Financial

Let’s face it: No one gets a credit card with the goal of making minimum monthly payments until the card is “maxed” out. Nonetheless, that word is ironically attached to many borrowers’ cards after they spend years buying things they can’t afford while making the smallest payments possible. The word “maxed,” which is slang for maximum or maximized, means “to make the most of or make the best use of.” Ironically, if your credit card is “maxed,” and you make only the minimum monthly payments, you are definitely not making the best use of your plastic. Consumers in this situation pay millions of dollars in interest every year.

On the other hand, it’s impossible to deny the advantages of using a credit card, especially when issues of consumer insurance, e-commerce, online banking, convenience, theft protection, and building good credit come into the picture. There is no doubt that when handled properly, plastic can make life a cashless breeze.

Set spending limits. Figure out how much money you can afford to pay on credit card debt at the end of each month and do not exceed this amount. If you can’t pay your purchases off at the end of the month, consider not buying them.

Treat your credit card balance like rent; it has to be paid if full. If you didn’t have enough money for rent, would you send your landlord 2% of what you owed and tell him to charge you 18% interest on the rest? The answer is probably no, and while carrying a balance is not as crucial as having a roof over your head, it does require you to pay interest on everything you purchase with that card. Carrying a balance doesn’t hurt your credit rating either, but for most credit cards, if you pay off all debt every month, you’ll never have to pay a penny in interest.

Shop online. Because you can’t touch, smell, hear, or feel your product while shopping online, you are less likely to impulse buy. Furthermore, it’s much easier to comparison shop and keep a running tally of what you’re spending when online.

Keep the spending down to one card. Having one credit card bill allows you to track your purchases more efficiently and it’s always easier to write one check rather than three. If you can’t fit everything on one card, chances are you’re spending too much.

Watch your statement for inaccuracies or fraudulent activity. If you are working hard at paying off all debt at the end of each month, the last thing you want to be doing is paying for mistakes or someone else’s charges. Record your charges every month and when your statement arrives, check your records against your activities for any inaccuracies or fraudulent activity.

Choose the right cards for your spending habits. If you tend to carry a balance each month, you will want a card with a fixed low interest rate. If you frequently buy valuable electronic or computer equipment, cards that offer extra warranty protection may be of interest to you. If you travel a lot, you will like offers with traveler’s accident insurance and frequent flyer miles, etc. Different cards offer different options; make sure you choose the one that suits you best.

If you have trouble making yourself pay off all of your debt every month, use a debit card, an American Express or a similar card that requires the full balance to be paid each month. You may have to pay high annual fees, but that will almost always be less than interest payments on hefty balances.

There is no doubt that credit cards are a handy tool for the average consumer. They make your life easier, keep your money safer, and help you establish credit. But when you continually maintain large balances month after month, you begin paying interest that often adds up to more than the original purchase. By following the simple steps listed above, you just might get the most out of your credit cards, instead of them getting the most out of you.

Is it wrong for a Christian to consolidate debt by using a consolidation loan? The answer is no, not necessarily. But there are some inherent problems that must be dealt with before a consolidation loan is advisable. AlphaServices believes that consolidation loans can make sense, but never as a first step in resolving debt problems.

Consolidation loans are designed to help people pay off bills and pay down debt. A typical consolidation loan requires security or a co-signer. If a person is consolidating an unsecured loan, this means that that they are exchanging unsecured debt for secured debt.

Although consolidation loans are usually simple interest loans (interest calculated on an annual basis) with typical interest often ranging from 22 to 24 percent or more, that is often less than the cumulated finance charges of the debts that are being consolidated, which are usually based on compounded interest (interest on the interest that accumulates daily). In addition, most consolidation loans offer lower monthly payments spread out over a longer period of time.

A consolidation loan can be a smart idea;if the person consolidating does not borrow more than what is actually needed to pay the outstanding bills.

For those who already have discipline problems, borrowing more than what is needed could easily become just one more way to splurge. Therefore, if a consumer does decide to consolidate, it is imperative that they not take on any more debt.

What tends to happen to most that obtain consolidation loans is that by paying off their bills, they no longer receive large monthly bills from retailers and credit card companies. They then begin to feel like they do not owe as much money as they did before, and have a tendency to stop worrying once the supposed solution has been found. Therefore, they start to use one or two credit cards, and before long owe several hundred dollars in addition to their consolidation loan. However, they must resist the urge to splurge.

Unless the problems that created the need for a consolidation loan (usually overspending) are corrected, they should not consider obtaining a consolidation loan. Otherwise a year or so later all the little bills will be back again, and when they are combined with the consolidation loan, the situation will be worse than it was before the consolidation loan.

AlphaServices believes that no one should consider a consolidation loan until they have been living for six months on a budget that controls spending. During that six months, he encourages the five following steps to eliminate as much debt as possible. If these steps are faithfully executed, a consolidation loan may not be necessary.

Allow no more debt, including bank and personal loans, and cut-up the credit cards if unable to pay them off each month (Proverbs 24:3).

Start retiring the debt (Psalms 37:21, Proverbs 3:27-28), beginning with the high interest debt first. If all of them are high interest, pay the one with the smallest balance, first. Once the smallest is paid off, put all the money on the next, and so on.

Generally speaking, if these steps are followed, the average family will be debt free in less than five years and the problem that caused the debt in the first place could very well have been corrected. Then once the overspending has been brought under control and if there is still unmanageable debt, it may make sense to substitute one large loan in a reduced interest rate for several smaller ones at higher rates.

The most common method of consolidating is through home equity loans. At first glance, it does appear to make sense to consolidate higher interest debts into one lower interest rate loan (especially if a fixed rate is offered and not a floating rate), by using home equity as collateral. However, AlphaServices believes that home equity loans are one of the worst ideas ever pushed on the average family. It encourages them to put their homes in jeopardy and borrow to buy things that they can easily do without, such as cars, or to pay off things that were primarily originally purchased through overspending.

In addition, one of the primary disadvantages of using a home as collateral for an equity or consolidation loan is that most home equity consolidation loans are demand loans. This means that the bank or lending institution has the right to "call" the loan due at anytime. If a borrower is not able to pay the total amount at the time of the "demand," foreclosure proceedings can be implemented without further notice.

If a person feels that they have resolved their overspending problem and still feels that they need to consider a consolidation loan, there are several places AlphaServices would suggest to obtain a consolidation loan other than a home equity loan:

Consolidation loans can at times be beneficial. However, the key to success with a consolidation loan is discipline. Once someone has consolidated their debts, they must maintain the discipline it takes to stop spending with credit. If they can not, they will often end up in deeper debt than before.


	AlphaServices Online \| home Computers \| Financial \| Publishing Financial Credit Cards - Are they for you? Let’s face it: No one gets a credit card with the goal of making minimum monthly payments until the card is “maxed” out. Nonetheless, that word is ironically attached to many borrowers’ cards after they spend years buying things they can’t afford while making the smallest payments possible. The word “maxed,” which is slang for maximum or maximized, means “to make the most of or make the best use of.” Ironically, if your credit card is “maxed,” and you make only the minimum monthly payments, you are definitely not making the best use of your plastic. Consumers in this situation pay millions of dollars in interest every year. On the other hand, it’s impossible to deny the advantages of using a credit card, especially when issues of consumer insurance, e-commerce, online banking, convenience, theft protection, and building good credit come into the picture. There is no doubt that when handled properly, plastic can make life a cashless breeze. So how can you really “make the most of” your credit cards without slipping into interest-accumulating debt? Set spending limits. Figure out how much money you can afford to pay on credit card debt at the end of each month and do not exceed this amount. If you can’t pay your purchases off at the end of the month, consider not buying them. Treat your credit card balance like rent; it has to be paid if full. If you didn’t have enough money for rent, would you send your landlord 2% of what you owed and tell him to charge you 18% interest on the rest? The answer is probably no, and while carrying a balance is not as crucial as having a roof over your head, it does require you to pay interest on everything you purchase with that card. Carrying a balance doesn’t hurt your credit rating either, but for most credit cards, if you pay off all debt every month, you’ll never have to pay a penny in interest. Shop online. Because you can’t touch, smell, hear, or feel your product while shopping online, you are less likely to impulse buy. Furthermore, it’s much easier to comparison shop and keep a running tally of what you’re spending when online. Keep the spending down to one card. Having one credit card bill allows you to track your purchases more efficiently and it’s always easier to write one check rather than three. If you can’t fit everything on one card, chances are you’re spending too much. Watch your statement for inaccuracies or fraudulent activity. If you are working hard at paying off all debt at the end of each month, the last thing you want to be doing is paying for mistakes or someone else’s charges. Record your charges every month and when your statement arrives, check your records against your activities for any inaccuracies or fraudulent activity. Choose the right cards for your spending habits. If you tend to carry a balance each month, you will want a card with a fixed low interest rate. If you frequently buy valuable electronic or computer equipment, cards that offer extra warranty protection may be of interest to you. If you travel a lot, you will like offers with traveler’s accident insurance and frequent flyer miles, etc. Different cards offer different options; make sure you choose the one that suits you best. If you have trouble making yourself pay off all of your debt every month, use a debit card, an American Express or a similar card that requires the full balance to be paid each month. You may have to pay high annual fees, but that will almost always be less than interest payments on hefty balances. There is no doubt that credit cards are a handy tool for the average consumer. They make your life easier, keep your money safer, and help you establish credit. But when you continually maintain large balances month after month, you begin paying interest that often adds up to more than the original purchase. By following the simple steps listed above, you just might get the most out of your credit cards, instead of them getting the most out of you. Consolidation Loans Is it wrong for a Christian to consolidate debt by using a consolidation loan? The answer is no, not necessarily. But there are some inherent problems that must be dealt with before a consolidation loan is advisable. AlphaServices believes that consolidation loans can make sense, but never as a first step in resolving debt problems. Consolidation loans are designed to help people pay off bills and pay down debt. A typical consolidation loan requires security or a co-signer. If a person is consolidating an unsecured loan, this means that that they are exchanging unsecured debt for secured debt. Although consolidation loans are usually simple interest loans (interest calculated on an annual basis) with typical interest often ranging from 22 to 24 percent or more, that is often less than the cumulated finance charges of the debts that are being consolidated, which are usually based on compounded interest (interest on the interest that accumulates daily). In addition, most consolidation loans offer lower monthly payments spread out over a longer period of time. A consolidation loan can be a smart idea;if the person consolidating does not borrow more than what is actually needed to pay the outstanding bills. For those who already have discipline problems, borrowing more than what is needed could easily become just one more way to splurge. Therefore, if a consumer does decide to consolidate, it is imperative that they not take on any more debt. Proceed with Caution! What tends to happen to most that obtain consolidation loans is that by paying off their bills, they no longer receive large monthly bills from retailers and credit card companies. They then begin to feel like they do not owe as much money as they did before, and have a tendency to stop worrying once the supposed solution has been found. Therefore, they start to use one or two credit cards, and before long owe several hundred dollars in addition to their consolidation loan. However, they must resist the urge to splurge. Unless the problems that created the need for a consolidation loan (usually overspending) are corrected, they should not consider obtaining a consolidation loan. Otherwise a year or so later all the little bills will be back again, and when they are combined with the consolidation loan, the situation will be worse than it was before the consolidation loan. Get on a Budget AlphaServices believes that no one should consider a consolidation loan until they have been living for six months on a budget that controls spending. During that six months, he encourages the five following steps to eliminate as much debt as possible. If these steps are faithfully executed, a consolidation loan may not be necessary. Transfer ownership of every possession to God (Psalms 8:6, Deuteronomy 5:32-33). Give the Lord His part, the tithe, from your gross salary, first (Malachi 3:10, Proverbs 3:9-10). Allow no more debt, including bank and personal loans, and cut-up the credit cards if unable to pay them off each month (Proverbs 24:3). Develop a realistic balanced budget that will allow every creditor to receive as much as possible (Proverbs 16:9). Start retiring the debt (Psalms 37:21, Proverbs 3:27-28), beginning with the high interest debt first. If all of them are high interest, pay the one with the smallest balance, first. Once the smallest is paid off, put all the money on the next, and so on. Generally speaking, if these steps are followed, the average family will be debt free in less than five years and the problem that caused the debt in the first place could very well have been corrected. Then once the overspending has been brought under control and if there is still unmanageable debt, it may make sense to substitute one large loan in a reduced interest rate for several smaller ones at higher rates. Home Equity Loans? The most common method of consolidating is through home equity loans. At first glance, it does appear to make sense to consolidate higher interest debts into one lower interest rate loan (especially if a fixed rate is offered and not a floating rate), by using home equity as collateral. However, AlphaServices believes that home equity loans are one of the worst ideas ever pushed on the average family. It encourages them to put their homes in jeopardy and borrow to buy things that they can easily do without, such as cars, or to pay off things that were primarily originally purchased through overspending. In addition, one of the primary disadvantages of using a home as collateral for an equity or consolidation loan is that most home equity consolidation loans are demand loans. This means that the bank or lending institution has the right to "call" the loan due at anytime. If a borrower is not able to pay the total amount at the time of the "demand," foreclosure proceedings can be implemented without further notice. Where to get a consolidation loan If a person feels that they have resolved their overspending problem and still feels that they need to consider a consolidation loan, there are several places AlphaServices would suggest to obtain a consolidation loan other than a home equity loan: The cash value of an insurance policy. Bank loans using in-bank deposits as pledged collateral. Credit unions against in-bank deposit in the credit union. Family loans or gifts. Retirement account withdrawals or loans (borrowing from an IRA is not allowed. Conclusion Consolidation loans can at times be beneficial. However, the key to success with a consolidation loan is discipline. Once someone has consolidated their debts, they must maintain the discipline it takes to stop spending with credit. If they can not, they will often end up in deeper debt than before.