Federal regulators have decided to step in and stop some of things credit card companies are able to do when it comes raising interest rates and changing your accounts’ conditions. The new regulations will make it much easier to understand the terms and conditions of your account and formulate finance charges that are more reasonable and fair.

Here’s what we may expect:

• The fine print on credit card applications and statements will finally be large enough to read (and even bolded in some cases)!
• Creditors will be forbidden to increase the interest rate on current credit card balances (without reason) and must allow the consumer to pay off that balance over a reasonable period of time. Consumers must also be given a 45-day notice before interest rates are adjusted for future payments.
• Creditors will not be able to apply payments made greater than the minimum in a way that maximizes finance charges.
• Promotional interest rates on credit cards will be more beneficial to consumers as creditors will be made to apply payments made higher than the minimum to any higher-rate balances first, and to give a grace period for purchases where the consumer is eligible.
• The deceptive practice of imposing finance charges called the two-cycle method will be banned. This method computes interest on balances on days in billing cycles before the most recent billing cycle causing the consumer to pay more interest.
• Furthermore, creditors will be required to provide consumers a more reasonable amount of time to make payments.

These new rules will take place in July 2010. If you are currently having trouble with your credit card debt or need advice, contact a certified credit counselor.

Credit Counselors urge you to take charge of your holiday spending plan! By planning ahead, you can celebrate the season in style without ending up in credit card debt. Here are ways to limit spending and stay on track.
• First, make a holiday spending plan. Make sure you include all holiday spending like extra postage, decorations, children’s holiday outfits, entertainment costs and family photos.
• Next, list everyone you want to buy presents for. It helps to write down any ideas you may have for gifts while creating this list.
• The earlier you start shopping, the better. Take care of everyone on that you have to ship to first so you can get those presents out early. Shipping rates increase as the holidays approach so the sooner you ship, the more you will save.
• Shop online. The internet makes it easy to shop around. It also makes it harder to buy on impulse. Since most retailers have inventory on their websites, you can decide exactly what you want to buy before going to the mall. This does not mean charge everything! Credit Counselors advise you to use a debit card with a major card label on it in place of a credit card.
• Combine gifts. If you and your sibling never know what to get your parents, combine your resources and get them one nice item together.
• Get the family together and draw names from a hat. This is helpful because each person is only in charge of one present.
• Have your children list one to three items they want. A good rule to follow is one gift they really need, one gift they really want and one educational gift like interactive computer games or books. They will probably receive plenty of other gifts from friends and family so don’t worry about them not getting enough.
• Shop the sales all though the year. You will find great bargains in your major wholesale retailer’s clearance aisle (especially on electronics).
• Be creative. It doesn’t cost much to make up coupons for things like a free foot rub, an offer to do the dishes for a week, a special movie night, or an offer to paint or rearrange the furniture. You could even make a coupon book, one for each month.
• Get ready for after Christmas sales. The stores are anxious to sell and will discount decorations, wrap, gifts, toys, trees and other holiday items at huge savings. You can stock up on dishes, napkins, food items and even clothing at up to 90% discounts. You can often find gifts for other holidays as well, like birthdays, Mother’s Day, and even Valentine’s Day.
Always remember that you should only spend what you have set aside for the holidays. If you ever find yourself thinking about using a credit card or taking money out of savings to purchase a Christmas gift because you do not have the money remember to stop, think and save. If you consistently find yourself up to your eyeballs in debt after the holidays, you may want to speak to a Certified Credit Counselor for some free educational materials or budgeting advice. Spend wisely this holiday season and have a merry Christmas!

Many seniors are struggling today due to the rising costs of food and medical supplies. Furthermore, people are living longer which means they have to stretch their retirement savings even further. Thankfully, some public benefits may be able to help.

Area Agencies on Aging (AAA)

Each state has made information available to the public for “area agencies on aging.” Such agencies can offer information on (or assistance with) transportation, in-home care, legal protection services, education and recreation. You can find local agency contact information at www.eldercare.gov. Credit Counselors have found this resource very helpful in meeting the needs of seniors.

Supplemental Income

According to credit counselors, many people who qualify for Supplemental Security Income (SSI) are not receiving it. This program provides monthly cash payments to low-income individuals aged 65 or older. In order to qualify for this program, an individual must have less than $2,000.00 ($3, 00.00 for a couple) in savings. To find out if you or a loved one qualify for SSI, visit their website at www.ssa.gov.

Health Care Costs

There are also programs available to seniors that can help with medical expenses. You can search for the latest information on “Medicaid” and “Medicare prescription drug coverage” at www.aarp.org.

Property tax relief

Most states have more than one property tax relief program for senior homeowners. In most cases, seniors can find more information on tax relief by contacting the local agency in which they pay their taxes.

Credit Counseling Agencies

Most non-profit Credit Counseling Agencies offer free budget counseling and educational resources. If you or someone you know is struggling, a Credit Counselor may be able to provide you with the information or resources you need regardless of age.

Most people would say that you should only consider bankruptcy as a last resort. While its important to consider all of your options first, there are instances where bankruptcy is appropriate and can provide you with the fresh start that you need. My concern with bankruptcy is when people file.

On average, one third of bankruptcy filers made the decision to file after being pushed over the proverbial edge by a credit collector; they couldn’t take the constant harassment and threw their hands up in the air. The problem with this – if you file bankruptcy today and, God forbid, you should find yourself with tens of thousands of dollars in medical debt next month, what will you do then? You can’t file again.

Bottom Line: If you have come through a financial crisis and are not still in the middle of it and could say, “If I could just get rid of this financial burden, I would be fine with my current employment, housing and transportation situation” then you might be a candidate for bankruptcy. Take the time to seek legal advice and explore your options. BEWARE: Most bankruptcy attorneys don’t get paid unless you file bankruptcy. Therefore, there may be special incentive to encourage you to file even if there are alternative options that are more beneficial.

There’s no doubt – America is at war and in the midst of a national debate as to why. Most people don’t question the universal support and appreciation of our troops who fight for our freedom. Did you know that while our soldiers are fighting for our freedom, many of them are drowning in financial debt?

Cash advance and payday lending stores have risen to epidemic proportions in heavily populated military areas. Many military personnel cannot be deployed due to the financial stress they face here which could distract their focus during critical combat situations.

There is help! Congress passed a law capping the amount of interest military personnel can be charged for a payday loan. Also the Servicemembers Civil Relief Act of 2003 provides a cap of 6% on all debts (credit cards, mortgages, car loans, etc.), provides eviction protection for dependents, and delays civil litigation.

Bottom Line: Tying a yellow ribbon around a tree or attaching a magnetic one to the back of your car is great. If you really want to help, ask the military man or woman you know if their family is aware of the provisions that have been made to give them the best possible opportunity to defend our freedoms without having to risk their financial freedom.

Family Credit Counseling Service receives hundreds of calls per week
from consumers looking for credit counseling and debt management
assistance. Often one of the first questions asked by a consumer is,
“Are you a non-profit organization?” My answer to this question is,
“Yes, but if you’re trying to find a trustworthy credit counseling
organization to assist you in becoming debt free, this is generally
not an adequate question to measure the legitimacy of a credit
counseling organization.”

Bottom Line: It’s good to know that an organization is a non-profit
organization. It’s even better if they are members of the Better
Business Bureau. If you’re really interested in ensuring you are
dealing with a legitimate organization, determine if that
organization is a licensed debt management provider in your state.
There are many states that don’t require licensing, but there are
many that do. Find out if your state requires licensing and if so,
choose a credit counseling organization from this short list. The
chances you will have the opportunity to speak to a credit counselor
that has your best interests in mind will increase greatly.

Ever find yourself in the intimidating position of dealing with a collector? Collectors can be very intimidating and persuasive, especially if you don’t know your rights as a consumer.

The Fair Debt Collection Practices Act protects you from the abusive practices of some collection agencies; the problem - most of us don’t know what rights this legislation provides. Did you know a collector is required to stop contacting you at your place of employment as soon as you request they stop calling you there? And did you know you can write a Cease and Desist letter to a third party collector which requires they cease collection efforts unless they decide to pursue further legal action?

Bottom Line: Know your rights as a consumer, especially if you find yourself faced with this situation. Avoiding creditors and making broken promises to pay are not the best ways to deal with a collector. Find out what your rights are and get help from a reputable source if necessary.

Payday loans, paycheck advances, or whatever you choose to call them are a growing industry, doubling in size over the past six years to nearly $28 billion in loan volume. Family Credit Counseling Service receives many calls daily from people struggling to break the cycle of Payday lending. But are they really the best option for consumers in need of a little help until the next pay day? Let’s investigate.

While legislators try to put caps on interest rates and the maximum number of payday loans one person can have, most loan providers have found the loopholes - mostly through providing online loans. The average loan carries interest rates between 300-900% annualized. Only 1% of loans written are to consumers who can temporarily use the funds, pay the loan off and walk away; the rest fall into a deeper cycle of debt.

"OK, but what is a person to do that has bad credit and an emergency need," you say? Great question! Many reputable financial institutions are beginning to provide payday alternative loans with much more reasonable interest rates and officials are looking at stricter legislation for these loans as they tend to prey on the low and lower-middle class.

Bottom Line: If you find yourself in a financial crisis, look around for alternatives before being lured by the bright neon lights of the corner 24 hour payday advance store. Look for a reputable lender that might offer an alternative product or talk to a credit counselor to discuss what your options might be.

The Federal Financial Regulatory Agencies statement released recently urges mortgage lenders to “identify borrowers at risk of default and pursue appropriate loss mitigation strategies designed to preserve home ownership.” Basically– find out who’s struggling and help them!

President Bush also announced his recommendations for the mortgage crisis recently (view video for comments or read Bloomberg article.) The President has proposed assisting consumers caught in high-risk mortgages to refinance into traditional mortgages insured by the Federal Housing Administration.

Bottom Line: There is no free money coming your way if you’re struggling with your mortgage; however lawmakers are beginning to take notice of the national crisis developing. A HUD-approved counseling agency can work with you and your lender to create a workout plan to get you back on track (contact Family Credit Counseling Service if you need help finding a HUD-approved counselor.) Rather than burying your head in sinking sand hoping your mortgage crisis will fix itself, stay informed of national news updates and take advantage of any assistance that becomes available.

As a credit counselor with Family Credit Counseling Service, I talk to people often who are overwhelmed with credit card debt. Many times during a counseling session I will discover credit card debt created by a medical crisis that occurred due to lack of insurance or being underinsured.

We all know a visit to the doctor can be expensive, even with insurance. If you require emergency assistance or need to be admitted to a hospital, medical bills can reach into the thousands and tens of thousands. When the medical crisis has passed, many find themselves in the middle of a financial crisis.

Medical collectors will begin calling shortly. Many people that don’t know how to deal with collectors panic and take the advice of the collector, “Which credit card would you like to use to pay your balance?” Without thinking, unsuspecting patients just paid a medical bill that usually carries little or no interest charge using a credit card with high interest rates.

Many medical providers are non-profit organizations. To have the status of “non-profit” requires these medical providers give a certain amount of care at no cost. When you are faced with a high medical bill, your first question should be, “What type of financial hardship programs can I qualify for?” If this doesn’t work, ask to set up a payment arrangement directly with the medical provider.

Bottom Line: Don’t compound your financial situation by turning a large medical bill into a credit card payment that could take many years to pay off after you factor in all of the interest that will be paid. There’s almost always a better way!

If you have more questions about your financial situation, Family Credit Counseling Service has counselors who can help today!