|
more detail information about managing credit card debt
at our affiliated site: SayPlanning.com
Topics:
- Pay on Time:
Pay your debt obligations on time, every time.
Send payments at least 2-3 days
before the due date to ensure that your payment
arrives on time.
Jump below to see how you can
make timely payments
- What if Your Payment is Late:
If you are going to be late with your payment, call
your creditor immediately. Explain your situation.
Many creditors will gladly accept credit card payments
over the phone.
If paying by credit card is not an option, notify
the creditor that you will be sending payment today.
Most creditors will make notation to your account
to avoid late fees.
If you find that the creditor needs
payment by the next business day to avoid late fees,
consider using a payment exchange service such
as Western Union. Their fees are less expensive than
overnight express mail service:
click for: http://www.westernunion.com
- What if You Can't Make Payment:
If you don't have enough money to make payment for
the month, suggest to your creditor
that you can pay perhaps half the payment now
and the rest next month.
If unemployment, divorce, sickness, etc., puts you
in a situation where you need to suspend payments,
discuss your situation with the creditor. Many
creditors have deferment plans for financial hardships.
The key point is contacting and
working with your creditor. Never assume that
your creditors are going to "walk away"
from your debt obligations. You want to avoid having
your account sent to collections. Creditors will be
happy to work with you if you make a honest attempt
to resolve your situation.
- Keep Records:
Keep and maintain all records when speaking with your
creditor. Note the date and time,
the person's name with whom you are speaking with,
the issue that you called about, and the recommendation
the creditor offered. Request a confirmation or other
ID number that proves that you spoke with your creditor.
These records are important proof in
the event you receive non-payment notification
with penalty fees and other "account suspension"
or "account collection" notices.
- What if Collectors Call:
If you receive a collection notice, contact your creditor
immediately. Find out why your
account was sent to collections after a repayment
agreement was reached. Request that they remove
your account from collections and renegotiate your
repayment plan.
If the creditor is unable to help, you might consider
taking the following steps:
- Never ignore collections
notices or payment due notices. Get them
resolve as quickly as possible.
- Understand your rights
under the Fair Debt Collection Practices Act.
Click
here to view rights
- Seek credit
counseling services from
a professional advisor. They can help negotiate
a debt repayment plan.
- Late Payment Charges:
Fees charged for scheduled payments that are past
due.
Creditors generally have a 5-10 day grace period beyond
the due date before charging late payment fees. But
note that creditors are in the business to make money.
So many are moving the grace period back.
The best rule is to always pay
your debt obligations 2-3 days prior to the due date.
See below for debt payment
methods
- Over-the-Limit Fees:
Fees charged for making purchases over your credit
line limit.
Your best rule is keep your credit
line balances at 50-60% of the total credit line limit.
This keeps your credit rating strong and avoids
going your limit.
- High Interest Rate Charges:
Fees charged for carrying a credit balance beyond
the 25-day grace period.
Many of these interest rate charges are around 16-22%
— considerably high penalties for "borrowing"
money.
For example, if your credit card
balance is $4,800 at an interest rate charge
of 17%, your monthly interest fees will be: $68.00.
If you have the same credit line balance ($2,500)
at an interest rate of 9.90%, your
monthly interest fees will be: $39.60.
If you consolidated your debt under a consolidation
program such as a home equity loan with interest rates
at 6% or lower, your monthly interest
fees will be: $24.00 or lower.
Now consider this. If you
paid just the minimum payment on a $4,800 credit balance
at the average annual rate of 17% plus 0.005% for
principal reduction, it would take
you a little over 21 years to pay it off your balance
(considering that you did not have any other charges).
That means paying $13,376.35 in interest charges alone,
for a total repayment of $18,176.35 for the privilege
of charging $4,800!
Your best rule is to always payoff
your credit cards each month to avoid interest
rate fees. If you maintain a credit card balance,
you might want to review some consolidation programs
to reduce your interest costs.
Link to our Debt
Consolidation Center for information
- By Paper Check:
The most common form of payment. You should schedule
time weekly to review bills so that all debt obligations
can be paid 2-3 days prior to their due date.
- By Automatic Draft:
This is where the creditor to automatically DRAFTS
your money account each month for the payment due.
This is very common for home mortgages and other fixed
loan payments.
Some creditors, especially for home equity, student
loan payments, and other personal loan payments, will
reduce your interest rate by to 0.25% or more if you
use this feature. This is one of the easiest and most
rewarding ways to pay your bills.
You need to make sure you have enough money in your
account to cover automatic drafts. You must keep good
accounting. You want to avoid overdraft fees from
your bank and non-payment fees from your creditor
if your DRAFT account has non-sufficient funds.
Automatic draft is best when you have an overdraft
protection account that covers non-sufficient fund
situations.
- By Online Payments:
There are two types of online bill payments:
- Bill paying using Personal
Financial Management software (PFM).
These software programs load on your computer and
function like checking accounts. You simply schedule
payments that are sent automatically to your creditor.
The most common software types: Quicken®
|| MS
Money®
- Bill paying using your online
bill payment services.
Most banks offer Internet Banking services, where
you can log-in and pay your bills online.
Link
to Gomez for a review of best Internet Bill Paying
Banks
Also check out these bill payment services:
u.s.
post office
checkfree
pay-bills-online.com
- Bill Payment Providers:
Service providers that will pay bills on your behalf.
You simply have all of your bills sent to them. They
will work out a budget plan where your obligations
are paid on time. They will also be responsible for
any billing disputes and charges.
These services do come with a cost.
Check out this online provider at:
http://www.paytrust.com/
You may also check the yellow pages for local providers:
bill
pay service providers
- By Credit Card:
There is only one reason for using your credit cards
to pay bills: to build rebate credit awards. Never
take out a cash advance to pay an obligation.
It will cost you plenty. It is much better to work
with your creditor if cash is short.
Paying by credit card involves
the following:
— you pay your obligations with your credit
card
— you take advantage of the credit card's 25-day
grace period
— you collect rebate awards for your purchase
— you pay off your credit card in full each
month
You can use your card to pay utility payments, living
expenses, and other family purchases.
We have more information about using rebate credit
cards for living purchases: click
here for FREE download
- By Cash:
Not very feasible since it would require a physical
visit to a payment exchange office. The fees can also
be high.
Paying by cash may be required
for individuals who lack bank money accounts.
One reliable bill payment service for non-bank customers
is Western Union: click
here for information
Note that your goal should be to fix up your credit
situation so that you can safely qualify for a banking
or other money account.
View topic: building
a credit history
- Reasons for billing disputes
include:
— incorrect purchases that was posted to your
account
— purchases that were to be refunded
— payments that were not properly posted
— fraudulent use of your account
— errors made by your creditor
- The Fair Credit Billing act
entitles you to certain protections in the
event of a billing dispute on open-line credit accounts,
such as credit cards, store cards, etc.) The act does
not protect fixed, closed-end accounts (mortgages,
car loans, etc).
More
information about the Fair Credit Billing Act
- Your first step is to speak with
your creditor by phone (and to guarantee your
rights by letter). The creditor must conduct a reasonable
investigation of your dispute within two billing cycles.
View
your course of action when disputing bills
- When speaking with you creditor,
keep notes of the time and date, the name of
the person assisting you, and creditor action to resolve
your situation.
Additional Information about Debt Management
at our affiliated site: SayPlanning.com
|
|
|
Notes: 
