Here are some sobering statistics about American debt.

• About 1.6 million U.S. households -- one of every 73 -- filed for bankruptcy in 2004.

• Average per household debt in the U.S., not counting mortgage debt, is about $14,500 -- especially noteworthy because before the 1930s, most middle and working class people had no major debts.

• Some 40 percent of American families spend more than they earn each year.

• Average personal wealth of a 50-year-old American, including home equity: less than $40,000.

• Nine of 10 Americans claim credit card debt has never been a source of worry.

• But 47 percent would refuse to tell a friend how much they owe.

• Twenty-three percent of Americans admit to maxing out a credit card.

• Eleven percent of Americans admit card debts went to collection.

• Thirteen percent of Americans have been 30 days late paying credit card bills in the past year.

• The average graduate student has six credit cards and one in seven owes more than $15,000.

• The personal savings rate in the United States has dropped from 8 percent in the 1980s to just below 2 percent since 2000.

On behalf of all of us at First Rate, I would like to take a moment to wish everyone a happy holiday season.  This past year has been challenging for many Americans including many of the staff at First Rate as we navigate our way through these challenging economic times.  But we remain committed to providing real solutions for those with severe financial difficulties and top notch customer service to all those who have enrolled in our programs.

Many are predicting that 2010 will be a better year economically.  This is not to say that we should expect a huge improvement but that hopefully the worst is over and the economy can start to rebound.  No one is expecting huge increases in housing prices or for the credit crunch to go away but in some ways that's okay.  Interest rates should remain low and that will help some people who do have large amounts of debt.

For all those Americans that are still struggling financially, our wish for you is that 2010 brings relief to those problems.  As always, we are available for a free personalized consultation to evaluate your situation and see if one of our debt relief programs would be of value to you.

Above all, have a safe and happy holiday and best wishes for a healthy and prosperous 2010!

The economy is in the tank and Americans are suffering.  It’s a natural response for the government to step in to “help”.  Last year we saw bail-outs, takeovers, and new laws all in an attempt to help stop a big problem from getting worse.   Some were probably necessary but others maybe not. 

Look at the new credit card laws.  There is no argument that Credit Card companies have been taking advantage of consumers for years.  But in the days when credit was plentiful and interest rates were low, no one really seemed to care.  It only got ugly when the economy tanked and large banking institutions started to look for ways to minimize their losses (at the expense of their credit card customers).  Banks that were losing millions in foreclosures could make up some of the loss by raising interest rates, increasing late fees, and doubling the minimum payments due.   But at what cost?   Most card issuers didn’t have to give the consumer much notice before changing these terms and therefore it took a lot of Americans off-guard and placed them in a bad financial situation.

The President, in an effort to stop consumers from being taken advantage of, signed a new law that will force the card issuers to give consumers more notice before changing terms.  In response, most credit card companies have already raised rates, increased fees and changed terms BEFORE the new law goes into effect.  And these banks have not just penalized borrowers with bad payment history--almost everyone was hit and many have even had their cards cancelled without warning further hurting their financial situation.

But this is probably just the beginning.  In the future we will most likely see all credit cards come with stiffer terms and gone are the days when you could hop from one 2.9% offer to another.  It’s likely as well that most banks will go back to cards with annual fees and offer fewer perks to customers who use their cards frequently.  In fact, a study by Synovate, a market research firm, found that U.S. households are already receiving dramatically fewer card offers in the mail.

Hopefully in the end, it will all even out but I would rather see the consumer have the option to have a card with high fees, low fees, or whatever perks are offered rather than to see the credit market so tight that you have to “take what you can get”.   Sometimes regulations end up hurting the very people they are designed to help.

Almost everywhere I turn, I find an article of editorial chronicling the mounting dissatisfaction that consumers have with their credit card companies.  And for good reason.  Card issuers have slapped more than half of Americans with higher interest rates, unexpected fees, lowered borrowing limits, and higher late payment fees.  And if you haven't been hit yet, your time may be coming soon.

More and more consumers are trying to fight back by switching to other cards or negotiating their rates.  But for some, getting a new card is becoming increasingly difficult and the higher interest rates are making it almost impossible to pay off their balances.  If you pay your cards off every month, you can probably apply for a new card and transfer your balance without too much trouble.  Remember--you are the customer!  If you are one of the 46% who carry a balance though, that solution may not be so simple--especially if your cards are maxed out and you are using them to meet your monthly expenses.  If that is the case, you need to address your situation right away before those fees force you into a bad situation financially.

A growing number of Americans are carrying high balances on their cards just to make ends meet and aren't sure when (if ever) they will be able to pay them off.  These high balances are hard to make the minimum payments but as card issuers jack the minimum payments from 2% to 5% and the interest rates from 11%-14% up to as high as 27%-30%, that can literally push these people to the brink of bankruptcy. 

If you find yourself in this situation, contact your credit card company immediately and try to negotiate a lower rate.  If that doesn't work, it may be time to turn to the experts.  The sooner you address the problem, the better chance you have of success.

If you're one of the thousands of Americans struggling just to make their minimum payments on their credit cards each month, I have bad news.   Citibank, MBNA, and Bank of America recently announced that they are raising the minimum monthly payment from 2% to 4% of the outstanding balance.  That's double and it may be just enough to send tens of thousands more Americans into serious delinquency.  Other major banks are expected to follow suit as well.

So what can you do?  The first thing is to figure out if you can continue to make your payments.  If not, you need to address the situation immediately.  The longer you wait, the more the interest, late fees, and balance will grow.

If you have savings, you may want to take some to pay down the balances but if you are truly cash-strapped and can't make ends meet then a debt settlement or debt management program may be in order.  The key to any effective debt program is to be qualified by an expert and then to get into the program before your debt escalates to the point of bankruptcy.

At First Rate Debt Solutions, we have trained experts who will analyze your situation and customize a program to meet your financial goals and budget.  Times are tough but there are answers out there for people in trouble.  If you need help, give us a call.  Toll Free (877) 332-8730.

In this crazy credit crunch, even having good credit can hurt you.  How, you ask?  Because the credit card companies aren't just penalizing those who are making late payments or maxed out.  It's just one more example of why consumers must always be looking out for themselves and making sure that they aren't getting into trouble.  Read this article in Time magazine about how consumers with good credit are experiencing problems too.

http://www.time.com/time/magazine/article/0,9171,1904129,00.html

And if you have questions about credit cards or your credit card debt, the experts at First Rate Debt Solutions are here to help.

Most Americans have a general idea of what their credit or FICO score is.  At the very least they know if it’s good, bad, or just so-so because at some point they’ve had to use that score to obtain some type of financing.  But there are some misconceptions about a credit score that can cause confusion.

The Fair Isaac Corporation (FICO) is who determines your credit score based on a formula that takes many different factors into account.   FICO scores are calculated from the credit data on your credit report.

Your credit score is not just simply, you have a credit, you pay on time and that automatically equals a good or high score.  It’s not that simple.  The actual formula that is used by the Fair Isaac Corporation is a secret but these are the five (5) main factors that affect your score.

1. Payment history (late, on time, etc.) – 35%
2. Amounts owed (especially in relation to the credit line) – 30%
3. Length of credit history (how long have you had credit) – 15%
4. New credit (how many new cards do you have) – 10%
5. Types of credit used (bank cards, department stores, etc.) – 10%

All of these can either negatively or positively impact credit score which can come to a surprise to someone who makes all their payments on time but didn’t realize that because they are maxed out on most of their cards and have opened several new accounts, their score is not as high as they thought.  Even things like other credit companies inquiring into your credit can lower your score.

Having a decent credit score (at least 620) is very important when you are going to apply for any type of major financing like a home loan or car loan.  The higher score translates directly into a more favorable interest rate.  Typically 720 and above will get you the best or most favorable rates available.  However, tough economic times can wreak havoc on your scores and your financial situation.  If this is the case, you may need to speak with a financial expert to re-evaluate your situation and make some changes that will help increase your credit in the long run.  The consultants at First Rate are credit experts and can help you determine what you need to do to maximize your credit score.

A bill that would dramatically change the way credit card companies do business in the United States was approved by Congress this week and is on it's way to the President for signature.

The bill says that credit card companies will now have to inform their card holders at least 45 days in advance before they raise interest rates or change any other terms and conditions.  Even more importantly, the new law will prohibit the credit card companies from raising the interest rates on existing debt unless the payment is at least 60 days late.

Another big change will force the credit card companies to tell their card-holders how long and how much it would take to pay off a card if they  only make the minimum monthly payment.

These changes will not take effect immediately but will ultimately help to protect consumers who have in many cases found themselves in debt far more than they can handle and feeling victimized by the credit card companies.

The credit card companies are fighting back saying that the changes will only increase the cost of credit to consumers.   But the changes really just put more information out that consumers need when deciding to use their credit cards.

Americans held nine hundred forty-six billion dollars in credit card debt at the end of March.  Many of those are having trouble making their payments each month due to rising interest rates and other circumstances.  If you are one of the millions of Americans struggling with credit card debt, First Rate Debt Solutions has programs that can save you thousands of dollars.

According to recent statistics, there were 984 million bank-issued Visa and MasterCard credit card and debit card accounts in the United States in 2006.  If you add in American Express and Discover, that number jumps to 1.5 Billion cards in use which represents about 73.0 percent of U.S. families.

With these types of numbers, it’s no wonder that America is a nation in debt.  Credit cards have become a habit and millions of Americans are addicted. The total U.S. consumer revolving debt was $963.5 billion in December 2008 and about 98 percent of that debt was credit card debt.

These numbers can be staggering and so are the implications.  The average consumer has a total of 13 debt obligations. These include credit cards/unsecured debt (such as department store charge cards, gas cards, and bank cards) and installment loans (auto loans, mortgage loans, student loans, etc.).  Of these 13 credit obligations, nine are likely to be credit cards.

Nearly one in every three consumer purchases in the United States is made with a payment card, including credit, debit and prepaid products.  Credit and debit cards provide a great convenience but when finances are tight, 59 percent of people surveyed said they would pay their credit card bills last.

About one in six families with credit card debt pays only the minimum amount due every month and 28 percent of those surveyed say their ability to pay off their credit card balance has become more difficult in the past year.

Where all of this gets really scary is in the interest rates and fees and how quickly they add up.  Most credit cards have an interest rate of at least 12.5%, many have annual fees, and almost all have late and over the limit fees.  If you can’t pay your bill in full and on-time, these fees can substantially alter the cost of whatever you purchased on the card.  Since 55% of all consumers keep a balance on their card, that’s a lot of dough.

If you are one of the many Americans that is finding it harder and hard to keep up with your credit card debt, there are solutions.  Don't let mounting debt destroy your financial future.   First Rate Debt Solutions has answers and we can help.

(data source: creditcards.com)

The government’s historic bail-out of mortgage giants Fannie Mae and Freddie Mac should bring some much-needed stability to the mortgage crisis. But the move may not help all homeowners. Those who are already behind on their payments or who owe more than their homes are worth may still be in trouble. Those who have been “holding on” and hoping for some relief may be in luck.

Foreclosure rates in 2008 have hit record highs as homeowners who couldn’t make their payments walked away from their homes not knowing what else to do. But if you’re in financial distress, foreclosure isn’t your only option.

If you can’t make your payments, don’t wait until it’s too late to look for help. If you own a home, that’s your first priority. A foreclosure will stay on your credit report for years and Fannie Mae has already announced that it won’t back or guarantee a loan for you for five whole years from the time to default on your current mortgage. If at all possible, keep making your house payments! Your home should be your first priority and refinancing or renegotiating your mortgage may be a possibility with the bail-out.

The down-turn in the economy is affecting millions of Americans and if you are one of them, we have options for you. At First Rate, our highly qualified financial consultants can help you with your home loans, credit card debt, and help you find the program that will get your finances back on track. If you have excess credit card debt, we can help you pay it off for a fraction of what you owe and getting rid of that debt may be just what you need to save your home. Contact our experts today for a free evaluation.