A Vitally Important Piece of Advice to All Women

Really? Vitally important? And what can this most important piece of advice be? Get your own credit rating established! I learned this the hard way when I got divorced after 23 years of marriage. Recently one of my clients -who is going through a divorce-was shocked when she was told she had no credit history. I now ask every woman who is in my coaching practice if she has established her own personal credit history.

Many women who married young and then find themselves single sixteen or twenty or more years later, find that they have no credit history if their credit card has been an extension of their husband's. Even if the woman was in charge of paying the bills, the monthly statements or the mortgage payment, it's the husband's credit rating that gets credited, not hers.

When this woman applies for her own credit card, it may be denied "because she has no credit history." Or she may be offered a "secure" pre-paid card, until she establishes her own credit. This card may be limited to $500.00 dollars and it might be a year before she is given a "real" one.

It is very convenient to have a joint bank account and have a credit card that is an extension of your husband or partner. No one wants to think of their relationship ending, but it does happen. Even if you have a wonderful relationship, and it is not ending, it is wise to have your own bank account and a credit card in your own name: you can subscribe to a magazine or put the gym membership on your card and pay it religiously when the statement comes in.

We live in a credit economy as opposed to a cash economy. You might want to start your own business or it might just be important that you feel in control of your own finances. Many of the discussions a couple have around money centers on one of them -A) spending more on personal items than the other -B) who then feels resentful and unhappy. One possible solution is that A and B each keep a predetermined amount of their income for personal use, and pool the rest. This amount is kept in their personal account and can be used with their personal bank card. Everything else is paid through the joint account and with the joint credit cards.

You are liable for the debt on your shared credit card, so you might as well be liable for your own credit rating. If you are interested in working through the emotional component of your money, finance and abundance issues, give me a call or send me an email.

© 2011 Patzia Gonzalez

Patzia Gonzalez-Baz has a Psychotherapy and Life Coaching practice in Newmarket, On; she specializes in using EFT, Emotional Freedom Techniques, to treat relationship issues, emotional components of pain, shock after a medical diagnosis, anger, anxiety, phobias, love pain, divorce; money, finance and blocks to abundance, as well as stressful changes in life, work or family. Patzia coaches clients from all over the world using Skype.

Free Debt Counseling

Everybody has had to use a credit card for something in their lives. Some individuals use their credit cards for emergencies only; others use their credit cards more freely. There is over $2.41 trillion in consumer debt in America and most of that debt is from credit cards. The average American household has over $15k in credit card debt, and there is a whole group of consumers that are way over their heads in credit card debt. Countless American consumers are dealing with unmanageable credit card debt and may feel like they have nowhere to turn.

Fortunately for these Americans there are many non-profit organizations that offer free tools, resources and advice to any consumer that are in trouble with their debts. These non-profit agencies that offer free debt counseling have been around since the 1950s and have saved numerous households from bankruptcy and from the grip of credit card debt.

What is Debt Counseling?

Debt counseling at its core is simply financial education. The original goal of the NFCC (National Foundation for Credit Counseling) was to spread financial literacy throughout the US in order to help consumers stay out of debt and bankruptcy. Now a day's credit counseling can go beyond educating consumers; now counselors are involved in analyzing a consumer's debt, setting up a sensible budget, and negotiating lower interest rates and fee waivers with creditors

What You Can Expect from Debt Counseling?

Always conduct your due diligence and make sure that you have found a credit counselor that has an excellent BBB (Better Business Bureau), outstanding customer reviews or testimonials and is an organization that you feel comfortable with. Once you have found a credit counselor that you like, you can expect a debt counselor to ask you a lot of questions in regards to your income, expenses and credit card debt. You are going to receive a great deal of information, resources, education and tools to help you find out how you got into debt, how to get out of debt and how to successfully set up a budget.

Your first session is also going to involve your counselor analyzing your financial situation. You should gather up three months worth of credit card bills, banking statements and reoccurring monthly bills. Be prepared to give your credit counselor all your information so they can properly assess your financial situation.

After your first counseling session, your counselor should be able to ascertain whether a counselor can help you or not. If the counselor feels that he or she can help your situation he is going to suggest that you enroll in their DMP (debt management plan).

The DMP

The debt management plan is used by credit counselors to assist in the reduction of debt for a consumer; it is utilized as a tool to help the counselor and consumer negotiate debt with a creditor. Once a consumer is enrolled in a debt management plan creditors will be contacted by the counselor to declare that they are enrolled in a DMP and the negotiation for lower interest rates, fee waivers and overall debt reduction can take place. A good credit counselor can lower an individual's debt load anywhere between 20%-to-50% and depending on the size of the debt can have the entire debt paid off in two to three years.

Even though the debt counseling is free, there is a suggested donation every month while enrolled in the debt management plan. It shouldn't be more than $75 a month but is well worth the investment, and on average the debt management fee is normally around $50.

Financial Independence

The goal of credit counseling is to educate the American consumer on personal finance and how to rid themselves of debt and give them the tools and resources to help them avoid ever getting in debt again. The road to financial independence is not going to be easy, you are going to need discipline, commitment and determination in order to succeed but that is a small sacrifice you're going to have to make to become financially independent.

Negotiating With Your Credit Card Company

Negotiating with Creditors

For some people zero is a beautiful number, especially when it used to describe the dollar amount of what you owe in credit card debt, but to get to that auspicious number it's going to take a lot of hard work and sacrifice.

As of July 11th, 2011 the national unemployment rate was at 9.2% and many economic experts are claiming that we are still in a recession so you mix that in with the rising consumer credit card debt in America that could spell trouble for a lot of US consumers. The average US citizen had around $14k in credit card debt, but on the high end there are millions of Americans that are suffering from excessive credit card debt so that journey to zero has become a tough one to start on.

Creditors don't especially like it when their customers start calling, and start trying to negotiate lower interest rates, and having fees waived but it's better than dealing with a charge off. Most credit card companies will try to avoid a charge off at all costs, because that directly affects their bottom line and does not look good to their investors or whoever is in charge of their books. The charge off is the last thing that a company wants to deal with, so even though don't exactly encourage consumers calling and trying to negotiate lower interest rates or getting their fees waived it's better than the alternative, which is a charge off, which is a credit card company's nemesis.

It Never Hurts to Ask

Jeff Palmer was trying to launch a marketing consulting startup, and he was racking up thousands of dollars in credit card debt to get the business of the ground, but once the credit crunch hit around 2009 his interest rates went up to above 20%. This rise in interest rates was making his financial situation almost completely unmanageable so he called the issuer to negotiate better terms for his debts. The creditor agreed to lower his interest rates down to 6%, but only if he agreed to close his accounts. He told the issuer that he would think about it but a week later B of A called him and said that they would lower it to 0% if Jeff agreed to close the accounts. Jeff jumped on this opportunity immediately, but if he never tried to inquire about better terms in the first place he would never had the chance to get a better deal.

A recent report just released showed that about 3 million people successfully negotiated better terms for their debt. So there is a growing trend of customers taking charge of their own financial futures by negotiating lower interest rates, waived fees, and better overall terms for their debt.

Time is of the Essence; Act Early

In this current economic downturn more and more creditors are striving to help their consumers when they get into a pinch, but you must act quickly. If you have a 30 day late on your debts, and you feel that your debt is becoming unmanageable it's important that you act quickly and contact your creditor to negotiate some sort of deal. Remember, these companies hate charge-offs and that's the absolutely last thing a creditor wants to do.

Many bigger creditors, like American Express, actually have a program in place to help with re-payment's of delinquent accounts (as do many other creditors), and many times, accounts will receive some sort of modification in favor of the consumer if you act quickly in the early stages of delinquency.

A consumer should be made aware of the down-side of a modification because some of these modifications can show up on a credit rating and can be viewed as blemish on a consumer's credit report. Especially if you are in the late stages of a delinquency, like a 90 or 120 day late, and a creditor forces the borrower to close the account that can be very damaging to your credit report.

So it's very important that you weigh out all your options and asses how much trouble you're in financially before you start negotiating with these companies.

CCC is an organization of accredited credit counselors who are very skilled at the art of negotiation with credit card companies. So if you feel that a professional credit counseling agency might be needed feel free to contact them immediately.