There are several resources to help you if you are trying to get out of excessive debts: - Debtors Anonymous
- Consumer Credit Counseling Services
- Debt Counselors of America (DCA)
The National Retail Federation and CardWeb.com accurately predicted that the 1999 holiday season spending average would be about $500,000 per second or $3.7 billion per day. The Pocket Change Investor (www.goodadvicepress.com/pci.htm) suggests the average American this holiday season will have purchased 24 gifts at a cost of $850-$950. To make matters worse, the Newsletter also suggests that a credit card will be used 1.6 billion times. I'm not certain what the interest on those purchases will be, but if not paid off rapidly, it can be an average of 3-6 times the amount of the purchases themselves. Debtors Anonymous
Debtors Anonymous started in 1968. It is designed for the person whose debts, low income production, and/or "problem spending" are causing suffering in their lives or the lives of others. Their primary purpose is "... to live without incurring any unsecured debt one day at a time and to help other compulsive debtors to achieve solvency." Today, there are over 500 meetings throughout the United States and in 13 other countries throughout the world as well as on the Internet. If you are unable to locate one in your area, you can contact the General Service Office at
PO Box 920888
Needham, MA 02492-0009
They can also be reached by phone at 781-453-2743 or newcomer E-mail address new@debtorsanonymous.org . Additionally, their Web site (see Related Resources below) offers links to online Debtors Anonymous groups. Consumer Credit Counseling Service
Though they are both all over the U.S., and the oldest counseling service in the country, you won't find a national resource under "CCCS". That's because the umbrella organization is National Foundation for Consumer Credit (NFCC). It is a national non-profit network of 1,450 Financial Wellness Centers designed to provide assistance to people dealing with stressful financial situations. Local organizations are listed in the yellow pages under debt or financial counseling. If you can't find a member office in your area, NFCC suggests the following questions to help you choose another qualified credit counseling service: - Is this agency a non-profit organization?
- How much will these services cost?
- Are agency services confidential and what counseling services are offered?
- Are the counselors and the agency itself certified?
- Are budget and credit education opportunities offered? Will my funds be protected?
Similarly at the NFCC page you can find listings for national organizations available on the telephone or Internet. You can also find local offices broken down by state as well as the 800 phone number referenced above. Additionally, there is a chat room and some fact sheets type articles revolving around credit problem issues. Debt Counselors of America (DCA)
Debt Counselors of America is a non-profit organization with services which are free or are offered at a low cost to help people when they need it most. Debt management, counseling, and budgeting are the norm of most counseling services. But DCA also offers: many online and off line articles and publications; a financial planning group with certified counselors; a Crisis Relief Team to assist those turned down by other agencies or those who have significant and complex financial problems; a live radio broadcast with consumer call-ins. HOPE (Helping Out People Everywhere) offers "resources, counseling, referrals, and grants you need to overcome an unexpected financial emergency."
| Establishing Credit
Whether you are establishing credit for the first time or re-establishing after a bad history, you will face many of the same dilemmas... you need history before you can get credit but can't establish history without having credit. This article resolves which comes first, the credit or the egg. Financial institutions pay a credit bureau to compile information about consumers. These reports are similar to high school and college grade transcripts; instead of grades, credit bureaus collect credit information. There are three credit bureaus that compile information about your credit history. They are Equifax, TRW and Trans Union. In order to get credit, you must show a number of stabilizing attributes. Most notably, your report must prove to the lender that he will get his money back. Without a history to prove this, however, you still have a few options at your disposal. Co-signed cards
One way is to piggy-back onto someone who already has a good credit history established and is willing to co-sign. If you are fortunate enough to know of such a person, you are not only well on your way to establishing credit, but you are very fortunate indeed. But be aware that any default of credit on your part affects the credit of the co-signer. People who care enough about you to co-sign, do not deserve a bad credit incident through no fault of their own. Once the co-signing has occurred, you simply make payments on or before the due date. In time you will have established a credit history. If you want to accelerate the issue, payoff the debt in full when the first bill arrives but not before. Completion of the full billing cycle is important for a "pays on time" report card to be established. This will not only make your creditor happy but your co-signer as well. The next step is to ask the co-signer to repeat his generosity (if necessary). Then: create a debt, wait until the first bill comes, pay it off in full. Keep repeating until you no longer need the co-signor. Credit history is now established. Secured Credit Cards
Another method to establish credit history is through a "secured credit card". With this method you open a savings account with someone who offering this type of card. Once the savings account is established (sometimes with as low as $100.00), you are issued a normal credit card which can be used up to the amount you have in the savings account. Be aware that interest is charged just as with any other card even though return payment is actually guaranteed to the lender through your savings. Now, follow the pattern I suggested in "co-signer" above: - Create a debt on the new card.
- Wait until the first bill comes.
- Pay the bill off in full or make payments until paid off.
- Repeat until you can establish unsecured credit.
Department/Gasoline Cards
Since gasoline credit cards are not revolving (cannot carry a balance forward month-to-month), often they are easier to obtain than regular credit cards. Similarly, some department stores offer revolving credit for a specific purchase and this is sometimes easier to establish. It is also a great way to establish credit. But a word of warning. Every time you apply for credit, you get a check mark. Too many check marks in a short period of time and you are declined for credit, "Excessive Inquires". It's an additional "catch 22" that usually will not catch you, but it is far from uncommon Final Thoughts
If you cannot control your credit card spending, it may make sense for you not to have credit cards at all. That having been said, we highly recommend to pay off your balance IN FULL, every month, and that you eliminate the need for the co-signer or a secured card as soon as possible. |
