25% of all Americans now have a fico below 600

Congress Reduce My Interest Rate

I wrote a post yesterday, commenting on Congress’s decision to inquiry into the practices of the Banking and [tag]Credit Card industry[/tag]. In the article I posted a link to a story on Yahoo in which [tag]Citibank [/tag]came under fire. I was glad to see the heat, because I have a [tag]Citibank credit card[/tag] and they are charging me [tag]loan shark rates[/tag] because I was late once 9 months ago.

I have called almost every month to see if they can reduce my interest rate. The answer was always “no.” For the last 9 months I have paid their high interest rates and paid more than the minimum. So after yesterdays news broke, I decided what the heck I will give them a call today to see if I could get my rate lowered.

To my surprise when I asked the customer representative he said my [tag]interest rate[/tag] was “too high” and he would definitely reduce my rate. 10 minutes later my interest rate was cut in half. Thanks Congress for putting the heat on! Even though [tag]Congress[/tag] has not legislated the [tag]credit card industry[/tag], at least it has changed the attitude of the bigger card companies.

Senate Takes on Credit Card Industry

[tag]Congress[/tag] is taking the [tag]credit card companies[/tag] to task over [tag]fees and interest rate[/tag] practices. [tag]Sen. Carl Levin[/tag], [tag]Chairman of the Senate Homeland Security subcommittee,[/tag] said an investigation by his panel found “abusive” and confusing practices by credit card companies that can increase financial pain for many families.

What Sen. Levin is doing is trying to get the credit card companies to take action on their own. They would be smart to take action because the last thing the [tag]banking industry[/tag] wants is congress to start legislating their business.

[tag]Citibank[/tag] has already made changes in their fees and interest rates to make a good show to congress.

Read more here

All American families who carry credit debt appreciate the effort of Senator Levin, but let’s hope this is a first step in getting real control of the Credit card industry. [tag]Debt[/tag] is not good for America. When Americans are strapped with debt they can spend less on the economy, their quality of life suffers, and we also know the number one cause of divorce is finances.

Stay tuned America. Let’s hope this congress goes to battle for us. Until then keep [tag]paying of your debt[/tag]!

Get an Emergency Fund

Every [tag]financial advisor[/tag] and [tag]debt reduction expert[/tag] will say you need an [tag]emergency fund[/tag]. Some like [tag]Dave Ramsey [/tag]say you need $1000 in the [tag]bank [/tag]before you start your debt reduction [tag]snowball plan[/tag]. Others like [tag]Liz Pulliman Weston[/tag] will say $500 is good. I agree with Ramsey in principle but the reality is most can only afford to find an extra $500, so I say anything you can put into the emergency fund will help when “[tag]Murphy’s Law[/tag]” hits.

Take it from me when you don’t have the [tag]money[/tag] is when “Murphy” will show up. So Weston gives a couple of great ideas on how to start up and fund your emergency fund:

• Tax re-fund
• Don’t buy any thing accept for the necessities for a month and put the saved money away
• Sell your stuff. Yard sales, e-bay, sell your stuff for cash!
• Save your change. A penny saved is a penny earned
• Go through your bills and cut out services you don’t need.

We have done all of the above to get more cash into the house hold. The most recently I called my cable company and was able to cut $20 a month or $240 a year. We are looking at the cell phone next.

Again when there is a will there is a way. So make it happen.

The Party's Over

So a co-worker of mine mentioned that [tag]February[/tag] tends to be a slow month for [tag]retailers[/tag] because most [tag]Americans[/tag] are recovering from the “hang over” spending they did during the holiday. [tag]Credit[/tag] usage during the holiday is as much apart of the holiday season as the [tag]Christmas[/tag] tree itself. This is unfortunate.

I say this because our family used to be one of the millions of [tag]American family’s[/tag] who bought gifts that weren’t in the budget and relied on Credit to get what we wanted. This year 2006, would be different. We had a game plan. Start saving early and start shopping early.

The game plan, put $50 a month aside for Christmas. In theory we would have $600 to spend on [tag]gifts[/tag]. We tried to look for “[tag]deals[/tag]” through out the year, particularly at Costco. We started buying gifts in late summer. By the time December rolled around we had 95% of our gifts purchased! And it was all done with cash no credit!!

What did we learn? [tag]Reduced stress[/tag] by planning ahead. We didn’t go into debt for the holidays. Established a game plan for next year, which worked. We already have a couple things we want to buy at [tag]Costco[/tag] next week for Christmas gifts.

This post wasn’t meant to be we are better than you at all. In fact we are just like you but this year we really wanted to make a change, which started with a spending plan. This rolls into the biggest part of having good credit, create a [tag]livable budget[/tag] where you can afford to [tag]pay off debt[/tag] and not just pay the minimums. This allows for timely payoff of credit and fosters [tag]responsible spending[/tag].

Poor Americans Give more

A study put out by the [tag]Christian Science Monitor [/tag]states [tag]Americans[/tag] who make less than $20,000 give more. To qualify this stat, this group gives more in relationship to their [tag]income[/tag]. I find this amazing, but at the same time its great to see everyone open their pocketbooks to those who have less.

Interesting fact: This year Americans will give away 260 [tag]Billion[/tag] to charity. Yes that is “B” as in Billions.

Great Thanksgiving Weekend

This weekend we finished our [tag]Christmas[/tag] shopping and yes we took part in [tag]Black Friday[/tag]. We saved a lot but instead of going to the stores at the break of dawn we waited until mid day. Our theory was the hard core shoppers would be done by then. Sure enough it worked. Hardly any lines great prices and we got a [tag]TMX Elmo[/tag] doll.

We also stayed with in budget, another added bonus in planning ahead. Hope everyone had a great [tag]Thanksgiving[/tag] week/weekend.


Dealing With Debt Collectors

About.com is a great resource for information of all kind. Today I found “Top 9 Tips for [tag]Dealing With Debt Collectors[/tag] and [tag]Collection Agencies[/tag]”

  1. Number one, knowing your rights!
  2. Ask questions about the debt and the collection agency
  3. Detailing your steps and interactions

Read the other 6 tips here.

The most important take away I from this list was don’t ignore the problem. It will not go away. [tag]Dealing with debt[/tag] collectors is hard. No doubt about that! Take it one step at a time and know your rights.

Black Friday

The [tag]Friday after thanksgiving[/tag] is the day retailers open stores early and offer deep discounts on their products. Will you be there? Some people make it a tradition to venture out to the malls to do combat with other deal seekers. My opinion is its fine to take part in this [tag]American tradition[/tag] as long as you stay with in your [tag]budget[/tag]!

Ooops did I say the “B” word. Sorry to rain on your parade but just cause they have everything on sale does not mean you have to buy everything! I personally don’t think my family will take part in [tag]Black Friday[/tag]. Unless we hear of a good deal.

We started our [tag]Christmas shopping[/tag] about 3 weeks ago. For two reasons, one to avoid the rush and two, to try and keep cost down, so far so good…

So if you will be one of the brave souls heading to the mall on Friday may the force be with you. You will need it.

Get Thin And Get Wealthy

ScaleA new report published by the British Medical Journal finds the healthier you are the richer you will be. They conclude there is a link between health and wealth. They also point out the tall people are more likely to make more money than shorter people.

I have often said Debt reduction is similar to weight loss. So to take my analogy further as you work on debt reduction, working out could help you make more money which means you can reduce your debt faster and start to make that money work for you.