Debt Disaster 101: When You Can’t Make the Minimum Payment

It happens.  We all go through periods of financial difficulties.  You’ve been sick, you lost your job or you’ve simply overspent.  You’re only human.  You really can’t make the minimum payment this time around. You know that you have to worry about late fees, high interest rates, not to mention the negative effect on your credit score and history.  Don’t worry – you’re not facing utter doom.  Here are the basic and most important things you can do to resolve your financial woes:

Call Your Credit Card Company ASAP. The worst thing you can do is just to allow the bill date to go past and wait for the late fees and the interest rates to eat you alive next month.  Don’t fear your credit card company.  Let them know right away and ahead of your billing due date about the problem you’re having.  If you have a good payment history with them to begin with and you can assure them that you can make the payment next month, most credit card companies will extend your due date, allow the late fees to be waived and continue to report your payment status as “current” with the credit bureaus.

Check The Payment Options. Ask your credit card company about alternative payment options such as post dating checks or even a debit card payment online.

Use Your Emergency Fund. If you’re dealing with a cold-hearted creditor, then it’s time to dip into your emergency fund.  Don’t put off creating this while you enjoy a steady source of income.  This is definitely the time to use that money.  Barring that, borrow from a friend or family member or ask for an advance on your paycheck.

Check Your Budget. Look at your bills and see which ones that can still wait a week or two for payment. Just be careful which bills you have to prioritize – you don’t want to be without water or electricity for example.  Consider your expenses and see what you can do without or spend less on for now.

Other Options. If you are having a lot of trouble consistently making the minimum payments on time, then you really need to assess your money management habits.  Debt settlement, entering a debt consolidation program and credit counseling are some of the options you should be looking into.  The debt settlement process is a serious step to take and you should carefully consider a good and reputable debt settlement company to handle your business. A good credit counselor, for example, can help you fix your budget and negotiate for lower payments with your credit card company.  Debt consolidation is a good option if you already manage your money well but are experiencing an unavoidable financial bind due to illness or natural disaster.  Just remember, each option does have its pros and cons and you need to carefully think and research which one will really be a great solution for you, rather than add its own new set of problems.

Debt disaster does happen.  All of us occasionally go through rough financial patches.  It can be difficult to rebuild your credit standing but you can start resolving the problem by taking immediate and well-considered action.

Account Cheaters That Kill Finances

One of the very devastating swindles that banks do to people is using the money deposited to them by lending it to other people or investing it to the banker’s expense.

Sometimes the best way to really lessen your worries when you invest your money in a bank is to have your account free from interest rates, as much as possible. Of course, in case the bank gets into any trouble, you don’t have to discuss nor argue about interest rates or any other fiendish issues that will only hurt your financial stability.

Some of the common victims of banks are people who have small business. Loan banks are often the culprit in terms of cheating customers. Some banks make their lending standards stringent to small businesses, and that is quite more reliable compared to banks that seem very generous in lending money but in the end, would only endanger the growth and development of the customer’s business.

However, common mistakes by small businesses include the use personal credit card cash advances where they are led to a double-bind. This leads to the profit of the bank that charge high interest and at the same time lowering the customer’s credit scores to fund the small business. The double-bind is supposed to help build up the business and improve cash flow for both the business and the bank. But with the terms that fool customers, later on loan applications would not be approved due to the lowered credit score.

Not all banks are capable of cheating customers through their accounts. There are still reliable and trustworthy banks that will ensure that your finances are well-managed and secured for the future.