7 Ways to Get Out of Credit Card Debt


According to Creditcards.com, about 40 percent of Americans carry credit card debt from month to month without paying it off.  The website also says the average interest rate on those credit cards is more than 13 percent.  So it’s easy to see why cardholders often struggle to pay down their credit card balances.

Here are 7 tips to get out of credit card debt:

  1. Stop using your credit cards until you pay them off.

Interest rates of 15, 20, or even 25 percent or more can cause credit card balances to grow rapidly.  People often find themselves on a debt treadmill, struggling to make the minimum payments and watching their principal balances grow.  Stop chasing your debt balances.  Use cash or a debit card until your credit cards are paid off.  That way, you can focus on paying down your balances.  And you won’t be tempted to spend more than you can afford to pay.

  1. Track your expenses to ensure that you spend less than you earn.

It’s a basic concept, but some consumers don’t know exactly how they spend their money each month.  They may

Budgeting 101


The first and most important step to effective financial planning is developing and implementing a budget. That, of course, sounds easy and even simplistic. But it’s more difficult than it seems. Budgeting simply means to live within one’s financial means.

Needs vs. Wants

You have a limited amount of money to spend each month, so you need to separate your needs from your wants.  Your “needs” usually include housing, utilities, food and clothing — the things you can’t live without. Once your needs are taken care of, any remaining money can go to unnecessary “wants” — those items that are nice to have, but not required to live.  They usually include things like cable TV, Internet service, restaurant meals, cell phones with many features, etc.

You need to be careful not to confuse wants and needs. A very common reason people get into serious debt is by failing to live within their means. They use credit to supplement their wants, but eventually this will cause financial trouble. For example, you need a place to live, but you don’t need a 3,000-square-foot home. A home is a need, but

Personal Signature Loans


A personal loan, sometimes also referred to as a Signature Loan, is a loan that can be used for many purposes. A Signature Loan is an unsecured personal loan. It’s not secured by the equity in your home (such as in a home equity loan) or by some other personal property or asset (such as a car loan). Depending on the bank or lending institution, these types of loans are commonly available for amounts ranging from $500 to $20,000.

Consumers typically use a Signature Loan for purposes such as:

  • Debt Consolidation
  • Major Purchases
  • Vacations, Holidays
  • Unexpected expenses
  • Home Improvements

Generally, a personal signature loan is a fixed rate, fixed term loan offering the following:

  • Terms from 2 to 5 years
  • Interest rates will vary based on credit score and income
  • Loan Amounts up to $20,000

Understand the Terms

These types of loans can vary widely depending on the lending institution. Generally speaking, most personal or signature loans are unsecured, meaning they do not have collateral attached. Because of that, these loans will be more difficult to obtain. Lenders will require that applicants satisfy their requirements for creditworthiness. The terms and conditions of each loan


It is difficult to avoid responding to market turmoil when you are stricken by a shock of falling prices and investment threats. In the past, the issue revolved around unpredictable home prices and credit risk fears together with the varied oil prices in the market.

Now, the suspects are not the same – they have taken a whole new path; they involve decreasing oil prices and economic factors across the globe, but the impact remains the same: an unpleasant market correction.

What Should You Do?

What can you do in such a time? It seems pessimistic to say “not so much” yet great investors adhere to their investment portfolios and evade the crowd rushing the exit.

For instance, take into account the mistakes many investors made exiting the market in 2008 – 2009. They recorded steep losses by selling their stocks. On the other hand, they became too cautious to re-enter the market after price rebound; as a result, they incurred a double loss.

The following are some tips to keep in mind at a time of market turmoil – such as now:

  1. Stay Disciplined – Market Timing Never Works

Stocks have stayed ahead of other asset classes since ages ago – including stretches of steep reductions.

Student Loan Repayment Options

Most student loans are funded by the U.S. government.  These loans, called federal student loans, offer some flexibility in how they are repaid.  Below is a brief explanation of some of the most common federal loan repayment options.

Standard Repayment – You pay a fixed monthly amount and pay off the loan in 10 years (or less).  You pay the least amount of interest with this repayment plan.

Graduated Repayment – Starts with a lower monthly payment amount and then gradually increases the payment amount every two years.  Like standard repayment, the repayment period is up to 10 years.  However, you’ll pay more interest over the life of the loan.

Extended Repayment – Stretches loan payments from the standard repayment period up to 25 years.  This lowers the monthly payment, but increases the total paid in interest.  Total student loan debt must be more than $30,000.

Income-Based Repayment (IBR) – Can help borrowers keep their loan payments affordable, with payment caps based on their income and family size.  This option can significantly lower payments and is best used in conjunction with a loan forgiveness program such as Public Service Loan Forgiveness.   Repayment period is up to 25 years.  Estimate monthly payments using the government’s Income-Based Repayment

Secured vs Unsecured Loans

There are two basic categories that most loan types fall into – Secured and Unsecured.

Secured Loan

Secured loans are those loans that are protected by an asset or collateral of some sort. The item purchased, such as a home or a car, can be used as collateral, and a lien is placed on such item. The finance company or bank will hold the deed or title until the loan has been paid in full, including interest and all applicable fees. Other items such as stocks, bonds, or personal property can be put up to secure a loan as well.

Secured loans are usually the best (and only) way to obtain large amounts of money. A lender is not likely to loan a large amount with assurance that the money will be repaid. Putting your home or other property on the line is a fairly safe guarantee that you will do everything in your power to repay the loan.

Secured loans are not just for new purchases either. Secured loans can also be home equity loans or home equity lines of credit. Such loans are based on the amount of home equity, which is simply the current market value of your home minus the

Student Loans


A student loan is a form of financial aid that must be repaid with interest. They are different than scholarships, which are usually awarded because of academic or athletic merit and do not have to be repaid.

Few students can afford to pay for college without some form of student loans.  Education loans come in three major categories:

  • Federal loans – Stafford and Perkins loans provided by the U.S. government
  • Parent loans – Parent Loan for Undergraduate Students (PLUS) provided by the U.S. government
  • Private loans – Provided by financial institutions

Since July 1, 2010, all new federal education loans have been made through the Direct Loan program.  These loans are made through the college’s financial aid office with funds provided by the U.S. Department of Education.  This includes the federal Parent PLUS loan in addition to student loans.
Federal Stafford Loan – The main type of federal student loan is called the Stafford Loan.  All Stafford Loans are either subsidized (the government pays the interest while you’re in school) or unsubsidized (you pay all the interest, although you can have the payments deferred until after graduation).   

  • Subsidized – Subsidized loans

3 Financial Goals for New Millennial Parents

Millennials, those born from the early 1980s to the late 1990s, have been considered through the prism of youth for many years now. But we’re growing up and starting to act like adults. Now that millions of people from Generation Y are in their 30s, this generation is starting to have children. In fact, there are well more than 20 million millennial parents already. Even though there are endless publicized (and not invalid) reasons why some millennials are avoiding parenthood, thousands of us are taking the plunge every month. So for new millennial parents, and for those considering the idea, here are three ways to prepare for parenthood, financially speaking.

Get Stable

A recent Pew survey found that 75 percent of childless, unmarried Gen-Yers want to have kids someday. Famously, this generation is strapped with debt from school loans and other sources. About 20 percent of millennial parents are currently living in poverty. In many cases, this is unavoidable. There’s nothing morally wrong with living in poverty, but the challenges of raising children in such a financial state are undeniable. It is difficult, though not impossible, to become financially stable if you already have children. But it’s a

7 Simple Steps to a Subprime Auto Loan

Buying a car can be a challenge for buyers with limited, new or poor credit. The good news is that loans are available for buyers in most credit situations. The trick is knowing how to access them. Do you have less than stellar credit? Downright bad credit? Here are some tips to help you get a loan, even if your credit has seen better days.

Before the Loan
This is the time to be realistic about your credit, learn your score and map out your car budget.

But first, some encouragement: Even if you have bad credit, you can still get a car loan. You will, however, pay a higher interest rate than will people with better credit. According to a recent report by Experian Automotive, 28 percent of new-car buyers and 54 percent of used-car buyers in the third quarter of 2014 had credit scores below 660. Customers with scores above 660 are generally considered to have good or great credit.

Borrowers with scores below 660 are seen as more of a credit risk, and can be grouped into one of three categories, based on score:

  • Nonprime: Borrowers with scores between 601 and 660
  • Subprime: Borrowers with scores between 501 and 600
  • Deep subprime: Borrowers

Debit Cards

A debit card is a financial tool that makes banking and spending money more convenient. However, you need to know the basics of how debit cards work and the best ways to use them.

What is a debit card? A debit card is linked directly to your checking account. You can use the card to get cash at an ATM. You can also use it to spend money anywhere that a debit card and/or a credit card is accepted. But, when you use a debit card you are not borrowing money (like you do when you use a credit card).  Instead, you are spending the money that you currently have in your checking account.

What is the best way to use a debit card? There are two ways to use your debit card to make purchases – debit or credit. While both ways spend the money you have in your checking account, they are different.

  • Debit transactions – Funds are generally deducted from your checking account almost immediately. Usually require the use of your PIN, and sometimes your bank may charge a fee for this type of transaction.
  • Credit transactions – This is a signature transaction and no PIN is required. More retail locations

Payday Loans

Payday loans are short-term cash loans based on a borrower’s personal check, which is held for future deposit or via electronic access to the borrower’s bank account.

Borrowers write a personal check for the amount borrowed, plus the finance charges, and immediately receive cash. In some cases, borrowers sign over electronic access to their bank accounts to receive and repay payday loans.

Lenders hold the checks for a short period of time – generally 14 days – at which time the loan and the finance charges must be paid in one lump sum. Borrowers can typically repay the loan in cash, allow the original check to be deposited at the bank, or pay only the finance charges and roll the loan over for another pay period.

If the account is short on funds to cover the check, the borrower usually faces a bounced check fee from their bank in addition to the costs of the loan, and the loan typically incurs additional fees and/or an increased interest rate as a result of the failure to pay.

Be Careful, It’s Easy to Get Into Trouble

Here’s an example of how you can get into trouble with payday loans. Richard was $200 short of having enough money

Using Credit Cards Wisely

Having a credit card can be a very important financial tool for many individuals. In general, credit cards are safe, reliable, and convenient to use. The responsible use of a credit card will reflect positively on your credit report, putting you in a better position should you need to secure a larger loan such as a mortgage or car loan. However, for some people, managing a credit card is harder than getting one.

Anytime you use a credit card, you are borrowing money you are obligated to repay. What you purchase does not matter – whether it’s a $500 set of tires or a $6 lunch from McDonalds. If you don’t pay your balance in full each month, your creditor will add interest to the total amount you owe. The key for any money management system as well as for credit card use is to make sure that you are not spending more on a monthly basis than you are bringing in.

Get to know all of the responsibilities in using a credit card. Educate yourself on exactly how a credit card works. Is a credit card or borrowing money really necessary, or would another option such as cash or a debit

Types of Credit Cards

There are many different types of credit cards in the market. So how do you find the card that is right for you? Perhaps begin by thinking about how you use credit …

Unsecured credit cards require no collateral or down payment and provide you with the ability to make purchases up to your credit limit. If you do not pay your balance in full each month, a finance charge will be applied to any outstanding balance. Your minimum monthly payment is generally 3-5% of your balance. A word of caution: making only minimum payments on your account will greatly increase the time it will take you to pay off the balance. You can avoid paying finance charges by paying your balance in full each month.

General-purpose credit cards are cards that can be used to pay for just about anything – clothing at a department store, gasoline, meals at restaurants, medical services, utilities, products for sale on the Internet, as well as to get cash advances. Another advantage of using this type of card is that it combines many different types of expenses into a single bill, making payment easier. These types of cards are issued by banks and other lending

The Car Buying Process

Step 1 – Research
Many people buy cars based on what they look like or what they are familiar with. Instead of buying the same type of car that you’ve always driven, it may be wiser to list the attributes you are looking for, and then do some research. Really think about what you want versus what you need. For example, do you care most about safety, size, cargo space, reliability, etc? There are great resources on the internet and in bookstores for car reviews. Come up with a list of options that would fit your needs.

Step 2 – Find Financing
Once you know what you are looking for, think about if you would like to buy new, used, or lease. What financing options are realistic for you based on your income and credit? You can visit our articles on these topics for more information. Don’t borrow more money than you are comfortably able to repay. Your credit score will directly impact the interest rate you will pay on your loan. For example, an individual with a FICO score of 720 is likely to be offered a loan for about 5.75%. Same loan amount, but applicant B has

Planning for Emergencies Pay Yourself First

Emergencies or unexpected events that require money can happen to everyone and usually happen when you least expect it. This is why having an emergency savings is so important. And the best way to build an emergency savings account is to pay yourself first.

Paying yourself first means treating your personal savings account like a priority bill. Don’t wait until your other bills have been paid. If you wait, there is a possibility that you will spend all of your extra money before you have time to deposit anything into savings.

At least 10% of your net income should be set aside for savings. The easiest way to do this is to have it directly deposited from your paycheck into your savings account. If you are able to save more than 10% of your net income, that is even better.

How do you save that much money?
Obviously, you are not going to save 3 to 6 months of living expenses overnight. Don’t let that be a deterrent for you though. Starting with small amounts that you save on a consistent (weekly, bi-weekly, monthly) basis will add up over time and help you meet your goal. Also, there may times during

Savings Accounts

A savings account is an account for individuals to save money and earn interest on the cash held in the account. You can open a savings account at a bank or credit union, usually for a nominal fee or even free of charge. The account can be used to save money for specific expenses or for longer-term undefined goals.

There are several types of saving accounts:

  • Passbook or Basic Savings – This is a good starter savings account because it is simple to set up, safe and typically has a very low or no minimum balance requirement. These accounts provide a very low interest rate.  But your money is protected by the federal government with Federal Deposit insurance Corporation (FDIC) insurance.
  • Money Market Savings – This type of account usually offers higher interest rates than a basic savings account, but they also require a higher minimum balance.
  • Money Market Funds – Mutual fund companies offer money market funds that have a small amount of risk, but higher rates of return than a money market account. This type of savings can be good for someone who already has an emergency fund built up, and wants to expand their savings portfolio without a lot

Relationships and Money

Money is one of the biggest sources of frustration in marriages. The main reason is that a lot of people have trouble talking about money. Talking openly and honestly about money can reduce stress in your marriage, and can lead to greater savings when you and your spouse on the same financial page.

Communicate. Why is it that we have such difficulty talking about finances? Some of us are embarrassed about our spending habits, the amount of debt we have, or the amount of income we earn. Others take the approach that money and finances is something that people don’t talk about — even with the closest of friends and family. The most important thing in any relationship is honesty, and this must hold true with your finances as well. You must let your financial partner know if you have credit card debt, a poor credit history, a bankruptcy, or struggle with the basics of money management.

Here are some tips to follow when discussing money with your spouse:

  • Understand your own weaknesses. Do you tend to overspend on certain things or events? Do you get defensive when talking about the bills? Knowing what your own flaws are will show you what you

Investment Scams

You need to be aware that there are investment frauds out there that could do serious damage to your finances. This article will help you spot and avoid some of the common persuasion tactics used by fraudsters.

Investment scams can take many forms and criminals can move fast when it comes to developing new pitches for the latest fraud. The most common securities frauds tend to fall into the following general schemes.

Pyramid Schemes – Fraudsters claim that they can turn a small investment into large profits within a short period of time.  In reality, participants make money solely by recruiting new participants into the program.  The fraudsters behind these schemes typically go to great lengths to make their programs appear to be legitimate, multi-level marketing programs.  Pyramid schemes eventually fall apart when it becomes impossible to recruit new participants.

Ponzi Schemes – A central person or “hub” collects money from new investors and uses it to pay “returns” to people who invested earlier.  They don’t invest or manage the money as promised.  The scam is named after Charles Ponzi, a 1920s-era con man who persuaded thousands to invest in a complex scheme involving postage stamps.  Like pyramid schemes, Ponzi schemes require a

Home Equity Loans

A home equity loan, or line of credit (HELOC), allows you to borrow money using your home’s equity as collateral. This essentially is a second mortgage that lets you turn equity into cash, allowing you to spend it on home improvements, debt consolidation, college education or other expenses.

To begin, let’s make sure we understand these two important definitions:

Collateral is property that you pledge as a guarantee that you will repay a debt. If you don’t repay the debt, the lender can take your collateral and sell it to get its money back. With a home equity loan or line of credit, you pledge your home as collateral. You can lose the home and be forced to move out if you don’t repay what you’ve borrowed.

Equity is the difference between how much the home is worth and how much you owe on the mortgage (or mortgages, if you have a home equity loan or line of credit).

Example: Your home goes UP in value

Let’s say you buy a house for $150,000. You make a down payment of $20,000 and borrow $130,000. The day you buy the house, your equity is the same as the down payment — $20,000. $150,000 (home’s purchase

Rebuilding Credit

If you recently filed for bankruptcy, a stable income and two to three years of solid money management can help rebuild your credit history.  Here are some ways to help rebuild your credit.

Make all payments on time.  A late payment damages your credit score.  And every late payment reaffirms your creditors’ belief that you are a bad credit risk.

Open a bank or credit union account.  If you don’t already have a checking or savings account, consider opening one. This sends a positive message to lenders about your ability to manage your finances.

Avoid high-interest loans.  Payday loans and cash advances have extremely high interest rates.  Try to avoid them and make sure you know what is expected of you before you take out a loan.

Apply for a secured credit card.  A savings account can be tied to a secured credit card, limiting the amount you can spend while establishing a positive credit history.

Get educated.  There are computer programs, books and courses available that teach people about financial planning and money management.

Show that you are a responsible consumer.  If you have a credit card, always make timely payments.  Pay your utility bills on time.  Don’t live beyond your means or purchase anything