The Health Dangers of Looming Credit Card Debt

By Eva Hilton

Buying on credit remains as popular as ever in the United States, even after the tough lessons of the 2008 global financial crisis. Over 46% of all American households have credit card debt and the average outstanding amount is $15,191. Although credit card debt declined immediately after the financial crisis hit (between 2009 and 2010), the number of indebted families rose again sharply in 2011 and remained at that higher level ever since. A lifestyle of living pay check to pay check fuels the use of credit cards, but the experience of college student debt is also one that can build a habit and a sense of normalcy of being indebted. Yet what many Americans fail to realize is that credit card debt not only has the potential to result in financial woes, but also in a wide range of health problems.

Debt and High Blood Pressure

Scientists at Northwestern University conducted a study among indebted Americans, in order to determine what health effects looming debt had on one's health. There were a total of 8,400 participants in the study, all of whom were between 24 and 32 year of age. What they discovered was that indebtedness and high blood pressure are closely linked, especially among young Americans. It was specifically one's diastolic blood pressure that appeared to increase as a result of major outstanding debt. The study focused on people who noted that their amount owing was so severe, that they would be unable to break free of it, even if they managed to sell all of their assets. Those with high debt had blood pressure levels that were 1.3% above the median. While this may not appear very significant at first glance, doctors note that levels that are just 2% higher than the mean result in a 15% higher risk of suffering a stroke than the average population. Americans in debt were also 13% more likely to display symptoms of clinical depression. With 73% of Americans noting that financial woes cause significant stress in their lives, it is clearly time to take the health risks of credit card debt seriously.  

The Connection Between Debt and Drug Use

Out of control credit card debt is also strongly connected to drug abuse, according to research conducted by the Centers for Disease Control and Prevention. Depression and debt are often part of the same cycle, and one that is very difficult to break. In a comprehensive study of attempted suicide among middle-aged Americans, researchers discovered that two of the most common factors present in a majority of cases were prescription drug abuse and financial challenges. Poverty and addiction are very closely linked, with scientists at the National Institute for Drug Abuse noting that "exerting self control can become seriously impaired" when someone is addicted to drugs, and this has a major impact on one's personal spending and financial choices. Some drugs, heroin in particular, result in drastically decreased mental functions, depression, as well as medical conditions, such as heart failure and severe arthritis, which are costly to treat for people without comprehensive medical insurance. Treatments specialists who deal with heroin addicts also speak of debilitating "bone aches" and the necessity of comprehensive medical intervention, to get the patient's health and overall well-being back in order. The rise in heroin use in the United States is becoming a major concern and is fueled by the fact that this form of contraband is now cheaper than ever, with deaths related to heroin having increased by a staggering 84% in New York City between 2010 and 2012. The same study, which formed part of the National Survey on Drug Use, showed that heroin use had risen by 79% nationally. 

The connect between drug use and debt is complex and reciprocal, in that the stress caused by out of control credit card debt can lead to an attempted escape from this situation through drug use, but drug addiction as well often results in serious debt, among people who otherwise would not have gotten into such financially dire situations. Yet in addition to drug use, staggering credit card debt has been shown to lead to a range of other health issues, including anxiety, depression and high blood pressure, which in turn can lead to heart disease and stroke. The culture of buying on credit and worrying about making payments later has become pervasive in western society, and while this may be convenient, it can also come back with a vengeance years later, when debtors pay not only with their wallets, but also with their health. 

Living Credit Card To Credit Card: How To Break The Cycle

By Maxime Rieman

Most of us have heard financial experts decry the dangers of “living paycheck to paycheck,” wherein a person’s income is so close to their expenses every month that they’re unable to put any money aside for emergencies or retirement. Of course, these gurus are right to be concerned: saving is an important habit to get into because it is an important safety net and it allows us to build wealth.

So yeah, living paycheck to paycheck isn’t ideal.

But really, I think the personal finance professionals are barking up the wrong tree. They’re right to be concerned that a lot of us are failing to save, but living paycheck to paycheck isn’t the worst monetary state you can be in. As most of us who have been in serious financial trouble know, there is a much direr financial situation you can fall into: living credit card to credit card.

Yep, credit-card-to-credit-card living is about as bad as it can get. If you’ve never experienced this type of financial lifestyle, it goes something like this: you charge up a credit card to the point that it’s just about maxed out. You probably keep your head just above water by paying the minimums on the card every month, just to be sure your credit score stays solid enough that you can get another card. Which you do. Then you charge that card up, without ever paying the balance on the first card. Again, you keep up with monthly minimums, but pretty soon you need another card. And not long after that, you can’t keep up with the minimums on the two other cards, so you use the third card to pay the other two. But now you have no more available credit, so you need another card. And so on. And so on.

Many college graduates fall into this trap. They graduate totally broke – student loan bills, rent, a car payment, and a bunch of other expenses eat up their nonexistent paychecks. But they also don’t adjust their spending accordingly, and quickly open more credit cards first to accommodate their splurges, and then to pay off the other cards. Keep in mind, in the past--even just as recently as 2007--banks were still doling out credit as generously as those free lollipops. So for many graduates, it is—well was--really easy to keep getting new cards to bail themselves out of payments that were too high on the other cards, and, of course, gain a little spending money, too.

This cycle lasts for about a year, and by then most realize that they are drowning. This is when the stress begins: stressed out about money all the time; constantly concerned about missing a payment or worse, not having enough to even pay the minimums; and sweat-inducing nightmares. For those, who are experiencing this during the Great Recession, I can only imagine your feelings of helplessness and the perpetual state of fright you must be in.

The good news is that, you can turn things around. You can go from a total money-wreck to financially savvy with some stubborn resolve, sacrifice and the knowledge that it can be done; knowing that there is an end in sight can really help on those hard days. If you’re looking to break the cycle of credit card to credit card living, try a few of the tips below:

• Stop using the cards – This is probably the most important step you can take towards stopping the credit card madness. It will be painful and unpleasant, but you have to stop using your credit cards entirely, at least for a while. Freeze them, cut them up, give them to a trusted friend, whatever – just keep those cards out of your wallet and out of your hands for the time being.
• Don’t open any new cards – No matter how bad the credit card withdrawal symptoms get, resist the urge to open a new card. Even if you promise yourself you’ll be responsible with this one, just say no. At some point you may be in a financial place where credit cards won’t pose a threat, but that’s not now.
• Put yourself on a budget – One of the reasons you probably got into debt is that you failed to create a plan for your money, which is what a budget does. Figure out how much money you make every month, then make a list of all your expenses, including non-fixed monthly costs like gas and groceries. Decide how much you want to spend in each category, making sure to allocate a hefty amount to debt repayment. Then, stick to your plan!
• Also, put yourself on a cash allowance – Since you’re not using credit cards, you’ll need a way to manage your spending money. I recommend cash. Go to the ATM every Friday; take out your spending money for the week ahead. Not only does this reacquaint you with the value of money (cash is concrete, credit cards are abstract), when it the money is gone, it’s gone. This will keep you out of trouble!
• Increase your income – Once you’ve quit credit cards and set a budget, it’s time to get serious about debt payoff by increasing your income. Get a second job, baby sit, walk your neighbor’s dog, or find some other income stream. But just be sure you use the extra cash to pay off your debts – no shopping sprees allowed!

Breaking the credit-card-to-credit-card lifestyle is tough, but it is doable. Even after a month you’ll start to feel better. Keep your chin up and know that you’re working towards a brighter financial future!

Maxime Rieman is a writer for NerdWallet, a financial literacy site where you can find brokerage reviews, such as this TD Ameritrade Review, when you’re ready to start investing.

Five Signs You’re Not Trying Hard Enough To Ruin Your Life With Credit Cards—College Edition

By Maxime Rieman

In these competitive times, many of us are pursuing lofty goals with a drive and determination that would make Aesop’s tortoise look woeful. After all, who doesn’t know someone who’s training for a marathon, writing a novel, or traveling the world? These days it seems like everyone is working on something big, and the bar for what constitutes “accomplished” keeps getting higher and higher.

While there are a lot of worthy aspirations out there, many Americans are working on a very specific endeavor, one that could potentially have long-lasting consequences—ruining their lives with credit cards.

Millions of people in the U.S. are destroying their credit and running up thousands of dollars in debt; they’re maxing out their cards, buying tons of junk they don’t want and can’t afford, while only paying minimums month after month. But the truth is, many of us who are trying to destroy our financial lives with credit cards simply aren’t doing enough to make sure that this goal is reached and we are not maximizing the example we’re setting for others who will soon be prey privy to the wonders of credit cards. Try as we might, we’re behaving far too responsibly with our cards and we need to put forth more of an effort to make sure that we’ll never get out from under the weight of consumer debt.

So how can you tell if you’re not trying hard enough to mess up your personal and financial life with credit cards? Here are five signs you could be doing more to reach your goal:

You’ve Never Gone Over Your Credit Limit
This is probably the most obvious symptom: if you’ve never had to pay a fee for going over the credit limit that your bank set for you, you really need to consider charging more. The interest and fees associated with going over your allotted credit could be all that’s standing between you and financial ruin, so if you’ve failed to purchase enough with your credit card to exceed that threshold, it’s time to hit the mall. A credit limit is really just a suggestion anyways.

You Don’t Obsessively Check Your Available Credit
If you feel comfortable enough to keep charging your day-to-day expenses to your card without worrying that you’ve run out of available credit, you’re definitely falling short of driving yourself into financial ruin. People who are really committed to letting their credit cards take them off a financial cliff are the ones you see in line at the grocery store obsessively checking the banking applications on their smart phones to be sure they can get out with their gluten-free pasta. Take a lesson from their desperation and make a bigger effort to eat up all of that available credit with mindless purchases. It might seem tough at first, but you’ll find that once you really make a commitment to buying useless crap, it gets easier over time.

You Can Sleep At Night
Every real credit card junkie knows that putting the goal of ruining their lives with their cards requires sacrifice, and one of those sacrifices is a good night’s sleep. If you never (or only rarely) lose sleep wondering how you’re going to pay your bills, you’re definitely not going to achieve the objective of total monetary devastation. Take it as a sign to start charging more if you’re getting a full eight hours every night, and remember that if you’re in a pinch you can always start putting your fraternity/sorority dues on your card. Do whatever it takes to get those balances up!

You’re Not Getting Random, Threatening Calls From Collections Agencies
One of the most persistent reminders that you’re really going the distance towards meeting your objective of ruining your life with credit cards is the unexpected and brash calls coming from collection agencies at all hours of the day. This is basically a commendation for not paying your bills, no matter how much the person on the other end might be encouraging you to cough up the cash. If you’ve never been awakened in the middle of the night—even though you were probably up anyways—by a bill collector threatening to tell all your future colleagues you’re a deadbeat, consider this a sign you’re being far too timely and responsible with your bill payments.

You’re Thinking About Buying A House
One of the hallmarks of financial responsibility is homeownership; so if you’re considering buying a house after college, kiss that goal of messing up your financial future goodbye. If you feel that in a few years you can take on a mortgage, you’re obviously been much too careful with your cash. Worse yet, if you actually qualify for a home loan, it’s really time to buckle down and start swiping that credit card.

Getting into a financial bind may seem hard at first, but with a dash of college-freshmen-ignorance, a pinch of giving-into-peer-pressure-and-keeping-up-with-the-Jones-Kardashians-everyone-else and a pound of prolonged-bill-opening-avoidance, you’ll achieve it in no time. Take these signs into consideration to gauge your progress periodically and remember: never let a trip to the Apple Store pass you by!

Maxime Rieman wishes being an adult weren’t so hard. Luckily, she works for NerdWallet, where she found cheap auto insurance, learned the ins and outs of credit cards and generally, how to be more financially savvy.

My College Credit Card Debt Mistake

Guest Post by Christine Kane

I have not had a credit card in over 10 years. I have chosen this path because I learned an important lesson at a young age. I was a freshman in College learning the ins and outs like how to sleep with your eyes open during lecture. When I wasn’t mastering this art form I was enjoying living the fine life with weekend road trips, new clothes, fine dining, parties and concerts.

Like most Colleges that first week of school when doe eyed freshman arrive, there are lot of on campus things to attend. Most colleges have a meeting where students can find new clubs, organizations and programs to become a part of. Roaming these halls are bankers and credit card givers.

I was approached by a charming fellow just a few years older than me. He offered me a credit card and I declined because I had heard from my family that is what I needed to do. After I said no, he persisted with his sales pitch of the credit card. Except, I didn’t realize it was sales pitch. These words that flowed from his mouth were music to my ears. Promises of low interest rate (what’s that? I had no idea), easy to use, use it for beer, books and gas. SOLD. I signed up and signed my credit score life away.

This little piece of plastic became my study, party and shopping buddy. I didn’t really know the limit or what would happen if the limit was exceeded. I didn’t know understand that paying the minimum wasn’t good. I had no idea, because no one told me.

6 months past and before I knew it I had accumulated almost 4,000 dollars of debt. Oops. What now? I panicked and when the card stopped working and the calls started coming, I did what any 18 year old girl does, I cried. I knew had to make that dreaded phone call home to explain that their scholarly daughter had in fact made a very uneducated financial move.

After a few lectures and a few ‘pull you out of school’ threats, we all calmed down. Thank goodness I was lucky to have parents that could afford to help me out of my mistake. They took the card and paid it off. I got job and to pay them back, plus interest, of course.

My advice to parents or young college students. Educate yourself on credit cards. Parents sit down with your child and explain the basics behind it. Students avoid the smooth talking men and pretty woman with shiny cards. Don’t ruin your credit like I did. And if you are in debt, don’t be afraid to ask for help from anyone whether they are your financial adviser or parent.


Author Bio:
Christine Kane from internet service providers, she is a graduate of Communication and Journalism. She enjoys writing about a wide-variety of subjects for different blogs. She can be reached via email at: Christi.Kane00 @ gmail.com.

Ban Uncontrollable Spending for Good

Guest Post by Lauren Bailey

6 Steps to Shopping Addiction Recovery

It is an unfortunate reality that many Americans and citizens across the world have found themselves in debt and living beyond their means. As common as this is, though, suffering from an actual shopping addiction is quite a separate issue, and it can leave hugely detrimental marks on your finances. If you have found yourself compulsively spending and you need to break the cycle, here are some easy steps to help start the process.

1.  Admit you have a problem and seek the help of a counselor.
As anyone who has struggled with an addiction issue knows, the hardest part about the process is completely admitting to yourself that you have a problem that is out of your control. The next step is admitting you need help. Remember, if you could help yourself, you would have done it already! Make an appointment with a counselor or psychologist to talk about the issue and get some guidance about ways to move forward.

2.  Cut up Your Credit Card
The first step to financial freedom after putting yourself in damaging debt is to give up your credit card, once and for all. Pay for purchases with cash, check or debit only.

3.  Find Shopping Alternatives
The compulsion to shop is not going to simply go away because you realized you are addicted. In fact, your need to shop will probably grow the more you try to fight it. Make a list of activities that you can do in place of shopping, so you have plenty of options handy.

4.  Bring a Shopping List Every Time
If you want to control what you buy, then you need to figure out exactly what you need, and only purchase those items. Make a list of items you need to purchase every time you shop, whether it is for clothing or groceries, and stick to it.

5.  Change Your Lifestyle
Keeping up the same routine as you had before you started dealing with your addiction will not help your recovery process. Instead, think of this as a time to change up the way you live. Drive a different way to work, eat out at different restaurants, and add activities that you never did before to your weekly schedule.

6.  Bring a Friend
When in doubt, bring a friend. Find someone you can trust to support your through your recovery process and call them when you feel the urge to shop, or when you have to go shopping and feel afraid you will overspend.


Author Bio:
Lauren Bailey regularly writes for online colleges. She welcomes your comments at her email Id: blauren99 @gmail.com.

Best 5 Books on Debt

Guest Post by Laura Backes

Perusing the financial self-help isle at your local book store can be overwhelming. Not only because of the amount of books but the amount of debt that got you to that dreaded self-help isle. Debt is not a foreign concept, lots of Americans struggle with credit card debt but not to worry there are books that can help you, here are a few:

The Money Book for the Young, Fabulous & Broke by Suze Orman

Suze Orman is every college student’s nightmare; consider her as no nonsense financial professor teaching you lessons about post grad life. This book is to help the young professionals with a small salary and student debt. Don’t let the title fool you, this book can help those who are older as well.

Your Money or Your Life: Vicki Robin and Joe Dominguez

This self help guide not only teaches you how to get out of debt and face the real issues but it puts your life back in to your hands. In 9 steps, this book shows you how to take control and learn to live life with your money and not the other way around.

The Total Money Makeover: A Proven Plan for Financial Fitness by Dave Ramsey

The not so sensitive financial guru Dave Ramsey, helps you find the source of your debt problem, you. This book teaches you what to do and what no to do. Listen to him and you are bound to get out of debt and it may not be the easy road but remember slow and steady wins the race.

How to Get Out of Debt, Stay Out of Debt, and Live Prosperously by Jerrold Mundis

A breath of fresh air is what this book brings to the table. Based on the successful practices of national Debtors Anonymous program you are able to relate to the millions of other Americans suffering from the paycheck to paycheck living and the relentless debt collectors. An easy and simple read, a must buy immediately.

The Ten Commandments of Money by Liz Weston

This book is realizing that today’s economy isn’t the easiest, the costs are going up and you aren’t making enough. The ten financial commandments that Liz Weston goes over will help you set a budget and stick to it, look at your options for the future and how you can control your own debt crisis.

So become a book worm and start reading. You will learn a few things that will help and guide you to financial happiness. All of these books can be found at your local bookstore or online. Happy reading and happy saving!

Author Bio:
Laura Backes enjoys writing about all kinds of subjects and also topics related to internet service in my area.  You can reach her at: laurabackes8 @ gmail.com.

Paying Medical Bills with Credit Cards, is it a Smart Choice?

Guest Post by Eliza Morgan

Those who really fear credit card debt are usually cautious when it comes to making future purchases. For example, if a couple knows they want a new TV for the living room, they'll usually save for a few months and then pay for a new TV with cash. But not everything can be so calculated, especially when it comes to your health.

Sometimes you get sick out of nowhere, and even if you're insured, getting billed for medical expenses is one of the easiest ways for someone to get into debt (or deeper debt). Think about it: one single trip to the emergency room can set you back $200 for someone with insurance. If this was an unexpected expense and you don’t have enough money in your account, what will you do? Charge it on your credit card. Depending on how quickly you can pay it back will determine how much interest you will accumulate. In fact, according to the most recent statistics, nearly 21 million Americans accrued credit card debt in 2008 due to using their cards to pay for medical bills. While health is important and unpredictable, there are some things you should consider first before using your credit card to seek temporary relief.


1. Negotiate with your Doctor/Hospital. First things first, it's always important that you speak up front that you may not be able to afford whatever procedure or test that the physician says you need. If it's an emergency situation the physician will go ahead and do the procedure, but they will be more willing to give you a discounted rate or work out some sort of payment plan (some charge interest; others do not). Either case, you are not obligated to pay any sort of out-of-pocket expenses up front so don’t be too tempted to put it on your credit card immediately. But if you discuss your financial situation from the beginning, the physician may be able to reduce your bill in some area, whether it's with the anesthesiologist if you've had surgery or with your medications.

2. Know who is more likely to Report to Credit Bureaus. If you put your medical bills on your credit card and then can't find a way to pay off your credit card bill, you will undoubtedly be contacted by a bill collector. From there, the appropriate crediting bureaus will be notified as well and your discrepancy will negatively be placed on your credit report and affect your credit score. While you do in fact want to pay off your medical bills at sometime, it's important to know that rarely do physicians and hospitals actually report to collection agencies (as opposed to credit card companies that do it almost immediately). In fact, various sources say that only.07% of medical businesses actually report their patients to bureaus. Most just write off any losses.

3. Get a Health Savings Account. Lastly, a great way to be better prepared for these kinds of unexpected medical expenses to acquire a health savings account (HSA). Most health insurance companies require a high deductible (about $1,500 for a single) to establish one through your plan but they can really be a life saver and help you be debt free. How it works: a portion of your paycheck (prior to taxes) is put into your HSA each month. You can build the money in your account tax free as well. You are then issued a debit card and can use that card strictly for paying for medical expenses, such as when paying off co-pays, medications, and remaining balances you may have on a surgery. It takes out the temptation of using a small portion of your savings for something other than medical uses. Your balance moves from year to year and works as an IRA after 65, so it can be invested.

Author Bio:
Eliza Morgan is a full time blogger. She specializes in writing about business credit cards. You can reach her at: elizamorgan856 at gmail dot com.

Ways to Avoid Credit Card Debt this Holiday Season

Guest Post by Amanda Tradwick

Some of us can spend thousands of dollars on gifts during the holiday season. Many of us turn to the convenience of our credit cards to finance these giving (shopping) sprees, causing us to impulse purchase and spend much more in the long run by paying high interest rates. Even more modest holiday shopping budgets can spiral out of control when they are compounded by excessive interest rates over the year, or more, they take to pay off. Here are a few tips to help you avoid using your credit cards this holiday season and accumulating more debt:

Make a List

Start out by making a list of everyone for whom you want to buy a gift. Include family, friends, work associates, church members and anyone else you can think of who you want to give a gift. If you find that the list has become too long, you can go back through and remove some people. Creating a complete picture of your gift list will help you budget better.

Set a Budget (and Stick to It!)

Now that you know who you want to buy for, start setting a price limit for each person to come up with an overall budget. This is easier than setting an overall budget and then dividing by the number of recipients because you aren't likely to want to spend the same amount on your officemate as you are on your mother. If you find that your overall budget ends up being too high once you've set individual limits, you can go back and make a few adjustments. Setting an overall budget -- and a per-person budget -- will help you to better select gifts once you begin.

Hit the Sales

Once you have your budget, maximize its potential by shopping sales and online promotions. There are a few times a year when many retailers are known to mark down their items, most notably the day after Thanksgiving and the Monday after Thanksgiving. Shopping during this time can save you a significant amount. The period after Thanksgiving and before Christmas is also a generally good time to shop.

Don't limit yourself to these sales times! Look for sales throughout the year -- even those right after Christmas if you're able to plan that far out for the next year. Also, take advantage of online sales and specials. Many retailers offer lower prices through their online stores, as well as free shipping and gifts with purchase. Check out all your options to get the lowest prices that you can.

Leave Your Credit Cards at Home

If you don't have your credit cards with you when you shop, you won't be tempted to use them to spend more than your budget, to purchase impulse items for which you had not planned, or to get "just a little something extra." Take cash with you, or use a debit card that is tied directly to your checking account and does not have a protective credit line. Once you're out of cash, you're done buying.

Make Gifts

The easiest way to save money on your gifts and to save yourself the burden of credit card debt is to make some of your gifts. Many friends and family would prefer to receive a gift that was made with a sincere spirit or that has some sentimental value. Framed photos, favorite baked goods or even heartfelt letters all make great gifts. Be creative and make it specific to the recipient.

Saving early, making a plan and doing some smart shopping can all help you to save money this holiday season and to avoid the burden of extra credit card debt. The earlier you plan (and save), the better off you will be and the brighter your holidays!

Author Bio:
Amanda Tradwick is a grant researcher and writer for CollegeGrants.org. She has a Bachelor's degrees from the University of Delaware, and has recently finished research on grants for married college students and student grants in north carolina.

Lacey’s Credit Card Debt Story

Guest Post by Lacey Cook

Hello all. My name is Lacey Cook, and this is my personal credit card debt story. I was always taught to spend my money wisely. From the age of eight, I started to save for my first car. By the time I turned 18, I had saved enough to buy a six year old car at about $8,000. I paid in full with a check, and I’d never felt so great.

After that, I went off to college, where I had some trouble keeping my finances afloat, but I made it through with the help of my parents. After graduation, I got married and started a new chapter of my life. That’s where everything started to go south. I had no student loans or credit card debt, and we’d just got a few thousand dollars for our wedding, but that wasn’t enough. He was about $40,000 in debt from student loans and credit cards, and we had no way of paying our bills. We struggled to find jobs, and we ended up having to use my credit cards to make ends meet for the first few months of our marriage.

Finally, we found jobs and started to slowly dig our way out of the hole. Everything was great, but we still wanted something more, so we decided to get a dog. We went to the pound to adopt one, and found the most adorable little puppy I’d ever seen. She was fun, yet still wanted to cuddle, and I knew she would be the perfect addition to our new little family. We spent our weekly budget for groceries on her and decided to eat bologna and mac and cheese to tide us over.

The second day after we got her, she started to look lethargic, and I wanted to make sure she wasn’t sick so I took her to the vet. Turns out, she had a very draining virus that could have killed her if we hadn’t caught it in time, and even with the treatment, she still only had about a 50% chance of survival. I handed over my credit card. Two days and nearly $2,000 later, we finally got to take her back home to nurse her back to health.

We knew, at that point, that we had to make some drastic changes in our spending to get us back out of debt. We sat down, made a list of all of our monthly expenses, and created a budget to suit our life. I started clipping coupons and stopped buying name brand items to cut down our grocery bill. We discontinued our cable bill as well and used digital rabbit ears instead. We cut down our budget so much that we were able to start paying way more than the minimum payment on our debts each month, which I know is important when you are trying to save your credit score.

We’re not out of the woods yet, but we’re getting there as fast as we can. In fact, we’ve been so successful, that we’re also able to put away a little money each month to start a retirement fund. I know you may be thinking that we shouldn’t have to worry about such things yet because we’re young and have plenty of time, but I have realized that I definitely don’t want to have to work until I’m too old to stand. The sooner a person starts to save for retirement, the sooner they can actually retire. I am determined and motivated to get out of this debt and live my life to the fullest.

Author Bio:
Lacey Cook is an author who writes guest posts on the topics of business, marketing, credit cards, and personal finance. Additionally, she works for a website that focuses on educating readers about getting their first credit card.

Credit Card Debt vs. Student Loan Debt: Which Should take Precedence?

Guest Post by Mariana Ashley

With Labor Day now done and long over with, all colleges have officially commenced. That said, there are many students who will be completing their final semester/year of college. While many are looking forward to earning their diploma, many are dreading what happens shortly after graduation—repaying student loans. But the situation may seem a lot worse for graduates who have to face a double whammy: student loan and credit card debt. If you find yourself in this situation, which debt should you try to take care of first and why? To find out, continue reading below.

What Kind of Debt Gets Higher Priority?

To state it rather directly, you should always aim to clear your credit card debt before your student loan debt. This is because since your credit card is considered revolving debt as opposed to installment debt, it will impact your credit score more ferociously and more quickly than a student loan debt. That's not to say that your student loans should be disregarded. But if you have some sort of student loan grace period—which is typically around 6 months or so after graduation—you should put all of your energy to wiping out your credit card debt first before making payments to your loan. It's understandable why you may want to pay off your student loan first during the grace period, after all you typically do not acquire any interest during this time. But ultimately credit card debt will do more damage. If you find an extremely high-paying salary job and can afford to pay off both credit card and student loans simultaneously then by all means do it. But if your resources are limited, go with the credit card debt first. If your student loan grace period expires and you still have a hefty credit card balance, talk with a student loan officer immediately to figure out a way to make the smallest monthly payments possible. Sometimes doing something as simple as consolidating all of your loans can result in a small monthly payment, some as low as $50. Whatever you do, you never want your loan to get defaulted though.

Debt Collection Rights

If for some reason you cannot make timely payments on either your credit card debt or student loan debt, you can be reported to a credit card debt collection agency or the Department of Education debt collection agency respectively. By law, debt collectors (of either department) can't threaten to repossess your home, car, or anything else valuable over the phone to compensate for your debt. But they can drag you to court and sue you. Here, if a judge finds you at fault then the judge can mandate that certain items be repossessed, garnish your wages, or collect your tax refund checks to pay off your debt if you don't the money to pay it off for example. Note that credit card and student loan debt collections work a little differently however. With credit card debt, each state has a statue of limitations—which simply means there is only an allotted time for which a debt collector can hit you with a law suit. For example, in Texas it's 4 years. A debt collector can still take you to court even after the statue of limitations is up—it's up to you to show proof that the allotted time has expired if you are taken to court. While you may get out of making the court forcing you to pay up, know that your credit report will be ruined for a good chunk of your life. Good credit is needed to make most big purchases that you will make as an adult, including a home and car. A student loan debt collector does not have any restrictions however and can sue you at any time.

Author Bio:
Mariana Ashley is a freelance writer who particularly enjoys writing about online colleges. She loves receiving reader feedback, which can be directed to mariana.ashley031 @gmail.com.

Finding Options to Help Fight Off Debt

Guest Post by Stella Walker

Getting into debt is scary. There is no denying that. You start to get this anxious feeling of being trapped; you have too many bills not paid off to think clearly. You know you have to do something, but you feel like you don't have a lot of options.

In actuality, there are a lot of options out there, and I'm not just talking about bankruptcy (although this is still viable in extreme cases). Half the battle is getting yourself out of this emotional and psychological slump and convincing yourself that you can be proactive about your debt and finances.

Cut off luxuries

If you can't pay your own bills, it's time to start making your own coffee and lunch and bringing it to work. You should also at least attempt to repair household items yourself. If there's no cancellation fee, cancel your gym membership and instead opt for good-old-fashioned jogging. While you're at it, cancel any other services that you don't need; if the service doesn't facilitate you getting out of debt, you don't need it.

Start a small business

While it is true that it generally does take some money to startup a small business, some business start-ups are actually extremely low cost. One extremely cheap startup is a snow cone stand. Have any secret hobbies or skills? Now is the time to put yourself out there and at least give it a shot. You'd also be surprised how cheap it is to start up an online business. You could even write a blog telling the story of your struggles with debt (like this one).

Balance Liquidation Plans

If you have a whole slew of credit cards with outstanding balances and frighteningly high interest rates, you should perhaps consider requesting balance liquidations plans from your creditors. While this doesn't allow you to charge to cards that you've liquidated, it does lower the interest rates to extreme degrees. Just be sure that you have ways to make necessary expenses without your cards.

Pay Cash

If you do wind up liquidating your cards, this is a great way to try budgeting with cash. The beauty of a cash budget is that it forces you not to overspend because you literally can't. You take out the amount of money you want to budget each week (or month) in cash, and if you find yourself getting low on cash, you just have to start scraping pennies and looking for food in the freezer until the set time that you allow yourself to take out more cash.

Use Envelopes

If you decide to limit your budget with cash withdrawal restraints, another great strategy is to organize separate budgets into different envelopes. For example, you'll have envelops for bills, clothes, groceries, etc. with a designated amount for each envelope. The idea here is that you limit a budget for each area of your life, and if one envelope empties to quickly, you have identified a possible spending problem in your household.

Author Bio:
Stella Walker is a freelance writer of free credit score where she writes about topics including credit, debt, investment, bankruptcy.

Fighting Debt Incurred Through Identity Theft

Guest Post by Nadia Jones

There's no getting around how much identity theft sucks. It's deceptive, hard to spot, and it is also hindering the spread of technology. As more information is used and stored online, the threat of identity theft increases exponentially as criminals can access more ways to steal your private information.

According to the Federal Trade Commission (FTC), nine million Americans have their identities stolen each year, resulting in $631 off out-of-pocket expenses for victims due to legal fees and misappropriation of their false debt. It can take years before someone realizes they are the victim of identity theft, resulting in months or even years of the victim's time being spent towards repairing their credit worthiness and adjusting their falsely accrued debt. Remember, you are not liable for fraudulent debt resulting from identity theft. Do not pay for a criminal's debt.

Preventing and Detecting Identity Theft

Before explaining how to get rid of your fraudulent debt without having to pay the debt yourself, I think it is extremely important to detail how to prevent identity theft. Since there are so many ways identity thieves can acquire your information, protecting yourself involves a combination of a lot of little things:

• Shred financial documents
• Sign the backs of credit cards immediately
• Don't carry your Social Security number or card with you
• Don't offer personal information to anyone you don't know or trust
• Be cautious of links in unsolicited emails
• Use a variety of secure passwords
• Keep your personal information locked and secure
• Report theft or loss of key identification material (passport, license, etc.)

It is also important that you monitor your bank and credit card statements carefully, looking for any unexpected transactions or new accounts made under your name. The same applies to loans and financial aid.

Also, review your credit report annually. You area allowed a free copy of your credit report every twelve months. All you have to do is request it. To order a free annual report, go to AnnualCreditReport.com or call toll-free to 877-322-8228. Otherwise, you can consult a consumer reporting company (like Equifax, Experian, or TransUnion) which will charge about $10 for a copy of your report.

Stopping Identity Theft and Fraudulent Debt

Once you realize you are the victim of identity theft, you have to defend your reputation and credit rating by immediately filing a "Fraud Alert" on your credit reports and then reviewing your reports carefully. This will alert creditors to raise security measures before opening any more new accounts or making changes to your existing ones. Filing a fraud alert will also get you a free copy of your credit report, so you can look for accounts that you didn't open and debts on accounts that you can't explain. The consumer reporting companies all have toll-free numbers that you can call to place a fraud alert, and you only need to call one:

• Experian: 1-888-EXPERIAN (397-3742)
• TransUnion: 1-800-680-7289
• Equifax: 1-800-525-6285

After filing a "Fraud Alert" you must do the following:

• Request for consumer reporting companies to block fraudulent information.
  
• Contact the security and fraud departments of companies where an account was opened or charged without your knowledge.
  
• 
  
  • Send them copies of supporting documents, including the identity theft affidavit.
  • Ask for verification that the account has been resolved and fraudulent debts discharged.
  
  
• File a police report
  
• Report fraud to the FTC
  

Thankfully, the FTC has a very useful "tools for victims" site that offers sample letters, directions, and even a chart you can print and fill out to remind you what you've done and what you still have left to do.

Author Bio:
Nadia Jones blogs at online school about education, college, student, teacher, money saving, movie related topics. You can reach her at nadia.jones5 @ gmail.com.

How to Avoid Overspending on Your Credit Card

Guest Post By Andrew Black

Your credit card debt could be piling up by now if you are into overspending. It is becoming a common problem these days as the number of so-called shopaholic people increases. Moreover, modern society has obviously made it very easy to spend much more than you should. It is about time you start aiming to clear your rising credit card debts.

If you want to obtain peace of mind, you should aim to curtail, control, and eliminate overspending. In reality, it could be harder than you think. Most of the time, consumers fail to resist the urge to spend according to their means. Overspending is a problem that leads to more financial problems. Thus, it would be best if you would observe the following tips on how to avoid it.

Prevent impulsive spending

Spending on impulse could be a habit. It is one of the main reasons cited for consumers’ overspending activities. To prevent it, try to reflect prior to buying any item. If you like to buy anything you see in a retail shop, try not to make a purchase right away. Instead, wait for a day before you actually decide to buy it. Doing so would enable you to rethink the proposition to buy and possibly find other items that could be comparatively better.

Do not go to places where there are numerous temptations to buy. Overspending is common to consumers who frequent shopping centres and retail shops. If you go to such places to overcome boredom, try to find other venues to do so. Likewise, try not to spend your lunch break strolling around retail shops. How about hanging out in a garden or a park where there could be less temptation to spend anything?

Live within a strict budget

If overspending is your problem, set a specific budget per week. Intend not to spend beyond this allocation no matter what happens. Furthermore, make sure your weekly budget is in cash, which is much easier to monitor. Keep your credit cards in a secured place and do not bring it whenever you go out so as not to face the urge to spend unnecessarily.

It would also help if you would know how much you spend. Be conscious when you buy small or relatively cheap items. For instance, do not buy coffee as frequently as you do. Review your bank accounts, payables, and credit card bills so you would determine how much you spend within a particular period. Also try to look at different types of items you purchase.

Set objectives when shopping

You could effectively avoid overspending if you would set clear objectives prior to shopping. Buy items because you really need them, not because you want them. Before deciding to purchase anything, think more than twice whether you would go on and complete the purchase. Do not try to look closer at things that do not fall within your shopping objectives.

Lastly, you could curtail overspending by avoiding spending by habit. Review your own habitual spending pattern. This way, you could determine whether you tend to buy things based on necessity or simply based on your habit. Try to find other recreational activities that would take most of your idle time from habitual spending.

Andrew has been working in the finance industry helping people to consolidate credit card debts. Andrew now likes to share advice on how to avoid debt.

No Advance Fees for Debt Relief Companies

Guest Post by Robert Zangrilli

Robert Zangrilli is the CEO of Franklin Debt Relief, a debt settlement company based in Chicago, Illinois but servicing clients nationwide.

Before October 27, 2010, the common practice in the debt reduction industry was to charge to up front fees to consumers who used their services. Prior to this date, my company for example, charged its fee over the first 18 months of our client’s programs, which usually lasted 24 to 36 months. Earlier this year, however, the FTC ruled that charging fees in advance to settling a consumers’ credit card debt as a practice was harmful to consumers. Certainly this was true of many companies, especially those who collected the majority of the fees before providing any services and in fact, probably had no real intention of settling their clients’ debts.

This all changed effective October 27, 2010 when the FTC made effective an up front fee ban for debt relief services. More specifically, the FTC ruled that debt relief companies must now negotiate the term of at least one of a consumer's debts in order to receive compensation for its services. Not only must there be a written agreement of this settlement, but the consumer must agree to it and have made at least one payment to a creditor in order for a debt relief company to receive compensation for its services.

On top of these new rules regarding fees, there are also specific provisions in the new rule regarding the advertising and sales of debt relief services. First off, debt relief companies are now required to make specific disclosures to clients before enrolling them into their programs. Second, debt relief companies are prohibited from making deceptive claims about the success of their programs, including how long it will take to settle a consumer’s debts and how much a client will save. While these two new provisions may seem unimportant, these are perhaps the most significant parts of the new rule because it makes it clear what is a deceptive practice in the debt relief industry, which in turn will be used to justify FTC actions against unscrupulous actors.

I hope this article sheds some light on the protections afforded to consumers seeking debt relief services. As is true in most industries, there are still bad actors out there trying to skirt the law by setting up face-to-face meetings with consumers (the rule only sold over the telephone), so it is important that consumers continue to do their due diligence before enrolling with a company. BBB complaint record, how long a company has been in business, and TASC accreditation (the debt settlement industry’s trade organization) are both good indicators of how reputable a company is.

Harassing Creditors and the Way to Defend Yourself

Guest post by Kevin Craig

As a bad debt grows, debt collection agencies seem to exert more and more pressure on the debtors in the form of creditor harassment. Although debt collection is legal, harassment by collection agencies is not! The FDCPA laws are like the cool shades that shelter the consumers’ rights and offers protection to illegal debt collection tactics. There are various types of harassment that the creditors impose on the debtors:

• Debt collectors threaten to hurt.
• They come to damage any personal property.
• They use obscene language over the phone.
• They threat to put the consumer behind the bars.
• They make disturbing calls at your workplace.

It is even possible for the consumer to get a counseling from the attorneys in their state regarding their rights like-

Creditor harassment and consumer rights – (Fair Debt Collection Practices Act)
There are two different types of creditor harassment laws, the federal laws and the state laws; the federal laws are for the entire citizen, while the state laws are only for the citizen of that particular state. If both the laws are taken into account it’s the state law that is more effective. The FDCPA is designed in such a way that it can fight back the abusive creditors and if required can also put a penalty on them which might even count up to $1000.
Utilizing unfair practices in collection of debt
There are situations where the debt collectors may charge more than the original amount.
The debt collectors may ask the consumers to incur certain extra financial charges.
The debt collectors may threaten to damage personal property.
Unfair or outrageous collection activities are practiced by the debt collectors.

Notice Violation
The creditor sends a letter to the debtor addressing him as a “dead beat” which means someone who has no money to pay for his credit cards.
The creditor sends out a collection letter which signifies a court order.
Limitations of FDCPA
Firstly, the debt must be a consumer debt and not a business debt.
FDCPA does not apply to third party collection agency.
It is only the debt attorney who can suggest which law applies and when, so that he can give him the required protection as and where required.
FDCPA to save the consumers from creditor harassment
The FDCPA has been designed in such a way that it can protect human rights against creditor harassment .If the harassment is illegal, the consumers can even sue the debt collectors for any kind of damages done either to their personal property or to them. A local consumer attorney can guide the consumers as to whether the case of violation of FDCPA laws against the debt collectors is legal or not!
You can try out the following to deal with creditors

1. Police assistance
2. Complain to the trading standards
3. Doing full and final settlement to clear debts with a help of a debt settlement law firm.
4. Take creditor to Small Claims Court.

Credit Card Debt and Sacrifices

The Move to North Carolina

I didn't get into debt overnight, but getting into debt was easy. Surprise! Getting out of debt won't happen overnight either and it will also require sacrifices along the way.

In Summer of 1997 prior to our deciding to eliminate our credit card debt we took the kids to Asheville, NC to do some camping and show the kids where we would be moving to.

I was preparing for a new career and retiring from the Navy the first week of July 98. I had been sending out resumes left and right to the Asheville, NC area (Remember that I was in Maine and had no friends or family in the Asheville area).

I had been scouring the internet for leads and came across one lead that fit me to a tee. The only problem is it was in the central North Carolina area and my wife and I were looking forward to the beautiful mountains. I had a couple of jobs in the western end of the state that I thought would pan out but the pay was the minimum that we thought we needed to make up for my current pay as a senior enlisted member of the Navy. The job in central NC could have been my job description for my Navy job. I had been doing this type of Information Technology management for a over a decade so I sent off an application.

I let my wife know that I applied for a position with a University that was well outside of where we were intending to live. She said she would be willing to sacrifice if the pay was X dollars (which would help us eliminate our debt). Well as luck would have it I was one of the 100+ applicants that got interviewed. They did a phone interview with me in Maine. After the first round I was their choice so they flew me down to North Carolina for a second round of interviews. When I flew back I was reasonably sure they would make me an offer, but what they were talking was $2,000 lower than the X dollars my wife desired to make the sacrifice.

It is now mid June I am about to have my retirement ceremony and would be leaving in less than 3 weeks. Currently all of my moving paperwork with the Navy still says that my stuff will be moved to Asheville. The Navy also said my final chance to change that destination had passed. It was at this point that the HR department of the University called and offered me the position. I accepted the offer and set a start date. I then let my wife know that we weren't going to be living in a box, I did get a job.

The catch however was that we were going to be living in Greensboro, North Carolina. The good news was that I was offered the exact amount my wife stipulated to when I initially applied for the position. My new boss later said she fought to get the amount increased by 2k because she didn't think I would accept the position where it was. She never knew my wife's bottomline, sometimes truth is stranger than fiction.

We sacrificed the dream of living in the mountains, a place which we had visited and fell in love with to move to a place we didn't know.

How did our sacrifice payoff?

The extra dollars did help us get out from debt easier, we were able to stick to our repayment plan. When one credit card was paid off that amount was rolled over to start paying more on another credit card. If we had not made the sacrifice we would have needed to pull back the money into the family budget when a card was paid off and we would still be paying off our debt.

How did Greensboro turn out?

Well we have been in the Greensboro area now for 7 years and we couldn't have picked a nicer place to live. The people are great and it is a fantastic place to raise a family. Neither of us were from North Carolina but it fit my wife's 5 hour rule. The rule states that we needed to live at least 5 driving hours from either of our parents (how can you not love a woman with this kind of rule). We are now over 10 hours from either parents.

Wait a minute, what happened to my stuff slated to go to Asheville?

I went to the department that said I had missed my last chance to change my destination of my stuff and told them that my stuff needed to be sent to Greensboro not Asheville. The young lad tried to hold the party line and reiterated that it was too late to change. I told him calmly that I have been in for 22 years and that not only could my destination be changed but that it will be changed and to go ask his boss how this was going to take place. He scurried off then came back and said that they could do it and to write on my package the new destination. A week later when the movers came you better believe that I checked their paperwork to make sure they had Greensboro down for the destination. Even then the motto "trust but verify" was applicable.

Living Without Credit Cards

If you read this post (Eliminate Credit Card Debt, The Beginning) you'll recall that my wife and I decided to get our credit card debt under control in November of 1997. This necessitated that our family would have to stop the use of our credit cards.

When you are used to having credit available the sudden withdrawal can be traumatic. Not having a credit card isn't too hard but it does require a little more planning. We picked a tough time to stop with the Christmas Holidays coming up.

It's amazing the time of year that we used the credit cards the most wasn't as hard to get through as I would have anticipated. We just had to set priorities, our kids were 1, 4 & 8 years old at the time so they were still easy to take care of at this time of year. We deferred any major gifts for ourselves and concentrated on the important things "Tradition and our children".

The real test happened in early January 1998. We sent our third grader off to school (did I mention we lived along the central Maine coast at the time) on a nice morning. Ten minutes later he was back and said there was no crossing guard. Well the street he has to cross is not busy at all so we sent him back. You see he was running late an we figured the guard left early. This time he was back again and he said he met another mom and her kid walking back from school. He stated that school was closed due to the coming ice storm.

This was the beginning of 12 days of stress. It started with freezing rain at around noon. We lost power around 4pm. When I heard pine trees starting to snap I moved the car out of the garage and onto the street. This turned out to be a good thing because branches off of the pine tree overhanging our driveway and electrical hookup snapped and not only blocked the garage but ensured we wouldn't be getting electricity any time soon.

We were without power for 11 days. The next day I went into town and there were wires down arcing and sparking everywhere. Just north in Canada they had high tension wire towers collapse like dominoes. This was the worst ice storm in Canadian history.

I immediately felt a little lost without the ability use a credit card. How would we manage this event? We stayed in the house two nights then decided we had to find a warmer place for the kids.

We spent the weekend at her sisters in Connecticut. We called our house and the answering machine didn't pick up so we knew we were still without power. We then called a neighbor and their machine picked up. They weren't home but we knew they had power. When we left my wife's sister asked where are you going to stay, we replied at our neighbors. They didn't know it yet but they had power and that is why you get to know your neighbors.

We then spent a night at our neighbors place. The next day with a little help our heater blower was wired into a neighbor's electrical box, this allowed the oil heat to warm the place up. Now we ran an extension cord 200 feet to an outlet on the back of a house behind us. This allowed us to run the living room almost like normal. A couple of light a computer and the TV. If we wanted to run the electric wok we had to turn off a couple items.

After 11 days the TV nightly news declared all the power was restored. We were surprised because ours was still out. By midnight they were at our house to hook things back up. So after 11 days we finally had our power restored.

What was the point of this meandering?

Even faced with a major disaster I didn't need to use a credit card. We used a little imagination and a little assistance from our neighbors and managed to come through this with good memories and some great stories. To top it off we came through it without adding any more debt to our credit cards.

I Never Paid My Credit Card Bill Late Until....

I enrolled in a credit card debt relief program.

That's right since I had to send in the money via money order, then the counseling group had to process it and send it out. This long process resulted in delays and late payments to the credit card companies for the first time ever.

How Were The Late Payments Handled?

I was very disturbed when I found that the new arrangement actually resulted in my payments being late. I contacted the counseling service and they said that this wasn't unusual in the beginning of the program and that I should contact the credit card companies and explain the situation to them and they will eliminate the late fee and remove the late flag from my account.

I did as they requested and sure enough the credit card companies responded as they indicated they would. But the next month it all was repeated again. This happened for a few months. The final solution was to push back the payment dates of some cards so there would be time for the counseling service to process the incoming payments.

It was a stressful time. I had never been late for any payment and as soon as I signed up I was being listed as late. Fortunately the group that I signed on with had processes in place to remove any late marks and fees from the clients record.

The good news is that now the credit counseling services use many more methods for accepting funds, from money orders to electronic fund transfers, so the problems I ran into should be fewer.

Eliminate Credit Card Debt, The Beginning

Let me set the scene and see if this is familiar to anyone out there.

November 1997, I was set to retire from the US Navy in Sept of 1998.

I had about $26,000 of unsecured debt (credit card debt). Every time I was transferred from one base to the next over the years our debt would increase by about $2-3,000.

We were making all of our payments on time, but it was like treading water we never gained on our debts and the biggest expense we had were our three lovely kids, ages 1, 4, and 8.

Did any of the previous sound familiar?

At this point we decided that we had to see what help was available to try and work our way out from under debt load. The most common group specializing in this type of assistance at the time was the Consumer Credit Counseling Service, a non-profit group that had offices across the USA. This is still one of the best groups out there.

The Consumer Credit Counseling Service in 1997 required one-on-one counseling and a budget set up with a counselor. I was arrogant enough to think that I didn't need any face time with a counselor. I wanted a group that was easy to use but I didn't want them to get personal with me. I knew I was going to have to stop the use of my credit cards and start taking a bite out of the debt crunch.

I used the internet to research alternatives and came up with Debt Counselors of America now called Myvesta. This was a non-profit group that would negotiate a lower interest rate with the various credit card companies on our behalf (this group doesn't seem to do this any more but does have great info on the topic). The only catch was everything had to be paid through them.

My credit card interest rates went from 21%-0%, 18%-10%, 18%-6%, 18-4% and 16%-16%. My largest debt on a single card was the Discover card which went for 21%-0%.

The only credit card I didn't place under the program was the one from my credit union. I have a good history with them, a reasonable rate and I didn't know how using the program would effect my credit rating. I wanted one avenue that was free of any possible problems. The card was at its limit and wouldn't be going down too fast since the other cards are the priority. But this card was listed as off limits by my wife and I.

Well this was the beginning. Later I'll explain what difficulties we ran into and how this effected our life.