How Can I Get Out Of Debt?

If you are one of the many consumers who owe more on credit cards and unsecured debt than you are able to pay, it may be time to ask yourself, “How do I get out of debt?”

The first step to get out of debt is to determine how much you really owe. This will probably be the most difficult part to confront – how much debt do I actually have?!?! When I ask potential clients this question they often reply “hmmm…well… gosh, I don’t really know.”

In order to determine this accurately, you will need to locate your most recent statements. If your account is already past due, your account could have been turned over to a collection agency. In this case, the statement you received may be from a collection agency as opposed to the original creditor. Whatever the amount is, you want to know your starting point and gathering up these statements will give you just that.

Gather your statements right now, and watch this video!

 

 

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Find Out What the Credit Card Companies Don’t Want You to Know!

Credit Card SecretsIf you are now reading this, you most likely are experiencing, or may soon experience, one or more of the uncomfortable situations below. You also may have seen ads for “credit counseling” or “debt consolidation” and think that they could be answers to your debt problems.

Be prepared to be shocked at what you learn and what the REAL SOLUTION IS.

Debt Facts

♦ Over 70% of all marriages that end in divorce are due to financial problems.

♦ 75% of all Americans are THREE (3) paychecks away from bankruptcy

♦ Of those Americans 1.5 million will file bankruptcy; 1.5 million will participate in consumer credit counseling; and 37 million will TRY TO NEGOTIATE WITH CREDITORS THEMSELVES – which the creditors love, because the people in debt trouble are not professionals and do not know how the system really works.

♦ On average, when you buy something with a credit card, you pay 132% MORE THAN IF YOU USED CASH.

♦ Typical minimum monthly payments for a credit card are divided into 90% interest and only 10% to principal reduction. The principal amount on your credit card is what the product or service you bought cost you.

♦ Over 71% of all credit card accounts have only the minimum monthly payments being made by consumers.

The truth is that you have fallen into a TRAP!

Look at the above statistics, and you can easily see that your situation is not uncommon. Not only that, but you have been led to believe that the only way out is unthinkable- file for bankruptcy. Or, you could always go for credit counseling. Either way, you would be giving up.

YOU CAN TAKE CHARGE OF THE SITUATION AND GET OUT OF DEBT WITHOUT FILING FOR BANKRUPTCY OR WAVING THE WHITE FLAG TO ONE OF THOSE CONSUMER CREDIT COUNSELING COMPANIES.

Click Here for More Information

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The Five Ways To Get Out of Debt, with Doug Daniloff

Doug Daniloff, CEO of Effective Financial Solutions, talks about the basics of debt and the five main options consumers have to handle their financial burden in regards to unsecured debt.

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The Truth About Debt Settlement Percentages

Settlement PercentageSETTLEMENT PERCENTAGES AND WHAT TO EXPECT. I’ve been in the debt negotiation industry since 1998 and have worked with one of the premier debt negotiators, Paul Killmar so I am well acquainted with the debt industry and what to expect from the negotiator. The truth is, the settlement percentage that is the industry standard runs between 43% and 45% of what is owed.  That is the average settlement percentage.

Now, you will get these incredible settlements where the percentage is 7%, which was one we got for a $35,000 debt, but those are very, very rare.

BANKS AND CREDIT CARD COMPANIES CASH-FLOW

Part of the settlement percentages have to do with the cash-flow needs of the banks and credit card companies.  If they are cash light, they may be willing to settle for a lesser percentage.  For instance, Citibank is having a hard time and they are now more willing to settle credit card debt for about 20% less than they had before.

MBNA use to give good settlement percentages, then in 1999, they settled for around 60%, but more recently, they have lowered their settlement percentages to around 40%.

EAGER SALES PEOPLE

I give you this information so you know ahead of time what to believe from the sales person.  Sometimes, it is popular to talk about the 1 credit card that settled for a very low amount and act like that is the norm of the banks and credit card companies.  It is not.

Just beware of the eager sales person and know ahead of time what is true and what isn’t.  Then, you can better judge the Debt Negotiation company.

I’ll bet that there are some of you who would like to see something a little more specific.  And, I believe I have just what you’re looking for.  I have posted samples of real settlement letters from actual settlements we’ve recently done for our clients.  (Only the names have been changed to protect the innocent.)

To see them,CLICK HERE.

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What’s the Difference Between a “Charge Card” and a “Credit Card?”

Credit Cards, Charge CardsCHARGE CARDS AND CREDIT CARDS ARE NOT THE SAME THING (even though they look the same). The main difference between the two is that charge cards require that the user to make a purchase pay what is owed within a pre-established time, usually 30 days. However, credit cards, which nowadays more people are familiar with than charge cards, allow the user to pay a minimum amount of what is due and pay the remainder over time.

Of course a very important component of the difference here is that credit card companies will charge interest for the privilege of paying at your convenience.

Charge cards were established in 1914, by Western Union (printed on paper), although a very early concept of consumers using a card for purchases dates back to 1887 by Edward Bellamy in his novel Looking Backward, where he uses the term “credit card” a number of times.

In 1957, Frank McNamara, invented the first official charge card, which he called Diners Club. In 1959, American Express was the first company to issue embossed plastic charge cards.

In comparison to charge cards, there is good and bad about credit cards. One the one hand, users can buy things today that they really cannot afford (which would be most beneficial in an emergency). However, what they are actually doing is increasing the cost of the purchase by paying over time, which can be come a significant burden to one’s personal finances.

Without the urgency of unexpected financial emergencies, many people use credit cards responsibly. However, regardless of whether a loss of a job, or a medical emergency, or plain old financial irresponsibility results in a credit card user getting buried in debt, through increased interest rates and ongoing extra fees, the effects are the same: Great stress and aggravation in life.

HOW TO GET OUT OF DEBT

There are solutions to reducing your debt and a number of options are available to you – without bankruptcy. However, each option should be weighed against their advantages and disadvantages.

Get the facts and find out for yourself how you can dramatically reduce your credit card debt. Speak with a professional debt counselor to find out what’s best for you.

There is no cost and no obligation for this service. A professional debt counselor will help you understand your options on getting out of debt.

Click “Contact EFS” for an immediate consultation, or enter your name and email below for more information.

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What’s The Difference Between a Credit Card and Debit Card?

CreditCardPerson2CREDIT CARDS AND DEBIT CARDS LOOK THE SAME, BUT THEIR “DIFFERENCES” ARE MORE IMPORTANT. In real simple terms, when you buy anything with a credit card, you are using money you don’t have. When you buy anything with a debit card, you are using your money. In fact, your money is removed from your bank account right after you pay for your purchase.

Stated another way, a debit card is just like a checking account, except you don’t need to manually write out the checks.

Conversely, every time you buy anything with a credit card, it’s as if you just took out a loan to make that purchase, which, of course, you will then have to repay. And for most consumers, they will be repaying that loan with interest.

In other words, a debit card uses money you already have and a credit card uses money that you don’t have.

Credit or Debit?

If you are accustomed to making purchases with a credit card, you are also very familiar with providing your signature, and/or picture ID, as part of the process for many purchases. When using a credit card, you will “not” be asked “Credit of Debit?,” along with being asked your preference between a plastic bag or paper bag, at your local grocery store.

You will only be offered that choice when using a debit card that is directly linked to your checking account. In which case, the transaction could be processed as a credit or debit purchase, and you may be offered the choice.

So, when your grocery cashier asks you “credit or debit?” the difference is more important than your answer for the next question of “paper or plastic?”

If you answer “credit”, then no money will be taken from your bank account, and the purchase will be just like using a credit card. If you answer “debit”, then the amount of money for your grocery purchase will be removed from your bank account.

Also, if you answer “debit” then you will usually need to enter your personal identification number (PIN) to complete the transaction.

Which is Better?

If you are able to respect that using credit cards is like taking out a small loan every time you make a purchase with one, and that you will be paying interest on your purchase if you don’t pay it back within the required time (usually 30 days or less), then credit cards can be a very handy way to handle money.

On the other hand, if you use a debit card, you are simply spending money that you already have, and therefor do not need to be concerned about having to pay interest for making purchases.

In other words, one is not inherently better than the other. It’s really a matter of your own understanding, responsibility and discipline that controls how one card may be better than the other.

Too Much Credit Card Debt?

Having said that, if you have gotten yourself deep in debt and it’s having a bad effect on your life, you should consult with a professional debt negotiation firm to get the facts about getting out of debt. A professional debt negotiation service has the ability to work on your behalf to significantly reduce your credit card bills, without filing bankruptcy.

Want to find out more?

Click “Contact EFS” for a no cost consultation to find out for yourself how to get your existing credit card debt dramatically reduced.

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Credit Card Companies Increasing Their Fees For You and Me

credit-card-feesTIRED OF CREDIT CARD FEES?  Well, look out, because more are coming your way.  USA Today reports a variety of ways that credit card companies are attempting to quietly integrate more fees for you and I to pay all for the privilege of using “their” credit cards. “Annual Fees” are making a comeback. If you travel out of the country, you may start seeing a surcharge for international purchases.

Some companies want to charge you if you “don’t” use your card (inactivity fee).

“Analysts say that because most provisions don’t take effect until February 2010, issuers are finding ways now to bolster their income despite consumers’ precarious financial situations.”

Now, more than ever, you want to pay close attention to what your credit card issuers are charging you.

Click the following link to read the entire USA Today article, Credit card issuers pile on new fees

By the way, if you are over your head in debt, and would like to dramatically reduce your current credit card bills, consult with a professional debt negotiation service to find out for yourself how all these fees can be negotiated away, as well as a chunk of the original principal, too.

Find out now, by clicking “Contact EFS” and get the facts, through a no cost consultation.

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The #1 Principle for Personal Financial Success

financial-successSOME SUCCESS PRINCIPLES ARE SO OBVIOUS that they would not seem to require repeating. On the other hand, as we become immersed in our live’s activities, accomplishments and problems, it’s possible to lose site of the fundamentals of living an enjoyable life. One such principle centers upon how we manage our personal finances. In this case, how YOU manage your personal finances.

Financial Success Principle #1

It may be easier to say it, than actually apply it, particularly if you consider you are not making enough money. But the thing is, it effects individuals and families that have low income and much higher income.

What’s the principle?

It boils down to simply spending less money than you make.

Obviously, this implies two directions towards managing your money:

a) Spend less
b) Create more income

Some would argue that they cannot spend less and some would argue that they cannot expect more income. If either were true (and they are not), then such a person, or family, would be doomed to financial disaster.

Continually borrowing against credit cards or other personal loans, and hoping that you will become solvent by winning the lottery or finding an unidentified money sack on your front porch are not viable options for successful living.

Spend Less

Reducing one’s expenses may be uncomfortable, but it’s vital if you cannot pay your monthly bills. Look for any recurring bills that represent services that you can do without – and reduce or eliminate them – at least until you create more income. Only you can determine the priorities of what are absolute necessities and what you can live without, but certainly, on a very fundamental level, you need food, clothing and some form of housing to survive. But even those basic needs may be reduced, if needed. But what about everything beyond that?

Of course, instead of reducing expenses, the better solution is to create more income.

Create More Income

On a temporary basis, creating additional money could mean doing extra work, whether that be working longer hours at your job (for hourly workers), or taking on a temporary or seasonal part-time job, and/or taking on a longer-term second job, if that is what it will take to handle your finances.

However, working two jobs for the rest of your life may not be what you consider a successful living arrangement. Ideally, it might only be necessary for a shorter period of time, perhaps no more than several years, depending upon your financial circumstances.

If you are particularly industrious, starting a secondary source of income that is a part-time business could be a potentially viable way to handle your finances. This is easier said than done, and there is no shortage of business failures. So, this is not for everyone.

But if you are a persistent individual and can truly deliver a product or service that people will pay for, and you can get that product or service known by people who will pay, you have the basis of a business.

In some cases, you might even find that, over time, your business provides a greater income opportunity than your job.

Reduce Your Debt

You have one more option to reduce your debt. You can reduce your existing debt by way of a professional debt negotiation service. To find out more, click “Contact Effective Financial Solutions” for a no cost, no obligation consultation on you can benefit from a professional debt negotiation service to substantially reduce your existing debt load.

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Good Credit-Card Customer? You’re Canceled.

cancelCAN A CREDIT-CARD COMPANY CANCEL YOUR CARD AND NOT TELL YOU? The following excerpt is from a post on the Wall Street Journal about a person who had 4 Chase cards canceled at once without any notice. Now, my first thought would be that this guy must have a really bad payment history for a credit company to cancel one, let alone four cards. However, that’s not the case.

This person appears to pay off his balance every month and is rarely late:

“However, I’ve always paid the balance on my Chase credit cards in full every month and rarely ever am I late (the last time was at least 6 months ago).”

What that means is that the credit card company is not making any money off this consumer.

It’s certainly no secret that credit card companies are in the business of making money, and most of their money is made from consumers who do not pay off their balance every month, which means no interest payments.

Regardless of whether this person’s consumer rights were violated, it would be a tough battle to fight and hardly worth the effort for most individuals, since they can just pull out another credit card….

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What Does a FICO Score Have to Do With You?

credit-scoreFICO IS THE MOST PROMINENT CREDIT SCORING SYSTEM used around the world. A credit score is a number that reflects your creditworthiness. Stated another way, your credit score is a calculation that represents the likelihood that you will pay your debts. Banks and credit card companies use credit scores when determining if you qualify for a loan. It is also used to determine what interest rate you will pay, as well as your credit limits.

The Fair Isaac Corporation (founded in 1956 as Fair Isaac by engineer Bill Fair and mathematician Earl Isaac), known as FICO, created the first credit scoring system in 1958, for American Investments. They created the first credit scoring system for a bank credit card in 1970. FICO is based in Minneapolis, Minnesota, United States. The company has offices in North America, South America, Europe, Australia and Asia.

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Beware Debt Consolidation (Your Home May Be Put at Risk)

debt-consolidation-cautionTHE NOTION OF “CONSOLIDATING” (bringing together into a single whole) your loans may seem like a good idea, since it simplifies the complexities of having too many bills that are out of control. However, there is more to debt consolidation that should be understood. Many “debt consolidation” programs are merely a way of transferring your outstanding bills into a home equity loan.

In other words, using the equity built up in your home to repay all of your unsecured debts.

Although these types of loan programs often include significant fees and can extend the amount of time to get out of debt, there is something more important to consider:

Debt consolidation loans work by converting your current unsecured debts into secured debt. More specifically, debt which is secured by your home.

What that means is that if in the future you fall behind on your payments you could risk losing your home. That kind of risk does not exist with your current unsecured debt.

If you have questions about your existing credit situation, and would like to learn more about getting out of debt, without bankruptcy, contact one of our professional debt negotiation specialists by clicking “Contact EFS” for a free consultation.

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Your Credit Score

credit-score2HOW DOES THIS ONE NUMBER EFFECT YOUR LIFE? Your credit score is a number. A number that may effect your life in a good or bad way. It determines whether you can get that loan to buy a car or a home, and it determines how much interest you’ll pay. And a little higher interest payment can mean a much higher cost, over the term it takes to repay the loan.

Your credit score is calculated from factors such as the amount of your current debts as compared to your overall credit. It also takes into account your past history of bill paying, how long you’ve been using credit, the types of credit you have used, and even the number of inquiries about your credit.

In essence, credit scoring is a bunch of math, since the process of calculating your credit score is done automatically.

Credit scores typically range from 300-850 for consumers in the United States.

Credit scoring systems are integrated into the lending process to standardize the way lenders determine how likely a debtor will be in terms of repaying a loan.

In the world of credit scores, bigger numbers are better and reflect a higher probability that you loan will be repaid on time.

When creditors file late payment reports about you, or difficulties collecting payments from you, your credit score goes down. Furthermore, when judgments and collection agency activity is reported, your score decreases even more.

Ultimately, continued delinquencies and negative filings about your record history can result in a negative credit rating or adverse credit history, which will mean you may not be granted a loan at all, or, you may have to pay high interest rates to obtain a loan.

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