Budgeting, Christian Credit Counselors, Credit, Credit Cards, Credit Counseling, Credit Score, Debit & Your Credit Score, Debt, Debt Consolidation, Debt Settlement, Finance, Holiday Tips, Money Management, Personal Goals, Saving

Credit Card – Avoiding the Debt Trap this Holiday Season

Gift Giving on Credit

Staying out of debt can be almost as difficult as paying it off especially when our emotions take over. After all, buying gifts for our loved ones during the holiday season is a very emotional purchase.

Preparing for gifting should begin way before the holiday season. In a survey conducted by The American Research Group, Inc., 2014 Christmas gift spending was up 8% over 2013 with an average of $861 spent per adult consumer. So what is the most efficient and painless way to save money for the holidays each year?

Budgeting for Gift Giving

Creating a management budget at the beginning of each year will ensure you achieve your financial goals, establish a savings, and have funds set aside for gifts and holidays throughout the year. First, calculate how much money you spend on the holidays annually and divide that by 12 months. This is how much money you will need to set aside in your monthly budget for holiday spending. There are many spending trackers and saving tools out there but sometimes its easiest to just create an envelope labeled holidays and put cash in it each month. This might seem like a tedious task, however when the time comes to buy gifts and holiday items throughout the year it will be nice to already have the cash available and not have to worry about denting your budget.

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    Christian Credit Counselors

    Simple Fixes for Runaway Credit Card Debt

    Despite the best of intentions, it is easy to fall quickly into credit card debt. When you struggle to pay just the minimum payment on your credit card bills, take logical steps to untangle the mess with Christian credit counseling. According to an article by businessinsider.com, the average American family has about $15,000 worth of credit card debt. Ignoring credit card debt results in more credit card debt. By facing debt with helpful Christian credit counselors, you can master your personal finances. Experts say there are several clues that let you know your debt is out of control. Debt counselors will help you with simple fixes.

    Getting out of Debt Denial

    Dodging bill collectors is one sign you are in denial about your credit card debt. With Christian credit counseling, you face your issues whether you have a spending problem, a job layoff or medical issues that are beyond your control. A credit counselor encourages you to list your debt and set priorities. By signing up for a debt management plan, you get out of debt faster.

    Setting a Payoff deadline

    By enrolling in a debt management plan at a Christian credit counseling agency, you find out precisely when you will pay off your credit card debt. According to businessinsider.com, a lack of clarity with regard to debt payoff creates stress. If you try to pay off debt on your own, your payoff date could be 20 years away. However, people are often surprised to learn they can pay off debt 80 percent faster with the right debt management plan.

    Paying off instead of Transferring

    Another common mistake consumers make is to transfer their debt from one card to another. Balance transfers don’t work for most people because the zero percent introductory APR doesn’t last. You will likely feel tempted to run up your debt on the old card after transferring previous debt.

    Other personal finance mistakes include sacrificing your savings plans in order to pay off debt. When you get a tax return, windfall or other monetary gift, put it aside in a savings account. You will prevent runaway debt because you have cash to pay for financial emergencies. Meanwhile, you can continue to pay off old credit card debt by making one monthly payment to creditors. Debt consolidation often alleviates the anxious feelings related to runaway debt.

    At Christian Credit Counselors, we strive to help our clients by giving them positive solutions for their runaway credit card debt. Talk to us about strategies for paying off debt and improving your credit score.

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      Credit Counseling
      Credit Counseling

      Credit Counseling for Millennials Who Want a Fresh Start

      When you are dealing with massive credit card debt in your 20s or early 30s, it is difficult to get a mortgage loan or a car loan. In some cases, lenders demand you pay a higher interest rate because of poor credit and too much consumer debt. By engaging in credit counseling, you take control of your financial future before it’s too late. According to a recent article by wgem.com, half of Millennials in their 20s decided to get a credit card after hearing a promotion or seeing an advertisement. The average debt for Millennials is $45,000, which is the amount some of their grandparents paid for a home. By consolidating debt, you pay off credit card debt and enjoy the hidden benefits.

      Qualifying to Buy a Home

      Some young people don’t realize their credit card debt prevents them from qualifying for a home in their desired price range. By receiving credit counseling, you learn the tricks and tips for improving your debt-to-income ratio. When you have less debt and higher income, you position yourself to afford a higher mortgage amount.

      Improving your Credit Score

      Certified and trained credit counselors also fill you in on the secrets for improving your credit score. Most colleges don’t offer personal finance classes. However, your personal credit counselor will answer questions about the pros and cons of carrying credit cards and strategies for boosting a credit score or avoiding bad marks on your credit history.

      Enjoying a Debt-Free Life

      One incredible strategy is the debt-free approach. While it is not for everyone, you can decide to live without credit cards or loans. Learning to use a budget, paying off credit card debt and saving or investing are just a few things you can do. People who enroll in a debt management plan satisfy the debt obligations they have to various credit card companies. A reputable Christian credit counseling agency will work with you so you pay a lower interest rate. Knowing your exact timeline for paying off all credit card debt gives you a sense of liberation and freedom.

      Other hidden benefits of the debt free life when you are young include more money to invest for retirement and money for your child’s college. When you no longer have a monthly debt management plan payment to make, you are able to allocate money for a 401(k) plan or Roth IRA. When you start saving young, you give your money time to multiply and grow. People who start saving young don’t have to save as much to retire with greater wealth compared to the late savers.

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        Credit Card Debt vs Credit Counseling

        Before opening up a new line of credit or applying for an additional credit card, weigh the risks. Many consumers do not realize they inadvertently hurt their credit scores by making financial missteps. According to a recent piece by CNBC.com, it is a risky time to carry new credit card debt due to the potential interest rate hike by the Federal Reserve. By receiving credit counseling, you figure out an intelligent method for cutting debt and staying out of debt. A trained and certified Christian credit counselor fills you in on the bigger picture as it relates to credit scores, a workable budget and savings goals.

        Paying more in interest

        If you don’t resolve your credit card debt, you could end up paying more in the form of interest payments to your creditors. People who consolidate debt with a debt management plan enjoy a lower interest rate. According to CNBC, the Federal Reserve data shows consumers’ credit card debt now totals about $900 billion. The number is about 3 percent higher compared to last year.

        Feeling the squeeze to pay the minimum

        Most people realize they will not get out of debt for a long time unless they pay more than the minimum on their credit cards. If you take out more credit card debt or fail to come up with a plan to reduce debt, you could feel financial pressure just to pay the minimum balance. A new survey by Prosper showed only 37 percent of people pay their credit card balance each month while 15 percent pay the minimum due.

        Rolling over credit card debt

        When you get credit counseling, you don’t just learn how to live below your means. You also come up with a debt management plan so you know your credit card debt will be gone within a certain number of months or years. The National Foundation for Credit Counseling found most consumers roll over $2,500 in credit card debt every month. If the Fed does follow through with the promise to raise interest rates soon, the debt on $2,500 becomes more expensive in terms of interest owed.

        Other risks associated with taking out too many credit cards include dealing with late payments or credit card delinquencies. Also, you could end up with no money leftover every month to save for retirement or other financial goals. You can avoid bankruptcy and debt settlement scams by talking to the trustworthy credit counselors with Christian Credit Counselors. We look forward to providing credit counseling so you can build wealth and live a life with financial peace. For more information on credit counseling, please contact us.

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          Credit Card Debt and the Need for Credit Counseling

          America Paying Down Debt

          Credit card debt and other money problems aren’t always signs of over-indulgence. In some cases, it is simply a sign that the American economy’s in trouble. The good news is the latest credit card debt study shows Americans paid down more than $34 billion owed to credit card companies. The amount they paid back is 7% more than in the past two years. While some consumers had the help of a Christian credit counseling agency, other consumers struggle with debt they can’t seem to conquer.

          According to a Media General news report, many people desire to pay off debt but end up with higher credit card balances. In fact, the CardHub study showed the average household credit card debt balance is more than $7,100, which is the highest level in six years. If you feel tempted to increase your credit card limit, yet can barely make the minimum payments on your different credit cards, consider Christian credit counseling.

          Lower your interest rate

          One of the reasons you need Christian credit counseling is if you have high interest rates on your credit cards. If you are not sure whether your credit card interest rates are high, you can talk to a trained credit counselor with a reputable organization such as Consumer Credit Counselors. In most cases, a debt management program creates a new agreement between you and your different creditors. Instead of paying the old interest rate in the double digits, you’ll be pleased with a lower rate.

          Eliminate late fees

          Late fees and additional charges happen to even the most conscientious person. Most people have busy lives that often get in the way of managing personal finances. The good thing about enrolling in a debt management plan is the fact that you can also enroll in automatic monthly payment so you never miss a payment. As far as old late fees, your credit counselor will work with your creditors to eliminate those.

          Improve your credit score

          After paying off your debt through a debt consolidation program, you’ll notice your credit score start to improve. When you take the budgeting and personal finance advice of your credit counselor or “finance coach,” you’ll also make the right moves to boost your score. Having a higher credit score means you’ll receive a lower interest rate on everything from a car loan to a mortgage in the future. With a bankruptcy, most consumers sacrifice their credit score for up to a decade.

          Whether you have been dealing with the constant harassment of debt collectors or simply want to make a positive change on your own, consider Christian credit counseling services. At Christian Credit Counselors, we help our clients set financial goals, come up with a workable budget and consolidate debt. We don’t judge or criticize. Instead of running up more credit card debt, be part of the statistics for Americans living a debt-free life.

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            Credit Cards

            Credit Card Promotions and the Untold Truth

            Understanding Promotional Credit Cards

            These days, just about every store has credit card advertising … some kind of low interest promotion. How often have you seen sales advertising “0% financing for 18 months” or “Pay no interest until next year”? These deals are hard to pass up, but they can end up costing you if you aren’t careful.

            Understanding the terms of the promotion can help keep you stay out of trouble. In most cases, if you don’t pay off the balance within the promotional term you will be back-charged interest from the day of your purchase. You could end up paying thousands more and see your monthly payments spike in the long run.

             

            Speaking of payments, if you are on a promotional plan and miss or are late on a single payment you may lose the reduced APR. Your purchase would then start being charged the account’s regular APR, which is usually over 20%.

            So how do you take advantage of the perks of a promotion without falling victim to the back-charged interest and high monthly payments?

            When deciding to make a purchase using “special financing”, check to make sure you can afford the monthly payment required to pay the purchase off before the plan expiration. This means you will need to pay more than the minimum monthly payment listed on your credit card statement. To find out how much you will need to pay on that credit card monthly divide the total purchase (balance) by the number of months included in the promotion. For example, a purchase of $2000 with a 0% interest promotion for 18 months will require a monthly payment of approximately $112.

             

            If you or someone you know is having trouble making payments, have them call the creditor. They want to keep you as a customer and may be able to offer you different payment options.

            If you feel like you are in over your head, call one of our certified credit counselors for a free debt analysis. We have relationships will all the major creditors and can help educate you about credit and debt.

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              Christian Credit Counselors, Credit, Credit Cards, Credit Counseling, Debit & Your Credit Score, Debt, Debt Settlement, Finance, Money Management, Personal Goals, Saving

              Credit Cards: Considering Credit History

              Considering Your Credit cONSUMER-cREDIT

              Do you have credit card accounts that you don’t use? Are you thinking about closing these unused accounts to clean off the slate? Read this article to learn more about the effects of closed accounts on your credit history.

              A Fair Isaac representative reported that closing accounts does not directly hurt one’s credit score, regardless of whether it was closed by the cardholder or the credit grantor. That’s the good news. The other side of the story, and there is always another side, is that closing accounts indirectly affects your credit history and therefore, your credit score.

              Closing Credit Card Accounts

              Closing unused credit card accounts can increase one’s credit utilization ratio. Credit utilization is a measurement of the difference between one’s available credit and the amount being used. This figure is calculated by taking the sum of your credit card balances and dividing that by the sum credit card limits. One’s credit utilization ratio directly affects credit scoring. Simply put, the higher one’s credit utilization ratio the lower his or her credit score.

              How does this come into play with regards to cancelling unused credit cards? The unused credit cards have low utilization since the entire credit limit is available. This offsets the higher utilization that one’s other credit cards may have. Thus, it reduces one’s overall credit utilization ratio boosting his or her credit score.

              Putting that into perspective, let’s say you have a credit card with a $5,000 credit limit and another card with the same. That’s $10,000 of total credit limit. Now let’s say you spend $2,500 on one card and some minor purchases on the other, which you have paid off. Your total balance, or debt, is $2,500, which equates to a credit utilization of 25%. If you were to close the card with no balance, your overall credit limit would decrease to $5,000, which would in turn increase your credit utilization ratio to 50%.

              Considering Credit History

              Closing credit card accounts can also lower one’s credit score by reducing the credit history age. Credit age is essentially that. How old are your accounts? In the credit scoring world, the older the better. Age is one representation of stability. Since older is better when it comes to credit card accounts and credit scoring, if you’re thinking of closing old unused accounts, think again. These accounts can actually help your credit score. Keep in mind, however, the FICO score does take into account both closed and open accounts, and closed accounts can remain on a credit history report for up to a decade.

              Setting all that aside, if keeping credit card accounts open leaves an open door to more spending – close them! Better to be financially free of debt and its negative impact on your finances, which we all know can lead to increased stress. And, who needs that!?

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                Financial Planning: A Dose of Truth and Grace

                shutterstock_55416607_montage

                Planning for a Financial Planner

                So you’re considering a financial plan! Perhaps your finances have told you that you need one. Planning with purpose for your financial future is a noble task. Sure many good things come to us in unexpected surprises, but planning for a good future, especially when it comes to finances, is a wise strategy indeed! You’re reading this article because financial planning interests or excites you, and just doing so is taking the first step.

                 

                Financial planning is a well marked plan to thrive financially, and I don’t know anyone who doesn’t want a secure, successful financial portfolio. It’s never too late to start making changes and never too late to pursue financial freedom. The key is: start where you are. Don’t dwell on where you have been or the mistakes and poor choices that you may have made. Everyday is a fresh start to the life you want to live, to the best you yet!

                Your Dreams, Desires, and Goals

                You have dreams, desires and goals. Everyone does. But, not everyone lives in such a way as to see them come to pass. Why do some succeed where others fail? Why do some thrive while others seem to strive after the wind? Not all of life’s answers come sugarcoated and some pills are hard to swallow. But, taking in wisdom, advice and eating humble pie is good for us all. With humility comes honor, and sometimes taking a long, hard look at ourselves is truly a humbling endeavor.

                Finances are a major test and testimony of our maturity and level of personal responsibility. It’s important in the process of self-discovery to admit the truth about your behaviors and choices and the effects they have had on both your life and the lives of those you influence, whether for good or for bad. Be sure to give yourself a healthy measure of both truth and grace. As imperfect people, who make not so perfect choices, grace is something we all need.

                Consider Your Financial Peace

                Start today by considering who you are, who you want to be. Consider what your financial situation looks like and what you want it to look like. Consider what it will take to get you there. Look at the situation objectively. Keep negative thoughts and emotions at bay. You are strategizing, planning, preparing and leading. It takes a strong mind and a strong spirit to be a good leader. The first person you lead is always yourself. And the truth is, if you can’t lead yourself, you really can’t lead others, not well, anyway.Financial grace is not a credit card with no limits and no consequences. If you charge, you owe. Same goes in life.

                Your material choices have consequences, both positive and negative. Grace goes the extra mile, however. It says, “Yes, you are where you are, but…you don’t have to stay there, and you certainly don’t have to return.” Grace gives us the opportunity to make a change, to make the change we desire. It helps us to feel empowered to walk out the lifestyle we want for ourselves and to make the daily choices that both get us and keep us there. Mary Poppins should have said a spoonful of grace helps the medicine go down.

                Planning Short and Long Term Goals

                As you begin to plan, look at both short and long term goals. Write out the steps it will take to accomplish them. With your basic plan in hand, your road map, determine if further help is needed to bring clarity or to implement your newly devised strategy. Share your newfound view with others and invite them to partner with you where appropriate. Your close family and friends are key players in the game called “your life.” And, be proud of who you are because no matter where you’ve been, what you have or have not done, you are this day, an overcomer.

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                  Credit – The Four Most Common Forms

                  What is credit? art-credit-cards-620x349

                  Credit is defined in a couple of ways. One is the amount of money you are approved to borrow from a lending institution. With this approval comes an agreement to repay the charges, any additional fees that can or will be applied, and to abide by time restrictions.

                  Credit can also be classified as your borrowing reputation. It paints a picture of your payment history and provides the lender with information regarding the likelihood of your repayment, in other words, your risk factor.

                  Use of Credit

                  When used responsibly, credit can be a convenient and effective financial tool. From a simple credit card to an auto or home loan, credit is the American way of life. Cashless transactions are soon becoming the way of the future, and credit cards are among the most prevalent. Understanding credit is important in order to use credit to your advantage and to prevent the common financial pitfall – debt.

                  Four Common Forms of Credit

                  Revolving Credit

                  This form of credit allows you to borrow money up to a certain amount. The lending institution sets a credit limit, or the most you can borrow. In revolving credit, the borrower revolves the balance by rolling from month to month until it is paid in full. Interest charges typically occur for any revolving balance. As the money is paid back, the difference between the maximum credit limit and the current balance is available to be borrowed. This is the most common form of credit issued by credit cards, such as Visa, MasterCard, and store and gas cards. Credit cards are considered unsecure credit because there is no collateral securing the amount borrowed.

                  Charge Cards

                  This form of credit is often mistaken to be the same as a revolving credit card. However, the major difference between a credit card and a charge card is the credit card can carry a balance, whereas the charge card must be paid in full each month. If the balance is not paid on time and in full, penalty fees will be added. American Express is an example of a well-known charge card. This form of credit is advantageous against accumulating credit card debt.

                  Installment Credit

                  Installment credit involves a set amount borrowed, a set monthly payment and a set timeframe of repayment. Interest charges are pre-determined and calculated into the set monthly payments. Common forms of installment credit agreements are home mortgages and auto loans.

                  Installment credit is also typically secure. Secure credit requires security for the lender. The borrower must provide collateral, something of value pledge in order to guarantee loan repayment. If the borrower fails to repay, or defaults on the loan, the lender may confiscate the collateral. A home is an example of collateral on a mortgage, and a vehicle on an auto loan. If the borrower were to default, the home or vehicle would be repossessed.

                  Non-Installment or Service Credit

                  This form of credit allows the borrower to pay for a service, membership, etc. at a later date. Generally, payment is due the month following the service, and unpaid balances will incur a fee, interest, and/or penalty charges. Continued non-payment will result in service cancellation and can be reported to the credit bureau, affecting your credit score. Service or non-installment agreements are very common in our everyday life. Cell phone, gas and electricity, water and garbage are all examples of service credit.

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                    Money, Love, and Marriage

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                    Marriage and Money

                    Roses are red; violets are blue. No matter the cost, I’ll stand by you…

                    Have you had the talk yet?…You know, the one about money, spending habits, future goals, budgeting…?

                    If you haven’t, it should be a top priority for your relationship.  If you have, have it again.  Discussing finances should be a regular and healthy part of your lifestyle together.  Being on the same page in this area will protect your marriage (or future marriage) against the most common relational enemy.  You’ve heard the statistics.  Money and finances are the number one reason couples argue and ultimately divorce. Don’t let your marriage become a number.

                    Make Finances a Joint Venture

                    Regardless of you or your spouses accounting or investment skill set, planning out your financial future and implementing those strategies should be a mutual effort.  Coming together to decide matters in the area of finance will allow you both to be on the same page number…of the same book.  Couples drift away from each other day by day when they are not planning their future together.

                    Relationships and matters of finance should not be left to one person alone, even if he or she is “better at it.”  This disconnects one partner from a key area and anytime one of the partners is left out of a major area of the relationship, it will lead to the two of them planning and living, by default, two separate lives.  We, as humans, are meant to be in relationship with each other, and drifters will eventually wash up on someone else’s shore.  So, make it a priority to come together and stay together in the area of financial planning.

                    Tip for Financial Success

                    Use this time of planning as an opportunity to build closeness into your relationship.

                    Respect and Love

                    The two greatest relational needs. Anytime you are communicating with your spouse, you are communicating either respect and love or their opposites.  Since the topic of finance can stir one or both of you up, be especially careful to communicate this respect, love and trust through words, tone and body language.

                    Listen and Speak Lovingly

                    Listen for his or her dreams, desires, goals, reasons.  Your partner has spending habits, as we all do.  Find out the why behind the what.  This will help you to understand your partner better and offer support when needed.

                    Be a voice of encouragement. Speak highly of and to your spouse.  Build him or her up with your words. Remind your better-half how capable, intelligent and valued he or she is.  You have the power to build up or to tear down, and it starts with a simple comment.

                    Give Financial Grace

                    If this is a new process for your relationship, a new way of doing things financially.  Give yourselves grace to get through the transition. Old habits may die hard, but building new and healthy patterns into your relationship is definitely worth the initial investment!

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