Posts Tagged ‘Consumers’

Credit Card Interest Rates- Skyrocketing or Getting Capped?

Thursday, November 19th, 2009

The Senate defeated legislation in May that was introduced by Senator Bernard Sanders to cap most credit- card interest rates at 15%. Consumer groups are saying the interest rates have worsened since that failed vote, banks are trying to boost rates up to 30% in advance of the new rule, to take effect in February 2010, requiring banks to give consumers 45 days notice of a rate increase. Sanders plans to reintroduce his proposal to cap rates at 15% and predicts having more Senate support this second time around.
Consumers are disgusted with the credit card companies as the government just bailed them out with consumer money and is now charging the consumer again with the higher interest rates. Consumers are getting hit on both sides by the credit card companies. Is this fair to the hard working American trying to make ends meet? I think not!

Give us a call at 866-364-9161 today and let SYD Financial work for you against the credit card companies

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Credit Card Debt: Consumers Maxed Out but Debt Relief Is Out There

Thursday, October 15th, 2009

CHICAGO, IL — 10/13/09 — As consumers with jobs continue to make strides in paying down credit card debt, others are not so fortunate and find themselves barely able to stay afloat. Debt relief options explained.

The U.S. economy finds itself at a strange juncture: top economists are mostly in agreement that the great recession has ended — yet the creation of jobs will lag behind and take significantly longer to fully recover. During this time period consumers find themselves in a credit crunch like never before.

Credit Card Debt is being addressed by many like never before. The Federal Reserve is reporting that overall consumer debt has dropped for the 7th straight month. The recession has been a real eye-opener. Yet others are sorely in need of help. This is where debt relief comes in.

Debt Relief comes in the form of many programs and services and there really is no one-size fits all type of deal. What works best for one’s circumstances and financial situation might not necessarily work well for another’s situation. While many consumers believe they are familiar with bankruptcy, many do not have an understanding of the harmful repercussions of a bankruptcy filing.

Bankruptcy causes the filer’s credit score to hit an all-time low. The bankruptcy will remain on the public record for up to a full 10 years in many states. During this time, obtaining any sort of credit will be next to impossible. They would be required to pay heft deposits on any future home utilities ordered (gas, electric, water, cable, phone, etc.) They would be denied an apartment rental. And they could very well be denied a job, as more employers are performing credit checks as part of their routine job applicant screening process.

Debt Settlement however is able to achieve great reductions in credit card debt — without the collateral damage of a bankruptcy filing. This program works by a debt settlement firm negotiating with the consumer’s creditors in order to extract concessions in the amount of debt that is owed. In almost all cases, debt settlement is able to achieve 50% reductions in credit card debt, with 75% reductions in credit card debt a very real possibility. This is true debt relief.

Call us today at SYD Financial at 866 364-9161 for a free consultation!

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Is Debt Settlement Getting A Bum Rap From Cut And Paste Journalists?

Friday, September 25th, 2009

September 20, 2009 by JR
Filed under Finance

Even a casual glance at a few articles on the same subject on the Internet reveals the same layout and opinion, and the same spelling mistakes, and even worse you’ll find many articles that are identical except for the omission of the original author’s name, or its replacement with a different name.
This means that instead of doing research and writing something meaningful, that the so called author or journalist merely copied and pasted somebody else’s work.
The vast majority of articles are now short on facts too, and more often than not they simply express an opinion, and are the kind of piece that almost anybody can knock out in a few effortless minutes.
So Why Is That?
The basic reason would seem to be laziness, and it appears to be a global thing, and not just limited to America.
So What Happened To Investigative Journalism?
Investigative journalism is hard work, and it means getting out and talking to people, digging deep and writing very few articles, and a good investigative journalist might spend weeks or months writing an in depth article, and certainly can’t churn out a new one every day or week.
The Bad Debt Phenomenon Deserves Good Journalism.
Every journalist that’s at all worthy of his salt, must know that millions of Americans are drowning under debt, and a good investigative story into what might help them would not only be a top story, but would help a great number of people too.
The Debt Settlement Business.
When did you last read an article in which the journalist discussed talking to somebody in the debt settlement business?
Probably never.
What’s now extremely common, is for so called journalists to see a new release about debt settlement or any other subject, and liking the article, they’ll almost immediately republish it after making few if any changes.
An Interview.
I did personally take the trouble to contact, and then interview someone that has been in the debt settlement business for many years, and what follows is what he told me.
Debt Settlement.
a) Is definitely not for everyone, but it’s generally right for people with more than $10,000 in unsecured debt who have encountered some kind of hardship such as divorce, a job loss, or have suddenly encountered unexpected medical bills, any of which makes it impossible for them to honor their financial obligations.
b) Plays an important and legitimate role in helping these people slash their credit card debt, and get back in control of their lives.
c) Has steadily gained acceptance since 2005, when new laws made Chapter 7 bankruptcy much harder for many people to file.
d) Gets fewer Better Business Bureau complaints than a popular alternative, which is credit counseling, and it successfully resolves a higher percentage of them.
What About The Bad Companies?
I asked him to respond to recent articles that were highly critical of debt settlement, and offered him the chance to put forward some kind of defense, and he critiqued two recent and very widely circulated articles.
The first was a recent AP (Associated Press) article that was given nationwide coverage, which he said,
a) Was typical of the current run of articles, since it was incomplete, and only partially sourced.
b) Contained no quotes or comments by anyone in the debt settlement business.
c) Contained frequent quotes by an executive of the NFCC (National Foundation for Credit Counseling) and even provided a link to their website.
d) Contained no mention of The Association of Settlement Companies (TASC), which is the professional association for the debt settlement industry, and has several hundred member companies that are carefully scrutinized.
He added that the NFCC was established by banks and credit card companies and is supported by them, and asked, “would an organization that was founded and is supported by banking interests put its stamp of approval on a legitimate, and highly effective alternative approach to reducing credit card debt?”.
The second article he took to task was published in USA Today, and he gave it slightly higher marks.
The writer of the article did include the quote, “For some borrowers with large debts that can’t be repaid within three to five years, a reputable debt settlement company may offer an alternative to bankruptcy”, but the quote followed a remark which compared debt settlement to “weight-loss product that causes you to gain 10 pounds”.
The writer of the USA Today article also referred readers to debtadvice.org and the Website of the Association of Independent Consumer Credit Counseling Agencies, but again made no mention of TASC, and offered no link to its website.
What Should Good Debt Settlement Companies Do?
a) They should explain the advantages and disadvantages up front, stating plainly that debt settlement is not for everyone.
b) Keep the client involved and updated as to every debt settlement decision that needs to be made, and not decide for the client in which order debts should be settled.
c) Clearly explain what the costs will be, and collect their fees over a period of several months so the client doesn’t suddenly get hit with a big bill all at once.
To Summarize
a) It would seem clear from the interview, that debt settlement is only right for some people, and in certain situations.
b) That even if it’s the right choice, that the person considering debt settlement should only go with a reputable Debt Settlement Company that’s BBB (Better Business Bureau) recommended.
More and more journalists are losing their jobs because of the Internet, but many could still make a fine living, and a name for themselves if they got up off their butts and started working for a living.

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Legislation Targets Fees That Can Add To Consumer Credit Debt

Monday, September 21st, 2009

Consumers will soon see the benefits of federal legislation aimed at reining in abrupt interest rate hikes and high late fees that can add greatly to their credit card debt.

Now, Senator Chris Dodd, a Connecticut Democrat who chairs the Banking Committee, is introducing new legislation that will follow up on these provisions by targeting the high overdraft fees that many financial institutions charge their customers.

“Excessive, automatic overdraft fees are forcing many American families deeper into debt at a time when they are already struggling to make ends meet,” said Dodd as he announced his new legislation.

Under the legislation, financial institutions would have to create an opt-in program, where consumers would be able to have their cards simply declined for insufficient funds rather than paying a fee that can in some cases can run well over $30 even if an account is over-drafted by so much as a dollar.

Dodd had previously been urging the Federal Reserve to enact such a provision.

Financial institutions maintain that they are merely providing consumers with flexibility to make purchases and avoid the embarrassment of having their card declined at an inopportune time. The institutions also point out that it is the responsibility of their customers to stay aware of what their balances are.

However, some critics have argued that lenders take steps to maximize their profits from overdrafts with practices like processing large purchases before smaller ones.

According to the Center for Responsible Lending, financial institutions collect about $17.5 billion per year in these fees. The organization maintains that many of these overdraft fees can be prevented if consumers are warned or have the transactions denied, and has reported that the average overdraft is less than half the amount of the average $34 overdraft fee.

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Credit Card Debt Increases Stress For Americans

Thursday, September 17th, 2009

There may be a lot of talk about the economy turning around, but do consumers feel their personal situation brightening?

A new study from Consumer Reports suggests that a combination of credit card debt, personal loan problems and healthcare issues are keeping people from feeling positive about their finances.

In September, the Consumer Reports Sentiment Index was measured at 38.1, the lowest level seen since October 2008.

Some of the possible reasons for this negative reading can be seen in the findings from the Consumer Reports Trouble Tracker, which showed that nearly 38 percent of Americans suffered some sort of financial problem over the past 30 months.

For example, 15.6 percent of Americans saw higher credit card interest rates and fees during that time period, 8.5 percent lost their health insurance or saw their coverage reduced and 6 percent were denied a personal loan.

The households most heavily affected by these sorts of financial calamities were those earning less than $50,000 per year, according to the data.

However, Consumer Reports’ findings were not strictly negative. They also revealed some positive signs for the economy as a whole, particularly when it came to expectations for spending and jobs.

The Consumer Reports Retail Index showed some stability, while the Employment Index rose to 50.3, an increase described as a “significant improvement” by the research group.

“Despite the negative forces consumers are facing, we have seen some stabilization and improvement in key indicators that suggest we could see and improvement in consumer sentiment over the next month,” said Ed Farrell, director of the Consumer Reports National Research Center.

Still, it remains to wait and see whether Americans will find their personal financial situation improves in the coming weeks.

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Debt Settlement Providing Great Debt Relief To Consumers

Wednesday, September 16th, 2009

As U.S. consumers cope with large amounts of debt and seek out good, proven methods for relieving this debt, one program has demonstrated its debt relief ability above all others, and this program is known as debt settlement.

(News4Press.com) Chicago, Illinois September 15, 2009 — Debt Settlement – the meaning of this program can be sort of mysterious to many. But what the program is and how it works is really a thing of beauty. But the question has be asked – why is there such an interest these days in debt relief? How did we arrive at this point?

As has been said in the past quite rightly – it’s the economy. We live in a global marketplace now. There is simply no denying this fact. And when one local, regional, or national economy falters it can have a domino effect on other economies of the world. And this is what has taken place.

The interest in debt settlement today stems from the fact that as consumer spending slowed, employers were quick slash payrolls. As jobs were lost, consumer spending slowed even more dramatically. Couple this fact with homes whose values have plummeted during this same time period, and credit card companies who have been raising rates and fees – and you have the perfect recipe for financial stress and duress. And this is what has occurred.

Debt settlement is of such great interest today because consumers are being hammered on many fronts today. They’ve heard of bankruptcy, but have doubts and questions about whether it really is the right thing to do – or does it do more harm than good (the latter is actually and factually the case).

Bankruptcy has many negative consequences, including: the virtual destruction/implosion (any harsh metaphor could be used here, as the devastation to the filer’s credit score cannot be emphasized enough), the inability to obtain future credit for a long period of time, the inability to rent an apartment in one’s own name, the very real possibility of being passed over for a job, as more employers are doing credit checks as part of their routine screening process for job applicants, and being required to pay hefty deposits for new home utility service in the future.

Debt settlement on the other hand is able to achieve enormous amounts of debt reduction and debt elimination without all the harsh consequences of bankruptcy. Debt settlement can in fact typically achieve a 50% – 75% debt reduction instantly, right off the bat. Think about that for a moment – having your credit card debt ELIMINATED by up to 75%! This is the beauty of debt settlement.

SYD Financial offers consumers a free debt evaluation which they can take advantage of at their website as listed below.

SYD Financial’s debt management professionals educate consumers on all the options available to them to get out of debt. SYD Financial helps consumers make the most informed decision possible so that they may get their financial lives back on track.

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Credit Card Companies Already Getting Around Regulations

Monday, September 14th, 2009

The first phase of credit card reform legislation recently came into effect, giving consumers a better chance to pay down their credit card debt, but it would appear that credit card companies have already found ways to circumvent the rules and have discovered loopholes in the law.

Although credit card companies are required to inform a card holder 45 days notice of a rate change, BusinessWeek notes that the provision doesn’t apply to variable rate cards. Because of that, according to the magazine, more companies are moving consumers into these variable rate cards which see their interest rates fluctuate.

In an effort to gain back some of the money they have lost on credit card defaults during the economic downturn, banks and credit card companies are also turning to fees for any number of things.

The magazine notes that one card issuer, Fifth Third Bank, charges a $19 tariff if the card is not used in 12 months, which the company says is meant to “encourage active use of accounts and to offset the increasing costs of accounts.”

Card companies are also looking to offset losses by targeting more affluent consumers and those with the best credit scores. Recent research from Mintel Comperemedia found that card companies had decreased overall credit card offers by 8 percent in the second quarter of this year, but offers of premium cards had risen 28 percent over that same time.

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Should Debt Settlement Companies Be Better Regulated?

Thursday, August 6th, 2009

At the time of writing, California is on the verge of passing a state bill that would further regulate the rapidly increasing debt-settlement industry, which continues to grow as more and more Americans become unable to pay their debts.

The bill, which was sponsored by Assemblyman Ted Lieu, D-Torrance (Los Angeles County), has the important backing of the industry’s two main trade groups, who say that the industry needs to be freed from the few dishonest and fraudulent companies that are getting the honest ones a bad name.

If passed, the bill would require debt settlement companies to ascertain that prospective clients are qualified for the program before enrolling them, but Gail Hillebrand of the Consumers Union says;

“We think that is too weak of a standard. It would be like saying if you have a pulse you are qualified”, and her group wants companies to make sure a consumer is both “suitable” and “able” to benefit from the program.

Caryn Becker, who is a policy counsel with the Center for Responsible Lending, says her group would settle for a fee based on the debt brought into the program,

“If it was 4% spread over the first six months and 18% (including the 4%) spread over the first three-quarters of the program.”

The Difficulties Explained
The business is presently largely unregulated, and only about a dozen states have laws governing debt settlement, although a few states have pending bills.

A seeming problem with getting the present bills passed is that many companies are totally legitimate, and many are BBB (Better Business Bureau) recommended, and states don’t want to regulate the good guys out of business, and particularly because the Bankruptcy Act of 2005 has made it harder for consumers to file to discharge their debts in court.

What Is Debt Settlement?
The major difference between a debt settlement company and most credit counseling services, is that a credit counseling service will most often attempt to aid the debtor to pay off his debts as they stand, whereas a debt settlement company will attempt to come to an agreement with the various creditors, which results in a lowering of the amounts owed.

Debt settlement, if done properly can be beneficial to both the creditor and the debtor, because the creditor gets a large amount of his loan back without forcing the debtor into bankruptcy, and the debtor gets his debt reduced by often as much 40-50%.

Debt settlement does damage the debtors credit score, but nowhere near as much as bankruptcy would.

How Does Debt Settlement Work?

a) The debtor enters into a multi-year agreement.

b) Stops making payments.

c) Puts the money into a savings account that he/she controls.

d) When the savings account is funded, the debt settlement company negotiates with the creditors and offers them a lump sum, which is considerably less than what is owing.

e) When, and if the debtor has paid all creditors, if there is still money in the savings account, then it must be refunded.

f) Debtors who fail to complete the program, forfeit the money that is on deposit.

How Much Does It Cost?
The debt settlement company generally charges a percentage of the debt that is owed, and it will most often be between 15 and 20% of the debt but might be a little more or less.

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