Debt Settlement Blog

Debt Relief Solutions, News and Advice for Saving Money
August 26, 2010

Credit Card Debt Declines to 8 Year Low

Author: admin - Categories: Credit Card News, Debt Articles, Debt Relief Articles - Tags: ,
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Credit card debt has been a significant problem for millions of Americans.  The amount consumers owed on their credit cards in this year’s second quarter dropped to the lowest level in more than eight years as cardholders continued to pay off balances in the uncertain economy. The average combined debt for bank-issued credit cards like those with a MasterCard or Visa logo – fell to $4,951 in the three months ended June 30, down more than 13 % from $5,719 in the same period a year ago, according to Trans Union.  The credit reporting agency said it was the first three-month period during which card debt fell below $5,000 since the first quarter of 2002.  In years past homeowners would take out a second mortgage for credit consolidation, but now those types of loan programs are no longer available.  Secure debt consolidation loans, like 2nd mortgages are difficult to find without owning a home and having a lot of home equity.

Negotiate Credit Card Debt and Save!

Credit card debt remained the highest in Alaska, but slid 7 % there to $7,148. A total of 22 states recorded debt higher than the national average.  Residents of Alabama paid off the most debt, dropping their average balance by 27 % to $4,753.  More borrowers also made payments on time. The rate of cardholders past due by 90 days or more fell to 0.92 % in the second quarter, from 1.17 % last year.

That’s the first time the delinquency rate has been below 1 % since the second quarter of 2007, before the recession, said Ezra Becker, director of consulting and strategy in Trans Union’s financial services unit. The rate fluctuates during the year, he said, but the improvement is more evidence that consumers are working to make sure their credit cards remain in good standing.  That concern reflects several economic factors, from the fear of unemployment to the fact that the collapsed housing market means it’s harder to cash in on home equity when money gets tight. “You can’t buy groceries with your house anymore,” Becker said.

Reflecting the weak economies in the states hardest hit by the housing crisis, the delinquency rate was highest in Nevada, at 1.5 % of cardholders, followed by Florida, 1.24 %, Arizona, 1.11 % and California, 1.08 %. In all, 16 states fared worse than the national average for delinquencies.

The lowest delinquency rates remained in North Dakota, at 0.54 %, and South Dakota, at 0.55 %.  In a twist, Becker said the foreclosure crisis could be helping to improve the timeliness of credit card payments and lower balances. When people don’t make mortgage loan payments, he suggested, they have a short-term cash boost. “That can provide extra money to pay down credit cards,” he said.  Besides paying off and refinancing debt, consumers are getting fewer new cards. Nationwide, the number of new accounts opened dropped almost 6.5 % from last year.  Trans Union predicts that the national delinquency rate will remain below 1 % for the rest of the year. However, on the high end, the Nevada rate is forecast to edge up to 1.6 %.  See the original article online

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May 19, 2010

Senate Approves No Cost Credit Score Rule

Author: admin - Categories: Consumer Credit, Credit Card News, Credit Reports
SafeOnlineCash.com

The U.S. Senate voted to adopt a new amendment that would extend consumers free access to their credit scores.  However the no cost access to credit is only granted in certain situations.  The credit report outlines the record of paying on mortgage loans, credit cards and additional debt.  Sen. Mark Udall (D-Colo.) sponsored the rule and added more legislation establishing new regulations on Wall Street financial firms, which the Senate is currently debating. It would allow consumers to obtain their credit scores for no charge from the three major credit repositories, Equifax, Experian and Trans Union, but only if the credit scores were used to make a decision that caused them to be rejected in a hiring decision.  If a consumer is turned away for credit for consolidating debt or refinancing loans the lender is not required to issue a free credit report.

At this time, consumers are entitled to obtain free copies of their credit report once a year from each of the three major credit reporting companies – Equifax, Experian and Transunion. However, those reports only contain the details of the consumer’s credit history.  To obtain their credit scores – which are what lenders use in making determinations of whether to extend credit and what interest rates to charge – consumers currently must pay a fee.   More and more, credit scores are being used not only by mortgage lenders in deciding whether to extend credit, but in other ways as well. Employers are increasingly looking to credit scores in making hiring decisions, assuming that a higher score is an indication of how well a job candidate manages his or her personal life, and thereby is a reflection of character.  It is not sure how this new legislation will impact credit repair industry.

The rule would require that consumers automatically be given their credit score if they are turned down for a loan or purchase, pay a higher interest rate on a loan or receive unfavorable terms on a credit card, or are not hired for a job due to their credit rating.  “For too long, consumers have been at a disadvantage because banks and home loan lenders use these credit scores against them while they have no idea what their actual score is,” Sen. Udall said. “A person’s credit score affects the terms of home loan terms, their ability to buy a car, rent an apartment or set up a new utility account. It’s simply not fair for lenders to have access to a consumer’s all-important credit score without the consumer being given free access to it.”  The original article was written by:Kirk Haverkamp.

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May 10, 2010

Controversial Debt Settlement Bill

Author: admin - Categories: Consumer Credit, Credit Card News, Credit Card Settlement, Debt Articles, Debt Relief Tips, Debt Settlement News - Tags: ,

Washington appears to be going for the throat of the the debt settlement industry. On Wednesday, U.S. Senators Chuck Schumer, D-N.Y., and Claire McCaskill, D-Mo., introduced the “Debt Settlement Consumer Protection Act,” which would limit the fees that debt settlement firms can charge and mandate written disclosures before services are performed, including the right to cancel for a full refund.  Enrollment in a debt settlement program usually involves making payments into an account administered by the firm, which uses some of the money for fees but also to negotiate with creditors and settle credit card debt when the account has enough funds for an offer. Meanwhile, many debt relief companies advise consumers to stop paying their creditors to make the lenders desperate even for a partial payment.  They do this because that is what the credit card companies need to even consider a debt negotiation

Bank Rate Debt Adviser Steve Bucci mentioned in his column, that consumers will hurt their credit score. While that is true, he may be overlooking the fact that most of these people do not have the ability to pay back their credit card companies with their present income.  It is also important to note that credit counseling and bankruptcy also damage the consumer’s credit scores.  According to debt relief advisor, Jeff Morris, “Getting more credit is not the top priority for a struggling American who are buried in credit card debt.”  Morris continued, “There is plenty of time to implement some credit repair programs after the person eliminates their credit card debt.”

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April 14, 2010

Obama Credit Card Debt Reform

Author: admin - Categories: Credit Card News, Debt Articles, Debt Relief Articles, Debt Relief Tips
SafeOnlineCash.com

American consumers continue to seek credit card debt settlement and relief because they owe more than $945 billion in credit card debt.  Last year President Obama signed a debt relief bill into law that is intended to limit the ability of credit card companies to raise interest rates and fees.  President Obama said, “With this bill we are putting in place some common sense reforms designed to protect consumers.”

The President signed the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 (H.R. 627).  This debt relief bill largely codifies regulations imposed by the Federal Reserve in 2008, but became effective on February 2010.  This debt relief bill limits the abilities of credit card finance banks to increase the interest rates of existing customers, charge account maintenance fees and assess penalties will be greatly restricted.

“20% of consumers are currently carrying credit card debt that has been charged interest rates above 20%.”  Card issuers will also be banned from enacting rate increases on existing balances due to “any time, any reason” or “universal default” and severely restricted from imposing retroactive rate increases due to late payment.  In addition, credit card companies will be required to disclose all terms of their credit contracts online and in language that consumers can see and understand so they can avoid unnecessary costs and manage their finances.

Complete details about debt relief and solutions like credit counseling, credit debt settlement and a secured debt consolidation loan are available online.

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August 28, 2009

Debt Relief Leads

Author: admin - Categories: Consumer Credit, Credit Card News, Debt Relief Articles, Debt Settlement News - Tags:

Debt Settlement Nationwide has put together some great lead generation campaigns for debt settlement, bill consolidation and loan modification agreements. If you are currently working in these areas this is the time to jump on some good debt relief leads. We are seeing great closing ratios on all of our debt leads.  The mortgage modification industry is alive and well and continues to pick up stream. The debt relief industry continues to grow steadily. Get these consumers into the right program now!

Debt Settlement Nationwide has debt relief candidates who are beginning to default on the credit card obligations.  This is a great to contact them as they just begin to run late and they still care about their obligations. Wall Street can set the criteria for the amount of debt and length of delinquency. We are finding the most active candidates are the ones who are maxed out the credit cards with a jumbo mortgage loan. These consumers are responding well to alleviating their debt to save their home. We also have been seeing good response from homeowners with large equity lines of credit or second mortgages. The response has been overwhelming at getting rid of the large debt amounts caused by the home equity and second mortgage. Get in touch with these motivated consumers now. We have internet leads, live transfer leads and direct mail marketing programs trageting consumers with high rate credit card debt.  Call Debt Settlement Nationwide today start consolidating tomorrow!

Debt Settlement Nationwide has loss mitigation candidates that are currently 30-60-90 day late on their mortgage. You can select the size of the mortgage and the length of delinquency. We have a lot of independent attorneys that are mailing these lead on their own.  Previously they were stuck in the clay and running in the red on their marketing. After switching into high octane Debt Settlement Nationwide data they are once again achieving phenomenal results. If you are not getting the results you need to be successful? Call Debt Settlement Nationwide and get back on the right track today!!

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August 17, 2009

Credit Card Debt Charge Off Update

Author: admin - Categories: Consumer Credit, Credit Card News, Debt Relief Articles, Debt Settlement News
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Credit card debt has exploded, with bankruptcy and debt settlement cases rising continue to rise at alarming rates.  The rate of U.S. credit card defaults showed signs of stabilizing last month, an indication that American consumers may not be in as bad shape as feared despite job losses and the housing slump.  Are credit card companies hiding their losses?

 

o    BofA credit card charge-offs edge lower

o    Capital One defaults rise, stock falls 1.1 pct

o    JPMorgan, Citigroup, Discover say defaults drop

o    Capital One Defaults rise

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August 11, 2009

Consumer Credit Declines Again

Author: admin - Categories: Consumer Credit, Credit Card News, Debt Relief Articles - Tags: ,

Credit card debt continues to calculate negatively for consumers straddled with high rates.  With delinquencies soaring the banks have been forced to cut available credit line for consumers across the country.  Consumer credit fell $10.3 billion in the U.S. in June, or at a 4.92 percent annual rate, to $2.5 trillion. It was the fifth straight month of decline, as banks cut limits on credit cards and some consumers remained wary of borrowing money for big purchases.  Home foreclosures have not slowed down and fears of more job losses have contributed to the credit reduction from banks and lenders

Economics blog Calculated Risk has this chart (it gets bigger each time you click on it) showing that in percentage terms the declines in consumer credit are the worst in at least the past four decades:

Looking at subcategories within the Federal Reserve report, credit-card debt fell $5.04 billion, or 3.8%, to $1.59 trillion — a record 10th straight monthly drop in credit card debt. And non-revolving credit, such as auto loans, fell $5.04 billion, or 3.8%, to $1.59 trillion.  Doesn’t seem consumers are ready to save the economy quite yet.  Article written by Mathew Padilla

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April 27, 2009

Debt Settlement Versus Debt Management Program

Author: admin - Categories: Credit Card News, Debt Relief Articles, Debt Settlement News - Tags: , , , , ,
SafeOnlineCash.com

The major difference between a Debt Management Program and Debt Settlement Program is that through a debt management option, creditors are being paid monthly whereas in debt settlement options the creditors are no longer being paid until such time as the debtor has built up sufficient funds to allow the debt settlement company to initiate negotiation procedures to reduce the amount of the debt and enact a lump sum settlement.  

Either way, in most cases, settling credit card debt or enrolling in a credit counseling program should eliminate harassing phone calls from bill collectors and collection companies.

Debt settlement can have a significant effect on a debtor’s credit score and rating as a whole, whereas a debt management after a period of time may have a positive effect on a debtor’s credit score, but may still be damaging to the debtor’s credit worthiness.  The good news is that credit can be repaired and credit repair solutions are affordable.  Take your time, when considering debt negotiations or any type of credit counseling.

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March 31, 2009

Thousands of Credit Card Consumers Report Credit Line Reductions in 2008

Author: admin - Categories: Credit Card News, Debt Relief Articles, Financial News - Tags: , , , , , ,
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Bad credit mortgage options remained non-existent for struggling homeowners seeking home refinancing with fixed rates and reduced monthly payments.  Millions of homeowners have been turned down by mortgage lenders across the country, because of low credit scores, delinquent mortgages, negative equity or employment instability.  Some homeowners may qualify for loan modification plans if they happen to have their mortgage collateralized by Fannie Mae and Freddie Mac.  However, only conforming home mortgages qualify for the federal mortgage modification program.  Jumbo mortgage loans do not qualify for the FHA mortgage, FDIC or federal foreclosure prevention plan, even if the homeowner resides in a high cost area like California, New York, Virginia or New Jersey. 

 

Today the Minnesota-based credit score developer FICO released the results of a study measuring the breadth of credit card limit reductions as well as the subsequent impact to consumer’s FICO credit scores. The study is the first of its kind since credit card issuers began to heavily ramp up their credit limit reduction activity in early 2008. Here are some highlights of the FICO study: 16% of the U.S population had their overall available revolving credit reduced between April and October of 2008. With credit bureau databases holding 200+ million consumer credit files, this would seem to indicate that at least 32 million cardholders lost some of their credit limits during the study timeframe of April 2008 through October 2008.


11% of the U.S. population, or 22 million consumers, lost some of their credit limits for a reason other than risky credit activity such as making payments late, having accounts go to collections, or having a negative public record added to their credit report during the study time frame. Credit card inactivity or low balances likely caused the lowered credit limits for this group. The median FICO score in this group is 770, so the adverse changes to their credit limits are not a result of poor credit risk.



A recent Fair Isaac report indicated that 10 million consumers acknowledged that their credit limits were reduced by a credit card company or home equity lender.  The financial companies that hold the debt on these credit cards claim that the maximum revolving debt for these accounts changes “because of some sort of risky credit activity including late payments, accounts in collections, or a negative public record added on their credit reports.”  However thousands of consumers with good credit scores ( borrowers with no late payments and no increased risks) reported to have their credit lines cut or significantly reduced without any changes in the credit profile.  Many of these consumers also claim that the reduction in credit limits caused their credit scores to drop on average of 40 points. 

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