"A wedding anniversary is the celebration of love, trust, partnership, tolerance and tenacity. The order varies for any given year."Paul Sweeney
|
| |
8 Ways To Consolidate Debt
Next to winning the lottery, a debt consolidation loan is a debtor's dream. With one monthly payment and a fixed monthly payment schedule, you can actually see an end to those monthly payments. In reality, consolidating bills isn't always easy. If you ...
Bad Credit Home Equity Line Of Credit
Bad credit can increase the difficulty that a homeowner encounters when seeking a home equity line of credit. Bad credit can be the reason for a poor credit score. What is a credit score? The credit score varies between the values of 300 and 850. The ...
Home Equity Line Of Credit Or Second Mortgage Loan Online - Things To Do With Your Homes Equity
If you are wanting to get a home equity loan, rates are still low enough that you may want to make use of that equity in your home. Do you need some ideas on what you could do to multiply your equity or make some extra money off of the capital that could ...
|
|
|
| |
For many years, the major credit card companies have allowed their customers to pay as little as 2% of their outstanding balance each month. This payment, while minimal, has actually allowed the credit card companies to reap record profits, mostly because of high interest rates. While interest rates on home loans have lately been in the neighborhood of six percent, the interest rates on credit cards sometimes reach as much as thirty percent per year!
The customer may not be paying much on the principal, but if they fail to pay that principal, the interest accrues quite quickly. In fact, it can take more than nine years to pay off a simple $1000 balance if the cardholder only makes the minimum payment each month at an interest rate of 20%.
Obviously, it is not in the best interests of any cardholder to make only the minimum payment each month. Many Americans can't afford to pay more, as the average credit card debt in a U.S. household is now approaching $10,000. On such a debt, the minimum payment would be $200, and for many, that is all they can afford to pay. At this rate, someone who holds the average amount of debt would probably need their grandchildren to finish paying it off for them; it could literally take generations to pay off that bill at 2% per month. That is about to change.
A recent change in Federal law requires the major credit card companies to increase their minimum monthly payment. The law was passed some two years ago, but the lenders were given a grace period to allow them to comply. Soon, several major credit card companies will begin charging a monthly minimum of 4%. This may not seem like much, but for those with large balances, a doubling of the minimum payment could be devastating.
A $200 monthly payment for someone with a $10,000 balance will now become $400, and for many Americans, that increase could drive them to file for bankruptcy. Should you find yourself with a large balance and a minimum payment that may be hard to pay, what can you do?
Without preaching, a little bit of common sense should be applied in this situation. Cardholders with such problems should, first and foremost, stop using their credit cards. Adding debt to a debt problem is not good. The next step would be to try to cut some household expenses to raise money to meet the new obligation. Buying lunch at work? Can you take a sack lunch instead? Can you consolidate your debt with a home equity line of credit? Try calling your bank and see if you can negotiate a better interest rate or a more favorable repayment schedule. It's not likely to work, but it's worth a try.
There are numerous solutions available to anyone with problem debt, but this fact is obvious - once the minimum payment goes up, it will not come down again. The credit card companies, by increasing the minimum payment, are trying to avoid situations where debtors cannot pay their monthly bills. The 4% rate will allow most cardholders to pay their bills sooner, and will probably cause fewer customers to default on their payments. That should benefit everyone.
|
|
|
|
|
|
 |
My Refi's a HELOC. Anything Wrong With That?Fox BusinessHome equity lines of credit, or HELOCs, and home equity loans are secured by the property. To the extent allowed by the tax code, based on the size and use of the loan proceeds, the interest expense is tax deductible. Home equity lines and loans used ... |
|
Dollars & Sense: What is HELOC?KHON2"A home equity line of credit - or HELOC - is basically a line of credit that's secured with a person's equity in their home," explains Lance Oribio of Central Pacific Bank. There are several different versions of a HELOC. |
|
Borrow From My Home Equity -- Just in Case?Fox BusinessA home equity loan is different from a home equity line of credit, or HELOC. I think you're actually asking about a HELOC. A line of credit can be a better financial backstop because with a line of credit, you don't have to borrow the full amount ... |
|
