But, their credit card interest rates are typically much lower and are even capped at 18% for federally chartered credit unions (unlike banks who can go upwards of 30%.) In my personal experience, when I called to lower my credit card interest, the credit unions had lower rates than two of the three traditional banks I called, but they couldn’t compete with the one traditional bank that offered me the lowest interest rate (11%). So, averages aside, the best way to know for sure is to do your research on the specific institutions you’re interested in!

Interest Rates for Savings Accounts
The sad truth is that whether you go through a bank or credit union, you won’t make a ton of interest by putting your money into a savings account. Credit unions usually earn a marginally higher interest rate on savings accounts, but still come in under 1%. To find the best rates offered for savings accounts or loans, check bankrate.com.

Credit Unions vs. Banks: Security

Government Protection
Whether you go for a traditional bank or a credit union, your funds will be covered should anything happen to the institution, up to $250,000. Traditional banks are insured through the FDIC (Federal Deposit Insurance Corporation) while credit unions are insured by the NCUSIF (National Credit Union Share Insurance Fund). Again, much safer than stuffing your money under your mattress!

So now that you have all this information, what’s the answer? Shop around! Even with these basic differences, that doesn’t mean you can’t find one credit union that is better than the other or one traditional bank that is better than the other. So start with a few banks you may want to join and a few credit unions that you’re eligible for. Then write down your priorities and see who checks off most of your needs. That is the only way to ensure that you will be happy with your financial institution at the end of the day.

Images by Adam Fagen and Jebb.

To help you cut through the misinformation, we’re going to examine the various costs of debt consolidation, including any fees and interest charges that might apply. We’ll also explain how these costs compare to those for debt settlement or debt management

Keep in mind that there are several different ways to do debt consolidation, including: a debt consolidation loan from a bank or peer-to-peer lender, a home equity loan, or a credit card balance transfer. (See our article Is Debt Consolidation a Good Idea? for a more detailed description of these)

What Kind of Debt Consolidation Fees Should I Expect?

Here’s a pretty comprehensive list of all the kinds of fees you should research when looking into the possibility of doing debt consolidation:

Origination fees: This type of fee often applies to new loans, whether it be a home equity loan or an unsecured debt consolidation loan. Lenders argue that these fees are necessary to cover the administrative costs of initiating your loan. Origination fees can be anywhere from 1% to 5% of your total loan amount (which is a lot!) so don’t take these lightly. In some cases, however, you won’t need to pay an origination fee when you get a debt consolidation loan.

Closing fees: This is another term for origination fees.

Annual fees: You’re especially likely to have an annual fee if you get a home equity loan or home equity line of credit (HELOC), and often you’ll have an annual fee with a balance transfer. These fees are often around $50 (though they can be less).

Balance transfer fees: When you do a balance transfer, you’ll have to pay a fee right off the bat that’s equivalent to a small percentage of your total balance (kind of like an origination fee). Usually, the initial balance transfer fee is between 3-5%.

Late fees: These obviously can vary quite a bit depending on what type of debt consolidation you’re doing. If you do a balance transfer, you need to be extra careful about late fees, because while normal credit card late fees run between $15 and $35, a late payment during a balance transfer introductory period can cost you hundreds of dollars. That’s because, according to the terms of most balance transfer offers, you start with a low (or even zero percent) interest rate for a limited period of time – but that disappears if you make even one late payment. Other late fees are not so drastic, however, you should still be aware of them and avoid them as much as possible.

Early cancellation fees: These are common when taking out a HELOC. For example, you may be charged either a flat fee (up to $400 or $500) or a percentage fee (around 1% of the loan amount) if you decide to close the line of credit within the first three years. The reason for this fee is that the company would prefer to earn more interest from you, rather than having you quickly close the account.

What Are Other Costs Of Debt Consolidation?

Other than the fees mentioned above, the only other costs are the interest charges, which as you might expect, depend upon the terms of your agreement and the type of debt consolidation you do.

If you get a debt consolidation loan from a bank or other lender, your interest rate will likely be between 7% and 30%. That means, on a loan of $10,000 you’ll be paying approximately $700 to $3,000 per year. If your credit score is good (i.e. above 700) then you’ll probably be able to find an interest rate less than 20% – and hopefully much lower.

On the other hand, if you decide to do a credit card balance transfer, you might not have to pay any interest for the first 12 months. Many credit card companies offer balance transfer deal with 0% APR during the introductory period, which can last up to a year (or even 18 months). But be careful, because as we mentioned above, you can quickly lose your 0% interest rate if you make a late payment OR if you don’t pay off your entire balance within the introductory period.

Finally, if you get a home equity loan or HELOC, your interest rates will usually be somewhere between 4% and 10%, however you are taking on much more risk than with other types of debt consolidation because you could lose your home if you aren’t able to make the payments. That’s why using a secured loan (which means one backed by collateral or property like your house) to consolidate your unsecured debt (not backed by collateral) is not recommended.

(For more information about each type of debt consolidation, read our post on Debt Consolidation Programs)

How Do Debt Settlement Fees Work?

So now that you understand how debt consolidation fees work, you might be wondering how they compare to the cost of debt settlement.

The fees for debt settlement are quite a bit different. When you work with a debt settlement company, you are essentially paying them to negotiate with your creditors so you can pay a fraction of your balances in a lump sum to cancel your debts. These companies are not allowed to charge you an upfront fee – instead they are legally obligated to wait until they’ve helped you settle at least one of your accounts, and even then they can only charge you an amount that is proportional to the amount of your debt that was settled.

Now, there may be other costs of doing debt settlement, and these are not as obvious. Since debt settlement requires that you pay your monthly amount to an escrow account instead of directly to your creditors, you will incur late fees on each of the accounts you’re trying to settle. This can sometimes cause your interest rates to skyrocket as well. If you don’t succeed in settling those debts, you will have more debt to deal with because of the fees and interest charges.

How Do Debt Management Fees Work?

Unlike debt settlement, the fees for debt management are somewhat predictable. Usually you will pay a monthly fee of between $15 and $50 to the debt management company or government-approved credit counseling agency that is in charge of your debt management plan.

In many cases, you will also need to pay a small fee to enroll, but you can almost always get at least one meeting with a credit counselor at no cost before deciding for sure if you want to do a debt management program. There are certain agencies that require you to buy educational materials that instruct you on how to budget your money better and how to get out of debt. These may sometimes cost $20 or more.

If the debt management plan is successful, you will still have a monthly amount that you must pay, which will be split between your creditors. You’ll need to pay that for 3-6 years on average in order to get out of debt. Late or missing payments during that time could result in late fees and increased interest rates.

Do Your Research On Debt Relief Costs and Fees

The bottom line is that you need to be well-informed about the different fees and costs of each type of program before you commit to any particular one. Each of the debt reduction methods discussed above can work for some people in certain situations, but they can also hurt you and make your situation worse if you are not prepared and/or don’t know what to expect.

So do your research and ask plenty of questions before you decide to use a debt consolidation loan, debt settlement, or debt management program to get out of debt. And if you’re trying to decide between several types of debt relief, see our article on the Ways To Get Out Of Debt.

Have more questions? Just send an e-mail to Ask (at) readyforzero.com.

“I love your website and the work you’re doing to help people. It’s great, I always tell people about ReadyForZero. I’m living proof that it works.”

It’s so much fun helping people get out of debt in the age of social media because it means we’re able to connect easily with people all across the country who are having success paying off their accounts using ReadyForZero.

Even as little as ten years ago, there was no easy way for a company like ours to hear spontaneous, continuous feedback from real users. But now, with Twitter, Facebook, and other social media sites, we can have a two-way dialogue with people at the click of a button.

A couple weeks ago we got one of those kinds of Tweets that makes us want to jump out of our seats and do a victory dance:

Thanks to @ReadyForZero!Paid off credit card #1 and moving right on to the next.Love your site and recommend it all the time.

— Chad Harris (@42graystreet) April 26, 2012

Awesome!

We have been extremely lucky to have some amazing ambassadors who talk about us to their friends and family – and anyone else who needs an easy and effective way to manage their debt.

Once we saw this Tweet, our fingers were itching to pick up the phone and give Chad a call. About two weeks ago we got our chance.

Chad is the first person we’ve profiled who has his student loans, auto loans, and credit cards all linked up in his ReadyForZero plan! In total, Chad said before he got serious about eliminating his debt he had $15,000 in student loans, an $18,000 car loan, and $16,000 in credit card debt.

He told us that since he not only has several different accounts but several different types of accounts, it has been even more useful to have a tool like ReadyForZero that helps him organize everything and does the math behind the scenes to give him the best plan to save money and get out of debt as fast as possible. Which is why we were so excited to talk to him. Without further ado, here’s Chad’s story…

Stage 1: Innocence

Have you ever had a passion for something? I mean, a real, honest-to-goodness passion that inspires you to meet new people, accomplish great things, and go to the ends of the earth in order to pursue your passion? If you have, then you know the joy it can bring.

And if you do, then you share a common bond with Chad. In his case, the passion that took him to all corners of the globe (or at least all corners of the U.S.) was the Dave Matthews Band.

Dave Matthews Band

He fell in love with their music early on, and became an even bigger fan as time went on. About five years ago, after graduating from college, he began traveling to see them perform in concert. Each show was a unique and exhilarating experience. Among the other DMB concert-goers he found new friends who shared his passion. They’d meet up at each successive concert, and despite not seeing each other in between, they remained great friends. When they’d finally see each other again, it would be like no time had passed since their last meeting.

Chad at The Gorge

During this time, he estimates that he went to over 20 Dave Matthews Band concerts in total. There were so many memorable concerts that Chad has a hard time picking his favorite, but two that stood out were a performance at The Gorge in Washington State (see photo above) and one in DMB’s hometown of Charlottesville, Virginia.

Stage 2: Awakening

Of course, these trips were not free, and Chad eventually came to the difficult realization that many young people make in the years after college. With student loans coming due and credit card balances growing after leaving college, he realized his lifestyle was not sustainable.

His frequent concert attendance was draining his budget, and often he was using credit cards to fill the gaps. Although he doesn’t regret those trips, he told us his income at the time was not enough to support that kind of frequent traveling along with all the other things he was spending money on at the time. “Sometimes I was flying, sometimes I was driving; but it all adds up, and it added up very fast.”

Today, he looks back at his younger self and isn’t afraid to use the word “irresponsible.” He told us, “I came out of college with a little bit of debt, but not that much. I think maybe just a couple thousand dollars. But [after college] I just kept using the card I had used in college.”

Despite taking some measures to live frugally, he found that his financial picture was deteriorating. “After I graduated from college I was living at home for awhile and that should have allowed me to pay off debt, but I didn’t… A few years ago I had maxed out a credit card and I went to get a new one. I just wasn’t changing anything about my life.”

As his debt started to accumulate, he began to feel squeezed.

“I can think back to some months when I had no money whatsoever,” he said. “I remember going to the bank one time and crunching my numbers and thinking ‘Oh my god, I’m going to be late on a couple bills, and I have no cash for the next 2 weeks.’” This is the common problem for those of us who get caught in the debt trap. The account balances grow slowly, kind of like a baby bear that looks harmless at first. But then, after growing bigger everyday, you look around and realize it’s big enough to crush you.

And just like that, suddenly Chad was in danger of being crushed by his debt: “I was thinking ‘how am I gonna put gas in my car? How am I going to get groceries?’ I even asked the bank to raise my credit limit on my Visa, just because I needed some breathing room, and they said no.”

Stage 3: Redemption

Chad knew that it was time to make changes. But like many people, he didn’t want to share his situation with those close to him. “I was too proud to ask for help – and debt is a subject you don’t really talk about with people – so I felt alone with this,” he told us.

Instead, he started doing research and trying to figure out better personal finance practices on his own.

And fortunately, around that same time he got a job that paid better, and he decided to get serious about watching his spending. He said, “I started my own budget and I just started tracking what I was spending my money on.”

Shortly after that, he came across our site. He told us, “I found ReadyForZero in January. And I can tell that because I’m looking back at my spreadsheet and I can see how I started changing where I was directing my money. When I started with ReadyForZero it told me to pay off my Exxon Mobil gas card and my Best Buy card first, because those had the highest interest rates.”

Seeing the high interest rates presented clearly to him in ReadyForZero made a big difference. And he said that being able to compare what would happen if he paid off those accounts to how much he would have to pay if he didn’t made him determined to tackle them. He said, “plenty of people had told me ‘pay off your highest interest rate accounts first!’ and finally ReadyForZero told me, ‘Dude, pay off your Best Buy card.’”

That’s when it hit home and he realized the need for a thoughtful strategy, rather than just paying money randomly toward each of his accounts. “I had been trying to pay off everything at the same time. And that’s not a good way, because you lose money in interest that way, and you don’t see much progress because each account is being reduced very, very little.”

“That’s why I love your site so much,” he said. “Because it feels like a community and I can see how other people are getting out of debt, and it allows me to stay informed on financial topics. And then the tool itself is telling you what your story is – and it looks bad, you know, but then it’s giving you a plan and saying ‘You can do this! If you can pay off this amount every month, you are going to be able to pay off these cards in this amount of time.’ And just to see those numbers is so helpful and makes you feel like you are in control. And I fell in love with your site for that reason.”

Once he began aiming directly at those high interest accounts, Chad saw rapid progress. “I had carried that Best Buy card for four years, and then in four months – boom – it was gone! And I honestly did a dance, a victory dance, when I got the e-mail [from ReadyForZero saying the account was paid off].” (Apparently, we’re not the only ones who like doing victory dances!)

Chad said one of his favorite things about ReadyForZero is the positive reinforcement and encouragement. He told us, “you know, you wouldn’t think, but when you get the e-mail with the trophy and it says congratulations – it makes you feel great.

Stage 4: Enlightenment

These days, Chad is on a roll. Not only has he paid off his two highest interest accounts, but he’s on his way toward paying off the third one.

He was quite happy to have those two cards done, saying, “in Best Buy’s case, I had maxed it out at $2,000 and it had been fluctuating between $1800 and $2000 for the better part of two years – with a 24% interest rate! I mean, geez!”

As for the Exxon Mobile card, he said: “That one was maxed out at $700. And the minimum payment on that was $12 per month and that was all I paid toward it, and I did that for over a year – and then [when I started RFZ] in two months it was gone.“

The beauty of having a plan and executing it is that he’s not losing any momentum after each card gets paid off. He just shifts to the next part of his plan. “Now I’m on to the next card, which is American Express,” he said. “What proves to me that it’s worked is I’m looking at how much I’m paying down my credit debt every month, and ever since I joined ReadyForZero I’ve paid an average of $418… and when I look at the previous months before that, I was only paying down $126. And my income situation hadn’t changed.”

With this success comes wisdom, and a more informed perspective on finances. “Now, when I buy something, I make a plan to pay it off,” he said. “I’ve started making good decisions. And I put more money toward the bills. I increased the total allocation per month that goes toward the credit card bills.”

Furthermore, his overall credit picture is much brighter. “My credit score has shot up to 724. I don’t have any bad things in my history like bankruptcy or late payments but my score had been way down because I had just so much debt. And now it’s way up.”

We’re so happy that ReadyForZero has played a part in helping him get to this point. We always love hearing about positive outcomes for our users. In his words, “It’s helped me become so in tune with my finances.”

Since things are going well now, Chad is planning to see the Dave Matthews Band live in concert a few times. After all, what is life without passion? And if you can pursue your passion and keep your finances on track, it makes everything sweeter.

Long term, Chad has a goal of building up a substantial savings account. He is focused on goals of financial stability that once seemed very distant. And his newfound mastery of personal finance has become part of his identity, carrying over to his office where he works as a Clinical Data Specialist for a medical device technology company. Contrary to the old days when he was afraid to talk about his finances, now he enjoys discussing personal finance with his co-workers. He shares our attitude that we can tackle debt together by erasing the fear and embarrassment from it.

And whenever he runs into someone who is working to pay off debt he recommends ReadyForZero to them. He told us, “I love your website and the work you’re doing to help people. It’s great, I always tell people about ReadyForZero. I’m living proof that it works.”

We’re lucky to have such a great success story, and we think Chad’s experience is an inspiration to anyone who would like to pursue their passion while continuing to remain financially secure. Keep up the good work, Chad!

How to Make Costly Weekend Activities More Affordable (Bargaineering)
Need a less expensive spin on traditional weekend activities? You may not have to give up your favorite things to do in order to save money. Read this article for creative ways to enjoy your favorite activities in less expensive ways.

25 Ways to Have Cheap Summer Fun (Wisebread)
How about some other activities for the weekend? Here are some great ideas for how to stay entertained this summer for cheap!

10 Ways to Save Money on Gasoline This Summer (OneMoneyDesign)
Are you afraid you’ll lose the money you saved on these activities in what you spend on gas? Not necessarily! Here are different ways you can save money on gas this summer. Good for the environment and good for your wallet!

Seven Ways to Make Big Bucks at Your Garage Sale (FiveCentNickel)
Hosting a garage sale is a great way to get rid of unnecessary clutter, make money, and mingle with your neighbors! If you have a lot of stuff left over from your spring cleaning, read these tips and then host your own garage sale!

27 Ways to Make Money for Teens (Adults Too!) (Christian Personal Finance)
Do you have teens that need to be kept busy when school’s out? Or, are you a teen and want find a way to make some extra cash so you can do all the things you love without asking mom and dad for money? Check out this article for ways to make extra money this summer – without having to flip burgers!

While we’re mentioning articles we liked, here are some blogs that were kind enough to feature ReadyForZero recently:

Balance Junkie
Make Money Make Cents
One Smart Dollar
See Debt Run
The Debt Princess
Young and Thrifty

Do you have ideas for making or saving extra money this summer that we haven’t mentioned here?  Share them with us in the comments below!

Democrats (including President Obama) and Republicans have both argued for keeping these interest rates at their current level, but they’ve disagreed on how to pay for the extension of the low rates.

So how will this debate affect you? Below we’ll describe the arguments on each side of this debate and how it may change (or not) your repayment of student loans.

Which Loans Are Affected by This Student Loan Debate?

The debate focuses on federal Stafford Loans, which allow students to borrow money directly from the U.S. Department of Education to pay for college. In fact, there are two types of Stafford Loans – subsidized and unsubsidized. The subsidized Stafford Loans are given to students who demonstrate financial need. These are often first-generation college students or those who come from families without any significant financial resources. For now, the subsidized Stafford Loans have an interest rate of 3.4%. On the other hand, the unsubsidized Stafford Loans are not based on need and have an interest rate of 6.8%.

The rate hike scheduled for July 1st would only affect the subsidized Stafford Loans, doubling their interest rate from 3.4% to 6.8%, which would bring their interest rates in line with the unsubsidized ones.

Here’s the really key piece of information though: the rate increase would only apply to new loans issued after July 1st. So if you’ve already got loans, the rate change won’t affect you.

The Two Sides of the Student Loan Interest Rate Debate

While it seems that almost everyone is in favor of keeping the 3.8% interest rate intact, disagreement has sprouted – not surprisingly – over how to pay the cost of extending this low interest rate. It’s estimated that it will cost the government about $5.6 billion to continue offering the lower rate to students.

So what are the opposing arguments in this debate? On one side, President Obama and Congressional Democrats supported Senate Bill 2343, which would have paid for this rate extension by changing a law that allows high-income individuals to avoid paying Social Security and Medicare taxes when they classify money they earn as dividends instead of cash income. Making the change would allow the government to recoup more tax money from those individuals, which would then be used to cover the costs of providing the lower interest rate.

Republicans, meanwhile, supported H.R. 4628, a bill that would pay for the lower rates by taking money from a preventative health fund that was created by President Obama’s health care reform law passed in 2010.

It’s not a coincidence that each bill targeted something sacred to the other side. We can be pretty sure that Democrats will not be willing to undercut President Obama’s signature piece of legislation, and Republicans will not be willing to raise taxes. For that reason, it’s pretty clear that the debate and the two bills, H.R. 4628 and S. 2343, have so far been mostly political posturing.

The Most Likely Outcome for Student Loan Interest Rates

Even though the attempts at extending the 3.4% interest rate have so far not been constructive, there’s a possibility that it will get done before the July 1 deadline. After all, there is quite a bit of pressure on both Democrats and Republicans to make this happen, and neither side wants to risk being blamed for an interest rate hike in an election year.

Most likely, one of the following scenarios will take place in the next month and half:

• Republicans and Democrats will agree on a compromise that keeps the interest rate at its current level, and both sides will claim credit for making it happen, or…
• They’ll fail to reach an agreement, in which case each side will blame the other for preventing it from happening

We can’t know for sure which outcome will transpire until we watch the events unfold leading up to the deadline.

So How Will The Student Loan Debate Affect Me?

Unless you plan to get subsidized Stafford Loans in the future, you won’t be affected by this debate.

Pretty straightforward, right?

Even if you have federal loans already (no matter which kind), you won’t be affected unless you’re planning to get subsidized Stafford Loans in the future.

It’s estimated that about 7.4 million students will be given new subsidized Stafford Loans after July 1st of this year, and those are the people who will be paying higher interest rates if a compromise is not reached. If you’re one of those people, you’ll have to pay up to $5,000 more over the life of your loan if the rate goes up to 6.8%.

What About Student Loan Forgiveness?

Since the current student loan debate only affects a small fraction of the total number of student loan borrowers, it’s worth having a broader debate about the rapidly increasing amount of student loan debt held by Americans.

One relevant idea is a student loan forgiveness proposal contained in H.R. 4170, a bill authored by Rep. Hansen Clarke, that would cancel student loan debt for borrowers who have paid 10 percent of their discretionary income towards their loans over the past 10 years. The bill would also cap interest rates on all federal student loans at 3.4%.

That’s certainly an intriguing idea, but as always, the problem is deciding how to pay for it.

In the short term, if you’re someone who’s struggling with student loan debt you should be aware of several programs that might help you get some breathing room. The first is called Income Based Repayment (IBR) and is a federal program that allows you to enter an extended repayment plan that will lower your monthly payments. Many private lenders have this type of program as well, so regardless of which type of loan you have it’s worth contacting your lender if you need lower monthly payments.

For those with federal student loans, it’s worth learning about the Special Direct Consolidation Loan Program that could make your life easier by giving you just one payment (and one bill) to worry about each month, as well as lowering your interest rate slightly.

Many former students are finding it difficult to pay off student loans right now because the economy is still tough for young people. If you’re one of the people who is struggling, inform yourself of the options available to you and be proactive in finding a program that might be able to help for your particular situation.

Image by borman818

DIY specialty gift baskets. A “Do It Yourself” (DIY) gift basket is simple to make and easy to tailor to your mother’s likes and dislikes. Just purchase an inexpensive basket at any craft store and then fill it with some of her favorite candles, bath salts, lotions and other beauty goodies. Or you could put in some candies, chocolates and other homemade treats. If it reflects your mom’s personality it will be even more special, so get creative with it!

Customize your own cards. Whether it’s a poem, a song or just a handwritten letter, creating a custom card will definitely bring a smile to your mother’s face. It doesn’t take much time or money, but it’s a heartfelt gift she will really enjoy – and will probably cherish for a long time.

Recipe card box or binder. A few years ago, I gathered up all my mom’s recipes, made copies of them and put them in a decorative binder. I bought some sheet protectors and tabs to label the recipes into sections. She absolutely loved the gift! It’s a nice way to organize the family recipes and you could do the same thing with a recipe card box as well.

Personalize a flower arrangement. All women love flowers and trust me when I say, we can never get them enough. Most local flower shops will let you create a personalized bouquet for that special someone. Look for online special at sites like ProFlowers.com and FTD.com for custom but inexpensive bouquets. It will mean so much more when you tell her you made the arrangement yourself. As an alternative, you could pick some wildflowers and make a wild arrangement too.

Start an herb or veggie garden. Herb and vegetable gardens have dual benefits; they cater to someone’s green thumb while offering fresh veggies and herbs for cooking. With simple herbs, like rosemary or basil, and veggies like tomatoes, you can start a vegetable or herb garden for your mom. You can find inexpensive pots and planters at most home and garden stores. It’s a nice gift that you and your mom can continue to grow and nurture together.

A day or night off. A mother’s work is never done and they deserve a day off from time to time. Offer to take over the household chores for the day, or volunteer to cook the family a meal. Purchase a certificate for a spa day, or give her a gift card to her favorite restaurant. Let her know the day is all about her.

Books and magazine subscriptions. My mom loves to read books and magazines, so one year I bought her a $25 discount card membership to a local bookstore. Every month she gets new releases and magazines for half the price. Consider buying her a subscription from Discount Mags or giving her an Amazon gift card to purchase ebooks of her choosing.

Clean out and wash the car. Gather up a bucket, some soap and a sponge and give the family car a good cleaning. Vacuum the inside and fill up the gas tank. You could keep this a secret and she’ll be surprised the next time she needs to car pool or run errands.

Canvas print of a family photo. You don’t have to be an artist or photographer to create a nice art piece. Take your mom’s favorite photo and upload it to a site like Canvas on Demand. It turns a photo into a beautiful art canvas. I did this with one of my vacation photos that now hangs above my fireplace.

A memory journal. I’m one of 5 brothers and sisters so we have some crazy, sad and funny memories we’ve made together over the years. Ask everyone in the family to write down their favorite memory into a journal. It can be something silly, or more serious, whatever you choose. When the next Mother’s Day rolls around, keep adding to the memory journal.

Give a gift that keeps on giving. All moms enjoy getting gifts that make their lives easier and help save them time. Consider buying your mom a crockpot, a vegetable/rice steamer or a blender. These are items that encourage healthy cooking that’s quick and easy, while saving time and money. Another gift that keeps giving are old-fashioned hugs and kisses, moms can never get enough of those.

These are just a few ideas to give your mom something special without spending too much money. If nothing else she just wants to spend a little time with you on Mother’s Day. Give her a phone call, take her out for coffee or send her a card in the mail. As long as the gift is thoughtful and heartfelt, it will be greatly appreciated.

What are your favorite Mother’s Day gift ideas? Leave a comment below!