In the earlier years of this century, a popular way to consolidate debt was to refinance your house. I know- I wrote a lot of debt consolidation mortgages back in those days.
What with the current state of the economy and the depressed housing market, refinancing is not such an easy option anymore. The Federal Government is bailing out banks and mortgage lenders right and left and the money just isn't flowing as freely as it did a few years ago.
That means people who need to consolidate debt have fewer options. If you have a bunch of credit card debts and don't want to (or can't) refinance your house, there are a number of options. In these times, keeping more of the money you earn in your pocket is important. Fuel and heating costs are going through the roof, so you'll need every penny you have (just make sure you have enough left over to buy a couple of hot dogs).
BEWARE OF DEBT ELIMINATION SCAMS! There is no such thing as "DEBT ELIMINATION," despite what some unscrupulous internet marketers would lead you to believe. The only way to eliminate debt is to PAY IT! The simplest way to pay of credit card debt is to reduce the interest you pay. This can be done with "zero percent balance transfers" where you can pay off one credit card with another that has a zero percent interest rate. The most important thing to do is pay the debt down while there's no interest and DON'T PILE UP MORE CHARGES ON THE CARD YOU PAID OFF. You could also explore a low interest unsecured loan from your bank.
If borrowing to pay off debt isn't in your plans, debt settlement is the best bet short of bankruptcy. Your credit rating will get whacked, but you can work out a plan where you can reduce the dollar amount of your debt and/or pay it back slower at lower rates. You'll be able to pay off your debts AND keep more money in your pocket too.
Whatever you do, look into all the ways to consolidate debt that are available to you. Every penny counts!
Get Out of Debt
Getting on Track in 2008
2008 looks to be a good year for the hotdogman. Even though there was some upheaval with the Hot Dog Truck, it will probably work out for the best. As I said in my previous post, a new truck is in the works. I won't have to get a loan to buy it either!
2008 is the year of paying down debt and paying with cash. No more secured loans for me! Even though they're helpful in some cases, I'm paying cash.
We're also going to get rid of our credit cards this year. We'll keep one, for renting cars and buying plane tickets. When we compare credit cards in 2008, we'll be deciding which ones to shred!
2008 looks to be a tough year financially for the US economy, we're not going to let it get us down. After all, people still gotta eat!
Free Credit Card Machine
When people drive up to the Hot Dog Truck and ask if I take credit cards, my answer is usually "what, are you @#$%ing kidding me?!?" As I look to the future with either an expanded mobile business or a fixed location hot dog stand, I'll probably need to be able to accept credit cards.
I worked in that industry for a couple of months when I was between jobs 8 or 9 years ago. The company I worked for did the processing but they also made a killing on the credit card machine for the merchant. It was expensive to do business with the company I worked for because the financed cost of the credit card machine ate up profits.
Now Total Merchant Services will give you a FREE credit card machine just for using them for processing. They have the industry standard Hypercom T4100 retail credit card machine and the best wireless Nurit 8000 credit card machine.
Both units are top of the line and would run $600-$1000 or more if you had to buy them new. Free sounds a whole lot better than that to me. Total Merchant Services believes that they can gain more long term customers for their processing services by offering value up front. Sounds like a good plan. In the coming months, I'll be looking at credit card machines and I'll be giving them a call.
No Christmas Payback
Christmas season is over and most folks are simply counting the days until they stop writing "2007" on their checks. The post holiday sales are winding down, decorations are coming down and there is no more Christmas music EVERYWHERE you go.
Now it's time to pay. People will be getting their statements for their credit cards in a week or two and ALL those shopping season charges will come home to roost. That's when the post holiday blues set in.
This season I was virtually done with my Christmas shopping BEFORE Thanksgiving. I did a good chunk of my shopping online and I used my PayPal DEBIT account. When I did venture out to an actual store, I used CASH. NO CREDIT CARDS. It was a very unstressful and enjoyable Christmas for us this year and it will be even better when we aren't out shopping for personal loans in February to pay off our credit cards!
Holiday Debt Consolidation
As I write this, MILLIONS of people are out Christmas shopping and racking up huge credit card bills. We have gotten those unpleasant January credit card bills in the past and now we only shop with ca$h so we don't get ourselves over our heads in debt.
There will be a lot of people who are in need of credit card counseling come the end of January. They should check out TheCreditExchange.com. They're a company, in fact the only company of its kind, that can refer folks to the appropriate credit card counseling, debt consolidation and debt management services for their particular situation.
All their affiliate companies are carefully screened to assure the person in need of credit card counseling that they won't be dealing with some flim flam operation. They also have lots of informative articles on debt consolidation and credit card counseling.
So if you go overboard with the plastic while doing your Christmas shopping, give TheCreditExchange.com a look.
Give Bad Credit its Due
If you are a person with bad credit, it seems like everyone and their uncle wants to offer you bad credit loans. There are so many offers (heck, if you have email, your spam folder is probably full of them) it can be confusing. Finding a place to compare different offers can help ease the confusion.
Whether your looking for a credit card, a mortgage or a car loan, the folks at Bad Credit Offers can help you sort through all the different bad credit loans available. They put their offers side by side on one page for easy comparison so you don't waste lots of time. It's a great idea.
If you use this site to find bad credit loans, make sure you understand the terms and the interest rate so you don't get trapped into a loan you can't afford.
VISA or MasterCard?
It's a question most people answer with "whichever card has more credit left on it!" Everyone I know has at least one of each.
People come up to the Hot Dog Truck all the time and ask if I take credit cards. My answer is usually "what, are you friggin kidding?!?!"
If I had a storefront location, I'd take VISA and Mastercard as payment. I'd need to get set up for credit card processing in my location first.
Bank Card Central is a company I'm looking at for credit card processing and restaurant POS systems. They're a one stop shop for all kinds of merchants who want to offer credit card processing. They can provide the terminal, straightforward processing fees and, best of all, low rates on credit card processing. When I get a storefront location, I'll take credit cards because it will increase my average sale.
While still housed in the Hot Dog Truck, it's still ALL CASH!
Recycled Credit Cards
Every day when I get the mail there is usually a credit card offer or two in the pile. EVERY DAY. I don't know why, in the age of the internet, these offers are sent to my house. The same goes for catalogs, mortgage solicitations and other junk mail. Does anyone read this stuff any more? I throw it right into the recycle bin (conveniently located near the mailbox). If I want to go searching for the best credit cards (or anything else) I'll do it ONLINE. No paper wasted and no looking at stuff I'm not interested in!
I'm always looking for deals on credit cards. They're a great way to get free cash. All you need to do is keep flipping your balance with 0% credit cards and you can go without paying for years! I've even turned a profit this way. Just draw 10 grand on a card, invest it and never pay until the investment has turned a profit. Free money is a good thing.
Where Credit is Due
If you need a new mortgage and you have Bad Credit, you could be royally screwed in today's market. Sub Prime or Bad Credit Mortgages are becoming increasingly more difficult to obtain due to the record number of foreclosures that have forced some lenders out of business.
There is still a place where people with Bad Credit can get a mortgage, a credit card or a car loan. BadCreditOffers.com has lists of lenders who will lend money to people with Bad Credit. You can compare offers side by side and see which lender has the best deal.
Beware the Bad Credit loan. Oftentimes the terms can be so poor, the new loan will just send you further into the red. If you can get a loan you can afford, it can be a great way to repair your credit. Just make sure you pay your bills!
Co-Op Credit Cards
I have my money at a small, local co-operative bank. I don't like big banks, they're too impersonal. I also don't like having a big bank credit card. Too many rules and regulations and too much FINE PRINT designed to screw people over.
That's why I got excited about an online bank I found called the Co-operative Bank. They may be an online bank, but they have small bank values. They have a charitable contribution credit card that donates to your favorite charity every time you use it. They also have a 0% balance transfer credit card. There's even the old standby "travel miles" credit card.
Whatever you want in a credit card, they have it and their rates are low too!
Credit Cards Can Make You Rich!
I had a friend who called 0% interest cash advance credit cards "the last great pyramid scam in America." He'd use the cards to get a cash advance, put the cash advance in the bank or in bonds and take out another card to pay that card off. This guy must've had 20 or 30 cards working at one time! John Chow told a similar tale on his blog about how he did a similar scheme. What a country!
There was also the guy (I forget his name) who scammed the airlines out of millions of miles with his credit card. He'd go to AAA and charge tens of thousands of dollars in traveler's checks on his creit card (there is no surcharge on traveler's checks at AAA) which would earn him airline miles. When the bill came in, he'd cash the traveler's checks and pay up. He never paid interest because he paid in full every month and he accrued enough airline miles to travel the world for free with his wife and kids! His scam was so successful, the airlines closed the loophole he exploited.
These guys made credit cards work to their advantage. They obviously had discipline. Too many people get into trouble with their credit cards by spending more than they can afford. This screws up your credit rating. When I was in the mortgage business, we dealt with people with credit problems all the time. The challenge was to help folks with poor credit repair their credit so they could qualify for a home loan. There are many tricks and secrets to credit repair and many of them work, some better than others. There are also a lot of scammers in the credit repair business, so be careful when reviewing these programs.
The best thing to do is not need credit repair services, tricks or secrets at all. Pay your bills, stay within a budget and don't max out the plastic. With good credit you can qualifiy for 0% cash advance cards like my friend and actually make money off the credit card companies. Unfortunately, credit card companies send these offers out knowing 999 out of a thousand people won't be so clever and will end up paying them interest.
Be careful out there. Compare credit card offers here.
