Five Ways to Escape from Credit Card Debt

Five Ways to Escape from Credit Card Debt

 

The banks have done their research... they know how convenient it is for you to carry around credit cards instead of cash. And the cards are shiny, with nice logos and pictures on them too.

 

Ah, the joys of carrying around plastic money. These cards with the logos on them fit so neatly into your wallet. Paper money just seems so unnecessary in today's world of easy electronic payments. In your wallet or purse right now, there are probably 2, 3 or even 4 major cards, all with specific purposes, and with their own history attached as to how you came to have them.

 

However, there's just that one little thing that's bugging you about your cards, and it's getting harder to ignore every month. You flinch every time the next card statement comes in the mail. You cringe when you open the statement and see the swelling amount they call "Total Balance Outstanding." It sure is outstanding!

 

It all seemed so easy while you were in the shop - using the card was so simple. Now though, facing that ever-fatter amount each month is chipping away at your peace of mind.

 

Yes, you guessed it, you're trapped in the steely claws of rapidly growing credit card debt, which itself could ruin your personal finances and place you into a debt level of critical proportions! So what do you do next?

 

One thing NOT to do is nothing... You must accept reality and plan your exit strategy to extricate yourself from this credit card debt-trap before it takes over your life. Below are five actions you can do initiate today to reverse your situation:

 

Only Spend What Have in Your Hand/Account

 

Some recovering credit card spenders have a tough time with this one, but it's an easy concept to put into practice. Spend money that you have in your bank account. If there isn't any money available to buy a certain item, you simply won't be getting that item right now.

 

This mentality definitely goes against the spend until you drop mantra out there, but in order to free yourself from mounting credit card debt, you must come back down to earth and recognize that you aren't wealthier than what you have in your checking or savings account.

 

Implement a Monthly Budget

 

Importantly, in the headline above we used the word "implement..." for a reason, rather than just "make a budget". You have to put your budget into play. Don't just stick it in a drawer and forget about it. Make notes, modify it as you go along, it's a dynamic equation that changes all the time, so you need to be flexible too. Just make sure you use it!

 

Your budget needs to list how much money you currently bring home after-tax each month, and what your expenses are in terms of your rent/mortgage, utilities, groceries, car leases, insurances, credit card bills and other outgoings. Notice how much as a percentage that your cards are sucking out of your monthly income... it’s scary, and it should be... most of its just interest, and not much comes off the principal. Banks do this on purpose, so they earn more money out of you, and you're locked into those repayments over the long term.

 

Usually the card repayments are about 2% of the closing balance... that's per month, not per year, so if you annualise that 2%, the interest rates are massive. Plus, you’re hardly scratching the surface of the principal.  If you’re honest with yourself, you're probably still paying for purchases that you've used up or have been completely forgotten about. Your credit card debt is not a convenience any longer. It’s tying you into long term payments to banks who could potentially ruin your so-far-unblemished credit rating if you step out of line.

 

Your budget should help you to regain control of your finances, as long as you accept that the bulk of your disposable income should go as a priority to purchasing necessities. A relatively minor portion should be allocated to your "wish list".

 

Change the Way You Think About Credit

 

Why use real money when credit is so much simple? Until this point, having one or more credit cards to use whenever you felt like seemed like a logical idea. It's simple to see that you never have to think about paying for the entire purchase right away. The banks are happy to allow you to keep on making those minimum payments on the closing balance each month. Plus you get all those frequent flyer points so it's a win-win right!? And so it's okay for you to buy those extra things you think you need right now, even if it chalks up another $200 onto your debts – you don't need to worry that you have no money in the bank account to meet those expenses, your credit card provides you with the means of obtaining just about anything you want, whenever you want!

 

Right?

 

Well, if that's how you previously thought about your credit cards, now is the time to wake up to yourself, and smell the coffee! You know that each time you whip out your credit card, you're pushing your finances deeper into debt. In fact, you're burying your own financial freedom deeper into debt.

 

Maybe you didn't see it that way before, but it's a fact. Your currently unchecked “laissez-faire” spending habits are digging you into a bigger and bigger debt hole. If one or more credit cards are over the limit, it's a big mistake to keep digging into debt, by using more credit. You need to make a decision NOW, that you're going to pay down your current card debts. Don't allow yourself any more spending, because you digging yourself further and further into that big, deep hole that you never be able to climb out of.

 

Target Your Debts One-by-One

 

A good strategy that many people find useful in coping with a large credit card debt is to target one debt at a time for quick elimination. Look at your statement to find out which credit card that has the highest interest rate, and make up your mind to pay over the minimum amount, and direct as much money as possible to that particular card each month, and get rid of it as a priority.

 

Just making your minimum payments lock you into paying the banks so much more over the long term, due to those higher interest rates. Once you clear each card, you'll have more money left over at the end of each month, so the amount you can afford to pay off should "snowball" and you'll be able to get rid of each consecutive card faster.

 

Remember, once you've cleared each card, cut it up and never use it again. If you use it - you've wasted all your time and effort. Many people fall for this trap too.

 

As the saying goes, it won't happen overnight, but eventually, you'll be free of this card debt, then you can turn your attention to the next card, and so on.

 

Seek Professional Help

 

If you really are struggling to get out of the debt-hole and back on your feet, seek help from a professional company that can give you a helping hand. Avoid bankruptcy, and Part 9 debt agreements, as they are similar to bankruptcy in so many ways. But there are companies like www.NoBankruptcy.com.au that can help buy you the time you need to regain control.

 

Having done all this its vitally important that you now must stay the course and commit to total credit card debt elimination. Don’t borrow more money to consolidate your debts, as this is not a good long term solution, it’s just a short-term band-aid. You’re still in debt!

 

Getting out of your credit card debt won't be as much fun as when you were buying up a storm, but once you realise that shedding debt is essential to your own personal financial freedom, you'll be a debt elimination champion, with amazing powers to keep you on track and out of the credit card debt trap forever.

 

“New Year, New Strategy – Part 2″

“New Year, New Strategy – Part 2″

Check out Christian Oey's answers on MOZO

NoBankruptcy CEO Christian Oey answers questions relating to debt and credit on financial web site Mozo.com.zu. (MO-ZO stands for Money Zone by the way.)

“New Year, New Strategy”

“New Year, New Strategy”

Debt Free, Cashed Up and Laughing - The Cheapskates way to living the good life: Make a deal

Debt Free, Cashed Up and Laughing - The Cheapskates way to living the good life: Make a deal: "The age old art of haggling seems to have been lost in our day-to-day shopping. Somehow, somewhere we stopped asking for the best deal and i..."

Choice Shonkys put spotlight on rewards credit cards

By Mozo 26 October 2010

Earlier this year we cracked the rewards code to reveal the value Australians were getting for their money with rewards credit cards with the launch of our Rewards Revealer tool. Today, consumer advocacy group, CHOICE, launched the 2010 CHOICE Shonkys, awarding the Commonwealth Bank Awards program a Shonky for low flying jest.

CHOICE singled out the Commonwealth Bank for its shonkiness in how the points are calculated for cards linked to the Qantas Frequent Flyer program. Unlike other rewards credit cards where one rewards point equals one Qantas Frequent Flyer Point, with the Commonwealth Bank card you only earn points at half the rate. It means you have to spend double the amount of money to earn the rewards.

The Shonkys, reminded us here at Mozo HQ of just how important the Rewards Revealer is, and so we decided to take this opportunity to take a look (and highlight) some other shoddy practices and unrewarding rewards programs.

Based on a $12,000 annual spend the three worst performing rewards cards are:

Card	Annual rewards value minus fees
NAB Gold Card	-$90
American Express Qantas American Express Premium Card	-$74
Citibank Gold	-$56

(excluding platinum cards)

Rewarding? Maybe for the banks but certainly not us consumers.

With the NAB Gold Card to earn you a flight from Sydney to London you’d need to spend a mind blowing $937,500 and that’s not the biggest catch. Points expire after 36 months, so unless you are planning on buying a house on your credit card, it’s virtually impossible to accrue enough points to redeem the flight before they expire.

But even more telling is that it’s not just a handful of rewards credit cards that will put you in the red. Of the 71 standard rewards cards in the market, 35 will cost you more than they return in rewards value each year (at $12,000 annual spend after the annual fee).

So, what can you do to ensure you get value from your rewards card? Here are our top tips:

1.      Make sure you are earning more in rewards than you are paying in annual fees.

2.      Always pay off your card in full each month to avoid high interest rates.

3.      If you have a credit card debt, switch to a low rate card instead.

Compare rewards credit cards at mozo.com.au

JUMP IN SENIORS DECLARING BANKRUPTCY SAID MIND-BOGGLING - RECENT STUDY

23 October 2010

Reuters
For more and more seniors, retirement doesn’t mean a debt-free life of leisure. An increasing number of Americans aged 65 and older are declaring bankruptcy, according to a recent study by John Pottow, professor of law at the University of Michigan Law School.
Those aged 65 and older represented seven percent of bankruptcy filers in 2007, a mind-boggling jump from 1991. They are the “fastest-growing age demographic,” according to Pottow’s study.
What’s the culprit for so much debt? Credit cards. Two-thirds of Americans who filed for bankruptcy said credit cards were the key reason for their financial problems, according to Pottow’s research. Besides having more credit card debt compared with younger bankruptcy filers, 44.8 percent of those aged 65 and older also had more plastic in their wallets. “They’re using credit cards as a maladaptive coping mechanism,” Pottow says.
Stephanie Osterland, a supervisor in the bankruptcy department at GreenPath debt solutions, sees an increasing number of seniors living beyond their means. Says Osterland: “They’re just trying to live off of a fixed income, and that’s usually Social Security. Maybe they have a small pension. We find they’ve used credit cards to supplement that income and expenses or they just end up getting into a lot of medical debt.”
In addition to escalating medical expenses, seniors have seen their portfolios hit hard by the lagging stock market. Carolyn Rodi of Saving Your American Dream says those considering bankruptcy should see a credit counselor at a non-profit organization to get their finances in order.
Credit counselors, such as those at GreenPath, help the elderly deal with a stressful situation. “We try to help them focus on what it’s going to look like” after they get out of debt, Osterland says.
Rodi also recommends that potential bankruptcy filers seek out pro-bono legal aid. “There are a lot of elderly people that are being taken advantage of by bankruptcy attorneys and mortgage brokers who are advising them improperly to pay for the bankruptcy, take out a reverse mortgage or to do things that aren’t in their best interest,” she says. ”If you have no income, why should you borrow to pay someone when you can get free legal aid?”
What are the chances of a senior paying off his or her debts? It’s difficult to determine, especially because seniors tend to be on a fixed income. And while finding a job — such as a WalMart greeter — seems like a viable option, it is not necessarily feasible for all seniors to work.
In addition, whether or not a person declares Chapter 7 (which involves the liquidation of one’s assets) or Chapter 13 (which allows debt restructuring) bankruptcy can be a significant factor in determining what one’s lifestyle will be. “If you have to file for Chapter 7 bankruptcy, you may be able to find affordable housing that allows you to just get by,” says Rodi. “Chapter 13 lets you keep your house and doesn’t touch your retirement savings.”
Regardless, filing for bankruptcy is very stressful for anyone. “A lot of our clients in that post-retirement age have a hard time coming to grips with their situation,” Osterland says. “It’s very emotional for them. We try to focus on the future and see if this debt can be lifted off their shoulders.”

Bad banks outed on public list

• By HELEN POW
• From: The Sunday Telegraph
• October 17, 2010

THE worst banks and lenders will be publicly named and shamed by the Financial Ombudsman Service (FOS).

The financial institutions and banks with the most customer complaints for sloppy service, excessive charges or misleading information on products, will for the first time be placed on a public list.

The Ombudsman hopes that by outing the worst offenders, financial firms will improve their service.

"Consumers, the public and the media need to access this information to see who the problem banks are," Consumer Credit Legal Centre principal solicitor Katherine Lane said.

"This sort of reporting is essential otherwise we, the public, cannot scrutinise what is going on and it will just continue.

"We need to know who is worst so we can approach the failing financial institutions and the regulator and ask what is being done."

The FOS received 19,107 complaints in the 2008/09 financial year a 33 per cent spike compared with the previous 12 months.

There was a 33.5 per cent surge in complaints about consumer credit over the year the bulk of which involved home loans and credit cards from 4645 to 6202.

Consumer Credit Legal Centre deals with 16,000 banking complaints each year and another 1000 involving insurance companies.

The centre said it had seen a huge increase in complaints regarding mortgage hardship and repossessions, with National Australia Bank proving the worst offender.

GE Money was also up there in terms of complaints about its interest-free credit cards, which lawyer Katherine Lane said were causing people on low incomes "no end of trouble".

The Australian Bankers' Association chief executive Steven Munchenberg said: "The only reasonable way of doing this, if the FOS has to do it at all, would be to have the number of complaints by institution as a percentage of their total customers.

"Everything we have seen so far gives us real concern that the information will not be fair."

 

 

Kind Regards,

 

Charles Fairlie

Client Devt & Marketing Director

M: 0434 52 44 66

www.twitter.com/NoBankruptcy

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Mortgage delinquencies highest in Sydney and surrounding suburbs, new report warns

Wednesday, 13 October 2010 10:28
Patrick Stafford – Smart Company

 

The Fairfield-Liverpool region and outer suburbs of Sydney are among the worst areas in the country when it comes to mortgage delinquencies and investors should keep an eye on these areas, a new report from Moody's Investor Services reveals.

But the author of the report also says Australia has a relatively low amount of arrears compared to similar economies and urges investors to examine the details of each area and not take the results on face-value. The report points out some areas are over or under-represented when it comes to mortgage delinquencies.

"If you compare our economy to other economies, like the US, or Britain or Spain, you will see our delinquencies are doing quite well in comparison. However, what this report does is highlight the areas within the country that you should keep an eye on," author Arthur Karabatsos says.

The Fairfield-Liverpool region, which includes suburbs such as Fairfield, Liverpool and Casula, recorded a delinquency rate of 2.77%, while Outer South Western Sydney, including suburbs like Macquarie Fields and Campbelltown, recorded a 2.55% delinquency rate.

The report defines a delinquency as failing to make one or more mortgage payments, meaning they are over 30 days in arrears.

The top 10 worst areas were listed as:

·         Fairfield-Liverpool (NSW)

·         Outer South Western Sydney (NSW)

·         North Western Sydney (NSW)

·         Central Coast (NSW)

·         Hunter (NSW)

·         Canterbury-Bankstown (NSW)

·         Lower Western WA (WA)

·         Central West (NSW)

·         Far West-North Western (NSW)

·         Mid-North Coast (NSW)

The report also shows that North Western Sydney, including suburbs such as Penrith, Mt Druitt and Blacktown, account for 6.48% of all 30+ day delinquencies. It is the only region classified as "highly elevated" in terms of contributions to overall delinquencies.

Karabatsos says the report uses the "Moody's Mortgage Performance Indicator" to compare regions, and claims it to be a more accurate measure. He says if a region has an MMPI of over "1", then those region's delinquencies are over-represented compared to the overall country.

For instance. Liverpool-Fairfield represents 4.24% of all arrears in Australia – but the region only accounts for 2.05% of loans. Therefore, the region is given an MMP of 2.07, and is classified as over-represented. Karabatsos says investors should pay attention to this ranking as it will give a more accurate picture of the market.

"When people look at postcodes, they can't get a picture of what's going on. I've had comments from investors about these postcode-based lists, and they literally try and find road maps and figure out the proximity of one postcode to the other."

"But what this does is helps investors find where the problematic loans are. We have gone to this new regional approach because I, for instance, can pick up straight away that Sydney is where all the problem areas are."

Melbourne and Brisbane have recorded some of the strongest results in the country, with three of the top 10 best performing areas located in Melbourne.

One of the biggest factors in high delinquencies is higher LTVs, Karabatsos says. He claims that "without exception, borrowers who have missed at least one repayment have a higher LTV and loan balance than all other borrowers within the same region".

In the All Gippsland region in Victoria, borrowers have a weighted average LTV of 62.52% and an average loan balance of $133,776. However, those who are 30+ days delinquent have LTVs of 73.30% and loan amounts of $$152,667.

However, Karabatsos declined to comment on how these LTVs are affecting the wider-housing market, saying Moody's is conducting further research in that area. Overall, he says, the report should be issued as a warning for investors.

"Look at the results, and see where certain arrears are over-represented. There are some areas in Sydney that are performing very badly but you need to look at whether these areas ore over-represented or not, and what the index categorises them as in terms of their overall contribution to delinquency rates."

Dark side of the honeymoon

Dear john,

You have been sent this article link by charles courtesy of smh.com.au

Personal Message:

Dark side of the honeymoon

October 13, 2010 - 3:00AM
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Informal debt agreements outside of the Insolvency Act

A new breed of "debt-help'' competitor is springing up, especially online, with names like nobankruptcy.com.au and mybudget.com.au, as well as minor start-ups such as creditplanb.com.au.

These services specialise in helping people overloaded with debt set a budget, negotiate affordable repayment plans with creditors and manage repayments – for a fee.

They are effectively creating informal debt agreements outside of the Insolvency Act.

Their customers, the people overloaded with debt, are not left with a lifelong black mark against their credit profile but may be without rights.

Fox Symes has dominated the debthelp industry for almost 10 years with its daytime television marketing strategy and slogan: "One thing saved me, a phone call to Fox Symes.'

In the past two years, Fox Symes has helped thousands of consumers repay $55 million to their creditors through a debt agreement registered under Part IX of the Bankruptcy Act.

The company administered 51per cent of all debt agreements registered with the Federal Government's Insolvency and Trustee Service (ITSA).

Fox Symes charges, on average, $100 per month in fees to collect one big repayment from the debtor and distribute it to creditors, who accept an average total repayment of 76 cents in the dollar of the debt owed.

That is expensive but that service comes with rights, said Fox Symes director Deborah Southon. "There are a number of operations negotiating de facto debt agreements with creditors but there is nothing there to bind creditors to the agreement,'' Ms Southon said. "A debt agreement is binding on creditors as well and provides debtors with certainty.

"Some people criticise formal debt agreements but they bind creditors as well to a deal and give debtors rights and let debtors move on.''

The marketing of Part IX debt agreements as pseudo debt consolidation instruments has been consistently criticised by consumer advocates and financial counsellors for years but they consistently deliver for creditors who have largely come to support them post-2007 reforms.

Nobankruptcy.com.au's Christian Oey said anybody could negotiate with their creditor if they were persistent enough. "You have to be patient and persistent and try to get to a person with authority over the computer,'' he said. "That's what we do and it can take time but it works.

"It is easier for us to do it for people. We know how things work.'' Mr Oey is a critic of formal Part IX debt agreements.

"There is no reason why heavily indebted consumers should sign a debt agreement. They are an act of bankruptcy that stays with you forever,” he said.

"Sometimes we have to be persistent and patient but we generally get to talk to decision makers at the creditors and do a deal that doesn't involve a debt agreement - that is good for everyone.

"Often people don't understand what the full consequences of a debt agreement are.''

Ms Southon said consumers should be aware that informal or de facto debt agreements do not prevent creditors from taking action in the future. "Informal debt agreements are a problem,'' Ms Southon said.

"A similar trend is emerging in the United Kingdom.

"There are some notorious small operators in this area.''

Formal debt agreements face another challenge from the government.

Changes to bankruptcy laws will add an up-front government fee to formal debt agreements from October 1.

The fee is expected to be $200 - plus an ongoing trailing commission on repayments of 1 per cent, which will be payable to the Federal Government's ITSA.

The debt help industry is already under pressure, and not just from economic stimulus payments and low interest rates.

There are only 14 registered debt agreement administrators left in Queensland.

There are 36 in Australia.

"The new fee will be problematic,'' Ms Southon said. "I wouldn't be surprised if the fee meets a lot of consumer resistance.

"What is ITSA going to do if a debtor refuses to pay the fee or can't pay the fee?

"These people can't pay their bills now.''

Credit Card Interest – the Ignored Rate-Rise Impact

Interest rates are set to rise again next month in a “double-whammy” for low-income families struggling with rising mortgage and credit card repayments.


“This latest interest rate rise will have a devastating impact on credit card holders, already struggling to pay back their debts compounded by punishing interest, as well as their mortgages.” says Christian Oey, CEO of NoBankruptcy.com.au.


“The focus at this time each month is on the impact on the home market and mortgage repayments, but what about the 15-20% rates being paid by credit card holders? They’ll increase again too.”


“We’re seeing more and more credit card debt repayments crippling families, rending apart peoples’ lives and forcing more people into bankruptcy,” said Mr Oey.


NoBankruptcy.com.au is a company specialising in Informal Debt Agreements, negotiating directly with creditors on their clients’ behalf.


“NoBankruptcy is a specialist team of debt negotiators, helping clients become financially sound once more, through direct debt management. We genuinely want to help people get back on their feet.” said Mr Oey.


Many factors can lead to people who were once financially sound becoming unable to meet their commitments. Job loss, illness, divorce and family issues can all have the effect of people taking their eye off their finances, allowing them to fall into disrepair.

Big banks eye independent rate rises

Big banks eye political environment to gauge risks of independent rate rises, says analyst Scott Murdoch

From: The Australian September 08, 2010
THE big Australian banks are forecast to independently lift key mortgage rates, to take advantage of the current political environment.

An analysis by Credit Suisse has found the major banks could raise their rates by up to 20 basis points, outside of the official cycle with the Reserve Bank of Australia.

A move of that size would ease the current pressure from higher funding costs but also increase the banks net interest margins, a key barometer of profitability.


The Commonwealth Bank of Australia has been named as the first bank likely to move because it has the highest level of share of the Australian residential mortgage market.


The bank, which is Australia's largest by market capitalisation, has a 26 per cent home loan market share compared to Westpac’s 24.3 per cent, National Australia Bank’s 13.1 per cent and ANZ’s 12.9 per cent.

Credit Suisse analyst Jarrod Martin said it was increasingly likely the banks would move out of sync with the RBA, given the current political climate.

"The political risks are clearer," he said.


"With a minority federal government now being formed by Labor, the major banks can now better assess the political risks associated with undertaking an out of cycle mortgage rate increase.


"We believe it's a prospect given the apparent funding cost and net interest margin pressures currently affecting bank core earnings growth."


Mr Martin said an increase, of up to 20 basis points, would reflect the constant pressure on the banks earnings due to higher funding costs.


The major four banks have to raise more than $100 billion over the next year to fund their current and future mortgages.

"This should be viewed as a glass half empty issue," he said.


"While such a development would be a positive incremental development for bank earnings it should be seen as defensive in nature and highlights the core earnings pressure in the industry.


"It helps compensate for the number pressures on bank core earnings but it does not increase the sustainable earnings power of the sector."


Still, a price leader needs to step forward. In the past, Westpac and the NAB have taken the lead and raised outside of the RBA but have faced intense political criticism and scrutiny.


Westpac currently has the highest standard variable rate of 7.51 per cent, compared to ANZ's 7.41 per cent, CBA's 7.36 per cent and NAB's 7.24 per cent.


"A price leader needs to emerge," Mr Martin said.


"We see CBA as the most natural price leader that needs to emerge to allow industry-wide mortgage rate increases to be effected," he said.


The analysis found that if mortgage rates were hiked by 20 basis points, each of the banks would experience an increase in their net interest margin.


CBA's net interest margin would move from 2.04 per cent to 2.13 per cent while Westpac’s would lift from 2.27 to 2.37 per cent.


The impact at the banks with smaller mortgage books would be less significant. ANZ’s margin would rise from 2.42 per cent to 2.49 per cent and NAB from 2.25 per cent to 2.31 per cent.

Blog-smacked!: Poker machines = STUPIDITY TAX

Blog-smacked!: Poker machines = STUPIDITY TAX: "All this talk about poker machines reminds me of an old saying I like: Poker machines are just another STUPIDITY TAX!"

Poker machines = STUPIDITY TAX

All this talk about poker machines reminds me of an old saying I like:

Poker machines are just another STUPIDITY TAX!

0% balance transfers debunked

By Hamish at http://www.mozo.com.au/

As winter dies and the stress of losing weight for summer sets in, spare a thought for credit cards that have gorged for months and are entirely unfit for the christmas binge. Now’s the time to think about a balance transfer.

Since you’re a clever sort, you’ll be ogling those super-slim interest rates on Mozo’s credit card comparison page — and hey, who hasn’t snuck a glance at a lusty 0% balance transfer rate? But here’s the rub: that low interest rate could end up costing you money.

“Zounds,” you might reply, and return to your ogling, but bear with us. We’ve been having a bit of a play with our nifty credit card calculator, which spits out the actual cost of a credit card — in place of all this interest rate and balance transfer malarky. The cost is the total you’ll pay in interest and fees to kill off that debt, and as it happens, it’s the best way to judge a credit card.

So let’s peek beneath the balance transfer covers.

•Citibank’s Clear Card, for example, offers a 0% for 6 months on balance transfers — and a stupendous purchase rate of 11.99% for 12 months. However, if you don’t pay off the transfer within that time, the balance reverts to a corpulent 21.24%.

For a debt of $3000, with repayments of $200 monthly, you’re looking at a cost of $308 in fees and interest.

•Suncorp’s Clear Options Standard credit card, by contrast, offers 1.9% for 12 months, and then 17.99% on the outstanding balance transferred. Punch in the same numbers, and the cost of knocking off that same debt is only $135.

The difference is, well, clear.

•St George’s Vertigo credit card has a lousier balance transfer offer still, at 2.99% for 6 months. However, after 6 months any unpaid balance doesn’t revert to a sky-high cash rate, but to a quite lovely purchase rate of 12.49%.

So what does that all mean? The same debt, with the same repayments, will cost $252 to pay off with St George.

And if, ahem, your repayments drop to only $100 each month, while that debt blows out to $5000, here’s the cost of each balance transfer in fees and interest:

Citibank Clear Card: $4639
SunCorp Clear Options Standard: $2304

St George Vertigo: $1974

The conclusion? Pay of that balance ASAP! But if that isn’t feasible, don’t just grab the best headline rate: it could be twice as expensive.

A Mixed Week of New Clients

Its been a mixed week of various new clients. From the older couple who owe the ATO over $100,000 to the young divorcee who has about $60k in unsecured debts, and also a chartered accountant who lost money trading shares and options... our new clients come from all walks of life and all states.

We have also been talking to a married couple that tried to apply for a Part IX, but we're badly advised and their application was rejected because it wasn't completed correctly. A shame, but really also a blessing for them, in that they can avoid some of the prohibitive issues that Part IX's bring.

The one element they all have in common though, is they need professional help, and seeking that help is the
first smart step in their recovery process. They're on the way to getting their lives back, debt-free and cashed-up, and never to look at credit cards the same way again!

I'm looking forward to helping more people next week. I wonder what sort of life-stories they'll have?

Debt Free, Cashed Up and Laughing - The Cheapskates way to living the good life: Double check

Debt Free, Cashed Up and Laughing - The Cheapskates way to living the good life: Double check: "If you were to check your grocery or department store receipts regularly, chances are you will eventually find an overcharge. This happens..."

Solving Credit Card Debt Issues

Well it’s been a big week, saw two people in Melbourne and they have signed up to our unique debt negotiation service. One of them has 5 kids, and his income has just dropped by two-thirds!!

Help!

He is really struggling, and has over $100k of ATO debt on top of the $50k of credit card debts too.

Other strugglers spoken to this week include people who can’t re-finance their home to get some cash because they had a default already, and the banks don’t want to know about them, full-stop. We have a solution for that situation as well.

It all just takes some time, planning and then sticking to the game-plan and once you come out the other side you’re debt-free.

Wouldn’t that be great?!?

ANZ wipes pensioner's $18,600 credit card debt

19/08/2010

By ninemsn Money staff

The ANZ has agreed to wipe $18,600 in debt from a Victorian pensioner's credit card after steadily increasing his limit over the past nine years.

Alec Stubbs, a former wharfie from Yarawonga, has had his ANZ credit card limit increased to $46,000 since 1991.

"It's clear this customer's credit limit should not have been increased to this extent, and due to the exceptional circumstances we have decided to clear this debt to ensure his family is not placed under any additional stress at this time," ANZ spokesperson Stephen Ries told the Herald Sun.

Stubbs, 72, has been on a pension for several years and receives $485 a fortnight.

He also had a credit card with the Commonwealth Bank with the limit steadily climbed from $3,500 in 2003 to $25,000 in 2006.

CBA spokesperson Steve Batten said the bank had stopped unsolicited offers to welfare recipients from 2007, and those who requested extra credit had to pass a financial test according to the Herald Sun.

Stubbs’ wife Pauline only discovered that her husband was $36,000 in debt when she opened his mail while he was in hospital being treated for cancer.

"I nearly died," she said. "How in the hell could they think a pensioner could really afford this? We are not secret millionaires.

"Even if he asked for this, don't they check into people's circumstances before they throw money around?"

The husband and wife have kept separate banks accounts throughout their 53-year marriage and she wasn't aware of the minimum monthly payments running into hundreds of dollars.

His deteriorating health and confusion has left him unable to properly explain his finances according to the Herald Sun.

In August the federal government promised new measures that would mean credit card companies would not be allowed to increase credit limits without agreement from customers .