It’s no joke.  There really is such a thing and it could be costing you a lot of money.  Behavioral economists have studied the spending habits of Americans and come to the conclusion that many of us have a dissociative spending disorder.

Dissociative means a partial or complete disruption of the normal integration of a person’s conscious or psychological functioning.  It is a process that severs the normal connection to a person’s thoughts or can disrupt normal cause and effect thinking.

I know that sounds pretty serious and in the case of some folks it can be if the spending disorder gets them into financial trouble.

How many times have to been tempted to buy something just because it was on sale?  It didn’t matter that you didn’t need it because it was 50% off and that was too good of a deal to pass up, right?  So you whip out your credit card and “save” a lot of money…

Not really because you just “spent” money on something you didn’t really need because your brain is focused on the “deal” you just got not the “money” you just spent.  This is especially true if you purchase with credit.  Using plastic money does not register in the brain as money out of your pocket the same way cash does.  If you have $100 in your wallet and you spend $60 of it, you can see what is gone and how little you have left.  When you use your credit card, you get the card right back and the money you spent is not tangible or real.

Merchants and advertisers have also figured this out and rely on you to impulse buy when they put up big signs that say “sale”. 

You can out-smart them though with just a few small changes.  Pay with cash whenever possible to avoid the credit card/plastic trap.  Don’t buy things you don’t need no matter how good the deal is.  Don’t buy anything expensive on an impulse.  Take a day or two to analyze if you really need and can afford the purchase and how you are going to pay for it.

Are you in debt and suffering from stress because of it?  If so, you are not alone.  The stress and associated problems that accompany it are becoming a major pain in the neck -- and the back and the head and the stomach -- for millions of Americans.

The problem has become so prevalent that there is even a new name for  it – Debt-Stress Syndrome.  When people are dealing with mountains of debt, they're much more likely to report health problems, too which only makes things worse as people try to navigate their difficult situation. And not just little stuff like loss of appetite of trouble sleeping; this means ulcers, severe depression, even heart attacks.

It is estimated that there are between 12 to 16 million who are suffering some type of medical or health issue that is related to their debts.  And the tough economic times and rising costs of living are just making things worse.

In a poll conducted last summer, people reporting high debt stress claimed the following:

·         27 percent had ulcers or digestive tract problems, compared with 8 percent of those with low levels of debt stress.

·         44 percent had migraines or other headaches, compared with 15 percent.

·         29 percent suffered severe anxiety, compared with 4 percent.

·         23 percent had severe depression, compared with 4 percent.

·         6 percent reported heart attacks, double the rate for those with low debt stress.

·         More than half, 51 percent, had muscle tension, including pain in the lower back. That compared with 31 percent of those with low levels of debt stress.

People who reported high stress also were much more likely to have trouble concentrating and sleeping and were more prone to getting upset for no good reason.  Stress is very harmful to the body. Stress is an alarm system designed to get you to recognize a threat to your survival. When you're constantly worrying and stressing over your debt, you put your body in a constant state of alarm. The body responds by releasing stress hormones such as cortisol and adrenaline, resulting in increases in your heart rate, blood pressure, breathing pace, muscle tension, and inflammation, and dumping fuel (glucose, fats) into the bloodstream.

Revolving consumer debt, almost all from credit cards, now totals $957 billion, compared with $800 billion in 2004, according to the Federal Reserve and that can lead to a lot of stress for those who do not have the money to pay for it.  Sometimes it’s a health crisis that puts someone into debt but the debt can also lead to  a health crisis which makes the situation far more dangerous than just facing bill collectors.

If you are in debt and suffering undue stress, there are several programs that can help you BEFORE it becomes a health crisis.  Let the professionals at First Rate show you what we can do to get you out of debt and keep you healthy for 2010!

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.

After the bankruptcy laws were changed in 2005, there was a drop in the number of filings each year.  But that drop was short lived as the declining economy pushes more and more Americans into filing for bankruptcy protection.  The numbers in 2008 were up over 30% from those in 2007.  These frightening statistics are all too real.

The real question now is after filing, how can you recover your financial well-being and get back on track?  First and foremost you are going to have to be patient.  It’s a long but achievable process.

1. Start by applying for a new credit card.  One with the lowest fees and rates you can qualify for.  Remember when you were in college and got your first card?  You were excited even though it was 30%.  That kind of card may be all you can get.  Take it and spend a little bit of money on it and pay it off every month.
2. Keep your debts at a minimum and make every payment on time.  This is critical to rebuilding your credit history.
3. After a year or so, apply for a another credit card with a lower rate and ask that the rate be reduced on the original card now that you’ve proven you make your payments on time.
4. Keep your balances under control.  Do not spend a lot on any cards or loans.  Part of a good FICO score is a low debt to available credit ratio.  Don’t buy anything you can’t afford to pay off in one month.
5. Don’t get sucked into any kind of credit repair scheme.  There is no magic pill to wipe out a bankruptcy.  It takes time and discipline.  The bankruptcy will stay on your credit report for 7-10 years but if you play your cards right, you can start to rebuild your credit before that.

The easiest way to recover from financial distress is to avoid bankruptcy in the first place.  Debt Settlement can often be the optimum solution to helping you avoid the long-term negative effects of a bankruptcy while still providing serious debt relief.  The key to a successful debt settlement program though is to get into the program before you are “bankrupt”.  Sometimes if you wait too long to address the situation, you leave yourself no option but to file. 

If you think you might be headed that direction, contact the consultants at First Rate for a free evaluation to see if debt settlement can help you.

This is a very common question and one that is easily explained.  In almost all cases, secured debts are not negotiable and in almost all cases, unsecured debts are.  That’s the short answer, but here’s the difference.

All debts are either secured or unsecured.  A secured debt is usually tied to an asset, like a car for a car loan or a house for a mortgage. If at any time you stop making payments, the lender (or lien holder) can repossess your car or foreclose on your house.  Secured is the same as collateralized and they just take the collateral if you can’t pay the debt.

An unsecured debt is not tied to any asset and includes most credit cards, bills for medical care, signature loans, private student loans, and debts for other types of services such as cell phone service and other utilities.

Some examples of unsecured debt that are not negotiable are:  government backed student loans, taxes (current or past due) and other government loans.  If you owe money to the IRS, you are most likely going to get a payment plan (best case) unless you file for bankruptcy.

One example of a secured debt that might actually be negotiable is your home mortgage.  Over the past year, we have had tremendous success with home loan modifications.  In most cases, we were able to negotiate a new lower payment for our clients significantly improving their ability to pay and therefore avoiding foreclosure.

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.

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.

The Federal Reserve and Treasury Department announced on Tuesday a plan to pump $800 billion dollars into the sagging economy.  The intent is to jump start lending by the nation's banks for mortgages and consumer debt.  By putting that money into the hands of the holders of securities backed by consumer and mortgage loans, the government hopes that more money will flow to consumers than has in previous bailout plans.   The Federal Reserve, the nations central bank, announced it will purchase up to $500 billion in mortgage backed securities.  This is being done to reduce their costs and increase the availability of credit for home purchases which in turn should foster improvements in all aspects of the financial market.

The first signs of relief were seen immediately as home loan interest rates dropped dramatically.  This could be the turning point that we've all been waiting for.  Now is the time to get all of your debt under control and be ready with an improved financial position.

Here at First Rate, we can help you settle your debt, provide a loan modification for your home or a loan.  Give one of our financial experts a call today and see what what we can do for you.  1-877-332-8730.