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Friday November 17th 2017

5 Smart Ideas for Reduction of Debt

If you are buried under rising debt and want to get rid of it as soon as possible, then you can consider various debt reduction ideas which will ensure an improvement in your debt situation. You can consider many debt solutions such as debt consolidation, settlement, etc. However, you can also consider a few frugal debt reduction ideas to hasten the process of debt elimination.

Some of these frugal debt reduction ideas are as follows.

  1. Putting up a yard sale: If you have a lot of extra junk that is lying around your house, then you can put up a yard sale. This way you can liquefy the money that is other wise lying as waste. You can sell off all your old discarded items that may include your clothes, furniture, toys as well as house wares. After you do this you would get some money out of the things that did not have any value for you. This extra amount that you earn you can put towards paying off your debt. Try to use it to pay for the debt that has the highest rate of interest. In case you have certain valuable items that you do not need any more, you can put them up for sale on eBay.
  2. Using as many coupons as possible: A great way of saving money on the things that you need is the use of coupons. As these coupons help you save, they indirectly also help you in paying off your debts as you can use the money you save to pay off your debts. You should try and use as many coupons as possible and then try to put the money that you save towards your debts.
  3. Hiring yourself is advisable: It is advisable that you hire yourself instead of others to do certain daily household jobs. You may usually hire someone to clean your house or cook for you. Try not to do that, instead you can do those jobs yourself and save a lot of money. This money can be put to use by paying it towards your debts.
  4. Making money through online surveys: If you have opinions to express, then you can earn while expressing them by opting for online surveys. In your extra time you can fill in as many as you can and earn money. This money can be utilized for paying off your debts.
  5. Utilizing your talents: Everyone is good at certain things all you have to do is try to cash in on your talents. Try to figure out what are the things that you are really good at. Then you must think of how to turn these talents into ways to earn money. Find ways in which you can successfully market your skills and then make payments with the profits that you earn.

With the help of these ways you can gradually reduce your debt and then eliminate it.

Author’s bio : Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. He is covering debt settlement, debt reduction, debt consolidation etc. including all other financial topics.

How Banks Make Money when They Can’t Lend


Many people don’t understand how banks make money. Essentially, they are money stores. They buy and sell money, rather than retail items. They sell loans, investment vehicles and various financial products, many of them invented by the banks themselves. Banks earn interest on loans and use that income to pay for interest on accounts and CDs. They also charge fees on financial products and services.

Because banks are in the business of lending, they can’t make money until they have money on hand. That’s why they use enticements like free checking and savings interest to gain new customers. It almost seems obscene that a bank can charge 11 percent interest on a $200,000 loan and then pay customers 1% on a $1,000 checking account, but that’s how banks make such incredibly high profits. Even in the down economy, when everyone else is struggling, banks are thriving and growing.

How Banks Earn When they Can’t Lend

Loaning money is a risky business. If the bank doesn’t get paid, it can’t pay its customers. That’s why banks have been looking for other ways to make money. One huge source of income for banks in a time when fewer Americans have the funds to borrow has been overdraft fees. According to the Center for Responsible Lending, the total cost of unauthorized overdrafts is about $23.7 billion per year.

Overdraft Fees

New regulations intended on protecting consumers from overdrafts, has actually made them more likely. While consumers can opt out of certain overdrafts, point of sale overdrafts often don’t go into effect until a month after an account is open. If the bank does not contact consumers to tell them it’s time to opt out, they may end up paying overdrafts inadvertently.

Recently, Bank of America and Citibank changed their policies on overdrafts for debit accounts. Now, the banks will refuse them unless instructed otherwise. Bank of America and Citibank will only cover debit card and ATM overdrafts if customers sign up to link their savings or line of credit to the checking account. The fees for these kinds of overdrafts are much lower.

Pay Day Loans

Another practice finding its way into banking is the Pay Day Loan. These loans must be paid back quickly, making them much more likely to result in default, then exorbitant fees. Borrowers become trapped in a cycle of debt that essentially amounts to legal loan sharking. Consumers flip the loan continually to extend the time they have to pay. In the end, the average pay day loan costs a 400% annual percentage rate.

Banks are an important convenience for consumers and an important part of our financial system. Unfortunately, they can also destroy the lives of those who fail to use banking responsibly.


Don’t Retire Early If It Means Going Without Health Insurance

Early retirement used to be a sign of prosperity, but nowadays, it seems almost foolish to try. There are no guarantees that the retirement income you have established today will be available tomorrow. Rates of return on investments are low. Add to that the difficulty of managing health care, and the outlook for early retirement looks bleak indeed.

Generally, we do not qualify for Medicare until age 65. That leaves a big gap for anyone wanting to retire at age 55. It’s important to look at all of your options and plan accordingly. If you have your heart set on retiring early, here’s what you need to know about making the most of health benefits available to you.

Piggy Back on Your Spouse

If your spouse has health insurance benefits through work and continues working, you may secure benefits that way. Generally, this works best if your spouse is a few years younger than you are. Otherwise, you may be in line for a spot of jealousy as your spouse comes home from the grueling grind every day only to find you relaxing in the sunshine. If your spouse just hasn’t reached retirement age, there is less chance of conflict.

Pensions

If your employer offers a good pension plan, you may be able to secure private health insurance cheaply until Medicare takes over. Such plans are becoming rare, as companies have begun scaling back benefits to meet ever-increasing demands for profits. Don’t assume the option isn’t there for you. Check into your pension plan and read it carefully. Some employers have been hoping to get away with denying promised benefits.

COBRA

Even if your pension does not include health insurance benefits, you can stretch those employer benefits out when you retire. Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), the typical employer must allow you to pay them to continue your health insurance coverage for at least 18 months. You benefit from the employer’s group insurance rate. Be sure to sign up within 60 days of separation or you may lose this option.

Individual Health Insurance

Once your COBRA eligibility period is over, you’re on your own until age 65. Under the Health Insurance Portability and Accountability Act (HIPAA), those who receive COBRA benefits can secure a certificate that allows them to bypass coverage problems that arise because of a preexisting condition. If your health is good, you might be able to get special coverage that is designed only for catastrophic illnesses. You pay for your annual checkups, prescriptions and routine care. The insurance kicks in for large expenses only after they exceed the deductible.

Going Without

You really shouldn’t consider this an option at all, even if that means paying for our own health insurance. Going uninsured, hoping you make it to age 65 when you can afford that life-saving surgery, is no one’s idea of a relaxing retirement. You’d be better of working and knowing you’re protected if you get sick.


Should You Pay Off Your Student Loans Early?

Should you pay off your student loans early? Absolutely! Paying off your student loans as soon as you possibly can is the best thing you can possibly do with your money. Tons of people graduate from college with thousands of dollars worth of student loans and completely forget or neglect to pay the money back once they are out college. This is one of the worst mistakes you can make. There are a number of reasons to pay your loans off as soon as possible.

Better Credit

First of all, paying your student loan as soon as you can will lower your debt to income ratio. This will allow you to have more money when you start to make important financial decisions later on down the road. Having a good debt to income ratio will allow you to afford a nicer house, car, and other objects you may desire. You may even be able to take the extra money afforded to you and invest it in order to start making even more money. Bottom line, the financial position you will be in later will be well worth the money you pay now.

Interest Savings

The longer you wait to pay your loans the more your loans will cost. Each month you don’t pay is more interest being added to the previous interest your loans have accumulated. The longer you wait to pay the more interest you will have to pay. The sooner you pay your loans the less you will pay altogether which could potentially save yourself thousands of dollars.

You’ve Got to Do it Sooner or Later Anyway

You cannot escape your student loans. You still have to pay your student loans even if you declare bankruptcy. Should your finances tank you will still have to climb back up with your student loans weighing you down. Paying your student loans early will allow you to deal with a financial crisis easier.

Most people start out with student loans as their only source of debt. Why not start your debt free life sooner than later by paying off your only source of debt as quickly as possible? You have nothing to lose and everything to gain from paying your loans right away.

Even if you can only pay off a portion of your loans you will still benefit more than not. Getting your finances in order as quickly as possible should always be your number one priority.


Step-by-Step Guide to Lower Credit Card Interest Rates

Credit card companies compete with each other using their individual interest rates. The following is a method in which you can use a credit card company’s competitive mindset to lower your credit card interest rates.

Getting the Best Rate

Credit card companies are in the business of making money. If they could charge you a hundred percent interest rate they would. However, credit card companies are constantly competing with each other for customers on a daily basis. No one would use a credit card that charged a hundred percent interest, thus a credit card company with a hundred percent interest rate would become bankrupt in a matter of days. Just how much you do pay can depend on how far you’re willing to go to get the best rate.

Gather Your Information and Start Calling

First off you need to get your credit card statements together and call the customer service number that is list on your credit card statement. This will call will take a while and probably try your patience but it could save your hundreds of dollars in the future so stick with it. Go through the recording and push the necessary numbers until you get a hold of one of your credit card company’s representatives.

Negotiating a Better Rate

Now that you have an actual person on the phone you can start step two. Simply ask the representative to lower your credit card’s interest rate. Make sure you point out that you constantly pay your bill on time. If you make a lot of late payments you may be unable to lower your interest rate at all.

Be Nice

It is absolutely essential that you keep a polite tone. You are trying to get the credit card company to do you a favor; people do not do favors for people that show hostility towards them. Stay polite and the customer service representative will be more willing to help you out however he or she can.

Be Persistent

If your credit card company can’t lower your rate then request detailed information on why they aren’t willing to lower your interest rate and how you can qualify for a lower rate in the future. You may need to simply wait a few months before calling again. It is actually a good idea to call every few months whether they approve a lower interest rate or not. You want to get as close to zero percent as possible.

Lastly, pay your bill in full each month. If you pay your bill in full you make sure your credit card company doesn’t have a reason to increase your interest rate. The longer you pay your bill in full each month without any troubles the more of a reason your credit card company will have to lower your interest rate next time you call.

Politeness and manners are the keys to lowering your credit card interest rates. Those who ask nicely and frequently are more likely to receive lower credit card interest rates than those who demand and never ask. One phone call could save you hundreds of dollars each year


What to do When You Can’t Pay the Minimum

It can happen to the best of us. For some reason or another you are unable to make your minimum credit card payment. As long as this only happens once in a blue moon you are okay; do not make it a regular occurrence or you will find yourself grave deep in debt. It is easy to just your minimum credit card payment if you can’t afford it and just go with the consequences. It is also incredibly stupid to do as well. If you find yourself in danger of missing your monthly minimum credit card payment follow the tips below to minimize its impact on your finances and credit score.

Be Proactive

The first action you need to take when you know you are going to miss your monthly minimum credit card payment is to call your creditor. Explain the situation you are in and why you can’t make your payment. Most creditors will waive the late fee and extend your due date as long as it is a one-time occurrence. The majority of creditors will also refrain from reporting late payments to credit bureaus. This is not guaranteed to occur. You may call and your creditor says they can’t do anything for you. However, if you choose not to call at all you will definitely be hit with the full extent of late payment penalties.

There’s Always a Way

Should you end up with a creditor that refuses to show any leniency you need to find a way to pay your minimum any way you can. You can try to find a friend or family member to burrow from, sell some items that are just collecting dust, get and advance on your next paycheck, or find a way to make a little extra money. It is important to keep any blemish you can from your credit score. The road to ruined credit often occurs from one missed payment slowly turning into more. Make the payment anyway you can.

Be Sensible

Do not put off other important bills to pay your credit card payment. While it is important to keep good credit, it is not worth losing your water or electricity. Should you find yourself falling behind regularly then you may need to try to work out alternative payments with your creditors or see a credit counselor as soon as possible. With a little proactive work you can to preserve your credit standing without sacrificing necessities. Do what you have to in order to stay in good credit today.