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| Home > Debt Settlement |
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The latest fees that the banks are adding on now are, for paying off your balance each month, and for being on time.
USA TODAY October 23, 2009
You floss regularly, yield to oncoming traffic and use your credit cards judiciously, dutifully paying off your balance every month.
You may believe that your exemplary behavior shields you from unexpected credit card fees. Sadly, that is no longer the case.
Starting next year, Bank of America will charge a small number of customers an annual fee, ranging from $29 to $99. The bank has characterized the fee as experimental. But card holders who have never carried a balance or paid late fees could be among those affected.
NEW RULE PROPOSED: Fed wants banks to get customer OK to pay debit card, ATM overdrafts
CALCULATORS: How long will it take to pay off your debt?
Citigroup, meanwhile, has started charging annual fees to card holders who don't put more than a specific amount on their cards, typically $2,400 a year. Other banks are charging inactivity fees if customers don't use their credit cards during a specific period of time. You heard that right: You could be spanked for staying out of debt.
These fees are the credit card industry's response to credit card legislation that will, among other things, restrict credit card issuers' ability to raise interest rates on existing balances. Credit card issuers are looking for ways to raise income before the new rules take effect in February. During the first quarter, 27% of credit card offers included annual fees, up from 18% a year earlier, according to Synovate Mail Monitor, a credit card direct-mail tracking service.
Curtis Arnold, founder of CardRatings.com, says he expected credit card issuers to raise annual fees after the legislation was enacted. What he didn't expect, he says, "was that good customers were going to be hit."
Fortunately, if you've paid off your balance on time every month, you probably have a good credit score. And when you have good credit, you have more choices.
What to do if your card issuer starts charging an annual fee — or increases the fee you're already paying:
•Call and complain. Check your credit score first to make sure you're on solid ground, says Adam Levin, founder of Credit.com, a consumer website. If you have a good score and you've been a good customer, the lender may be willing to waive the fee to keep your business.
•Weigh the benefits of rewards against the annual fee. The days when you could get a rewards card with no annual fee are numbered, Arnold says. If your rewards card charges a fee, you'll need to figure out whether the value of the rewards exceeds the fee.
That's not always easy to do, particularly with cards that give you airline miles, says Chris Fichera, associate editor for Consumer Reports. Rewards miles often come with restrictions and expiration dates, making it difficult to figure out how much they're worth, he says.
"A lot of airline cards are not the best deal unless you can combine them with a frequent-flier plan," Fichera adds.
If you're not a frequent flier, Fichera says, you're probably better off using a card that gives you cash back. As long as you can estimate how much you spend, it's easy to figure out whether you'll get enough cash back to justify the annual fee.
•Leave. If your card issuer won't waive the fee, you'll have a choice: Pay the annoying fee or close your account. Unfortunately, this decision isn't as clear-cut as it sounds, because closing an account could hurt your credit score.
One of the factors used to calculate your credit score is what's known as the "credit utilization ratio," which is based on the amount of credit you have outstanding as a percentage of your total available credit. When you close a credit card account, the amount of your total available credit shrinks, which could lead to a higher utilization rate. This ratio accounts for 30% of your credit score.
In addition, closing an account you've owned a long time could affect your credit history, another factor used to calculate your score, Fichera says.
Still, if you aren't carrying balances on your other accounts and the card is relatively new, closing your account is worth considering. Even now, there are good deals out there, particularly for card holders with good credit, Arnold says. For example, the Fidelity Rewards American Express card pays 2% of cash back to a Fidelity account, with no limits on cash rewards and no annual fee.
If you don't care about rewards and just want a credit card that doesn't charge an annual fee, consider applying for a card through a credit union. Many credit union cards charge no annual fee and offer below-average interest rates.
Associations, such as the USAA, which provides products and services for military personnel and their families, also offer good deals on credit cards, according to Consumer Reports.
Get Debt Relief
• See up to 50% of your debt negotiated away
• Gain freedom from debt in as little as 12–48 months
Debt settlement can help you say goodbye to debt and hello to a new life
We are dedicated to helping you turn things around. No matter how much debt you have or how far away the light at the end of the tunnel may seem, our professional attorneys and negotiators can help you break free from the constant stress and pressure of overwhelming debt. We will help pave the road to a fresh start for you and your family.
Get rid of your debt without bankruptcy
Debt settlement is one of the most affordable ways to get out of debt. If you are thinking of filing for bankruptcy, debt settlement may be a better choice for you.
Here’s how debt settlement can help you get out of debt:
• Our debt settlement professionals will negotiate with your creditors to lower your balances as much as possible.
• You will begin making one easy monthly payment into an FDIC-insured account that will be used to settle your reduced debts.
• With lower balances and lower interest rates, you choose to have your debts settled in as little as 12–48 months
Debt Settlement vs. Bankruptcy: Why debt settlement is the right choice
The biggest problem with filing for bankruptcy as a way of freeing yourself from debt is that it will seriously affect your credit for years to come. It may result in you losing property and in some cases, and unless you made less then $27,000 last year, you may end up having to repay your debts too.
• A bankruptcy can leave a terrible stain on your credit report for 7–10 years
• In a Chapter 7 bankruptcy, you will be required to sell off all of your property that is not protected by law.
• In a Chapter 13 bankruptcy, your debts will not be wiped out. You will have a bankruptcy on your credit report and still have to set up a repayment plan to pay off all or part of your debts.
• With a bankruptcy on your credit report, you will find it difficult to get affordable interest rates when you try to buy a home, a car or apply for any other form of credit.
• A bankruptcy can stay on your official court records for more than 20 years, sometimes for the rest of your life. It will hurt your chances of being approved or even hired when you apply for a job or a loan or try to rent an apartment.
Debt settlement can be a better way to live a debt free life
• Unlike a bankruptcy, our debt settlement program will not show up on your credit report. Although the debts that are settled for less than the full amount will typically be noted as “settled” rather than “paid” on your credit report, no one will be able to tell just by pulling your credit that you are working with a debt management solution.
• Once you pay off your new lower balances, creditors will report to credit agencies that your debts have been settled, which means you can get out of debt without having to lose your property or set up a lengthy bankruptcy repayment plan.
• Although your credit score may drop while you are in a debt settlement program, once you have successfully completed the program, your unsecured debts will be paid off and you will be able to start taking steps to get your life back without a bankruptcy to hang over you and your credit report for as long as 20 years.
• With debt settlement, there are no negative court records that follow you around and hurt your chances for future employment, leases or loans.
Call New Hope Mortgage Solutions today at 1-866-611-7725 and let’s start changing your life for the better now! |
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| Client Advisory Disclosures |
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• We cannot guarantee that the creditors will stop calling the client even though they are being represented by an attorney.
• Original creditors are not stopped when a letter from an attorney is received.
• Bill collectors are not allowed to call if they know a client is represented by an attorney but could continue to do so.
• We can reduce creditor calls and report violations of Fair Debt Collection Practices Act to their state attorney general.
A letter will be sent to the client in the introduction packet that the client can send to the creditors when the client comes on the program. This letter will be referencing that the client will be hiring an attorney to assist them with their debt.
The law firm will be sending a letter to the client’s creditors after the payment is made by the client. The client must have all of their creditor statements into the company prior to sending the letter from the law firm. Also, by sending the creditor statements, the client’s mail will be transferred to the company that much sooner.
The best way for a client to handle their creditors is to change their phone numbers and get new numbers that are non-published.
They should have caller ID and not answer their phone when they see an unknown number.
They can write down the names and numbers of the people calling them and send them to our creditor hotline, but we do not guarantee that we will contact the creditor unless the client has funds enough to try to settle the account.
Clients should avoid communication with creditors because the creditors will threaten, harass, lie and tell the client they do not deal with debt settlement companies. By communicating with the creditor, the client is more upset about their program and has a more likely chance of canceling because they cannot handle the stress.
This is a very important point and must be stressed to the client:
DO NOT TALK TO YOUR CREDITORS!
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