July 28, 2005


Credit Card Debt Causes Housing Bubble Burst!

Credit Card Spending’s Impact on New Jersey Mortgage Foreclosures and Sheriff Sales

Cranford, N.J. (PRWEB) July 22, 2005 -- Just about everyone in foreclosure has high interest/high balance credit card debt. So what? It’s going to get worse!

Most families, living from paycheck to paycheck, have historically resorted to credit card purchases for big ticket items such as televisions, computers, or gourmet barbecue grills.

Post Sale Housing Counselors at the Special Care Group are concerned because we’ve seen that credit cards are now being used for routine purchases of staple goods including groceries, disposable diapers, prescription medication, the payment of utility bills, and now gasoline.

In the wake of recent changes to the US Bankruptcy Code, MBNA, Citibank, and Bank of America announced they were raising the minimum monthly payment requirement on credit card balances. In some cases, required payment will double, and it’s certain that other lenders will soon follow. What’ll happen if the Borrower misses or is late with the minimum monthly payment? For one thing, the penalty for missed or late payments on some credit card accounts can trigger late fees, and/or an interest rate hike to 28% or more... Already strained household budgets must endure an impending budgeting nightmare. These insidious changes to credit card debt will become proximate cause to an increase in mortgage loan default. Talk about tightening the screws!

The American Dream is owning your home. The American Nightmare is when your home owns you! For New Jersey families that face the loss of their home to mortgage or tax foreclosure, Special Care Group is pleased to announce it’s new educational website @ www.SpecialCareRealty.com.

Financially distressed homeowners are encouraged to view Special Care Group’s “NJ Preforeclosure Tutorial” and are invited to request an Evaluation and Recommendation Report prepared by a recognized authority on loss mitigation techniques, who is also a contributor to, “NJ Preforeclosure Primer: Half Truths and Outright Lies!” This informative book pertains to properties in the early stages of foreclosure, right up to the sheriff sale or sheriff auction.

Special Care was formed in response to, and as a solution to the identification, then solution to financial problems and other entanglements that precede the forced sale of mortgaged property.

For additional information, or to request a complimentary copy of “Half Truths and Outright Lies!” call 1-866-999-4SCR (4727)


How Many Are In Your Wallet?

The magic number varies, but the advice for juggling them doesn't. Don't use too much of your available credit, and don't open or close too many at once.

By Bankrate.com

Look through your wallet. How many credit cards do you count?

Have promises of better rates, perks and lower fees caused your wallet to overflow and your mailbox to be stuffed with hundreds of offers each month?

While most Americans carry between five and 10 credit cards, some people carry up to 50 -- which could wreak havoc on your credit score.

So, how many credit cards should you have?

Most experts say there's no single magic number. Rather, the question can be answered by scrutinizing how much you spend and how much you can pay off. But there is an upper limit: Credit agencies warn that the more cards you have, the bigger risk you carry for racking up debt and damaging your credit.

Beware of store credit cards

"Some people go hog-wild at Christmas and open lots of store credit cards to get that 10% to 15% off their purchase," says Cate Williams, vice president of financial literacy at Money Management International. "Relatively speaking, that is a good idea if you pay off the balance and close the card right away. If you don't, then you will be costing yourself more money in the long run when your credit score isn't up to par."

Steve Rhode, president of Myvesta, a nonprofit consumer-education organization, agrees, saying that each time you open a store credit card, 20 points are taken off of your credit score because, he says, "Historically, store credit cards are issued to anyone with a pulse. They issue credit cards to people who otherwise can't get credit."

Other credit counselors say that you should open a store credit card if it is a store that you shop frequently. Williams says that many store credit cards provide their customers with coupons, bonus points and information on upcoming sales that can only be obtained if you carry the store's card. However, she highly recommends that you open no more than one favorite-store card.

Some rules of thumb

According to Steve Bucci, Bankrate.com's Debt Adviser columnist and president of Money Management International Financial Education Foundation, the average person carries 11 "credit vehicles." Typically, seven are different types of cards and four are installment loans for cars, furniture, student loans or mortgages. Some credit experts see people with 45 or more credit cards -- and many of them are high-income earners. Some are people who think that the more credit you have, the better, says Bucci.

He says a good rule of thumb is to keep two to six credit cards. "Make sure the credit cards you have are Visa, MasterCard, American Express or Discover, because merchants will take almost any of them," he says.

Try your best to pay them off regularly, or if you can't pay them off, find a credit card that has a low interest rate to use for emergencies when you need new tires or when your water heater breaks, says Williams. "It's also a good idea that your other credit card has reward points or air miles, something that gives you something back. That card doesn't have to have a low interest rate if you pay it off every month."

Keep your debt ratio low

Another rule of thumb to remember is to keep your debt ratio under 50%. If your credit card has a $5,000 limit, don't carry a balance of more than $2,500.

Keep credit purchases under 50% of the credit limit. (If you have a) $5,000 limit -- and you want to buy a $4,000 furniture set -- split the purchase onto two cards," says Williams. She says that creditors don't like to see a card almost maxed out; they look at you as a risk, someone who is using too much credit and has trouble paying off debt.

There is no one sure-fire way to have perfect credit. In fact, four credit experts were interviewed for this story and they offered contradicting advice. However, they all agreed on two major things:

Make your payments on time. One late fee or even two can really bring down your credit score and increase the rates on your other credit cards. You are the only person responsible for payment.

Do not run up your credit. Ideally, you should keep your balance low -- less than 30% of your credit limit on each card.

Some debt advisers also warn not to close too many cards at once. It will cause your debt-to-credit ratio to fall. For example, if you have $10,000 of potential credit and a $5,000 balance, you are using 50% of your potential. If you shut down a card with a $2,500 balance quickly thereafter, you will have $5,000 of debt and only $7,500 of potential, upping your ratio to 67%.

"It's a tricky business, but creditors don't care, because they know you need credit. If you are a good, money-conscious consumer who pays for everything in cash, basically you are dead to them. So establishing and using credit wisely is so important," says Rhode. "I'm a huge fan of credit cards -- used appropriately, a credit card is a safe way to buy goods -- the money is not taken out of your account before you get to dispute the charge. Other forms of payment have less protection."Williams agrees.

"Credit cards are great because they offer you so much protection against fraud that checks and cash can't guarantee, especially when it comes to return policies or fraudulent purchases," she says.

Credit card basics

If you have a credit card, you have a credit history. So, the first thing you should do is obtain a copy of your credit report, review it for inaccuracies, correct any problems and then slowly close unused accounts -- trying to close one per month.

Not having a lot of credit cards decreases your worry of late fees. It is easier to remember your payment dates. "Someone with 15 or more cards probably has a difficult time remembering when all of them are due," says Rhode.

Having more credit and more credit cards does not necessarily make a good rating. The key factors are job stability, paying as agreed and paying on time. Keeping up with payments will build a better credit rating than opening numerous credit-card accounts.

Be aware of the terms on your credit card, because those terms dictate your agreement with the creditor. You need to ask about the interest rate and what penalties are attached to the card.

Also, don't close your oldest accounts if you find a better card. "If you close a card you opened in college 10 years ago because you found a better card, creditors will penalize you, because they are looking for a lengthy and successful credit history," says Joyce Murray of Money Management Internal.

According to Experian, one of the three major credit reporting agencies, there's no right number of credit cards for everyone. It depends on how much you spend and how much you can pay off. However, what you can afford at present may change now that most credit cards are increasing their minimum payments.

Just remember that the street of credit fairness runs only one way, and it's in the favor of the creditors. Credit card companies can change interest rates at any time. The most important thing to remember is that you are responsible to keep up with your bills and stay on top of your credit.

July 19, 2005


The Lie You Were Never Supposed To See

A Brutally Effective and Proven Tactic for Emptying Your Bank Account

How Creditors Turned a Simple Slight Of Hand Trick Into One Of The Biggest Scams Ever Pulled… And Most Of Us Have Fallen For It…

Is this lie keeping you broke…

There are two forbidden words in the language of most people struggling with debt. At the mere mention of these words, most debtors will swear under oath that these two words are worth all the pain and suffering they’re going trough plus much, much more.

I’ll let you on to these 2 words in just a minute. But let’s look at how this simple trick has kept you trapped, stressed out and constantly worried about how you’re going to pay the next bill and, at the same time happy and content that emptying your bank accounts and giving all your money to the creditors is the right thing.

We’ve all fallen for it at one time or other, educated by the billions of dollars spent every year by the banks to keep the lie very much alive. 100’s of books have been written about its importance and you’ll probably hear it mentioned at least 2 or 3 times a week in various media.

Why are these billions spent every year? Because it brings in $10s of billions more in profit. Giving the pushers riches beyond our imaginations! But more importantly, it keeps you on a tight leash, making those monthly payments, emptying your bank account and retirement funds… worried what even a small mistake might mean.

I’m sure you’ve noticed… people are getting killed every day for a few measly dollars. So for $30 billion or more every year… who cares if your life is ruined, if you’re stressed out or if you’re going through some wild divorce because your finances got too much.

Heck, for $30 billion a year what would you be willing to do?

So, are you ready to take a new look at those 2 words… I hope so; your financial future is under attack by highly trained mercenaries that know exactly what they’re doing.

Here are those two words: "credit report".

What happened… How did you feel when you first discovered what we were talking about? What took place when you thought about those big bad black marks on your credit report? What emotions or thoughts went through your mind? What body reactions do you have at the thought of even slightly damaging your credit report?

Did your blood pressure increase… did you find yourself getting annoyed? How about immediately rejecting everything that you’ve read so far? After all, we all know just how important a credit report really is, right?

Take a look at this. You know for a fact that if you damage your credit report you will not be offered any more credit, you’re interest rates will go up, you might not be able to buy a car, getting a house will be out of the question. Every day items like groceries and gas will have to be paid for using cash. You will not be able to spend over your means any more.

But wait on a minute…

Can you do any of that right now? Have your interest rates gone up? Do you have any money to put down on a house? And if you applied for another card right now – would you get it? Do you have any room on your cards to actually get any more debt or could you afford to pay it even if you did?

If you keep struggling to protect your report, paying everything you can to the creditors, when do you really foresee any of this happening? 7 - 10 - 30 years from now?

Now, this is important. Once you’re debt free again and start putting your current monthly payments into a savings or mutual fund you’ll be amazed how quickly it grows. Putting just $500 a month into a 10% mutual fund over a 5-year period will grow to $38,280. But continue that over 10 years it blossoms to $99,931and amazingly, in just 20 years it will dramatically explode to an incredible $359,129.

But wait, there’s more… if you kept putting that same $500 a month into a 10% compounding mutual fund over 30 years it would be worth over an astronomical one million dollars… $1,031,421 to be precise.

At minimum payments how long is it going to take to pay off the average credit card debt? 25 to 30 years. What will you have to show for it after all that time?

Listen: This is exactly why the billions are spent every year, building the lie that your report is so important. They believe you have their money… and they want that million dollars.

Having said all that, I have a confession to make… I personally believe that a good credit report is a great thing. It can help in many ways, such as buying a house, getting a car or even insurance at a great rate. But here’s the bad news…

It only works as long as you don’t have debt coming out your ears. It works when you can make the payments without having to spend every dime you own. It’s works as long as you use it against the banks… paying off the cards every month. Becoming what they call “a debt beat”, using their money without making them a profit.

This is where you should be, having great credit but not needing it. Using it to borrow money for a property or other investment that puts more money back into your bank account. This is the type of thing that credit reports should be used for. Not everyday items and groceries that you’ll be paying back for years to come.

How do they make this scam work?

Have you ever watched a skilled magician; the way they keep your eye fixed on one hand while the other is quickly hiding the vanishing rabbit. For the skillful practitioner it’s relatively easy to do. But there are many other uses for this simple skill.

Simply, the basic idea of all most deceptions is to keep the target’s (your) gaze away from the true intention or purpose of the activity. In the creditors case… they keep your attention on your credit report. If you’re busily trying to protect your credit with a deep belief that doing that is right, how much money will you be willing to hand over before you figure out the scam.

You don’t even feel it at first. Their hands deep in your pocket, grabbing all they can while your gaze is so firmly fixed in the other direction. You know something’s going on, you can feel something’s wrong, after all, life should not be this stressful, should it?

Let me reveal a little secret to you… Your hard earned money… your future wealth and children’s inheritance, is worth more than a piece of paper that tells you how much more debt you can have.

Just follow this logic for a second: You’re drowning in debt, up to your eyeballs with alligators, creditors are pounding you for money. Every penny you’re earning is going to paying the bills… desperately trying to keep up to date, or at least not to fall too far behind.

Possibly all your savings and retirement accounts are being emptied, or already gone, and for what? What have you really gained from all this?

It makes me so mad every time I talk to somebody that has done just this… drained every penny they owned from all their accounts, mortgaged the house to the hilt, and borrowed money from family or friends, without making a dent in the amount they owe. Only to have the creditors put out their hands for more, never happy with what they’ve got.

But you say… all my family, friends, co-workers etc. all believe in the report. So, how can what you’re saying be true? How could so many people be wrong?

Follow along with this story. Imagine for a second that you’ve been dropped off on an island in the middle of nowhere. By luck, you’re rescued by a local tribe and taken to their camp and treated like a king. You soon notice, however, that there is unrest in the tribe… they are planning a war with a tribe on the other side of the island and there is a major disagreement as to the plans of their attack.

The older generation believes that to win the war, 3 young women from the other tribe need to be kidnapped and sacrificed, thrown into the nearby volcano while blindfolded at dawn. Only this will allow the gods to smile on them and win the war.

However, the younger generation believes the older generation has it wrong. To appease the gods you must kidnap 5 young women and throw them into the volcano at noon, un-blindfolded. Only this will allow them to win.

This is where you come in… to settle the dispute they decide to ask you what they should do. Do they take 3 or 5 women, sacrifice at dawn or noon and do they blindfold or not.

It’s obvious from where you’re standing that sacrificing young women is not going to make any difference. In fact, it’s probably what’s causing the problem in the first place, as both tribes have similar viewpoints and both tribes kidnap young women just before a war.

So what do you do? How do you convince a tribe with century old traditions that what they believe and have been taught is, without a doubt, wrong? Who put that belief there in the first place, was there some alternative motive to its conception?

Which leads us into the next point. Your credit report is simply a tracking method for the creditors… it lets them know how much pain and suffering they are willing to get you into. It lets them know how much debt they can safely give you and an estimation of how much profit they will make from you. Based on your credit report to date… how much debt have you been able to get?

But what’s my point …

Staying trapped in debt just to protect a piece of paper that is designed to keep you trapped in debt is just plain silly, whatever way you look at it. Your main goal should be to eliminate your debt as soon as possible with the intention of never getting back into debt again. Or, at least not this bad-type of debt.

The answer is simple.

Take action to eliminate your debt. It does not matter what method you chose, as long as you just take action. If it takes you 5 years of concentrated effort, regardless of what it does to your report, in the long run you are going to be considerably better off.

Three years… that’s really as far as most creditors look back when looking at a report for normal credit use. Yes, it does stay on your report for seven years but credit can be rebuilt. Around 8 years from now (if it takes you 5 years to get out of debt), you’ll start to see a significant change.

And yes… you will get more credit card offers than you know what to do with.

The other choice… 8 years from now you’re still be hoping something is going to change in your life, win the lottery, get an unexpected inheritance, so you can start eliminating this debt. Eight more years of stress and frustration.

Alternatively, PBS can have you out of debt in 30 months or less. We’ll help you through every step of the program, and calm your nerves when things get scary. We’ll help you understand exactly how you got into this mess so you never fall for it again. And best of all, we’ll do everything humanly possible to actually get you out of debt.

Here’s another promise… Once you’ve eliminated your debt, you’ll never want to get back into the same mess again. Being free is just too much of a great feeling, such as having money in your reserve account so you never need to worry about being laid off or becoming ill or knowing that your retirement is secure and growing every year.

It’s like getting a huge pay increase with no additional effort or work on your behalf.

So what should you do? Pick up the phone… right now…and call 800-404-8687 ask for Jae and say “I want to be out of debt once and for all. How do I get started?”

We’ll make sure that you do it right.

Feel that hand wiggling around in your pocket right now, quietly stealing your wealth. Lets cut it off at the wrist once and for all. Take action and call so it never gets a chance to sneak back again. It will be the best financial decision you’ll ever make.

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