Finance & Loans

Is U.S. household debt load going down?

According to the U.S. Census Bureau, 69 percent of American households carry some form of debt. Luckily, this is a lower number of households that are burdened with debt compared to ten years ago which was 75 percent of U.S. households. Major causes of debt include unexpected medical expenses, credit card debt and student loans. The average mortgage debt of a U.S. household is $150,000 according to the U.S. Census Bureau and the average household credit card debt is around $15,000. Many believe that student loan balances of U.S. households are increasing at an alarming rate and according to the U.S. Census Bureau the average student loan balance is about $33,000.

Making a monthly budget and sticking to it is one of many ways to get control of your debt. This will help you to cut out some expenses that are not essential and to use savings from those expenses to pay down credit card debt starting with the card with the highest interest rate. Try and renegotiate the interest rate. If you fail to get an interest rate reduction in your first attempt, try again in few months. In the meantime stop charging onto your credit cards. Stick to your monthly budget and avoid impulse purchases.

Closing credit cards to get a higher credit score could impact your FICO score negatively

We know that several factors can affect your credit score. Among them your payment history, balances, type of credit, and inquiries on your credit accounts are important. Many believe that having a balance on each credit card help to get a good score and others think that closing credit cards help increase the FICO score. Let’s dig a little deeper into these two.

How outstanding balance to total credit line can affect your score

Let’s say that you have a credit card with a credit limit of $35,000 and a balance you owe of $5,000. The ratio, credit to outstanding balance, in this case will help you to get a good score. On the other hand, situation could be different with a credit card with a total credit limit of $6,000 and with an outstanding balance of $5,000. Here the ratio of the credit limit to outstanding balance is not healthy from a credit score point of view and therefore, lead to a lower credit score.

Closing credit cards to improve your score

Closing credit cards even you don’t owe anything on those cards could lead to a lower score. Closing credit cards lowers your available credit.

Understanding How You Can Fight Charge Backs

Fraudulent charge backs are something that every online business has to deal with day in and day out.  Before you can learn how to fight these charge backs, you first and foremost need to understand what they are.  A charge back is when a customer will actually dispute a charge that has appeared on their credit card.  The dispute is a claim that they basically did not receive the product or service that they paid for when they made their purchase.  Some of these charge backs may be fraudulent, an attempt by the customer to get product fee of charge.

Charge backs are something that can cost online businesses a lot of money out of their own pocket.  They can cut into your sales in a big way.  One of the best ways to fight a charge back is to keep the most thorough documentation possible.  By maintaining an immense amount of documentation in the form of sales invoices, shipping confirmations, and so on, you can prove that you shipped out a product and made every effort possible to complete a sale.  By maintaining documentation, fraudulent charge backs can be highly minimized.  Companies who do not maintain documentation can get taken advantage of by dishonest consumers very easily.

The fact of the matter is that with a good partner such as Solid trust pay you can keep fraudulent charge backs to a minimum.  Charge backs can be fought by Solidtrustpay.com thanks to their professional experts who can keep your business sales safe and secure.  Solidtrustpay can set you up with a merchant account, and get your sales rolling in.

Prepaid debit cards are booming

Big money machines like JPMorgan Chase and American Express are entering the prepaid debit card business.  Chase Liquid card which entered the market in July 2012, charges $4.95 a month for the card.  The American Express introduced its Bluebird card in October 2012 and the cards are sold by Wal-Mart.  They do not charge a monthly fee but gets percentage from the merchant.  The card industry is  forecast to generate $168 billion in U.S. funds and generate $1.7 billion in fees by 2016.

Prepaid debit cards come in many forms.  Some holds a fixed amount while others works as a bank account.  According to some research more than 47 percent of U.S. households use prepaid debit cards.  Lack of oversight by Federal authorities makes the card business more lucrative.  However, the Consumer Financial Protection Bureau recently started to review the card business.  Since they are loosely regulated, fees charged by many issuers vary widely.  According to some, prepaid debit cards carry a big risk for the holder because they are not guaranteed by the Federal Deposit Insurance Corporation (FDIC).  As a result some watchdog groups are pushing the FDIC to protect funds and provide regulation and oversight to the industry.

Let a Debt Collection Agency Collect Your Debts

A debt collection agency specializes in collecting debts for companies. They are hired by the company and given a list of the individuals that have outstanding debts. Debt collection is a growing business and more companies are using debt collection services than ever before. The companies that are hired to collect the debts are paid a percentage of every debt that is paid.

With today’s economy many companies are feeling the hit of losing money from outstanding debts. Most of the debts come from individuals that own them money for goods or services.

PSI Collect is a debt collection agency. They have several options available to companies to collect debt throughout the country and around the world. Their nationwide bad debt recovery service collects debts in every state across the country. Businesses can search for collection outsourcing services online. There are many companies that have a variety of services for debt collection. The price range varies with each company for debt collection services so it’s best to do some research before making a final decision. There are also various types of software for debt management that enables companies to manage their debt by developing a system to prevent it from happening. This is usually the best solution for smaller companies that have smaller budgets and cannot afford to outsource their debt recovery to a collection agency. However, debt collection agencies are the perfect solution for larger companies and corporations with international customers. So if you’re looking for a debt collection agency you can search online to find the one that best suits your needs.

Fighting Charge Backs, Do Not Throw Money Out The Window

Companies face the issue and threat of charge backs every single time that a transaction is made through their store.  When you think about charge backs, you have to first and foremost start by learning what they are.  A charge back occurs when a customer disputes the legality of a transaction on his or her credit card.  A fraudulent charge back can be placed by a customer who is just trying to cheat the same system that aims to protect their rights in the e-commerce purchasing environment.

If you want to be able to fight charge backs you should do a few things.  The first thing that you can do is to actually call the customer and reach out to them.  If you speak with a customer, they may actually retract the charge back dispute that they have claimed.  The other thing and arguably the more important fact is that you need to be able to retain as much documentation around your transactions as physically possible.  Documentation is key to be able to fight a charge back.

If you want to be able to fight charge backs, getting set up with a company who will stand by you is important.  This can mean being established and accepting credit cards with the help of reliable companies such as Solidtrustpay.   They will also, as operators of merchant accounts, be sure that they are tracking what they need to as well. Solid trust pay can help educate you about what information you need to retain.

Bad Debt Management – The Right Way

The reason so many people get into trouble with their finances is not just because they spend too much, but also because they have bad debt management. When the bills come in every month, many people are inclined to either just pay the minimum amount or avoid paying it altogether if they’re too high for their current budget. If not followed up with, companies can stand to lose millions to delinquent payments from customers.

As a business, it can be difficult to hire a full time staff to follow up with these customers who have either refused to pay or who aren’t prepared to pay each month. This burden of time ultimately leads to a burden on revenues and bottom lines. Collection agencies are a good alternative from trying to manage debt collection “in house.” With the right collection company, you can recover a large portion of your lost revenues over the short term, and close to all of your receivables over the long run.

Business collection outsourcing is a process whereby a small business can contact an independent collection agency such as www.psicollect.com to call delinquent consumers on their behalf. These agencies are relatively inexpensive when you consider the cost of hiring full time employees to handle your debt management in the first place.  Bad debt recovery is a challenging venture, which is why having a strong team of individuals on your side to help is always important. Trained professionals are able to get the money your business is owed to take all of the headache away from you.

Two new healthcare related tax provisions for 2013

The 2010 Healthcare Act, known as “Obama care”, is being implemented gradually.  Now that sitting U.S. President, Barack Obama, has been reelected for a second term and the U.S. Senate continue under Democrats, it is highly unlikely that the Act will be eliminated during the second term.  Two new tax provisions will come into play in 2013.

First, a $2,500 annual maximum contribution limit will be in place for Flexible Spending Accounts (FSA).  In the past some plans limited annual contributions while others didn’t giving employees another tax free subtraction from their salary.  Funds can be used for qualified childcare as well as medical expenses.  The total contribution will be capped at $2,500 starting in 2013.

Second, the qualifying threshold for Itemized Medical Expense Deduction has been increased from 7.5 percent to ten percent for most individuals.  This applies to your medical expenses over 7.5 percent of Adjusted Gross Income (AGI).  However, if you reach age 65 before December 31, 2013, you can extend the current 7.5 percent limit until the tax year 2016.    If your spouse reach the age 65 in 2014 through 2016, the current 7.5 percent rate will continue through 2016.  Everyone will be subject to ten percent rate in 2017.

Few year-end financial actions

The end of year is only three months away and it is time to make certain key financial moves in order to save money.

Simplify your finances:  Most utilities, mortgage companies and other merchants allow online payments.  You can also make automatic contributions to your retirement savings plan online.  They save money and provide you with a discipline to stick to your financial goals.

Make necessary moves to save on taxes:  There are many overlooked tax deductions.  If you have children under the age of 13 and you pay for childcare while you and your spouse at work, you can take a deduction for childcare expenses.  If you have kids in college, you can take credit for college expenses under the American Opportunity Credit.  If you moved more than 50 miles due to a new job or transfer, you can claim job related moving expenses when you file your 2012 tax return.  If you are thinking of donating to charity, do it before the end of the year.  Gather all your receipts and keep them in one place for easy access during tax time.

Review your contributions to retirement plans:  There are catch-up provisions for those who are nearing or over 50.  Maximize contributions to IRA and retirement plans.

Bankruptcy as an option to get out of debt

Debt problems don’t go away when you go to sleep. It will be there when you wake up. Debt problems can cause severe anxiety and uncertain future. Lingering issues of whether your wages will be garnished, what will happen to your financial situation in an emergency and whether you will have enough money to buy food and pay your rent are among many issues related to debt. Many solutions from debt-consolidation to reduce monthly payment to bankruptcy to eliminate certain debt are available at your disposal. If you are faced with late payments, collection notices, threat of lawsuits, and delinquencies, bankruptcy may be an option.

There are two types of bankruptcies available for individuals: Chapter 7 and Chapter 13. Wiping out debt that you are no longer able to pay is handled under Chapter 7 or you may consolidate all your debt into one low monthly affordable payment under Chapter 13. In either case you need to consult an experienced legal expert. The legal advisor should decide which course of action is best for your individual situation. Filing a bankruptcy may stop accumulation of negative debt reporting in your credit report. Take adequate steps to create a positive credit history after the bankruptcy.

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