credit card debt Archives - Page 19 of 24

Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

The New Shape of U.S. Household Debt

Posted on April 14, 2017by Admin

Household debt in America has been reshaped in ways that could potentially affect how financial experts are able to help manage a consumer’s liabilities. The overall debt of U.S. households is $100 billion smaller than it was in 2008. According to the Federal Reserve Bank of New York, it also looks a lot different now than it did then.

Mortgage debt remains the largest debt burden. However, its share of household debt has declined along with that of credit card debt, while the share of student loan debt and auto loan debt has grown.

By the end of 2016, mortgage debt accounted for 71 percent of household debt, down from almost 79 percent in 2008. Student debt had more than doubled since 2008 and more than tripled since 2003 to 10.4 percent.

Auto loan debt had a 9.2 percent share at the end of 2016, which is approximately one-third larger than it was in 2008. All three types of debt had larger shares of households’ income than credit card debt.

All of this means that housing debt fell $1 billion from its peak in 2008 of $9 trillion, while student loan debt rose $700 billion and auto debt rose $350 billion.

Financial experts attribute the change in household debt to a change in the demographics of U.S. debt. Households that are headed by those 60 years old and older now account for just over 22 percent of outstanding U.S. debt, which is up from 16 percent in 2008.

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If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Man Used 31 Credit Cards in Poorly Planned Financial Scheme

Posted on April 10, 2017by Admin

Federal officials say 28-year-old Janzaybe Khan, was living the good life in an illegal $165,000 spending spree until his luck ran out. He used 31 credit cards and spent more than $59,000 on gift cards, precious metals and cash advances.

Some of the proceeds were transferred into Khan’s bank account, while others were transferred to various individuals, according to the U.S. District Attorney’s Connecticut office. Court documents reveal Khan was able to qualify for and utilize 31 credit cards by falsely stating his income, assets, address and employment history.

After maxing out his credit cards, Khan filed for Chapter 7 bankruptcy and attempted to discharge all of his credit card debt.

In his bankruptcy filing with the court, Khan falsely stated that the majority of his debt was the result of gambling losses. Khan also made a number of false statements under oath during an examination by the U.S. Trustee in his bankruptcy case. The U.S. Bankruptcy Court refused to discharge Khan’s debts.

Instead, Khan was arrested on a criminal complaint charging him with bank fraud, conspiracy to commit bank fraud, and making a false oath and false statement under penalty of perjury in a bankruptcy case. The complaint alleges that the financial institutions that issued Khan’s credit cards incurred losses of more than $165,000 as a result of the scheme.

Bank fraud and conspiracy to commit bank fraud each carry a maximum sentence of 30 years imprisonment.

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Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Delinquencies on Timeshare Rentals Reveal Another Sign of Consumer Debt Weakness

Posted on March 10, 2017by Admin

Americans are getting more behind on their timeshare rental payments, according to Fitch Ratings. Approximately 3.75 percent of timeshare borrowers were behind on their bills in the fourth quarter, up from 3.37 percent in the same period a year earlier, and the highest level since the end of 2011, according to the report.

According to Fitch, the defaults are evidence that loan companies are becoming less strict when financing to customers. These companies are also writing off more loans. The default rate rose to 0.70 percent in the fourth quarter from 0.61 percent in the same period a year earlier.

Other pockets of weakness include online consumer loans and subprime auto loans, which we have touched on in previous blogs. These rising delinquencies come as Americans have increased their debt at the fastest pace in three years.

U.S. household debt increased by $226 billion in the last three months of 2016, bringing total consumer debt to $12.58 trillion. The numbers, which include mortgages, student loans, auto loans and credit card debt, are dangerously close to the $12.68 trillion high-water mark in 2008.

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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How a Balance Transfer Affects your Credit Score

Posted on March 1, 2017by Admin

If you are struggling to pay down credit card debt, the interest is not making it any easier. Transferring the debt over to a 0% interest credit card can save you money in the long run. But applying for a new credit card, or any type of new credit requires a “hard inquiry” to determine if you qualify.

This can have a small, but short-term effect on your credit score. The five biggest factors in determining your credit score include: credit utilization, payment history, types of credit, credit inquiries and the ages of your accounts.

Here is an explanation of how each of these can be affected when you do a balance transfer.

Your Credit Utilization: Suppose you owe $10,000 on Card A, which has a limit of $12,000. You are using 83% of your available credit. But now you open Card B and move all $10,000 onto it (it has a credit limit of $10,000). You are now using a total combined available credit of 45% (a combined $22,000 on both cards). The new lower credit utilization will help boost your credit score.
Payment History: If you made regular, on-time payments on your old card, doing the same with the new card will not cause you to see a drop in this area.
Types of Credit: Diversity is key. Having a good mix of credit cards, auto and mortgage loans that you pay on time every month will help you generate a good credit score. Since you were using a credit card previously, you will likely not see any difference here after a balance transfer.
Credit Inquiries: Applying for a new credit card will put an inquiry on your credit. As long as you are not applying for multiple lines of credit at the same time, you are probably only looking at your credit score dropping 5 points, which is only temporary.
Age of Credit. Once you receive your new card, keep the old one. Do not cancel it. You want to keep your oldest cards open so you can build up that history for as long as possible.

Bottom Line: Opening a new account and transferring the balance over can save you money, as long as you do not charge more on the new one and focus on paying it down. Do not expect a huge jump at the very beginning, but as you begin to pay down your balance by making on-time payments, you will see your credit score improve. The new lower credit utilization will help boost your credit score.

Related Resources:

http://www.cbsnews.com/news/how-a-balance-transfer-affects-your-credit-score/

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Three Simple Ways to Pay Off Credit Card Debt

Posted on February 28, 2017by Admin

Many consumers know the problem with using credit cards is that oftentimes you end up paying for purchases after you buy. The average interest rate on a credit card is 13.51%- if you carry over a balance. As of September 2016, cardholders carried on average a balance of $7,527. When you pay off your credit cards in full or have your debt discharged in bankruptcy, you have more disposable income for your financial goals and can better plan for your future. But how do you get there?

Here are three simple steps to eliminating your credit card debt.

Step one: The obvious- Stop using your credit cards. Pay in cash for all of your purchases. For online purchases use PayPal or your debit card. Using a “cash only” system allows you to spend what you have.

Step two: Make extra payments toward the principal. Lenders are required to show you how long it would take to pay off your credit card if you only made the minimum payments. Request your statements be mailed to you, online you may not be able to see this number. It will certainly give you a wake-up call. For example, the average American with $7,527 in debt, would spend 11 years paying the card off if they only paid the minimum balance. The interest would cost you $2,869!

Step three: Set financial goals and SAVE for them. Set up savings accounts for your big purchases. For example, if you are going to need a new car in the next 6 months or are planning a family vacation this summer.

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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

The Effects Debt Has On Your Emotions

Posted on February 24, 2017by Admin

The average U.S. household carries debt- more than $132,000 in fact, including mortgages. Approximately 40 percent of households have credit card debt. The interest on credit cards alone is costing as much as $1,300 per household per year.

If you are struggling with debt, understanding the common emotions and actions surrounding debt can help you take positive steps moving forward to help improve your financial and mental health.

Powerlessness. If you have a large amount of debt, it can make you feel powerless. The best way to fight back is to take control. Get on a budget and stick to it. Knowing that you are taking control and have a plan in place will help you regain a sense of power.

PTSD-like symptoms. A recent survey found that one in four people who are in debt have symptoms similar to post-traumatic stress disorder, or PTSD. That number is even higher for millennials. Among people age 18-34 who are in debt, 36 percent suffer. Symptoms can include denial, avoidance (such as not paying bills), and not being able to sleep.

Fear & Anxiety. Debt can make us anxious. Be proactive and set up auto-pays on recurring bills you have. It will give you one less thing to think about. Put credit cards away (only temporarily, remember not to close out the accounts).

Retail Cravings. Nearly two-thirds of women and 40 percent of men have spent money to improve their mood, according to research. If you overspend, any euphoria you experience will surely diminish once the bills arrive in the mail. When you feel yourself wanting to spend, ask yourself what’s really going on. Think of the HALT acronym: Are you hungry, angry, lonely or tired? Address these feelings head-on without the use of a credit card.

Lowered defenses. Lowered defenses might be caused by anything from having a couple of glasses of wine to a break-up, to battling a cold. Be smart about your spending. To resist online impulse buys, delete credit card information stored on your computer and mobile devices.

Celebration. Did you recently receive a bonus or land a big account? When it comes to the risk of debt, feeling overly happy can be just as dangerous as feeling overly sad, which can oftentimes cause a financial splurge. Put any financial gain toward your debt or into savings.

Related Resources:

http://www.wbrc.com/story/34555906/6-ways-debt-can-wreak-havoc-with-your-emotions

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Qualifying for a loan is getting harder for some consumers

Posted on February 15, 2017by Admin

Banks are becoming more selective when it comes to approving loans for those with less than perfect credit. The data is surprising as many consumers seem to be benefiting from job growth and lower debt levels. However, 11.7% of banks have tightened their standards for auto loans in the first quarter, from 3.3% last year, according to the Federal Reserve and Deutsche Bank.

Credit card standards were strengthened by 8.3% of banks, compared to none in the fourth quarter. With the economy in its eighth year of recovery, lenders are extending their reach to those with cash flow pressures, borrowers at low – and middle class income levels to increase revenue.

The share of delinquent personal loans and credit card debt increased in the third quarter to 3.53% and 1.33% respectively, according to TransUnion and UBS. Out of those consumers surveyed, 18% said they expected to default on a loan payment in the next 12 months, up from 12% in December.

The number of subprime auto loans (those requiring a FICO score of 600 or lower) that were at least 90 days delinquent reached the highest level since 2010 in the third quarter at 6 million. The number of bad loans were by auto finance companies, not banks.

Two-thirds of the households who earn less than $40,000 say financial concerns have increased over the past six months for them. The latest numbers reflect the incomes of many low- to moderate-income working families are not keeping up with the costs of rising health insurance deductibles and monthly expenses.

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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

6 Credit Score Killers and How to Avoid Them

Posted on February 14, 2017by Admin

There are financial missteps you can make that are guaranteed to lower your credit score. One of the biggest factors in determining your credit score is your past payment history, but there are other things you may be doing that can affect your score in a negative way.

A first missed payment. Per a FICO study, a single 30-day late payment can cause a good credit score of 780 to fall 90 to 110 points. An average score of 680, can fall by 60 to 80 points. You can avoid missing payments by setting up auto-pay from a linked checking account every month. If auto pay makes you uneasy, you can set up automatic alerts that will remind you when your bill is due.
A maxed out credit card. Credit utilization is the second most important factor of credit scores, so reaching your card’s credit limit can be problematic. What’s worse, is if you have multiple cards you are doing this with. Remember, for optimal credit score results, it is recommended you keep the amount of debt you owe collectively and on individual cards below 30%, and ideally 10% of your credit limit.
An error. This happens more often than you might think. A report from the Federal Trade Commission discovered that one in five Americans had an error on their credit reports. Staying on top of your credit score and monitoring it for mistakes can help.
An account in collections. That medical bill you thought insurance covered or a utility bill you forgot to pay in college can drop your score 50 to 100 points (if it winds up on your credit report). That account can legally stay there for up to seven years, plus 180 days from the date of your first missed payment. Keep an eye on your mail for any outstanding debts and resist the urge to ignore a call from a debt collector.
Applying for several credit cards or loans at a time. These credit inquiries account for 10% of your credit score. Keep credit applications to a minimum. Making several requests in a short period of time can cause your credit score to dip.
Closing out your old credit cards. Another component of your credit score, 15%, is the length of your credit history. Closing old credit cards, especially your oldest card, makes your credit history seem shorter than it really is.

Related Resources:

http://finance.yahoo.com/news/5-big-credit-score-killers-110000016.html

https://www.thebalance.com/things-that-hurt-credit-score-960510

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How to Tackle Long Term Credit Card Debt

Posted on February 2, 2017by Admin

It takes 13 years to pay off a $5,000 credit card bill, if you only pay the minimum each month. Florida is in the top 5 states with the highest credit card burden, according to a recent study from CreditCards.com. The study also sheds light on the effects high credit card debt has on U.S. household finances.

By allocating at least 15% of gross monthly income toward credit card debt, the typical Florida consumer’s payoff time drops to just 18 months and costs $678 in interest, in the above scenario.

Here are some other proven ways to help tackle long-term credit card debt.

Be careful how you spend that bonus check. Seasonal commissions and bonus checks can provide an added sense of confidence when it comes to spending. Not a good thing, if you are struggling to pay down credit card debt. Break this extra income up into three parts: debt reduction, major purchase and savings. Remember: paying off a large portion of credit card debt can save you thousands in interest.

Consolidate. If you have multiple unsecured loans that you would like to have lumped into one payment, debt consolidation may benefit you. This option gives you the opportunity to save hundreds of dollars with a lower interest rate and you can combine all of your payments into a single monthly payment.

Cut your budget. One of the best ways to pay down your debt is to find savings elsewhere. Cut down on your grocery bill, cancel monthly membership fees you may not be using as much as you thought you would, etc.

Define your goals. Do you want to reduce your debt or be completely debt-free? Set timelines for yourself and how much you need to pay to meet those goals each month.

Prioritize. Focus on paying off the highest-interest debt, first. This is your biggest financial drain. Another idea is the “snowball method,” which essentially means paying off the debt with the smallest balance first, continuing to the debt with the next lowest balance, etc. This strategy allows you to see immediate results in paying down debt, and builds confidence and momentum to keep you on track to pay down the rest of the debt.

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Related Resources:

https://www.thestreet.com/story/13937063/1/how-to-tackle-the-high-costs-of-long-term-credit-card-debt.html

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

FTC Cracks Down on Dishonest Payday Lenders

Posted on January 30, 2017by Admin

The FTC has been targeting fraudulent payday lending companies, headquartered in Missouri and Kansas, with consumer settlements reaching as high as $1.266 billion. The FTC recently announced charges against Joel Jerome Tucker, and his companies, SQ Capital LLC, JT Holding Inc., and HPD LLC, for selling portfolios made up of phony payday loans.

The loans listed in the portfolios named fake lenders and debtors, including their social security and bank account numbers, and led to collection activities against consumers who had not taken out loans, according to the FTC.

In another case, a settlement was reached between the FTC and payday lenders, Tim Coppinger and Ted Rowland, and their companies.

Under the terms of the agreement, the lenders paid nearly $1 million with the threat of substantially greater judgments (up to $32 million) should they fail to abide by the terms of the settlement agreement. The fraudulent activity included debiting money from the accounts of people who never requested loans, but for whom the payday lender had obtained personal information. They would then charge interest and fees on the unauthorized loans.

Click here to read more on this story.