Meet Christopher – Now Debt Free Thanks to Pacific Debt

Name: Christopher

Age: 35

Location: California

 

When did you enroll in our debt settlement program and how much debt were you facing? How did carrying all of that debt make you feel?

We enrolled March 2016 in Pacific Debt’s program, with $23,176 in debt. Carrying that much debt made it almost impossible to make ends meet. We could make only minimum payments, and would immediately be checking balances and available credit to see which card we could use next. Purchases were for necessities, not fun or frivolous items. We lived credit card limit to credit card limit.

 

Christoper, Debt Free, Pacific Debt

Tell us about your journey through the Pacific Debt program? Are there any special team members you would like to recognize?

Our journey through Pacific Debt’s program was worry free and easy. We were contacted immediately whenever something was needed, and we were informed of every step taken along the way. Brian LoBianco was amazing to work with! He took care of our account and our debts in the fastest way possible, never neglecting quality service, and ended up getting us great settlement agreements with our creditors. He was professional at all times, and we could tell that he cared about us and the assistance he provided.

 

How does it feel to be debt free? What are your financial goals moving forward?

It feels amazing to be debt free! One thing this program allowed us to do is learn how to live without using credit. By not being able to use our cards, and by lightening the load that we carried, we were able to manage our budget in a credit free way, realizing what we really needed, and what we could do without. Our financial goals are to continue to live completely free of revolving debt, not having to worry about paying high interest for what easily could have been the rest of our lives doing what we were doing before.

 

We know we are not perfect. What suggestions or advice would you offer to help us improve our program? All advice is welcome.

I honestly was completely satisfied. I will say, the first 6 months to 1 year of creditor/collector phone calls was nerve racking. Understanding that things had to get worse before they could get better was key, though it was still a time that worried us. Pacific Debt made sure we understood the process, and what to do with those calls and contacts, and that made all the difference. We knew Pacific Debt was in our corner the whole time.

Read Over 1300 Real Pacific Debt Client Reviews

At Pacific Debt we’ve always focused on providing an awesome customer experience and delivering great results. Over the past 15 years, our team has settled over $200 million in consumer credit card debt and helped tens of thousands of individuals and families.

A couple of years, ago, our team started actively asking our customers to share their experiences online, so that others who are struggling with debt could see for themselves the power of our program. In that time, our customers have shared over 1300 online reviews, with an average weighted user score of 9.47 out of 10.

Consumers who are struggling with excessive credit card debt, are often unsure where to turn for help. Being an Accredited Debt Relief provider is no longer good enough for consumers who are living in the age of Yelp and Amazon, where real customer feedback and reviews are easy to come by. We’ve found that these first hand experiences, from real customers, really make a big difference for consumers who are weighing their options and evaluating different companies.

While the majority of reviews are overwhelmingly positive and validate our program, we don’t turn a blind eye to opportunities for improvement. Any negative feedback received is used as a customer service opportunity and we follow up with our clients to better understand their situation and see what can be done to turn things around for them.

Read a Recent Review

To highlight the power of our online customer reviews, here is a recent review from Marissa in Pittsburgh, Pennsylvania via BestCompany.com:

“After doing some research and reading online reviews, I decided to reach out to Pacific Debt for help with my credit card and loan debt. I worked first with Rian to go over who they are as a company and how they were going to help. After being setup and starting their program, Kimberly B. became my account manager and main point of contact throughout this program. She’s awesome and keeps me in the loop regarding my account and settlement progress. It is easy to get in contact with anyone at Pacific Debt with questions or concerns. They understand your situation and answered any and all questions that I had.”

Read More of Our Reviews

For consumers interested in reading our online reviews, a compilation of our real client reviews can be found below:

What you're doing wrong with your debt

What You’re Doing Wrong With Your Debt

It’s likely that you only use credit cards to make everyday purchases. People don’t often carry around cash anymore simply because credit cards are more convenient. You might even have several cards for specific stores. You make payments here and there and wonder why all the sudden, you’re thousands of dollars in debt. $40 on gas + $100 on groceries + $5 on coffee + $15 on lunch during the week will definitely add up. I can also bet that you’re not just at the coffee shop or sandwich stand next door once a week. Then take that credit card debt and add it to your car payments, student loans and mortgage and you’re likely drowning in all the numbers next to that dollar sign. There are several ways to pay off your debt, but some methods are more effective than others. If several years have gone by and you’re still making payments on credit cards and loans, you’re probably doing something wrong.

Here are some of the common mistakes people make when paying off debt and how you can get out of that trap as soon as possible:

You don’t have a plan

It’s great that you are putting payments on your credit cards, but without a smart plan, you won’t really see your efforts pay off as much as they can. If you have several credit cards, it’s smart to make a list before you tackle them. Write down the credit card name, balance due, interest rate, minimum payment and due date. Some people have made the mistake of putting the minimum payment on all their cards or focusing on the credit card with the most balance. While this is a plan, it’s not the best one. Instead, focus on the card with the highest interest rate as that the one worth paying off first and the pay the minimum on the rest of your cards until you can solely focus on them. You’ll pay off your debt quicker in the long run when you’re paying off bigger amounts on a single card. Mainly focusing on one balance also makes your debt seem less overwhelming as opposed to throwing $50 here and there on multiple cards at the same time.

You’re missing payments

 

While you’re devising your plan, set up all your accounts to automatically pay by the due date. This will ensure that you’re not hit with late payments. If you know exactly how much will be coming out of your bank account and when, it’ll be easier to make sure you have the right amount of funds for that payment every time. You can even change the payment dates to work around your paychecks. Noting all of your debt information on paper or on a spreadsheet will help you see things in a bigger picture so you’re prepared every month. If you are charged with a late fee, call the credit card company and kindly ask if they will waive it for you. They’ll be more likely to reverse the fee if you tell them you’ll be setting your account to automatic payment, if this is your first late fee or if you’ve been a long time valued customer. It never hurts to ask.

You keep a balance on your cards to build credit

Keeping up your credit score should definitely not be a priority over paying off your debt and it’s likely that your good credit score got you into this debt in the first place. Carrying a balance on your card each month that you’re being charged interest for is actually ruining your credit. Pay off your debt now and stop worrying about hurting your credit score. There are several ways to boost your credit when it’s time, but for now, paying off these cards should be number one on your list. Also keep in mind that just because you have a high limit on your credit card doesn’t mean you should be maxing it out. A $15,000 credit limit does not equate to a shopping spree. In fact, you should be keeping your utilization rate low and your balance should not exceed 30% of your credit limit. For example, a card with a limit of $15,000 should never have more than a $4,500 balance. Doing this will definitely protect your score later.

You’re putting it off until you make more money

“When I make more money, I’ll pay this card off. When I make more money, I’ll clear all my debt. When I make more more money, life will be great.” Well when will that be? The time is now. The longer you procrastinate paying off your debt, the more debt you’ll be in. Simple as that. An emergency might come up. Your company might downsize. You might decide to pursue a different career and end up working a lower paying job until you learn the ropes. Who knows what can happen, but you don’t want to have all this debt acquiring on top of it all. Start paying off as much as you can starting now.

You don’t know your options

Stuck paying a high balance on loans you simply cannot afford right now? Got a balance with high interest rates? You have options and asking what they are is where you can start. If you’re paying off student loans and don’t make enough money to pay the monthly payments, don’t have a job as a recent graduate or recently got laid off, you can request a deferment or forbearance for a certain amount of time. Stopping payments on student loans for now can help you focus on your other debt. Refinance your car to reduce the amount you pay each month, reduce your interest rate and change the length of your loan. Also ask your credit card company if you can reduce the interest charge on your monthly payment. Some companies will grant this request if you’ve been a loyal customer who makes payments on time. It also helps if you have a good credit score or if it has recently improved. These companies want to keep you as a customer so simply request a lower interest rate and hope for the best.

You always give into your friends’ invitations

We’re not telling you to live like a hermit crab until you’ve zeroed out all your cards and loans, but you need to be smart about where you go out and how often. As much as you want to and as hard as it is to break bad habits, don’t accept every invitation your friends throw your way. Lunch here, coffee there, brunch on weekends and happy hour during the game can cost you hundreds of dollars a month when you add it all up. Plan accordingly, choose the events and be ready to decline if it’s something you can’t afford to do. Only try going out to celebrate your friends’ special occasions like birthdays and anniversaries and avoid the random “Wanna grab a drink?” invites. If your colleagues always go out for lunch on Fridays and you don’t want to miss out, vow to eat a packed lunch for the rest of the week and choose an affordable option on the menu. If you’re invited to watch the game at a bar during happy hour, eat at home first and you won’t be tempted to order something at the restaurant. You also don’t need to order a drink to enjoy the game. Be smart and disciplined (almost like you’re on a diet). When you’re on a diet, you watch what you eat, you create a meal plan, resist temptation and create incentives when you achieve your goals, like if you lose 10 lbs. in 2 months, you’ll buy new workout shoes. When you’re on a spending diet, you need to decide what’s a necessity and what’s a splurge. Create incentives the same way and treat yourself without breaking the bank. For example, for every $1,000 you pay off, reward yourself with a Netflix binge, a drive to the beach, a homemade pancake breakfast or a lazy day to sleep in and do absolutely nothing. Having a reward system for your goal to pay off debt can help you achieve it faster.

It’s not a priority

Having large amounts of debt can be extremely detrimental to many factors in your life. It can affect you buying a house, buying a car, going on vacations, changing your career, opening up a business or going to grad school. It can even cost you landing your dream job as a larger percent of employers check your credit along with running a background check. According to a 2012 study from the Society for Human Resource Management, 47% of U.S. companies conduct credit checks and if they see that you have poor credit history, have missed payments, filed bankruptcy or have large amounts of debt, it could cost you the job.

Your life will benefit greatly when you learn how to manage your money, pay off cards in full and on time, and experience what it’s like to live debt-free. It’ll feel like a huge weight has been lifted off your shoulders and you could be a lot closer to it than you think. Just make paying off debt a priority, cut out the bad habits that are costing you money, make a plan, find out your options and be disciplined. This can be hard, but it can be done. You just have to start somewhere. Don’t let debt run your life and the sooner you start paying if off, the sooner you can start living your life to the fullest.

Top 5 causes of debt

Top 5 Causes of Debt & How To Fix Them

They say it’s smart to have between 3-6 months worth of expenses saved up incase of an emergency. To give you an idea, if your monthly expenses round up to $5,000, there should be $30,000 sitting your saving account right now. But in this age of consumerism, people are likely swimming in debt instead of in a comfortable amount of hundred dollar bills. As of May 2016, 38.1% of all households carry some sort of credit card debt and according to the most recent survey from the U.S. Federal Reserve, the average credit card debt of U.S. households is about $5,700. That’s a lot of money to be sitting on credit cards that likely comes with an interest rate that will boost that debt even higher.

Sometimes, debt is accumulated from massive charges that are typically unexpected such as a medical emergency, a broken car or a divorce, but usually, debt is accrued over a longer period of time by charging common expenses like gas and groceries. These “small” charges here and there look unthreatening at first, but then it spirals out of control where you end up only paying the minimum balance each month, leaving you with more interest to pay in the future.

Here are the top 5 causes of debt and some suggestions for how you can get address the problem.

1. Divorce

The leading cause of arguments among couples revolves around money more than any other causes of typical domestic disputes. It’s likely that one or both parties had accrued debt prior to getting married and “what’s yours is mine” unfortunately applies to the bills too. Although it’s recommended to discuss money and spending habits before tying the knot, if couples don’t create a reasonable plan to paying off debt and spending money, it will lead to marital strife that can turn into divorce. The average percent of divorce in the United States is between 40-50% and the cost of getting divorced is $15,000-$20,000. Also going from a two-income household back to one can take a significant toll on your bank account.

2. Unemployment & Underemployment

No one expects to lose their job and it never comes at a good time. Unless you have the recommended 6 months worth of expenses stored in your savings account, you’re going to accrue a lot of debt sooner than later just to pay off your current bills and it’s possible that it’ll take longer than 6 months to get another job. There’s also the unfortunate occurrence of taking a pay cut when having to suddenly work part-time either due to having a child, a medical issue, or getting fewer shifts at work. We’re creatures of habit, so although our employment status might have changed, it’s very likely that our spending habits haven’t. People are typically spending more than they earn and recent studies have shown that although income is decreasing, the rate of spending is still climbing up, which leads to the next reason for debt.

3. Poor Money Management

Related to financial illiteracy, not many people have a good grasp of managing the money they earn likely because they were never taught the simple rules of spending and saving growing up. These people rely on credit cards for expenses and the idea of instant gratification is a major factor. It’s so appealing for us to buy something and have it now, but pay for it later. If you don’t pay off your credit card balance in full, you’ll end up paying a good chunk of it in interests. Most credit cards today have an interest rate ranging between 15-20%, making anything you buy cost a whole lot more than what you paid for. This also ties in with impulse spending and making poor financial decisions. Having a monthly game plan to tackle your common expenses will keep you from spending more than you make. It’ll also be a good idea to educate yourself on the rules of the bank, loans and credit cards to see if you can reduce your fees, avoid late charges and have 0% APR for a set period of time.

4. Minimum Payment Trap

So you racked up a credit card and can’t pay the full balance. You know you have to pay something on it so you set up your account to automatically pay the minimum every month and brush it off, feeling assured that payments are being made. Months later, you check your account and wonder why you still owe so much. Well, that’s interest for you! Here’s an example to give you an idea: If you owe $10,000 on a credit card and pay a minimum of $250 per month and your interest is 15%, you’re going to be paying $3,950 in interest in the 56 months it’ll take you to pay it off. That $10,000 easily turns into nearly $14,000 before you know it. If your interest rate is 20%, that payment towards interest becomes $6,617 and it’ll take you 67 months to pay it all off! That’s over 5 years of your life spent paying off this credit card while you’re stuck paying off your typical expenses too, such as food, gas, rent or mortgage and a car. Bottom line is that you should always pay the balance in full, but if you can’t, pay as much as you can as fast as you can.

5. Military Status

A recent study revealed that members of the military accrue debt at a higher rate than civilians and there are a number of reasons why. First of all, military members may be receiving a steady paycheck but it isn’t large enough to support their means, especially if they’re supporting a family, making them resort to credit cards to compensate. Next, frequently moving can add to the debt if an active military personnel is forced to sell their home and they can’t get an immediate buyer. They end up paying two mortgages until they receive an offer on their old home. It may also be difficult for the spouse to find a good-paying job right away during relocation. And finally, when military members find themselves in debt, they end up staying in debt because they don’t want their superiors finding out. They don’t seek out help due to their fear of losing their security clearance, ruining their chances of a career advancement or being discharged. This just makes their debt continually increase.

If you’re currently in one of these situations, there are a number of routes to take to reduce your debt, but the first step should be to come up with a spending plan and stick to it. Review your spending habits and see where you can cut down. Your daily cup of Joe at the local coffee shop can definitely add up in the bills. Pay your balances in full as often as you can and use cash if you’ve got it. People tend to spend less when they only use real money to pay. And most importantly, if you’re married, make sure you keep all lines of communication open and ask for help if you need it. In a perfect world, both parties of the couple will be savers but that’s an unlikely story. If you’re the spender, it might be a good idea to have your spouse manage the money until you’ve got a good grasp on saving more money each month.

If you feel like you’ve tried it all on your own and need professional help, one of our professional and friendly counselors here at Pacific Debt can talk you through your options. Our consultations are free and it’s our goal to get you out of debt for less than you currently owe.

How to get out of your debt quickly

How do I get out of debt quickly without hurting my credit?

Each day our enrollment counselors at Pacific Debt are posed with this question: “How do I get out of debt quickly without hurting my credit?” The answer, unfortunately for most, is that there is no easy way out, and depending on the option you select, as well as your prior payment history, your credit may be impacted. The reality is that it took a long time to accumulate the debt in most cases, and it generally takes even longer to dig yourself out, due to the interest and fees charged by credit issuers.

One of the fastest ways to get yourself out of debt, is to enroll in a debt settlement program, which is an alternative to bankruptcy. For those struggling with over $10,000 in unsecured debt, it can be a turning point in their financial lives and put them on a path to a debt free future. Unfortunately, many individuals and families don’t get the financial relief they need because they are paralyzed by the fear of their credit score dropping. This relates back to the original question posed in this post, which is that most consumers are looking for a solution that is “quick” but that will also not “hurt their credit”.

For the record, your credit score is important. Individuals with a FICO score of 720 or higher generally can borrow money at the lowest rates available, meaning car loans, mortgages and credit cards will carry lower rates of interest. If you own a television or surf the web, you have been exposed to countless advertisements and financial gurus all espousing the virtues of a high credit score. The fact is, credit is important.

However, I would argue that for most individuals struggling with excessive unsecured debt, their low credit score is not what keeps them up at night. Nor is their credit score what prompted them to call us for help.

No, just about everyone that picks up the phone to call Pacific Debt for the first time is concerned with their actual debt. Clients often have a combination of credit cards, high interest personal loans and payday loans. We often hear stories of clients borrowing from one creditor to pay another. For some, this is a cycle that they have been trapped in for years, possibly decades. Many of the people we consult with are excellent candidates for debt settlement; however, many still opt to not get the help – even when the problem involves over $40,000 in credit card debt. The primary reason cited for not proceeding is “affect on credit”.

For those of you who are stuck on the fence with your decision, here are three points to consider when weighing your DEBT versus YOUR CREDIT:

  1. How much is your “good credit” costing you? The reality is, your good credit is probably what enabled you to accumulate the debt in the first place. Now, consider how much interest you are paying each month. Are you making any progress on the debt? If you are paying $400 per month in interest and seeing little to no progress, that translates to $4800 per year, $19,200 over four years, and you will STILL likely be in debt! If the above situation resembles your own, it’s clear to see that maintaining your “good” credit is a cost that you simply cannot afford. Alternatively, if you choose to stop throwing away your money, you could be DEBT FREE in as little as 3-4 years. Upon completing Pacific Debt’s program, that $400 per month could then be used to fund a retirement account, college savings or down payment on new home or car.
  2. Have you had any recent late payments? Are you close to being maxed out on your cards? Do you have collection accounts? If you have answered “yes” to any of these, your credit score probably isn’t as good as you think it is. Pacific Debt has a relationship with Experian and can actually run your credit and pull your score for free to let you know where you stand. Once your debt is resolved, you can then begin focusing on improving your credit score by borrowing and using credit wisely.
  3. If you are struggling with debt, the last thing you probably need is MORE debt! The primary reason people maintain good credit is so that they can borrow money at favorable interest rates. While enrolled in a debt settlement program, your score will be negatively affected and you should avoid borrowing more money. Like all things, time heals all wounds and your score will improve through proper credit management. With that said, one of the many benefits to debt settlement is that our clients learn to live without relying on credit. Upon completing their programs, our clients have spent two to fours years budgeting and managing their finances without depending on credit cards to finance their monthly expenses. As a result, our clients have learned new financial behaviors to avoid falling into the debt trap in the future.

As with all decisions concerning your finances, it’s important to weigh all of your options. One of our professional staff members would be happy to complete a thorough budget analysis with you, and review your debt situation. Based on this information, we are happy to review your options and help you to decide if debt settlement is right for you. Please call us directly at 1-877-722-3328 for a free, no obligation consultation.

Get out of your debt by saving money every month

5 Ways to Save Money Every Month

Most people spend far more than they need to on things that don’t actually make any noticeable difference to their quality of life. Of course, there are obvious ways to start saving, such as eating out less, spending less on your hobbies and going on fewer vacations, but not everyone wants to sacrifice the things that they love most in order to start saving a bit of money for the future. Provided that you are not in a desperate state of debt already, now is a great time to start putting some money aside by cutting your monthly outgoings without having to lower your standard of living. Following are five money-saving considerations that you might be overlooking:

1 – Change Your Utility Providers

Things like heating, electricity, water, city tax and various other bills are things that everyone has to pay, but most people also pay more than they need to for the exact same services. Given that most utility industries are so competitive, it shouldn’t come as any surprise that there are many other options out there, some of which may be much more attractive to you. Thanks to price comparison websites, it only takes a matter of minutes to find out how much you could be saving by switching to a new utility company. However, don’t be attracted only by a short-term deal, and instead think of the longer term saving possibilities when choosing a new utility company.

2 – Change Your Phone Provider or Plan

Many people pay far more than they need to for their mobile phones, and consumers are often fooled by the lure of expensive new phones offered for free in return for an overpriced contract that is difficult to get out of. However, being another competitive industry, the cost of mobile calls, text messages and even mobile Internet, has dropped drastically in recent years, so there’s no need to be paying more than absolutely necessary. Unless you are a heavy mobile user, you will likely find it preferable to go for a prepaid plan so that you are not bound by any contracts or likely to fall victim to any surprise bills.

3 – Stop Paying Interest

Unless they are in the process of being paid off, most debts continue to cost you money in interest to the extent that the monthly payments can put a huge dent in your income. Irresponsible use of credit cards, overdraft, loans and other lines of credit can quickly lead to you spiraling deeper into debt. To avoid paying interest, pay off your debts as soon as possible, but if your income is not great enough to pay them off within a few months, you may want to consider consolidating your debts and transferring them to an interest-free balance transfer credit card or debt consolidation loan. This way, you’ll have to pay a one-time fee (on the balance transfer card), after which you’ll have a certain amount of time (typically six to 36 months) to pay off the debt without paying any more interest.

4 – Buy in Bulk

Buying in bulk, whether shopping for groceries, stationary, cleaning products or anything else that you use on a daily basis, is invariably cheaper than any other option. However, many people are put off spending a large amount of money in one hit, failing to take into account the long-term savings in the process. Instead, consider doing your grocery shopping at a discount supermarket, Costco, or other such venues that primarily cater to businesses seeking wholesale prices. You might need a membership card, but they are usually not difficult to get, and you can often borrow one from a friend without any problem. Saving money by buying in bulk also applies to things like subscriptions, whereby you can purchase things like computer software and prepaid mobile cards that will last you for a year or more.

5 – Change Your Banking Habits

Many people spend more than they need to on their day-to-day banking, either in overdraft interest fees, withdrawal fees, poor exchange rates abroad, money transfer fees or even monthly fees just to keep the account open. Your requirements will vary depending on your lifestyle and your priorities, but there are some tips that apply across the broad. For a start, if you use a credit card, make sure you only use it for emergencies, and be sure to pay the bill off in full every month so that you avoid paying interest. You should also consider opening a savings account if you don’t have one already, since you’ll be able to earn a small amount of interest on what you save, and it’s always wise to set aside some money for a rainy day. As is the case with just about anything else, you can compare bank accounts and other financial services online until you find something that better suits your particular requirements.

Saving money and getting control over your financial affairs is more about making a few changes to your spending habits rather than sacrificing the things you love. By taking time to more closely examine your outgoings, you could be surprised by just how much extra cash you can put aside each month.

Erase credit card debt forever

“Erasing” Credit Card Debt

Since the great recession of 2008 many of us have had to rely on credit cards and other forms of unsecured debt just to get by. The heavy burden of too much debt can be overwhelming. Although it may seem that debt is a mountain too high to scale, it can be overcome. By following a few simple rules anyone can “erase” credit card debt forever.

The first step on the road to debt freedom is to reduce one’s consumption by evaluating and changing your spending habits. It is a concept that is almost too obvious. Many people get into debt because they spend what they do not have. Of course, there are many people who make less than their bills add up to. So how can these people reduce their expenses? The obvious answer is to find a way to lower the amount of money you owe every month by cutting expenses down to the bare necessities, or by finding a way to supplement your income.

Most of the time, it is not because bills are higher than income that cause people to start relying on credit cards. Most of the time, people simply cannot seem to wait for that big ticket item which they want so badly. It may be a television, a computer, a gaming system. The truth is, most people who find themselves in credit card debt are not using their cards to cover their bills. So to come full circle, it’s imperative to stop spending money on the things you want, and instead only leverage a line of credit out of necessity.

The second step is to pay more than the minimum monthly payments, which are designed to keep the cardholder in debt for as long as possible so that the balance can keep accruing interest. Three years is a long time to wait to pay off a small sum like $300. There are credit card calculators online which can be used to figure out exactly how long it will take to pay off the card if the minimum due is paid each month. They also show how much is ultimately spent on paying off the card.

A good rule of thumb is to pay as much as possible each month. If bills are cut to the bare minimum and paying off the card is set as a top priority, it will be easier to pay the card off quickly. The faster a card is paid off, the less interest is accrued. This is true with all interest related debts such as mortgages and car payments as well. Once the card is paid off, a person can still use the card responsibly on occasion. In fact, some credit card companies will charge a fee if the card is not used unless the account is closed. The best way to continue to use the card without going further into debt is to make sure that any items bought with the card are in the budget and the statement balance is paid in full. Any rewards that are offered for use of the card can be taken advantage of this way without falling back into debt. The card may also be used in emergencies provided the debt is paid off quickly.

The last thing to remember about credit card debt is to make payments on time and never exceed the limit. Falling behind or exceeding the limit on a card will normally trigger huge increases in the APR. The default rate may be as high as 29.9%. To make matters worse, there are often fees for both and it is easy to keep maxing out the card if one keeps spending after each payment.

If you’ve already tried pushing yourself to do the things mentioned above and are still struggling with your debt, it may be a good idea for your to speak with a debt relief professional about your options. If you’re interested in how Pacific Debt can help you, please review the details on our debt reduction program.

Check your credit card report regularly

Why you need to check your credit report regularly

If you are in the market for a new home or a car loan, chances are you have already checked your credit report and credit score. You know how important good credit is to getting the lowest rate on those loans, but do you realize how important a good credit score is to other aspects of your life?

The truth is it is important to keep regular tabs on your credit history and credit score, even if you are not in the market for a new home or car. There are a number of reasons why checking your credit report should be a regular part of your financial life.


Good Credit Can Lower Your Car Insurance Rates

You may think that your car insurance rate is only influenced by your driving records and how many claims you have filed, but that is not necessarily the case. Many car insurance companies also look at the credit profile of drivers before setting their premium rates.

If you are shopping for a new car insurance policy, it is a good idea to pull your credit report first. A mistake on your credit report could results in higher premiums and wasted money.

You Can Recognize Identity Theft Before it Can Hurt You

Identity theft is a growing problem, and the results can be quite serious. Falling victim to an identity thief could leave you thousands of dollars in debt – and cost you thousands more as you try to clear your name and regain your reputation.

A careful review of your credit profile is one of the best defenses against identity theft. If someone is opening accounts in your name or taking out loans, that information will show up first on your credit report. Notifying the credit reporting agency – and the police – of any unauthorized activity is the best way to nip identity theft in the bud.

Bad Credit Could Cost You Your Dream Job

You already know that the local mortgage lender will check your credit report carefully, but what about your future boss? Many companies routinely screen the credit reports and credit scores of job seekers – and what they find could cost you the job.

Be sure to check your credit report carefully before you enter the job market. Check for any potential errors that could lower your credit score and cause a potential employer to look unfavorably at your job application.

As you can see, your credit report affects much more than your ability to get a loan. Knowing how your credit report is used, and how to check it, can help you fight identity theft, save money on car insurance or even land a great new job.

If you haven’t already done so, be sure to pull a free credit report over at annualcreditreport.com.

Three Things You Absolutely MUST Know About Credit Card Debt

Legislation has tightened the rules that creditors have to play by in recent years. However, even with these new laws on the books, debt collectors still regularly exploit consumers who don’t know their rights. If you’re carrying credit card debt, it’s important to know what the rules are regarding credit bureau reporting, interest and collections practices.

1) Debts Older Than Seven And A Half Years Should Not Be On Your Credit Report

Under the Fair Credit Reporting Act, an account that has been charged off can only appear on a consumer’s credit report for seven years and 180 days from the original date of delinquency.

The original date of delinquency is the date that the first payment became overdue directly priorThree things about Credit Card Debt to the account being closed. For example, if someone had credit card payments due on the first of each month, and missed their February payment and all subsequent payments until the card was closed, Feb. 1 of that year would be the original date of delinquency. If they missed their payment on Feb. 1, but then later brought the account back into good standing, Feb. 1 would not count as the date of original delinquency. In other words, it’s the date of the first missed payment that started the chain of missed payments that eventually led to account closure.

In the past, the date could be changed when one collections agency sold the debt to another. This is no longer legal, but some of the shadier collections agencies still try to get away with “re-aging” the debt by simply reporting incorrect dates to the credit bureaus and hoping the consumer doesn’t notice or isn’t aware of their rights. A debt can be re-aged legally only if the consumer agrees in writing with the current debt holder to make payments on the account.

The date of original delinquency should be listed on credit reports under a “tradeline” bearing the original creditor’s name; sometimes, however, these don’t appear. If the original tradeline isn’t available on one credit report, check the other two for it. If it isn’t on any of your credit reports, you’ll need to dig up your old statements from the credit card company to determine the true date of original delinquency. If you don’t have these, you can usually get them from the original creditor without any trouble, though they may charge a fee for them.

If you’ve been a victim of re-aging, you should first contact the current debt holder and inform them that they are reporting an incorrect date of original delinquency in violation of FCRA Section 605. If they do not voluntarily change the date, the next step is to report them to the FTC using the “Complaint Assistant” tool at their website. You can also contact each of the credit bureaus directly about changing the entry, though this method is less sure. You’ll have the best chances of getting through to them if you hand-write a polite letter with any supporting documentation that is necessary.

One important thing to note is that debts aren’t cancelled after seven years, they simply can’t be reported to the credit bureaus any longer. Owners of the debt may still attempt to collect it from you by contacting you directly.

2) There Are Legal Limits On Interest That Can Be Collected

The original creditor is allowed to continue collecting interest and late fees that were specified in the original contract until they charge the debt off and sell it to someone else. From there, the law gets a lot more complicated and fuzzy. The Fair Debt Collection Practices Act limits debt buyers to collecting interest and fees that were specified by the original contract, in essence putting them in the shoes of the original creditor.

Some debt collectors go above and beyond, of course. As with illegal re-aging, they’re hoping the consumer doesn’t know their rights or challenge them on it. State law comes into play here. legal limits of debt collection practicesEach state has its own statute of limitations on how long a debt collector has to sue a debtor, usually four or five years. The state where the debt originated is the one that matters for this time limit — it doesn’t matter if a collection agency in a different state purchases it. Once that statute of limitations is up, the debt collector has no legal recourse whatsoever to collect on the debt. All they can do is pester the debtor with letters and phone calls in the hopes that they’ll capitulate. State law may allow them to continue adding interest at this point, but they have no means of collecting on that amount unless you agree to pay them.

When debts are sold, they are sometimes only sold with the name and last known contact information of the debtor. If the original contract was lost at some point while the debt was changing hands, the debt holder no longer has any legal basis on which to charge interest or fees.

Collections agencies will often present a staggering amount of interest and fees to the debtor in the hopes of convincing them to “settle” for a substantial reduction. But the reason they’re always so willing to settle is that they originally purchased the debt for much less than its actual value, and they know that if they’re taken to court over it, they’ll likely have a hard time justifying the extra amount they’ve tacked on.

3) Many Common Collections Practices Are Illegal

The Fair Debt Collection Practices Act lays out a set of rules regarding what debt collectors can and can’t do. Of course, some will take calculated risks in violating these laws, with the expectation that the relative few consumers who catch them in their wrongdoing and get them fined will be outweighed by the many they can intimidate and harass into paying.

A debt collector isn’t allowed to contact third parties about your debt. They can only communicate with the original creditor, the credit bureaus, and an attorney that yolimitations of common debt collection practicesu specify. They are given more freedom to contact other people solely for the purpose of determining your whereabouts, but they can only contact each third party once and cannot reveal that they are collecting on a debt.

If a collector has gotten hold of your phone number, there are limitations on when they can call you. Calls earlier than 8 a.m. and later than 9 p.m. are forbidden. If you can demonstrate that you work a late shift and sleep during the day, you can also prevent them from calling during that time. They are allowed to contact you at work, unless your workplace has a policy preventing personal calls or collections calls. If you have appointed an attorney to represent you and they have the attorney’s contact information, they may no longer contact you directly.

Collectors may never use threats, insults or obscenity in any communication with you. They are also not allowed to publicize your debt in any way. They are allowed to verify your name when you pick up the phone, but then must immediately identify themselves as a debt collector. As with re-aging, complaints about violations can be directed to the FTC through their online “Complaint Assistant” tool.

Debt collectors will continue to skirt rules as long as they think it’s profitable and not too risky for them. The only answer is consumer vigilance. At a minimum, everyone should take advantage of their free annual credit reports to ensure that the information in them is accurate.

The Dollars and Cents of Bad Habits

frustrated with credit card billsYou know all of the compelling health reasons to quit smoking, drinking, or overeating, but somehow always manage to put it off “until next month” or “after the holidays.” In fact, if you’re like most people, you always have a reason to postpone taking a positive step toward improving your health. Instead of procrastinating, why not take a dollars and cents approach to cutting back? You’ll see immediate financial rewards which can be more motivating than you may think. By looking at your bad habits from a financial viewpoint, you’ll soon have more money in the bank – and improved health!

First, take an honest look at your bad habits. Whether it’s smoking, drinking, overeating, impulse buying, or anything else that adversely affects any part of your life, honestly appraise the behavior. Take a piece of paper and quantify the cost of the bad habit in terms of dollars and cents as well as its impact on your life.

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For example, if you drink two cases worth of beer per week at $18 per case, you’ll have several considerations including cost ($144 per month and $1872 per year), weight gain, family problems, and other alcohol-related concerns such as driving restrictions, long term liver damage, and even hangovers. By giving up your beer habit, you’d save nearly $2000 per year, with an immediate payoff of $144 in your pocket within the first month. In addition, in this example, you could even lose about a pound and a half per week without dieting or starting an exercise regime. That’s assuming an average of 100 calories per beer. Less drinking also means less conflict and improved health.

No matter which habit you’re trying to kick, look at the financial costs involved as a motivating factor. You’ll be surprised at how quickly those $5 daily lattes and $12 restaurant lunches add up. For instance, if you drink a $5 latte each day at work, you spend $25 per week, $100 per month, and $1300 per year on this indulgence. Likewise, if you eat out during the workweek and spend about $12 each time, you spend $60 per week, $240 per month, and $3120 per year on calorie-heavy lunches.

These are just the obvious costs. Smokers pay for cigarettes but are also charged higher insurance premiums. In addition, when it’s time to sell a car or house, smokers may have to pay to have their cars professionally detailed or replace carpets and draperies in the home where non-smokers may not.

Once you’ve calculated the cost of your habits, prioritize them and determine which ones may need professional help to kick. Many social drinkers can stop drinking on their own while others may need counseling, rehab, support, or some other form of intervention. Don’t be afraid to seek the help you need, even if it may cost you money upfront. In addition, don’t let the enormity of the problem stop you from taking positive steps right now to get back in control. Taking small steps forward will eventually get you where you want to be while doing nothing does absolutely nothing.

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Next, commit to kicking your habit one month at a time. It’s commonly cited that it takes about
27 days to break a habit, or just under one month. If you have several costly habits, don’t try to
kick them all at once. Pick one to start with. Once you’ve successfully gone an entire month and feel as though the habit is in the past, move on to the next one.

Let’s say that you want to give up your $5 lattes on month one and then cut back on your alcohol consumption on month two. Buy a calendar and a set of beautiful stickers and use them to track your progress. Write your monthly goal across the top of the calendar in large bold text so that you see it every day. This written reminder will help reinforce the habit that you are attempting to break while holding you accountable at the same time. Post the calendar in a prominent place where others can see it, too. This shows others what you are accomplishing and may even encourage support or inspire others.

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While you’re at it, write yourself a check for the amount of money you would have spent or put that money in a piggy bank. By the end of the first 27 days, you may not even realize that it’s time to go out for coffee as your habit could very well be in your past!

Don’t let a relapse get you down or derail your efforts. If you break down one day, consider it a mistake and move on, making sure not to relapse on the next day. If you find yourself falling back too often, consider professional help, especially if you’re addicted to nicotine, alcohol, or drugs.

At the end of the first month, total up your savings and congratulate yourself on a job well done. Your job is not over yet as this is a month-to-month bad habit cutting plan. Continue with your first bad habit and move on to the next one.

If you stick with this dollars and cents approach, you’ll find that kicking your bad habits makes financial sense. Best of all, you’ll find that this strategy yields many dividends including better health and improved relationships.

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