Free Credit Counseling

Have A Cell Phone Contract You Need To Get Out Of? Here's How.

        Short and sweet, here is some very practical advice.

        Cutting Costs often involves terminating unnecessary services such as cable T.V.,
lawn care, etc. If cell phone use is not part of your job, your cellular phone service would
also fall into the non-essential category. However, it's not always easy to hang up on a twoyear service contract that comes with heft penalties and fees for early termination.

        Consumers can now utilize a new service to avoid the $175. to $200. early termination penalty.
For a $19.95 fee, Celltradeusa.com finds people to take on your existing contract thereby satisfying the
cell companies bottom line. Reports indicate that it is fast and easy and can be accomplished completely
online.

        If you feel you still need a cell phone for emergencies you can always use pre-paid minutes,
purchased from your cell phone provider. There is no contract involved in pre-paid minutes.
If you found this article helpful, you can find more like it by visiting: http://freecreditcounselingblog.typepad.com/creditcounseling/ and subscribing FREE to the newsfeed
from this blog.

Written By:
Steven Ciantro
American Debt Enders
Member National Association of Certified Credit Counselors
Help@americandebtenders.com

This article may be reproduced in its entirety provided the entire signature line including this
permission line is included.

420 Million Credit Cards, Almost 1 Trillion In Unsecured Debt!

         There are currently 420 million credit cards in the US, and growing, and just under 1 trillion dollars of unsecured debt. Couple this with delinquency rates hitting a 4 year high of 4.53%, and balances up by nearly 10% from 1 year ago and you have not a pretty picture. It's not that Americans are spending more lavishly on luxury items, in most cases, they are forced to use credit cards as an income supplement to keep up with rising energy and food prices. Many Americans realize that this is not a time to live beyond ones means, but if even after making substantial cutbacks still cannot make ends meet, they are left with no choice but to use credit cards to an even greater degree. Additionally, where people were using home refinancing as a source of extra income, with the significant tightening of the credit markets and complete wipeout of the sub prime lending industry, credit cards have taken front and center as the means of just keeping up.

       If things continue on this path, there will not be enough credit counselors in the US to clean up this mess. You might think that given this scenario, banks would have figured out that they are not helping the situation by charging onerous fees and interest rates. I recently met an individual with a 700 credit score who was offered a credit card at an introductory rate of 2.77%. The problem was that with balance transfer fees and nuisance fees the total APR was disclosed to be 72%. Additionally, many banks are reducing the credit lines of even cardholders with no late payments. Why? They are seeing the writing on the wall.

    There is no good reason to suspect that any of this will change soon. The price of energy is not going to retreat, especially not with increasing demand and need, and literally everything that we consume is tied to the cost of energy. If you think that any of our leaders can come together and make real solutions to any of this, you are kidding yourself. Those who are calling for change need to be aware that change is coming, but it may not be what they were anticipating.

    So, what to make of all this. As I consistently write in all my articles, now is the time to scale back your life. Live under your means. If you are carrying heavy credit card debt with usurious interest rates now is the time to to something to pay it off. Consider a debt management program. If you cannot afford your current credit card payments and are falling behind, consider a debt settlement program. Please, do not just ignore the problem, it will not go away by itself.

    If you would like more articles on debt solutions and have not done so already, please feel free to subscribe to this free credit counseling newsletter by visiting: http://freecreditcounselingblog.typepad.com/creditcounseling/. If you would like to speak to a credit counselor feel free to visit: www.americandebtenders.com.

Written By:

Steven Ciantro
Member National Association of Certified Credit Counselors
Help@americandebtenders.com

Should I Speak To My Creditors When Enrolled In A Debt Settlement Program?

    Wow! What a great question, and unfortunately, one which I have not seen addressed in to many articles. The general answer is, it depends on the guidelines given to you by your particular debt settlement law firm or company. When you enroll in a debt settlement program, and hopefully, it is one in which you are represented by legal counsel, that law firm will have its own set of guidelines on how to handle your creditors. The settlement law firm or its customer service arm, will send out letters to each of your creditors advising them that you have enrolled in there settlement program and now represent you concerning these debts. Will this make the creditors stop calling you? Not always. The original creditor can still call you, as they are not bound by the Fair Debt Collection Practices Act. Many times, however, once they learn you have enrolled in a settlement program and are represented by legal counsel, they will stop.
Some will just wait out the one hundred and eighty day charge off period, while continuing to mail you statements and offers to settle, and some will continue to call you.

     After one hundred and eighty days of non payment by you, the account will charge off and either go to an outside collector or there own internal collections department. This is where you are protected by the Fair Debt Collection Practices Act, as the act applies to collection agencies which are not the original creditor, but rather have been assigned the debt or purchased it for less than full value. Often times, the collection company will have received the notification that you are represented by settlement attorneys, but just not bothered to look, or simply chose to ignore it.

     The Fair Debt Collection Practices Act says that collectors cannot call you once they have been notified that you are legally represented. In fact, there is a penalty of $1000.00 per call, if they violate and you can prove it. Unfortunately, I know of clients who have enrolled in excellent debt settlement programs but against the advice of the company continued to take calls from creditors. Unless you have been advised by your settlement company as to how to handle these conversations, it can be disastrous. I know of one client who allowed the collection company to take $200. from her checking account as a one time payment, even though the account was placed with a settlement law firm and she was paying them at the same time. What happened? Generally, there is no one time payment with collection companies. They went into her account each month for four consecutive months before she realized she had paid them $800.00. She actually was angry at the settlement company, even though they had no idea what was happening, because she failed to contact them to get advice before she gave over her checking information.

    Some settlement law firms actually will tell you that they do not want you to speak to creditors enrolled in there program at all. Just let them do the job you hired them for, and call them if you have a question. Some settlement law firms will actually void any warranties they gave you in writing when you enrolled, if you speak directly to your creditors.

   The bottom line is, few people are trained in how to handle creditor phone calls. Thats why you enroll in a debt settlement program. You need to let the experts work on your behalf, because the creditors are trained to use scare tactics, that in many cases are simply not even true.

    If you found this article useful and are not currently a subscriber to our Free Credit Counseling Newsletter, please visit: http://freecreditcounselingblog.typepad.com/creditcounseling/ and sign up for our free feeds from our blog.

Written By:

Steven Ciantro
American Debt Enders
help@americandebtenders.com
Member National Association Of Certified Credit Counselors
877-766-2465

This Two Pronged Approach Can Get You Back On Track Fast, Financially

    By now it should be quite clear to anyone reading this article that there is no government program that is going to bail anyone out of a financial crises. The bottom line,as I have written so many times, is that the key is self empowerment. In keeping with this line of rational and practical thought, I offer the following.

    If you are overcome by unsecured debt, whether it be credit cards,payday loans, retail store cards, deficiency judgments for car repossessions or medical bills and you would seriously like to try to regain control over your situation, first, speak with a credit counselor and see what programs may be available to you for dealing with the debt, outside of a bankruptcy. If the answer is a debt management program and that works for you, fine. Whether the answer is debt management or debt settlement may sure it is a program you can afford. Enroll in the program. First lets talk about if debt settlement is the program you selected. If it is, then most likely many of your accounts have either gone to collection or are about to.

  Once 180 days passes without your having made any type of payment to your original creditor, by law, the original creditor has to charge off the account. This is usually when the account is sent to an outside collection agency. Your credit report is noted account charged off, and the missed or late payments stop being reported. These missed and or late payments have of course lowered your credit score. Next, and here is part two of your two pronged approach, enroll in a credit restoration program at the same time or shortly after you enroll in the debt settlement program. That way, you can work on both eliminating the debt in an affordable manner and eliminate the missed payment negatives and late payments from your credit report at the same time. By the time you are finished with the settlement program, you stand an excellent chance of being well on your way to a higher credit score.

  If you are knowledgeable and have the time you can try he credit restoration part yourself. If not, may I suggest:  http://www.vrtechmarketinggroup.com/aciantro/ . American Debt Enders is an affiliate of this awesome credit restoration program. This recommended approach works. I have personally seen it work over and over. The most important aspect of insuring success is that above all else, you actually overcome inertia, and act.

Written By:
Steven Ciantro
Nifce Certified Credit Counselor
Member of the National Association Of Certified Credit Counselors
American Debt Enders
877-766-2465
Help@americandebtenders.com

This article may be reproduced in its entirety provided the full signature line is used including this permission line.

If Your Credit Counselor Can Only Offer You One Solution, Find Another Counselor

    Having just completed my recertification as a Nifce certified credit counselor and member of the National Association of Credit Counselors, I noticed that the banks actually created there own definition of credit counseling. As amazing as it seems, if you tell a banker from the credit card industry that you are going through credit counseling, they think that you mean you have enrolled in a debt management program, which they control. If you say you are being counseled about the difference between debt management and debt settlement then the banker would comment that this is something other than credit counseling.

  It should be no surprise to anyone in the industry that the banks and some legislative bodies have managed to narrow the definition of what the real spirit of credit counseling is. It is about offering a solution which really meets a persons needs. People with debt problems have more needs than just the immediacy of getting rid of the debt. They have a need to live. In order to keep going there are certain other needs that must be met. What happens if they need a car and, of course, because of bad credit or lack of a cosigner cannot get one. What about credit restoration? Should the counselor tell them they have to wait seven years before the negatives on the credit report will improve? What about a credit card? Even a basic, secured credit card. It is very difficult to function in todays world without one credit card. You cannot rent a car, etc.

   Frankly, non-profit credit counseling conveniently ignores these issues. Why? Because they do not have answers. They can only offer you budgeting education, and a debt management program, or even sometimes housing counseling, but nothing else. The legislators need to take a deep breath and start thinking of credit counseling in different terms. Smart companies have chosen to operate as for-profit credit counseling/referral companies. This allows the counselors to offer a wide array of debt solutions through strategic alliances with partner companies which offer programs more suitable or specific to a clients needs.

  A client opting for a debt settlement program should know that the nature of the program is that the creditors will not be receiving money until it is time to settle the debts in one lump sum. So, this clients credit score, although 99% of the time already quite low, is going to need some credit restoration sooner than seven years. Is it possible? Absolutely. Many of todays more astute referral companies when enrolling someone into debt settlement will also enroll them into a credit restoration program. How about also offering a secured credit card and bad credit car loan.

   The wave of the future in the credit counseling industry is for companies which can offer this array of life saving programs to the debt oppressed to truly allow them to achieve self empowerment.

    If you would like to read more self empowering articles on debt reduction and debt relief, please subscribe to the newsletter feed from this blog by visiting: http://freecreditcounselingblog.typepad.com/creditcounseling/, the subscription is free and we never share your information.

Written By:
Steven Ciantro
www.americandebtenders.com
Certified Credit Counselor
877-766-2465

This article may be reprinted in its entirety provided the full signature line including this permission line are included.

Why So Much Conflicting Information About Debt Settlement Programs?

       Depending on which article you read, Debt Settlement programs are either hailed or cursed. It is no secret that in recent years Debt Settlement programs have flourished, as dropout rates for Debt Management programs have increased. Lets take a moment to explore why views of debt settlement programs can be either vitriolic or praised by others.

       Imagine you are a credit card bank and making huge profits charging 29 to 35% interest along with nuisance fees like overlimit charges, late fees, and unrequested default insurance with as many holes as Swiss Cheese. Everytime someone charges , lets say, $5000. in revolving credit, and pays only minimum payments, you are reasonably assured of getting back five times what you disbursed in unsecured credit in a relatively short period of time. Armed with the knowledge and ability to predict default rates from FICO scores your business is booming. Couple this, with the fact that a number of years ago, as an industry, you had the brilliant idea of being able to rehabilitate credit users who got into trouble paying after you squeezed the last usurious dollar from them, by enrolling them into a Debt Management Program, which you created, to help loosen ever so slightly, the very noose you tightened.

        So for years, you, the banks are king of the hill. Suddenly, as americans use more and more credit because they are either living above their means, or have suffered a financial setback out of there control, default rates begin to increase. All of the non-profit debt management companies, completely controlled by you, and which are paid a handsome collection fee by you, are having unacceptable default rates, and not collecting as much money. Right about this time, the debt settlement industry wakes up and sees a huge opportunity. Bankruptcy laws tightened, largely at the behest of the banking industry, default rates increasing, consumers desperately  looking for help, all add up to what we have today as a very sophisticated Debt Settlement industry. Here, clients can hire legal counsel to represent them and do the settlement negotiations for them. Usually, creditors stop calling and for half the monthly payments that were going to the banks, the hard pressed debtor now has a way out. While the debtor would have to bite the bullet for a few years, in terms of a less than stellar credit report, there was a light at the end of the tunnel, called debt freedom.

    Is it at all surprising that the banks, non-profits and our state and federal regulators who allowed these usurious conditions to exist, are not fond of debt settlement companies? What about collection agencies? What might there take be on debt settlement companies. We already know that they like the idea of debt settlement. Why? Because they buy these charged off accounts from the banks for sometimes pennies on the dollar, and then, in a settlement, make there money back maybe ten times.
So, collection companies like settlement companies which have accumulated enough money to settle there clients accounts, but are not crazy about these companies, which charge a fee, but are not ready to settle, but also run interference for there clients until they are ready.

     This is the plain truth. Do not be bamboozled by some of the blustery  tones taken these days regarding settlement programs and settlement companies. Liking or disliking debt settlement programs is all a factor of which side of the fence you are sitting on. And, which side of the fence you are sitting on, does not change the fact that these programs do work and for many, are the only way out.

     If you would like to learn more about debt relief solutions and options, please subscribe to the newsletter feed from this blog, by visiting: http://freecreditcounselingblog.typepad.com/creditcounseling/ and leaving your email address. Your information is never shared, and if you subscribe, you will receive a free budgeting program to help you manage your money and remain debt free.

Written By:
Steven Ciantro
Nifce Certified Credit Counselor
www.Americandebtenders.com
Help@americandebtenders.com
877-766-2465

This article may be reproduced in its entirety providing the signature line and this permission line are included.

Debt Settlement Works, But don't Wait To Long

     If your debt is at the point where it is oppressing you or you do not see an end in sight, them it may be time to consider debt settlement as an option. Debt Settlement in recent years has grown up. A bad economy, coupled with outrageous usurious interest rates and ridiculous fees  charged by credit card banks which have become extremely aggressive in there marketing. Additionally, because banks are acutely aware that default rates are rising among credit card users, they have become only slightly more willing to accommodate your crises.

    If you are in a situation in which you have tried unsuccessfully to work things out with your creditors, do not waste me. If you cannot afford a debt management program, which is totally controlled by the banks but administered through non-profits, and do not want or are not eligible to file for a bankruptcy, then a debt settlement program may well be right for you.

    The very best debt settlement programs are administered by attorneys. So when looking for a settlement program, make sure you choose one that is administered by an attorney or law firm that specializes in debt relief. You also want to check the fee structure and make sure there are some type of prorated guarantees, so that, in the event you are forced to withdraw from the program, you can receive a refund, pro rated, based on the amount of work the firm has completed on your behalf. Each debt settlement  law firm will have its own set of criteria for accepting your accounts into their program. Basically, non of them will accept an account on which you have already been sued by the creditor or collection agent. Hence the title," don't wait to long". Some credit card banks have stepped up collection efforts for past due accounts. Some will forward your delinquent creditor card account to there in house counsel to start a judgment proceeding against you after 90 days. This is a major change from even two years ago, which is why I say, do not wait to long.

    If you are already enrolled in a good debt settlement program, and you are sued, then a good settlement company will advise you accordingly. Since the best settlement attorneys have relationships with collectors and creditors, they have some credibility and clout when they represent you. I cannot tell you how many people I have counseled with who have finally come to the point, after receiving a threatening letter from a collector to start exploring settlement programs only to find the collector has sued before they could finalize the enrollment process. Most settlement lawyers will charge a fee of about 15 to 25% of your debt which you will pay in monthly installments. Even with the fees the entire program including fees and settlement charges should not cost you more than about 55% of your total debt. Thats a pretty dramatic savings. Many of the better settlement companies also offer bankruptcy service, so even though you do not want to file a bankruptcy, it can be used as a viable threat against a creditor who does not want to cooperate, and afford you with an additional level of protection.

  If you would like more information on credit counseling and debt relief options, please feel free to subscribe to the newsletter feed from this blog at: http://freecreditcounselingblog.typepad.com/creditcounseling/ . The newsletter is free and your information is never shared. Please also feel free to contact the author using the contact information below.

Written By:
Steven Ciantro
NIFCE Certified Credit Counselor
www.americandebtenders.com
Help@americandebtenders.com
877-766-2465

This article may be reproduced in its entirety provided the signature line including this permission line is included.

A Different View Of Todays Economic Crises

     OK, you say, so here we have another view of the economic problems growing in our country. I say, think again, I do not think you will hear the "talking heads" of TV land or our national leaders giving you this view. I would like you to know, as you read this article that in addition to being a credit counselor, I am also a pretty conservative capitalist who strongly supports a minimul government regulation free enterprise system. Since I have considerable experience in the areas of credit and debt counseling, mortgage brokering and credit restoration, and while not an attorney, even the court system as it pertains to debt and judgments and subpoenas.

       So lets start at the beginning. as far back as the 1700's, the concept of buy now and pay later existed in some form. In the 1920's, hotel chains issued them to there customers for convenience, when they were on the road. In 1946, John Biggens of the Flatbush National Bank invented the "Charge-It" card. This was the first bank issued card and was used as a retail credit card for store purchases. In 1951, the Diners card was created, and in 1958,The American Express  card was born. It wasn't until the 1970's with the creation and regulation of the magnetic strip that credit cards began to grow in popularity. If you can believe this, in the mid 70's, congress actually banned the mass mailing of active credit cards to people, unless they were requested.

     How things have changed. By the 1990's, government lawmakers made a 180 degree turn around and de-regulated the credit card industry. Helped along by two favorable Supreme court decisions which essentially eliminated the usury laws (Usury laws defined illegal interest rates), the seeds for potential disaster were sown. Also, during the 1990's our lawmakers decided home ownership should become easier for everyone to achieve. They did this by allowing he formation of the sub-prime investment market. Wall street got into the mortgage game and realized how much money was to be made by creating mortgages for people with bad credit who could not verify there income, or ability to pay. The problem was that to get a sub-prime loan you generally had to pay an onerous rate of interest. Of course, not initially. You could purchase the home for perhaps as low as 3% interest with no money down. But , after the first, second and third years, the interest would skyrocket increasing the monthly payment to an unaffordable level. These loans became secured investment instruments traded on wall street for a premium, because of there high rate of return, or high interest charged to the home buyer.

    Instead of rewarding the sub prime borrower who made on time payments month after month, as these escalation of interest clauses kicked in, the interest and monthly payments increased to levels which were unmanageable by many. Thereby forcing a new loan with all of its accompanying closing costs, broker fees and bank fees and taxes due for another closing. Everyone was benefiting, but the homeowner, who was deceived into thinking this was the way it should be.

  Couple this with the deregulation of credit cards allowing banks to charge as much as 35 and 40% interest, with onerous late fees and over-limit charges and we add another ingredient to the soup. Couple this with the advent of payday loan companies being allowed to charge 350% interest annually for a payday loan, then add to this the universal default clause allowing banks to raise your credit card interest just because you may have paid late on another banks credit card, and you have a very sour tasting soup, indeed. The really amazing thing is that now everyone is investigating everyone else to see what happened. The FBI is investigating the Mortgage industry, of course, no one seems to be doing anything about the banks charging onerous fees, as credit card fees continue unabated, and payday loan companies continue to flourish.

   If Wall street and the mortgage banks had been a bit more astute and less greedy, they would have rewarded sub prime borrowers with lower interest rates rather than forcing them to refinance. This should have been a no brainer. When credit cards reached there credit limit, instead of allowing an over-limit charge with an out of this world fee, the over-limit charge should have been denied. No over-limit charge and thus no over-limit fee. Universal default clauses should have been made illegal. What does paying late on my Visa card have to do with my mastercard. The banks argue that it shows increased risk. It produces increased risk, due to the higher interest rate!

   Then, in about 2004 the OCC, or Office of the Currency Comptroller ordered banks to raise the minimum payment on credit cards to at least 3% of the balance and encouraged 4%. They said this would allow higher interest credit cards to be paid off faster. The problem with this brain storm was that many people did not have the monthly cash flow to accommodate these higher minimum payments. why doesn't anyone think about this stuff, before they act.

    All this brings us to today. Coupled with all of the above, we now have a recession and, in my opinion, run away inflation about to take place. Meanwhile, congress finds it necessary to hold hearings on steroid use in baseball. If this weren't such a tragedy, it would be hilarious.

  Again, just a few minor course corrections applied ten years ago would have, I believe prevented this melt down. Amazingly, the banks have become indignant with the advent of debt settlement as an option for debtors who would like to avoid bankruptcy, but cannot afford the Debt Management programs which are controlled by the banks. What's the bottom line? Greed, has gotten out of control, and, our leaders are asleep at the switch. I just read an article stating that after a law suit brought against Ameriquest Mortgage Company, Ameriquest was fined for not accurately disclosing costs and fees associated with many of its loans. Isn't that nice. The people who were abused got a small meaningless check, and the lawyers got rich.

   This article is not about hindsight. Each of the examples I mentioned occurred because of greed. if reasonability had been applied in each of these areas, i totally believe, that as a nation we could have avoided, or at least minimized what is about to befall us. The bottom line here is you need to do what you must to get out of debt, as fast as you can. If you must seek out credit counseling, get into a program, whether it be debt management, or debt settlement, or just learning to better manage your money, but make it a priority to be beholden to no one. You may subscribe to our Free Credit Counseling Newsletter absolutely free by visiting:http://freecreditcounselingblog.typepad.com/creditcounseling/. Do so, and we will send you a free budgeting calculator software.

Written By:
Steven Ciantro
Credit Counselor
American Debt Enders
Help@americandebtenders.com
877-766-2465

This article may be reproduced in its entirety provided that the full signature line including this permission line are included.

What Is "Locus Of Control" And What Does It Have To Do With Debt?

      As I am currently in the process of renewing my NACC Credit Counselor Certification, one of the chapters has to do with "Rotter's Locus of Control". The word Locus is latin and basically means position, and J.B. Rotter was a psychologist whose work goes back to the 60's. The Locus of Control idea is that as humans we tend to think one of two ways about the circumstances and events that shape our lives. Internal Locus of Control people believe that the circumstances and events surrounding them depend on their own ability and behavior, and conversely, External Locus of Control people see the world as driven strictly by luck or chance.

    So what does all of this have to do with debt you ask? Almost everything. If you have an external Locus of Control and you find yourself in a position of being oppressed by debt, regardless of how you got there, then you are one of those people who looks for a magical debt relief program that will take all of the burden off of you and allow the debt to disappear. If you do enroll in any type of debt settlement or debt management program and hit even the tiniest snag, you will blame everyone involved for not doing there job, instead of calmly taking control and resolving the problem. If you cannot make your payment one month, it will be because you have chosen a bad program, before any other rational reason. You may be one of those people who "shop" for a Debt Management Program quote, thinking that you will somehow get better pricing from one program over another, but never actually go forward with anything. You believe that the fact that you have a debt problem is the fault of the banks, the credit card companies, the casino, your spouse who does not fulfill your needs or any other number of possibilities. I do not mean to be harsh here, but if you see yourself in any of this, there is hope for you.

  What about an internal "Locus of Control". If you are one of these people, then you are way ahead of the game. You realize that regardless of how the debt problem happened, you refuse to allow it to get the better of you and will do what is necessary to gain self empowerment and debt freedom. You will find one credit counselor you trust and let he or she help counsel you on what options are available to you so that your debt issue may be resolved once and for all. You will be open to changing your behaviors so that you avoid the debt pitfalls of the future. You will take what the counselor has to offer and use it. Learning to budget, understanding various program options like debt settlement, Bankruptcy, a debt management program, or how to deal with the creditors yourself in a more effective manner.

  If you would like to know if you are an internal or external "Locus of Control" person you can take the test developed by J.B. Rotter by visiting: http://www.psych.uncc.edu/pagoolka/LC.html , doing so will give you insight into yourself and help you gain knowledge to empower yourself in all areas of your life.

Another thing that will empower you in the area of debt is to subscribe to the newsletter feed from this blog. You can do so by visiting:  http://freecreditcounselingblog.typepad.com/creditcounseling/, and simply leaving your email address. Your information will not be shared, nor will you be bombarded with emails. If you have found this article to be helpful, or would like more information about your particular debt situation and what can be done, please feel free to contact me using the contact information below.

Written By:
Steven V Ciantro
Nifce Certified Credit Counselor
American Debt Enders
Help@americandebtenders.com
877-766-2465

This article may be reproduced in its entirety provided that the signature line and this permission line are included.

Are You Paying Credit Cards With Credit Cards?

    In my years of credit counseling, I have recently noticed a new, well, maybe not new, but definitely a growing trend. That is, individuals using credit cards to pay off credit cards and in the process developing growng balances even in excess of $200,000.00. That's $200,000.00 in unsecured, revolving debt that will take more than one lifetime to pay off. In other words, these types of balances will never be paid off.

    It's not that the individuals who have engaged in this practice are trying to get over, at least, not a single one that I have ever met. It just sort of sneaks up on them. All of the people whom I have met who find themselves in this predicament have incomes of less than $40,000. per year. Did they take vacations and buy big screen TV's? No, not a single one I have ever met. Some had a sort of innocent skewed view of things, but none malicious.

   They started by using there credit cards like anyone else. Paying notoriously on time. Oops!, perhaps that was part of the problem. Always paying more than the minimum balances. This invited higher credit card balances and more and more offers, along with credit scores at the height of perfection. But no money or real assets to cover any of the money owed. Once the balances went beyond $20,000., they would simply transfer as much of each balance as possible, with a little left over, until the card balances reached a point of no return. Meaning they could not possibly make minimum payments on earnings, and it was so easy to pay each one off with new higher balance cards coming in daily.

    So, here we have it. The perfect marriage of credit score and credit, but not credit worthiness. In fact, all of the people I ever counseled with in this predicament, weren't even good bankruptcy candidates, for one reason or another.

    I just hate asking this next question. Whose to blame? The individual?, The banks?, Family members?, Credit Card companies?, The lack of any, and I do mean any, financial literacy education in our schools? I have my own opinion, but will not share it. The fact of the matter is the Credit Score and the credit card companies, a marriage made not in heaven, is a perfect blend of madness.

  I think you might agree with me that a perfect credit score is not necessarily an indicator of ability to pay back. Do yourself a great favor. Follow the biblical admonition of being neither a borrower or a lender. Keep yourself debt free. A mortgage is a worthy debt, but, only if it's taken wisely. If anyone tries to give you credit at a predatory rate, and tells you it is because you have a bad credit score, walk away, if at all possible. Do what you must to raise your score. Whatever you do, keep yourself in as much of a debt free posture as possible. If you are in trouble, try subscribing to the Free newsletter that comes off this blog. No one will contact you, and no one will share your information. You can subscribe at:  http://freecreditcounselingblog.typepad.com/creditcounseling/. If you need help beyond that, please feel free to email me at: Help@americandebtenders.com or visit my website at: www.americandebtenders.com.

Written By:

Steven V. Ciantro
Credit Counselor
American Debt Enders
516-476-5903

This article may be reproduced in its entirety providing the signature line and this permission line is included.