Friday, January 28, 2011

Credit Line Extension

Kind of busy of late, but I thought I'd fill you all in on a recent event with one of my credit accounts.
Remember I recently posted that I accepted a lower interest rate check offer on one of my credit cards? I then took the money and turned around and paid off the remaining balance so that all that was left was the low interest rate loan amount. My strategy being to pay off debt with these low rate offers and then get further low rate offers.
Well, I just received a big boost in my credit line from the card where I paid off the high interest rate loan. This is really good too.
Now almost all of my debt is at low interest rate (most at 4%), and my credit lines keep growing and growing.
See my Snowball This! article for how I'm doing it.

Thursday, January 20, 2011

Obama Stimulus Relief

Is it Real?

Has President Barak Obama included personal debt relief in the stimulus package? That seems to be the rumor, and many websites are actually offering consumers an option to apply for government stimulus relief. In fact, there have been so many people signing up for this stimulus relief that the federal government has stepped in and put the kibosh on it.


The reason is: Because there's no such thing! The stimulus package passed by Congress, and signed in to law by the President, has no provision whatsoever for personal debt relief. But that hasn't stopped unscrupulous companies from trying to lure unsuspecting consumers into programs they think are government backed. So the FTC has stepped in with a probe of these offers supposedly promising government assisted debt relief.

Don't be fooled.

There is no government bailout for the consumer. Your only options are to negotiate your debt down or to file for bankruptcy. If you decide on the former, a debt settlement attorney is your safest avenue. Creditors are obligated to deal with law firms acting as your legal representative.

Start today.

Getting your debt accounts settled for pennies on the dollar will enable you to pay off your creditors and start re-building your credit. The sooner you get started, the sooner you'll be in the high grass of financial independence.

Wednesday, January 19, 2011

Credit Card Calculator

Credit Card Calculator
Free credit card payoff calculator by

Oprah Debt Diet

I've decided to go on a quest. I'll be looking at different fad debt relief programs. This started with Dave Ramsey's "Debt Snowball", which I ran into and didn't really agree with (see Snowball This!). So next on my list is Oprah Winfrey's "Debt Diet".

The Debt Diet has two phases, made up of four steps each. I've included the link to her site so you can look up the particulars, but I'll list the steps here.

  • Step 1: How much time do you really have?
  • Step 2: Track your spending and find extra money to pay down debt.
  • Step 3: Learn to play the credit card game.
  • Step 4: Stop spending.
  • Step 5: Create a monthly spending plan.
  • Step 6: Take big steps to grow your income.
  • Step 7: Prioritize your debts and raise your credit score.
  • Step 8: Understand your spending issues...and save!
    As I said, the first four steps fall under what Oprah calls Phase One, and the remaining steps naturally fall under Phase Two.

    It would be hard to take issue with much of the Oprah program. Many of the steps seem to be quite obvious, such as "stop spending". Of course, sometimes we are so immersed in a problem that we need to be reminded of the obvious.

    For me, the real meat of this program is in Step 7. This step outlines where to prioritize your resources, starting with secured debts and ending with debts to family and friends. Oprah also encourages us to up our credit score within this step.

    Overall, this program seems a little simplistic. All the steps make sense, but there are few tools here to help those who are in serious straits. I'd say the Debt Diet is more tailored to those in just a little financial distress, rather than to those in actual financial trouble. If you're in financial debt trouble you may want to look at debt settlement. If this is the case, a settlement attorney is your best bet.

    Friday, January 14, 2011

    Money Help

    Welcome to 2011! It's a brave new world, renewed again in the midst of another cold winter. Hope you all had a wonderful holiday season. I've been out of commission for a bit, getting changed over to a new computer and a secure location on the server. But I'm back now and ready to talk again about personal finance.

    I'm prompted to get back on the stick again today because I received some good news in my P.O. box. Remember, a few posts back, I was telling you about creating some room on a credit card in order to get a special interest offer. Well, that's what came in the mail today. And the offers keep getting better and better as I continue to make timely payments and improve my financial standing. Today's offer: 0% for 6 months, or 3.99% for 12 months. Zero percent! Wow! This is exactly what I was talking about when I asked you to pay off a credit card you were in good standing with. Then you get a great interest offer like this, and then transfer your high interest rate card balances over.

    Of course, 0% sounds great, but in reality, (and I fully expected this) after doing a little math, the 4% offer is actually a better bargain. So, since I have to choose one or the other, the 4% offer will be the one I go for.
    The particulars of this particular situation are as follows:

    This is for a Capital One account with a $3,000 credit limit and normally a 20% interest rate. I have about $500 on the card already at a 4% promotional rate, so I will only be able to transfer about $2,500 from a higher rate card. My higher rate account is currently at 20%, so that will be what we use to calculate our savings. As with virtually all these types of offers, there is a 3% transfer fee charged for the transaction. So here's the math:

    6 Months 12 Months

    0% 3.99%

    Loan Amount: $2,500 $2,500
    3% Fee: ($75) ($75)
    Interest: 0 ($100)
    20% saved: $250 $500

    Savings: $175 $325

    As you can see, the loan amounts and the fee for the transactions are the same. There is a cost to carrying the $2,500 for a year at 4% of $100 (actually for comparison purposes this could be halved to $50, which would cover the 6 month period of the 0% offer). Savings is calculated at 10% for the 6 month loan (20%/year x .5) and the full 20% for the 12 month loan.

    So I would have paid $500 interest, over the 12 months, but instead, I am paying $100 in interest over the 12 months and a $75 one time fee. That makes a savings of $325. That's pretty good when you consider we are talking about such a small principle amount ($2,500). Of course, were I to be able to do this on a larger scale (and I do already have $4,000 at a permanent 4%, and $1,500 at 8% for 6 months) the savings would really be significant.

    These figures are well above what one could reasonably expect as a return from even the most lucrative stock or bond market investments. So take a few simple steps and start toward financial freedom (and take that "snowball" and throw it at the next personal finance guru you see).