How Many Credit Cards Should I Have

How Many Credit Cards Should I Have?

Credit cards make buying quick and easy. Earn airline miles or rewards for spending money! Apply for a credit card and get money off your purchase instantly! But whipping out a credit card to pay for impulse purchases or to make up income shortfalls can get you into a world of trouble.

In 2018, the average US household had $6,929 in credit card debt. If you live in Alaska, the average resident has an average of $14,000 of credit card debt – the highest in the US. The average American has 2.35 cards, some open and some closed but still factored into their credit report.

With those positives and negatives in mind, do you really need a credit card and if so, how many credit cards should you have?

Do You Really Need A Credit Card?

The answer to “do you really need a credit card” is maybe. There are great reasons to have a credit card and great reasons to avoid credit cards. It depends on you and how responsible you are with that tempting piece of instant cash in your pocket.

Positive effects include that responsible use can help build credit. Credit cards are revolving credit, which means the account stays open, unlike a car loan that has a set end date.  You want some revolving debt to show that you use your credit wisely and pay on time. Lenders will look at your credit utilization ratio to see if you are a good risk. Credit utilization is how much of your available credit you are using each month. The lower your credit utilization ratio, the better.

Late payments and/or high balances have negative effects on your credit rating. So, the answer is if you will be responsible, a credit card is a great idea.  

Contact Pacific Debt today for a FREE Consultation

Why Should I Have Credit Cards?

Hotels and airlines, to name two businesses, may insist that you pay with a credit card. Online purchases are easier with a credit card. They can be very convenient in an emergency.

If you are applying for your first credit card or routinely apply for every card that you are offered, there are a few things you need to take into consideration.

Every “hard inquiry” that a lender makes negatively affects your credit rating. A hard inquiry is a request for your credit report. Each new credit account will temporarily bring down your credit score. Lenders like to have older accounts and each new credit card (or loan) brings down the age of your report.

How Many Credit Cards Should You have?

How many credit cards should you have? Most experts recommend two from different networks (Visa, Mastercard, American Express or Discover). These two should offer a different type of rewards (for instance, airline, general purchases, cash back). Some stores (Costco) will only take one network (Visa). If you travel internationally, some networks (American Express and Discover) are not as widely recognized.

Is it bad to have a lot of credit cards? It depends on you. If you are using your credit cards wisely, a drawer full of credit cards may not be bad. However, if you max out one credit card after another, a new one won’t help you get out of debt.  

Some people are able to use balance transfer credit cards to help them lower their interest rate. These cards often come with balance transfer fees and startlingly high interest rates if you miss one payment. Always read the fine print!

Some credit cards come with incredible sign-up bonuses. These cards often come with annual fees that offset bonuses. Make certain you understand what you are getting “free” and what it costs.

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What Credit Card Should I Get?

If you have no credit history or bad credit, start with a secured credit card. These have a limit secured by money held in escrow. As you use and pay off the card each month, you improve your history. You are also building good habits.

Once you have that card and your behavior under control, you can add a second card. Look for one that has rewards that you will use and don’t expire. Consider an airline rewards card and a cash-back card.

Whatever you do, pay off your monthly balance and make all your payments on-time.

And finally….


For more information, talk with one of our debt specialists today.


How to Manage Debt during the Holiday Season

How to Manage Debt during the Holiday Season

Entering the holiday season with a mountain of debt is a terrible experience. It’s made even worse with the added weight of an abysmal debt-to-equity ratio.

For parents, the weight of responsibility to provide for your children is multiplied during the holidays — one of the few times other than birthdays when the kids expect to receive gifts.

For children, the excitement of past holidays and the expectations of opening presents on Christmas day can create a crushing experience if they feel disappointment. So, what does this mean for parents?

Are you expected to get deeper in debt just to avoid disappointing the children?

Should you buy just a few good gifts or many small gifts?

Is there a way to satisfy your kids’ expectations and avoid more debt?

Believe it or not, there are many ways to avoid getting deeper into debt during the holidays and it all begins with expectations.

The Root of the Holiday Debt Problem

Is it wrong to spend money during the holidays?

No, it isn’t.

But it can do damage in the future if you aren’t careful with how you spend. That’s why you need to cultivate a habit of smart gift giving. Smart gift giving is different from normal gift giving, because you focus on needs over wants and completely cut out holiday overspending habits.

To begin your path to smart gift giving, you’ll need to identify your overspending habits. There are two culprits when it comes to holiday overspending: avarice and love.

Parents/family either love their children so much that they hate to see them disappointed on Christmas — resulting in overspending on Christmas gifts — or they’re so preoccupied with “having nice things” that they willingly fall deeper into debt.

Debt and gift-giving have gone hand-in-hand for far too long — it’s time to break up these two highly unlikely lovers and forge healthier holiday spending habits.

Check out these great ways to avoid going deeper in debt during the holidays.

Contact us today and chat with a debt specialist free of charge.

The Gift of Giving

Yes, it’s cliche. But constant repetition hasn’t made this any less true — giving will always trump getting. And luckily for all of us, giving doesn’t necessarily mean paying.

There are important, fundamental financial lessons to be learned and developed through giving:

  1. A focus on needs over wants
  2. The true meaning of value
  3. How material things and money affect wellbeing

Through giving, you can actually learn how to save money when buying things for yourself.

Think about it.

If you approach every purchase with a budget in mind, a healthy perception of value, and a focus on your needs, your purchases will become smarter, saving you money in the long run.

Learning to give smart gifts can actually teach you to save money.

Most gift giving involves spending. But you can also give time, knowledge, experience, and care. For example, if you know how to play the piano, you can offer to hold free lessons for the kids in your neighborhood. This is both a gift of time and knowledge.

Whichever type of giving you decide to adopt this Christmas, you’ll likely need to be more outgoing and social than you were before. Opportunities for giving don’t just show up on your doorstep — you have to learn about other people to identify what they need.

I had a friend growing up who celebrated Christmas, but not like the rest of us. He didn’t wake up on Christmas to a mountain of presents under a tree. He wasn’t ever home during the holidays.

Every Christmas, my friend’s family would do charity work in neighboring towns and sometimes different countries. He made new friends and lasting memories of helping those much less fortunate than himself.

Though an expensive excursion may be out of the question for parents struggling with finances, the idea is the same and it doesn’t have to cost money.

Here are some great ways to give without spending too much money (or none at all):

  • Host a dessert swap with neighbors
  • Grow and give away fruits and vegetables
  • Get a charity-focused credit card
  • 12 days of Christmas; acts of kindness
  • Employer gift matching
  • Fundraising for local charities
  • Organize a neighborhood food or gift drive
  • Donate your old clothes, toys, and goods
  • Donate blood
  • Host a cooking day with your friends; make dinner for random families

More than getting gifts, your kids deserve the valuable lessons that come from giving. Yes, random acts of kindness can make a big difference for those on the receiving end. But just imagine the nurturing effect giving will have on your kids.

In time, your children will become givers instead of receivers. You will spend less money on Christmas gifts and more time on learning the meaning of Christmas.

The Gift of a Brighter Financial Future

Sometimes, gift giving is made even more difficult when choosing a gift for those suffering from financial troubles. After all, would you buy an Apple watch for someone who struggles to pay their bills?

There are some great ways to actually improves the lives of those you are giving to, without removing the spirit and festivity of the holidays.

Parents can educate their kids to live or at least desire to live a financially savvy life. Though financial wellness gifts may not make much immediate difference, they will relieve the stress of future holiday debt.

Use the best budgeting apps to manage your expenses during the busy spending season. An good budgeting app can save you some valuable dollars here and there that will make a difference in the end.

By Christmastime, you should at least have a bit of your tax refund set aside for smart gift-giving. When it comes to teaching your kids about taxes, it’s important to lead by example. Plan a family tax prep night, to teach your growing kids about the importance of keeping receipts and records of transactions.

Professional Preparation for the Holidays

In the months leading up to the holidays, offer to work extra hours to impress your superiors. Your hard work leading up to the holidays could lead to a bonus or a promotion.

You can even express your desire to your superiors to earn some extra money to save up for the holidays. You may qualify for a pay increase if you accept extra responsibilities at work.

Besides working extra hard in your chosen career path, you also have the option to make money on the side to save up for the holidays.

Spending the next month as an Uber or Lyft driver will put some extra cash in your pocket for those added holiday expenses.

The Motley Fool reveals that you can make between $371 and $1,853 per month by driving for Uber. Of course, it completely depends on the time you put into it, but you can actually make enough money to pay for Christmas.

Other possible side gigs include:

  • Freelance writing
  • Dog walking
  • Social media manager
  • Caregiver
  • Airbnb
  • Garage sales
  • Donate plasma
  • Party planning
  • Research study participant
  • Become a tutor

No matter how much money you have or how much debt you’ve accumulated over the years, there is always a way back. Yes, the holidays are a time of giving, but they don’t have to be a time of going into debt.

Practice smart gift giving by focusing on needs over wants, saving up money beforehand, making extra efforts at work, sharing good financial practices with your kids, and by focusing on the real reason for the holidays: family.

For more information, talk with one of our debt specialists today.


Disclaimer: We are not attorneys or accountants and can not give you legal advice. If you have legal or tax questions, you should contact the appropriate expert.

What Happens to Debt When You Die

What Happens to Debt When You Die?

What Debts Are Forgiven at Death?

Once you die, what happens with your debt? It depends on the type of debt and if there are cosigners. Basically, all debts pass into the estate along with assets and other liabilities. Even if you have very little, you still have an estate in the eyes of the law.

Most people have wills (and if you don’t, you should). A will determines how assets are distributed. However, before anything is distributed, creditors are given a chance to claim part of the estate.

Talk to one of our debt specialists today to learn more about our debt settlement program.

What Are Different Types of Debt?

  • Secured Loans

  • Unsecured Loans

  • Student Loans

  • Taxes

Secured debt, like mortgages, are passed along with the asset. If you are given a house in a will, you also get the mortgage. If you are unable to pay the mortgage, the bank can seize and sell the house.

Unsecured debt, like credit cards, must be paid as long as there are enough assets in the estate. If the debt is in the name of the deceased and no one else, the debt must be settled with the estate.

If there is a co-signer, the debt passes to the co-signer.

Student Loans

Generally, student loans die with the borrower. In some cases, the debt also dies if the parent(s) of the borrow die. You will have to provide proof of death to the school or lender, which is referred to as a death certificate, or proof of death certificate. A proof of death certificate has to be signed by a funeral director and can be presented to companies and organizations to inform them of the deceased.

IRS Taxes

IRS Taxes never die. In fact, they may even increase because you will still have to pay income tax on anything earned up to the date of death.


All these categories are very complex, particularly taxes.

You should have the guidance of an accountant or attorney.

Is Family Responsible for Deceased Debt?

This is another complex area. It depends on the type of debt and on the state where the deceased was a resident.  If you live in a community property state, the laws can be extra confusing, so talk to an attorney.

If your deceased loved one has debts,

talk to an accountant or attorney before agreeing to pay anything.

Can Collections Agencies Call You?

Absolutely. They can and will. However, once the estate is probated, all debts owed by the estate are gone. They may call you while the will is in probate. Refer callers to the personal representative (executor) named by the court to handle business on behalf of the deceased.

Remember, generally, and unless, your attorney/accountant says otherwise, you DO NOT owe anything.

Do not make promises or payments to collectors. Do not give the collector personal information including bank account numbers or social security numbers. The collector is not necessarily a collector but could be a scam artist who reads obituaries.

If the callers violate the Fair Debt Collection Practices Act (FDCPA) or your state’s FDCPA, report them.

What if the Primary Credit Card Holder Dies?

It depends on the status of the secondary credit card holder. If the secondary was only an authorized user, the secondary is not liable for the debt, the estate is.

Hint: don’t use the card after the primary dies, or you may end up with the debt. Credit card use after death can also be considered fraud.

If the secondary is a co-signer, the secondary is responsible for the debt of the primary cardholder.

Are there Deceased Credit Card Collectors?

Yes and no. They are either regular debt collectors or scam artists. Again, talk to an attorney or an accountant before agreeing to pay anything to anyone.

What Happens with Credit Card Debt after Death?

If there is not enough money to cover debts, the creditors will be notified as to that fact. They should write off the debt as part of the cost of doing business.

If there is money, the credit card company must stop adding interest and fees while the will is being probated.

In most cases, debt is not inheritable.

Again, talk to an attorney BEFORE agreeing to pay any debts.

Stopping Credit Cards After Death

The personal representative should contact the credit card companies. They may require a death certificate. Some credit card companies can be unpleasant about canceling cards. Keep at them until you get the cards canceled.

Do everything in writing and keep records of who you talk to, what you send, and what response you get.

If you are not the personal representative, refer everyone to the personal representative. You have no legal standing in the deceased’s business.

We can’t stress enough that you should talk to an attorney and/or accountant before settling debts. Debt after death can be a complex issue and you will probably need expert guidance.

For more information, talk with one of our debt specialists today.



How Does Debt Consolidation affect your Credit Score

How Does Debt Consolidation Affect Your Credit Score

What is Debt Consolidation?

Debt consolidation combines most of your debts into one loan with a lower interest rate. It allows you to consolidate your monthly payments and hopefully allowing you to get debt-free sooner.

There are several ways to consolidate your debt. You could do a balance transfer credit card, take out a personal loan, borrow from your retirement account or against your home’s equity. You can also work with a debt consolidation company.

There are other options than debt consolidation. Pacific Debt offers debt settlement options for people with more than $10,000 in unsecured (generally credit cards) debt.

For more information on both debt consolidation and debt settlement,
talk with one of our debt professionals.

Does Debt Consolidation Hurt Your Credit Score?

Debt consolidation hurts your credit score in the beginning. Before getting a loan or getting a new credit card, you will have to have a “hard” credit check. This generally lowers your credit rating by a few points on each inquiry. Before you apply for new credit, research the different loans and ask for quotes based on “soft” credit checks. You can make an informed decision and limit the number of hard checks.

Opening the new account will also lower your credit scores for a short time period. However, as you pay off your debts on time and the account age, your credit score will improve. As you pay off your debts, keep some of the oldest credit cards open (and debt-free) to improve your credit history.

Should I Consolidate My Debt?

There are good reasons to consider debt consolidation. By lowering interest rates, you’ll save money. Just make sure that balance transfer fees don’t eat up the savings.

Rolling many debts into one debt can make your life simpler. If you’ve been plagued by missing or late payments, you may save money by avoiding penalties. Not having missing and late payments will help your credit score. Payment history makes up 33% of your credit score, so a better payment history is important.

A lower-interest loan will let you put more money toward the principal instead of interest fees.

For more information, talk with one of Pacific Debt’s debt professionals.

Where Do I Start?

    1. There are several strategies that make debt consolidation work.
      1. Have a plan: transferring debt around without paying it off won’t get you debt free or improve your credit score.
      2. Make certain that your consolidation loan will save you money, get you out of debt, and raise your credit score. Take fees into consideration.
      3. Investigate several options
        1. Balance transfer credit cards – these come with fees, so double check them to make sure that any interest savings aren’t eaten up. Check the time limits on paying off your transfer. The interest rate may increase dramatically after that time limit. Promo dates are generally between six and 24 months. PAY OFF your transfer before that date. If you cannot, this may be a terrible idea. Know the payment due date!
        2. Personal loans – Lower interest rates can help you pay off higher-interest credit cards. Shop around and ask for quote based on soft credit checks. Double check the terms as the interest rates may be very high.
        3. Retirement account loans – Talk with a professional accountant before doing this. There are severe tax penalties for not paying back a retirement account loan.
        4. Home equity (HEL) or line of credit (HELOC)- If you own a home with equity (you owe less than you can sell the house for), investigate this type of loan. You will need to have more equity than you do debt for this to work in your favor.  Be aware that if you do not pay your home equity loan back, you can lose your house.

Pacific Debt can help you understand your options.

What Should I Expect?

Expect a hit on your credit score, although you can limit the effect with soft credit checks. If you pay off debts, stop missing or making late payments, and then pay off your new loan, you should see improvement in your score over time.

If you have questions, Pacific Debt may be able to help you understand your options.
However, Pacific Debt is not able to offer legal advice or answer tax questions.


Our Debt Specialists can help you explore your alternatives to bankruptcy, including debt consolidation and debt settlement options.



We are not lawyers and are not giving legal advice. We strongly recommend speaking to a professional before making any decisions.

How to improve your credit score in 30 days

How to Improve Your Credit Score in 30 Days

Your credit potential lives and dies by your FICO rating. You’ve probably heard that term but may not know what it means to you and your credit. In this article, we will go over some common techniques you can follow in order to start improving your credit score in 30 days.

What is My FICO Score?

FICO, or Fair, Isaac and Company, started in 1956. It is a data analytics company focusing on credit scoring services. Before 1956, you had to know someone to get a loan, or have a lot of collateral, or pay outrageous interest rates. FICO changed all that and allows people to get loans based on their history of paying back loans. FICO is a brand name, but credit reporting agencies either use My FICO or VantageScore.

The higher your FICO score the better loan rates are most of the time. Since your FICO score is very important, find out what you can do to start improving it right away. In some cases, you can start to improve your credit score in 30 days.

To have a FICO score, you must have at least one account open for six months or longer that has been reported to the credit bureau in the last six months. You cannot have a deceased person on the account. The report is not just late or missed payments, all formal loans are reported to the credit bureau.

Pacific Debt can help you become debt-free with their debt settlement program. Get your FREE consultation today!

Guidelines to Build Good Credit:

  • Pay your bills on time
  • Use credit sparingly
  • Stop applying for new credit cards. Each query by a credit card company lowers your score
  • Use your credit responsibly

You can get your FICO score very easily. You are entitled to one free report a year from TransUnion, Experian, and Equifax. You want one from each because they do not share data among themselves. To get your FICO report, contact:


On the report, you will see your score and a list of your creditors. There will be a section for all your open and closed accounts, defaults, bankruptcies, and any credit inquiries for the last seven to ten years.

Check this over very carefully. Mistakes happen. People often discover they have been victims of identity theft through their credit scores.

Generally, lenders prefer to see a 680 credit score or better. If yours falls below that, you can improve your credit score fairly quickly.

How to Improve Your Credit Score in 30 Days

Below is a step by step guide to start improving your credit score right away. In some cases, this can take longer than 30 days to see positive results.

Step 1: Request your annual reports and examine them carefully.
Step 2: Correct any errors you find. This is a lengthy and difficult process but stick with it.
Step 3: If you have late payments, make them up and then stay current on your bills.
Step 4: Pay off smaller balances.
Step 5: If you are in collections, contact them to see what you can do to resolve the issue. The collection report will stay on your report for seven years, but it won’t have as big an impact.
Step 6: Remove older, closed accounts. You need some of these older accounts to show that you do pay off your debts, but too many are a red flag.
Step 7: Ask your credit card company for either a lower interest rate or an increase in your credit limit. DO NOT use that increase for more purchases!
Step 8: Get secured credit cards. These require a deposit to show that you can pay off the card.
Step 9: Try to have no recent revolving balances (unpaid balances).
Step 10: Remove credit inquiries.

How to Remove Credit Inquiries Fast

Whenever you apply for a job, fill out credit card paperwork or even get a new cell phone, the company will usually do a “hard” inquiry on your credit. Each time this happens, it could drop your score by five points and stays on your credit history for two years.

To remove credit inquiries from your credit report

  1. If you did not authorize the inquiry, send a certified letter to the credit bureau
  2. Tell them you did not authorize it, to investigate it and then remove it from your account
  3. Include a copy of the report with the inquiry highlighted
  4. Request they send another report once the inquiry is removed within 15 to 20 days
  5. Keep a copy of the letter for your records
  6. Follow up

How Long Does It Take to Improve Your Credit?

You can make improvements to your credit score in 30 days. To make larger, more significant improvements will take time. A bankruptcy will stay on your report for at least six years and has a huge impact on your score. Missed payments and defaults take about 18 months to be considered less important.

My Fico Summary

The simplest way to maintain at least a 680 credit score is to pay your bills on time, use credit wisely, and avoid getting into debt in the first place. Unfortunately, that can be easier said than done. If you need help, a reputable debt settlement company like Pacific Debt, Inc can help.

Pacific Debt, Inc offers a FREE consultation. Their debt specialists will perform an in-depth analysis of your debt and advise you on your options. They ensure that you understand all the program details. Depending on your financial situation, Pacific Debt, Inc works directly with you to become debt free in less than two years. The company does not make money unless your debt relief program works for you. You have nothing to lose and everything to gain by contacting Pacific Debt for your free consultation.

Our Debt Specialists can help you explore your alternatives to bankruptcy, including debt consolidation and debt settlement options.


5 ways to get debt relief from credit cards

5 Ways to Get Debt Relief from Credit Cards

Credit card debt is a problem for many Americans. For many people keeping up with monthly credit card payments is increasingly difficult. Causes vary. An illness, job loss, low income, or poor spending habits may be at the root. Spending more than you earn is very easy to do, especially with the convenience of a credit card.

If you cannot make your monthly credit card payments, act immediately! It’s easy to get caught up in increasing debt. You may not be able to break free without the help of a debt relief professional.

What types of debt relief help are available? We’ll discuss some options that may help you pay off debt. Hopefully, you can use these options to pay off your debt and start enjoying a debt free life.

What is Debt Relief?

Debt relief can come in the form of debt settlement which is the ability to negotiate or settle, your loan amount with the creditor. You may be able to lower the interest rate or even eliminate your entire debt.

Your situation is unique, and no one method fits everyone. Explore your options carefully and pick the one that makes the most sense for your situation.

Get a Free Consultation and find out how our Debt Settlement Program can start helping you live a debt free life today!

What Are My Debt Relief Options?

  1. Make Your Monthly Payments – Use our Credit Card Interest Rate Calculator to see exactly how much you’ll be paying on interest and principal.
  2. Debt Settlement – negotiate a lower balance on your debt amount
  3. Debt Consolidation – taking out a loan to pay off other debts
  4. Debt Management – working with a credit counseling agency
  5. Bankruptcy – a legal remedy to settling out of debt. Make sure to consult a lawyer in your area for more information

The last four options come with credit consequences on your Fico score. However, not paying your debt on time may also result in negative credit consequences. The biggest benefit of paying off your debt is that you will be able to rebuild your credit later. You can improve your credit score with effort and learn better money management skills.   

There are several types of debt that cannot be eliminated or settled. These include child support, student loans, and other secure loans.

What Do Debt Relief Companies Do?

Debt relief companies negotiate on your behalf with your creditors to help settle your debts. The debt specialists have worked with thousands of creditors. They know which creditors are willing to work out solutions and which are completely unwilling to settle.

Debt specialists know state and federal laws that govern lawsuits, collections, and statutes of limitation. Your debt specialist will guide you through each step of the process. The credit repair program takes two to four years and you’ll be in contact with your debt specialist at least once a month.

Once your debt is relieved, a reputable credit repair company will help you repair your credit rating. A good credit score makes it easier to buy a car, get a mortgage or even get better rates on credit cards and loans.

Steps Debt Relief Companies Take

  1. Your debt specialist will access your free annual credit report from Equifax, TransUnion, and Experian. You are entitled to one report each year, but they can be confusing. A debt specialist will guide you through the report.
  2. A debt specialist will go through your budget with you to see how much you can afford to pay each month
  3. Your debt specialist will work with your creditors to help settle your debts. They may be able to lower interest rates, settle on a lower amount, or even get the entire debt erased.

Who’s the Best Debt Relief Company For Me?

Pacific Debt, Inc has an excellent track record with credit repair. In business since 2002, they are in downtown San Diego. Pacific Debt has earned an A+ rating from the Better Business Bureau and is a BBB Accredited Business. They have settled over $200 million dollars in consumer debt. ranks them as one of the best debt settlement companies.

Pacific Debt offers a free consultation. Their debt specialists will perform an in-depth analysis of your debt and advise you on your options. They ensure that you understand all options and all the program details. Depending on your financial situation, Pacific Debt works with you to be debt free in one to two years. The company does not make money unless your debt relief program works for you. You have nothing to lose and every to gain by contacting Pacific Debt for your free consultation.

Read real reviews from people who have used Pacific Debt to settle their credit.

A Certified Debt Counselor can help you from drowning in debt!


How to stop drowning in credit card debt

How To Stop Drowning in Debt – A DIY Guide

Learn How To Stop Drowning in Debt Yourself

People fall into debt each day – it might just be a national epidemic. The problem with being in debt is that once you’re in, you’re in! It’s very difficult to get out of debt because it can be a financial trap.

If you can’t keep up with your credit card payments, or miss a payment, your credit will take a nose dive right into the toilet.

Cash is king, but good credit is just as important! Most people do not have cash reserves for a big purchase and must depend on credit. This is where good credit can be a godsend. Let’s discuss the necessary steps to take to keep you from drowning in debt.

Figure Out Your Debt Situation

Your first step in getting out of debt is to identify all your debt.

  • Get a copy of your credit report from or This gives you a list of all your creditors
  • Figure out the current debt amount, interest rate, monthly payment, due date and any other important information
  • Record all this so it is very clearly laid out

Once you have all the information you can make an informed decision. It might be depressing but it is important to know.

Most experts encourage you to pay off the highest interest debt first. Others suggest paying off the smallest debts first. Sometimes paying off the smallest debt makes you feel like you are making progress. It depends on your unique financial situation.

You may be able to refinance or renegotiate terms, interest rates, and other debts. Many people are drowning in student loan debt. Student loans are difficult to renegotiate, but refinancing can be done.

If you need help learning what your interest charge on purchases will be, try our finance charge calculator.

Start a budget

Next, find out where all your money is going. Write everything down. Include where your cash is going, where you use your credit card, and what you can eliminate.

This is the basis of your budget. Budgeting doesn’t have to be a chore, but it is the only way you are going to get out of debt.

Your budget should include necessary and discretionary expenses. Your budget should consider the following, although you may not have expenses in every category. Don’t forget annual expenses like car registration.

  • Housing
    • Mortgage/Rent
    • Property Taxes
    • Household Repairs
    • HOA Dues
  • Utilities
    • Electricity
    • Water
    • Heating
    • Garbage
    • Phones
    • Cable
    • Internet
  • Groceries
    • Food
    • Alcohol
    • Toiletries
    • Cleaning Supplies
  • Personal Expenses
    • Gym Memberships
    • Hair Cuts/Salon Services
    • Cosmetics
    • Babysitter/Child care
    • Child Support
    • Alimony
    • Subscriptions
  • Transportation
    • Fuel
    • Tires
    • Oil Changes
    • Maintenance
    • Parking Fees
    • Repairs
    • DMV Fees
    • Vehicle Replacement
  • Healthcare
    • Primary Care
    • Dental Care
    • Specialty Care
    • Medications
    • Medical Devices
  • Clothing
  • Gifts
  • Emergency Money
  • Entertainment Money
  • Household Supplies
  • Insurance
    • Health Insurance
    • Homeowner’s Insurance/Renter’s Insurance
    • Auto Insurance
    • Life Insurance
    • Disability Insurance
    • Identity Theft Protection
    • Longterm Care Insurance

Figure out how much you spend in each category. Be honest. If you eat out every day, include that! Now you have a good picture of where your money is going and how much/where you are spending it.

Your next step is to decide necessary and discretionary expenditures. You may have to give up eating out, drop a gym membership, or stop buying coffee for a while. It won’t be forever.

See if there are places you can cut down your necessary expenses. Could you get a less expensive car, move to a new place, or save money on other expenses?

Do What You Can Yourself

  1. Consider refinancing debt
  2. Call credit card companies, etc. and renegotiate your interest rates
  3. Drop or decrease expenses
  4. Consider consolidating debt through a home equity loan
  5. Use cash to avoid the temptation to whip out a credit card
  6. Wait 24 hours before purchasing a non-essential item
  7. Add another/better job if possible

Get Professional Help Paying Off Debt

A debt elimination agency may be able to help you set a budget, renegotiate interest rates, and teach you how to manage money more effectively.

Ask about

  • Services offered – look for a range of services
  • Free educational information
  • Developing a plan for the future
  • Fees/Contributions – get them in writing
  • Contracts or Agreements
  • State Licensing
  • Counselor qualifications and how they are paid (commission, etc)
  • Security of personal data

Getting into debt is easy. Paying off debt is what takes work and effort. Following these suggestions can definitely help you to stop drowning in debt.

A Certified Debt Counselor can help you from Drowning in Debt!


Different Types of Credit Cards

What Types of Credit Cards Should I Have?

Different Credit Card Types For Different Reasons

There are many different types of credit cards available today but which credit card is perfect for you? Though the first official credit card is nearly 70 years old, the idea of buying items for immediate consumption and paying for them later has been around since 1865.

However, it’s only been in the last few decades that companies have expanded the types of cards they issue. There’s an ideal fit for everyone, depending on your goals, financial situation, and credit history.

In this article, we’ll provide a brief description of all your choices and help you narrow down the selection to one that’s right for you.

Why Should I Have a Credit Card?

Admittedly, a credit card can be dangerous. There’s something about the idea of not having to immediately pay for something that can make money seem almost unreal. The average US household owes more than $16,000 in credit card debt, further demonstrating the appeal (and potential danger) of “buy now, pay later.”

However, credit cards can also be incredibly helpful for the following situations:

  1. Emergencies: If your car breaks down, and you’re nowhere near payday, paying on credit may be your best choice. This is especially true if your paycheck has already been spent on other expenses. Having a credit card allows you to pay back the purchase over time and on your own schedule.
  2. Convenience: Remembering to have cash on hand can be a headache. Being able to pay for something, regardless of how much money you have in your wallet is a first world convenience.
  3. Rewards: Some cards, which we’ll discuss in a moment, come with rewards. If you’re saving up for a vacation or need to earn airline miles for a trip, a credit card can help get you there faster.
  4. Build a credit history: If you plan on buying a house, car or taking out a business loan, credit cards help you build a solid financial history. Many lenders won’t allow you to borrow unless you can show that you’ve handled credit responsibly. Click here for tips on buying a home with bad credit.

What Are The Different Types of Credit Cards?

Annual Membership: These cards come with a yearly membership fee. Typically, the fee comes in exchange for higher rewards. American Express was the first company to charge a membership fee, and most of their cards also require full payment of each month’s balance.

Other companies, such as Capital One, have recently followed suit with cards that charge an annual membership, though these cards don’t always come with rewards. Instead, it’s more like an insurance deposit for those with spotted credit history.

Rewards Cards:

As the credit card business became both more competitive and lucrative, more companies duplicated the American Express model of offering rewards for using their cards. However, many waived a membership fee.

Now, you’ll see rewards credit cards offering cash back on purchases ranging from one to two percent on airline miles, hotel stays, gift cards, merchandise, and more.

Airline Specific Credit Cards:

In an effort to diversify revenue streams, airline companies have begun issuing credit cards. Some can be used anywhere as a regular credit card, while others are only for use with the airline. Using these cards allow you to earn airline miles that you can use on future flights. For universally accepted cards, you’ll often get bonus points when you sign up or make purchases from the airline or at the airport.

Low Interest Credit Cards:

Some cards offer very low or zero interest for an introductory period. This is helpful if you need to make a large purchase and plan on paying it off before the regular interest rate kicks in. These cards are often reserved only for those with top-tier credit.

Gas Cards:

Gas stations have been issuing credit cards for decades to encourage brand loyalty. Some can only be used at gas stations, while others are universally accepted. Most will give a cashback reward for general purchases (usually one percent) and pay you back five percent for purchases made at the gas station.

Retail Cards:

Many department stores and retail stores have their own credit cards that they issue to loyal customers. This allows retailers to recoup some of the credit card transaction fees while also using consumer behavior for market research.

These cards are worth it if you get a discount on an initial purchase and cash back for repeat purchases. Otherwise, it’s just another hunk of plastic to keep track of and an additional bill to remember to pay on time.

Business Credit Cards:

A business card is similar to a personal card, but with some additional perks. There may be lower fees, better rewards, and higher credit limits. In addition, you can often add multiple members and allocate different credit limits for the users. For example, if you run a business and have employees who travel, you can issue cards to employees and allow the ones who travel the most frequently to have higher credit limits than those who don’t.

These cards also offer helpful reports based on business and personal expenses, which helps keep your finances organized if you mix business with pleasure.

Student Credit Cards:

College campuses are notorious for signing students up for credit cards and offering them free gifts like toasters in the process. A student card often comes with higher fees and lower limits, but if you’re a young adult with limited credit history, this is an ideal way to start small with charges and prove that you’re responsible.

Secured Credit Cards:

If you’re in the process of repairing bad credit and trying to rebuild, you may not be able to get approved for a regular line of credit. In cases like these, you may need to get a secured card. This requires you submit collateral that’s valued at an amount equal to or greater than the amount of credit you’ll be able to use.

There may even be fees involved. It’s definitely not ideal, but if you’re recovering from a financial crisis and need to rebuild, it might be your only option.

Pre-Paid Credit Cards:

These cards aren’t actually credit cards, but they serve a similar function in allowing people with poor credit histories to use something that resembles a credit card. Instead of submitting collateral, you pay funds in advance and “load” the card with funds. Then, you can use it as a credit card.

Often there are fees involved to reload and apply, so double check and compare the options before making a decision to use one particular credit company.

Which Types Of Credit Cards Should I Have?

Your lifestyle will determine the best credit card for you. Think realistically about what you plan on using credit cards for, your credit score, and what you hope to gain from a credit card.

For example, if you have average credit and you’d like to plan a vacation, you should try a general rewards card or an airline card.

If you’ll be paying your balance in full each month and want the highest rewards, you might want a premium membership card like American Express.

For people trying to rebuild their credit, you’ll have to shop around. Be prepared for rejection, but don’t settle for anything that’s unfair. A secured card or a card with a membership fee may be your best bet.

There are countless scenarios, so again, think about your goals and choose from there.

Is There A Perfect Credit Card for Me?

While there’s no one perfect card, we do highly recommend rewards credit cards that offer cash back and other bonuses. Most major banks issue them, and the interest rates are relatively consistent, depending on your credit history. We suggest choosing one that has the highest daily rewards percentage but also has quarterly events that can double, triple or quintuple your rewards.

For example, a credit card may give five times points at all grocery stories for an entire quarter. Often, it caps at a modest amount, but you’ll still be getting significantly more rewards than you would without the event.

The Final Credit Card Conclusion

Credit cards are convenient, easy to use, and new technology is making them more secure than ever. Most companies are eager for your business, even if your credit is less than perfect, so before committing to a card, shop around for the best rates and highest rewards.

If you’d like to find out exactly how much money you’ll be spending on principal and interest, check out our Credit Card Interest Rate Calculator.

Certified Debt Counselor can help you get rid of debt and stay out!


How to spot financial scammers

How to Spot Financial Scammers

Perhaps the more difficult part about making money, is actually keeping it. We have expenses, debts, and everyday necessities that need to be fulfilled before putting our money safely into our bank accounts. Sadly, we’re also losing money to sheer gullibility.

Anthony R. Pratkanis points out that “every year, Americans lose over $40 billion in telemarketing, investment, and charity fraud.” Why do we fall so easily to financial fraud? Why are we so gullible? Debt is a burden that most of America is trying to overcome. It is also a burden we would do anything to shake — this means we are willing to fall for financial fraud because we want to believe there is a quick way, an easy way, and a shortcut to breaking free of debt.

According to Comet, 80.9% of baby boomers, 79.9% of generation x, and 81.5% of millennials are in debt today. That’s a huge portion of our economy that is just trying to keep its head above water. Put in this perspective, it’s easy to see that you aren’t alone. Unfortunately, this rising percentage of debtors has awoken a different kind of corruption beyond simple debt — financial scammers are targeting those in need of debt relief.

So how do you spot the scammers? How do you shake the financial sharks?

Grow Confident, Gain Knowledge

We succumb to scammers because we want the easy, quick way out — that is our first financial mistake. We must learn to become confident and independent.

The first step is to improve your own financial decision-making ability. Though you’re currently in debt, that does not mean you can’t grow, learn, and adapt. You should be aggressively attempting to learn everything you can about finances — you must believe that you can dig and claw your way out of this financial predicament.

A key component to gaining confidence is to prepare correctly. As Dante put it, “The arrow seen before cometh less rudely.” So put the time in to prepare for your upcoming challenges. For example, if you have struggled with filing taxes, prepare your documents beforehand and stay organized so that, when the time comes, you will be able to get a bigger tax refund in less time and with less stress.

If you have made financial mistakes in the past (as we all have), it’s time to get over the guilt. What did you do wrong? How do you get past it? What decisions should you make in the future to avoid similar mistakes? It is absolutely vital that you ask yourself these questions before achieving financial freedom.

Though sometimes we must lean on the advice of financial experts, your confidence can only quicken the speed at which you approach financial stability. Whether you are currently employing a debt relief service or are thinking about it in the future, you should be strengthening your personal financial responsibility.

Scamming Scare Tactics

I have received several calls and messages over the past few weeks that start out with phrases like “this is your final notice before we terminate” and then end with something like “lower your credit card rates.” Though not exactly a scam, the company that keeps calling me

Scammers will often use extreme language to evoke feelings of urgency. Words like “terminate,” “final notice,” and “warning” are meant to alert you to a fake-serious situation.

First of all, I do not currently own a credit card, so it was pretty easy to spot the scare tactics. However, even though I did not yet know what the phone call was about, I could not help but feel my heart flutter just a bit. Fear is the most common friend of financial scammers.

Nobody wants to lose thousands of dollars, so scammers will usually promise to instantly end some looming threat of debt. Quick debt relief is a goal that hasn’t quite been achieved yet. Most debt relief companies can square issues away between 24-48 months. Even for financial experts, debt relief is a process. Don’t be fooled by those who promise to wipe away a debt in just a day.

The Most Common Scams

While many scammers use scare tactics, there are many others that will play on all of your emotions to get your money. Don’t fall prey to the most common scams that promise wealth, safety, or security in exchange for personal or financial information.

According to, some scammers will pose as members of the “nonexistent ‘Consumer Protection Bureau.” Government officials at the CFPB continue, adamantly stating “This is not us. We are the Consumer Financial Protection Bureau, or CFPB. Some scammers may claim to be with the Federal Trade Commission’s (FTC) Bureau of Consumer Protection. Others may claim to work for the CFPB or FTC, but neither of these agencies calls consumers to alert them of winning a lottery or sweepstakes. ”

The CFPB also warns that scammers will often claim that they are from the IRS and that you owe debt. Such scammers threaten lawsuit or arrest if customers refuse to pay. It is important to note that debt collectors cannot use unfair or abusive collection tactics — such threats would be considered illegal collection tactics. To avoid tax identity theft, try staying ahead of your taxes, carefully inspect your credit reports, and be ready to freeze your credit if you suspect identity theft.

Read Up on Financial Services

Never accept a financial service without first looking at customer reviews. If you are considering working with financial experts to relieve your debt and lift your burdens, be sure that the company has the requisite accreditations (like the AFCC and the IAPDA for debt relief companies).

Customer reviews should act as a supplement to all of your research into each individual company. If you find that the vast majority of customer reviews oppose what the company or service claims, then you should move on. On the other hand, if you find a debt relief service whose customers support the company’s claims, you know when you’ve found a reliable and trustworthy company.

No matter your financial situation, you are always in danger of financial scams. Always be skeptical of those who threaten and ask for personal and financial information. Do not be intimidated by cheap scare tactics or promises of quick wealth. Your confidence and ability to spot a scammer will protect you on your personal path to financial wellness.

How to buy a house with bad credit

How to Buy a House with Bad Credit in 2018

How to buy a house with bad credit is one question we hear from our readers often. You may have been told that buying a house with bad credit is a virtual impossibility; or if you somehow manage to get a mortgage, you’ll be hit with a cripplingly high-interest rate. While it is unquestionably tough to purchase a property with poor credit, neither of the two statements above are correct. There is a program that can help you when you are looking at buying a house with bad credit and it provides you with a reasonable loan rate.

Mortgages usually have out-of-reach requirements for those battling poor credit. Borrowing for a house is the biggest expenditure most people ever face and lenders will get personal to deduce your creditworthiness. You’ll need to show information about your student loans, auto loans, credit card balances, outstanding medical bills, and all other financial obligations.

Lenders use this information (along with your pay stubs) to calculate your debt-to-income ratio. If this ratio is too high, you’ll be denied. Most lenders want this ratio below 36%, meaning your monthly debt payments must not absorb more than 36% of your salary.

Talk to one of our debt specialists for FREE. They can help answer any questions you may have when looking to buy a house with bad credit.

What is Classified as a ‘Bad’ Credit Score?

Every credit reporting agency calculates a Fair Isaac Corporation (FICO) score based on your credit information. This score can range from 300 to 850. A score of below 580 places you in the bad credit range.

Your credit score is based on the following information:

    • Payment History
    • Debt-to-Credit Utilization Ratio
    • Credit History Length
    • New Credit
    • Types of Credit

While there are ways to boost your credit score, they take time which isn’t helpful if you’re buying a home with bad credit in the near future. Fortunately, it could be possible to benefit from a Federal Housing Administration (FHA) loan; a low-interest mortgage offered to applicants with bad credit scores.

Am I Eligible for an FHA Loan?

Just to be clear, the loan is ‘backed’ by the FHA but you still need to deal with lenders. The FHA loan is theoretically available to applicants with a credit score of 500-580. However, prospective lenders can still turn you down and up until 2017, it was difficult to get a loan with a credit score of under 620. As of December 2017, 23.6% of applicants with a credit score of 600-649 were approved for an FHA loan; only 5.25% of applicants were approved with a credit score of 550-599.

The FHA loan program was implemented in 1934 and has helped over 40 million Americans to achieve their dream of homeownership. It recently announced that it would be sweetening the deal for lenders and the new changes could help 100,000 extra families own a home each year. Here are the organization’s credit score minimums; please take note of them if you are intent on finding out how to buy a house with bad credit:

FHA Loan Requirements

    • A score of 300-499: Not eligible for an FHA loan.
    • A score of 500-579: Eligible with 10% down payment.
    • A score of 580+: Eligible with 3.5% down payment.

Unfortunately, there are no programs for people with credit scores below 500. Indeed, mortgage experts suggest that there is little possibility of a loan with a score of under 530.

As you can see, you need your credit score to be above 580 if you wish to benefit from the 3.5% down payment option. For the sake of calculation, it means you can buy a $300,000 house with a $10,500 down payment. If your score is between 500 and 579 however and you are approved, you require a 10% down payment which is a substantial sum of $30,000.

Bump Up Your Down Payment On a House

While this is admittedly a difficult undertaking, it is one of the best ways to buy a home with bad credit. Some lenders will approve you for a home loan even if you have poor credit, so long as you make a significant down payment. As you’ll need 20% of the home’s purchase price just to avoid Private Mortgage Insurance (PMI), most lenders will expect applicants with bad credit to put down 30% of the property’s price. Using our hypothetical $300,000 example, you’ll have to save $90,000!

What a Bad Credit Score Does to Mortgage Rates

A 100-point drop in your credit score could add 0.25% or even 0.5% to your rate while a person with a good credit score can expect a rate of at least 1% lower than someone with a poor or bad credit score. If you receive a 30-year fixed rate loan of $300,000 at 4%, your monthly payments are around $1,300. At a rate of 5%, those payments increase to over $1,500. Over the course of your mortgage, that 1% difference equates to over $40k extra in interest! We encourage our clients and readers to visit our Credit Card Interest Calculator to get a better idea of how much you’ll be paying on interest and principal.

You Can Buy a House with Bad Credit, But Try & Give it a Boost First

While it is untrue to suggest that bad credit will prevent you from becoming a homeowner, it will make things harder. If you are unable to get the FHA loan, you’ll have to save up a large down payment and lenders will issue a higher interest rate because they see you as a greater risk. Check your credit report for errors, pay high-balance and high-interest credit cards first, and try to make all loan payments on time. Also, don’t forget to check out our finance charge calculator to see exactly how much you’ll be paying on interest and principal.

Find out how a Certified Debt Counselor can personalize a Debt Relief Program for you today!


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