Paul Ferraresi

If you’re among the two-thirds of credit-card holders who carry an outstanding balance, you might have noticed that your interest rate was hiked recently, or your billing cycle shortened. Failure to navigate card providers’ payment terms successfully can earn you one of several consumer-unfriendly fees.
Some of the industry’s more creative practices, like including the balance from a prior billing cycle in current finance calculations. Alas, these protections won’t take effect for up to 18 months.
The minefield of credit-card booby traps is being cleared, but not soon enough for consumers struggling with debt.
In spotting unfair or deceitful lending practices, several shopping/news Websites like CardTrak.com, Credit.com and CreditCards.com can help. They report on new credit-card pitfalls, provide calculators and other tools for comparing card offers, and translate the arcana in credit-card terms and conditions.
CardTrak.com and CreditCards.com give a big picture view. CreditCards.com identifies the top five card issuers. CardTrak.com notes late fees and over limit charges have tripled since the 2001 recession. The average ding for each is $35 now, and those penalties are assessed much more readily than before.
Even more damaging to your wallet may be the growing “spread” between the prime rate and interest rates charged by the dominant card issuers. Trip over some of the terms in your credit card agreement and you may be graduated up to an annual percentage rate of 28% or more.
Fewer cardholders have been making progress reducing debt lately. Sixty-day delinquencies have jumped nearly 24% since August, according to industry monitor Fitch Ratings (www.fitchratings.com), which expects complete charge-offs to rise 33% this year. Issuers’ portfolios continue to be profitable, however, precisely became they’ve been able to raise rates on cards users, notes Fitch. Credit.com offers an extensive list of cards across categories, and a free questionnaire that will give you a quick estimate of your FICO score.
CreditCardClients.com’s Savings Agent is another useful search tool. Enter your current card balance and a few other credit details (without any identity information), and Savings Agent will compare your needs to about 200 of the newest cards offers, indicating the 10 cards that will save you the most money relative to your current card.
IndexCreditCards.com also follows the credit card industry closely, and lets you rummage around a frequently updated database of more than 1,200 credit offers. Besides having encyclopedic listings of cards by category, both LowCards.com and CardRatings.com review individual cards.
BadCreditOffers.com, on the other hand, is dedicated to finding credit cards and other kinds of loans for people with bad credit histories. The terms might not be optimal, but even in today’s market BadCreditOffers.com lists more than 12 potential credit lines, both secured and unsecured, for those with low FICOs. But be careful: Applying for a new card usually will knock a few points off your FICO score.
It’s best, of course, to pay credit balances in full every month. But if you must play (and pay), at least know the rules of the game.

An associate of ours, Kim Barmann, in New Mexico sent this report. I wanted to share it with you to emphasize the importance of staying vigilant in saving money.

$ People Are Saving Less

• The Commerce Department reports that Americans are saving at the lowest rate since the Great Depression.
• Personal savings stood at a national level of negative $6.2 million in January.
• About 40% of Americans say they are saving nothing for retirement. One reason: Over the past year, inflation rose 4.3% while salaries rose only 3.4%.
• One in four Americans told the Employee Benefit Research Institute that they have no saving at all.

$ Retirement Is Coming Later and Later

• The percentage of Americans 55 or older working full-time increased from 54.2% in 1993 to 64.4% in 2005.
• Nearly one in four people between 65 and 74 was still in the labor force in 2006, compared with just one in five in 2000.
• A recent study indicates that 17% of workers have suffered a reduction of retirement benefits offered by their employers in the last two years. Of these, only one-third say they are saving more for their retirement as a result.

$ Student Debt Is Piling Up

• Tuition cost have climbed 60% since 2000, and the average graduating senior now owes more than $20,000, according to the National Center for Education Statistics-twice as much as graduates owed a decade ago.
• Nearly a quarter of recent grads owe in excess of $25,000.
• While student debt rose 8% from 2005 to 2006, starting salaries rose only 4%.

These are the statistics. Break away from the crowd and do NOT be one of the statistics. Call us if you want to stand out from the crowd.

Danger!! Money borrowed from the equity in your home should be used to conserve, not consume! Unfortunately, you can see many home equity lines of credit darting across the lakes or on the mountain slopes.

The equity in your home is not like an ATM. The worst thing you can do is borrow against your home equity and buy depreciating assets. You borrow equity to conserve not consume. Read the rest of this entry »

Sometimes a variety of circumstances combine to cause a cash flow crisis and the result is an over-extension of credit. This can lead to emotional and marital problems in addition to the financial turmoil. When a person has reached this situation, there are several steps to be considered:

• Immediate cessation of the use of credit
• Evaluation of the extent of the problem – listing debts
• Consideration of declaring bankruptcy
• Seeking the services of a credit counseling service
• Developing your own workout resolution Read the rest of this entry »