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!

I talk to individuals all the time who ask questions like, "I co-signed for a loan and need to figure out how to get my name off now because collectors are calling me." Let me take a moment to educate on what it means to co-sign.

When you co-sign for a loan you are essentially a co-applicant. The reason your friend or family member needs a co-signer is because they have poor or insufficient credit. The bottom line is they are a bad credit risk for the lending institution who has decided to deny their credit application unless someone else joins the equation. The whole point of a co-signer is so the creditor has another person to go after for payments in case the primary applicant lives up to their credit history and defaults on payments.

There are only two ways a creditor is going to let you out of your obligation as a co-signor: The primary applicant might decide to make good on payments and create a good enough payment history that the financial institution is willing to refinance the account in only the individual’s name. Otherwise you’re out of luck unless you can find another lender to refinance without you. Don’t hold your breath here!

It’s too late to start asking how to have your name removed from a loan or credit card when they account is in default - that’s the last thing the creditor is going to do for you. Don’t be surprised when they begin to call you to ask for payments when they’re unsuccessful at collecting from the primary borrower.

Bottom Line: Be very careful when co-signing for a loan or credit account. As a credit counselor I’ve seen it ruin the best of friendships and tear families apart. Never even consider co-signing unless you are certain you have the means to make those payments if your friend or family member decides to use their money on more important things than bills.

Isn’t it amazing what people will do to make a dollar? Organizations are shooting up all over the country promising to help you avoid foreclosure and turn around your financial situation. The problem - most of them are charging high up front fees and running away with your money without doing a thing to improve your situation. Worse than that, they are targeting low-income, minority and senior homeowners who are most vulnerable.

These organizations receive foreclosure information through public records and notices (which are readily available to anyone) and contact you. They will require you not contact your lender during this relief process, keeping you out of the loop with what is actually being done. Many are asking you to sign over the title (some don’t ask but just hide it within the paperwork) with the intention of selling it back once your payment arrears have been resolved. Most will strip any equity in the home through high, buried fees and make it next to impossible to get back on your feet.

Bottom Line: Never trust help that is unsolicited! If you’re having problems, contact your lender first to see if a workout plan can be arranged. If that doesn’t work, contact a HUD approved housing counselor to see what other alternatives might be available (a listing of approved counseling agencies can be obtained by clicking on http://www.hud.gov/offices/hsg/sfh/hcc/hcc_home.cfm.) In most cases your mother’s advice still holds true: “If it’s too good to be true, it usually is!”

Media outlets are flooded with companies willing to write a debt consolidation loan using the equity in your home to pay off those high interest rate credit cards, but is this a good thing?

It’s true a home equity loan can pay off debts that carry high interest rates (provided you’ve got enough equity.) In many cases the interest paid on a home equity loan can even be deducted on your taxes. Sounds like a "no brainer," right? Not so fast!

Consider that you are not only using the equity in your home to pay off unsecured debt, you are also converting that unsecured debt into SECURED debt. Now, if something happens where you can’t afford your monthly payments, you could risk losing your home.

Here’s the typical scenario: Unless people are completely committed to living debt-free and changing spending habits, people pay off credit card balances with their home equity loan but continue with uncontrolled spending. If this happens, the typical homeowner will find within a couple of years that they not only have a new home equity payment, but new credit card balances that snuck right back to the same levels. If you thought it was difficult making those high-interest credit card payments before, try figuring out where the money is going to come from to pay for those and your new home equity loan.

Bottom Line: Determine your commitment level to change your spending habits before you apply for that home equity loan. If you’re not completely committed, find another solution to your credit problems!

Beginning February 18, 2009, analog television signals used by rooftop antennas and rabbit ears will be shut off.  An estimated 20 million Americans continue to receive their television fix through these means and will need to make plans to invest in alternatives or prepare for life without Ryan Seacrest, Oprah and all of the Desperate Housewives.

Here are the solutions:  Invest in a new Digital TV or DVD recorder, subscribe to cable or satellite service, or purchase an analog-to-digital converter.

As a credit counselor, I’ve advised many clients to forego the luxury (that’s right, I said luxury!) of cable television in order to prioritize other financial goals like paying off debt, purchasing a home or simply making ends meet with a monthly household budget.  If that’s you and you feel you just can’t live without your TV “fix,” don’t miss out on the estimated $1.5 billion dollars our government has set aside to subsidize the purchase of these converter boxes.

Bottom Line:  Watch for subsidized coupon announcements available beginning January 1, 2008, and don’t wait to request up to two per household if your sets require one.  Subsidized funds may dry up and there will be no income qualifications to request these coupons, so I’m confident we’ll see people taking advantage of the system and selling these coupons on EBay.  The price of these converters hasn’t been set yet but is expected to sell for $50 - $70 each.  If you’re on a fixed income or a tight budget, you won’t want to miss out on $40 worth of savings.

It seems there is nothing new under the sun when it comes to disaster and tragedy: global warming is blamed for devastating floods and wildfires, government is blamed for loss of lives from international conflicts and then you have the completely unexpected like last week’s tragedy on the I-35W bridge in Minneapolis, MN.

Something I’ve noticed (and I’m sure I’m not alone) when tragedy strikes is how quick people are to offer the standard, “Let me know if there is anything I can do to help.” For most, this statement is more of a common courtesy than an actual request to assist.

No one can completely understand the difficulties related to surviving these kinds of tragedies unless you’ve lived through them. What’s even more devastating is when life goes on after the loss of a loved one, life savings or personal property and the victim left standing is holding a mountain of problems that will stretch far into the future. Realistically, if you’re coping with grief, making sure a credit card bill is paid on time could easily be the least of your worries.

If you really want to help a friend or loved one facing a devastating crisis, pull them aside during a moment of quietness and offer to step in to take control of their household finances until they get back on their feet. Opening mail and writing checks for bills might seem insignificant but the amount of headache and frustration you’ll save them in the future will be immeasurable.

The New York Times recently published an article (read article here: http://www.nytimes.com/2007/07/31/opinion/31tue1.html?_r=1&oref=slogin) discussing the atrocities against consumers by the credit card industry brought to light this spring by Democratic Senator Carl Levin of Michigan.

While I agree with the alarmist perspective of the author on this subject, I won’t be holding my breath waiting for legislation that will cap penalty interest rates at 7% above previous rates or capped charges for consumers who exceed their credit limit. The savvy consumer isn’t going to wait for this legislation to pass either as a means to financial freedom.

Bottom Line: Debt free living is a choice! It’s going to require an evaluation of your current lifestyle and spending habits along with a detailed plan of attack toward debt. Determine today you won’t spend the next twenty-six to thirty years paying off that credit card debt!

1. When using an ATM at night, bring a friend or find a machine in a well-lit area such as a bank, credit union, or grocery store. The risk of being robbed at an ATM increases after dark.
2. Take the time to memorize your PIN number. Carrying it with you will only increase the chance that your money will be stolen if a thief takes your purse or wallet.
3. Do not dispose of your receipt near the ATM. It could contain information that a theif may use to find out more about you and your accounts. Even the last four digits of your account number can pose a risk to your security.
4. Examine the ATM for unusual devices or attachments. Criminals can attach a card skimmer over the original skimmer to steal information from the magnetic strip on the back of your card. Hidden cameras can be positioned to record your PIN number.
5. Consider avoiding the ATM altogether by taking advantage of th cash-back option when using your debit card to make purchases at local grocery or convenience stores.