“I’m in debt up to my eyeballs” as the saying goes…or maybe you’re in debt up to your ankles.  Regardless of the level of debt you have, you can eliminate it.  It’s all about having a strategy and discipline—and we can help you with both!

Eliminate your credit card debt but make sure you understand the new Credit CARD Act that takes effect February 22^nd—Use it to your benefit…

The Credit Card Accountability Responsibility and Disclosure Act (CARD Act) takes effect February 22, 2010.  This act establishes new rules for credit card issuers, and is designed to protect the consumer. But do these new rules really benefit all consumers?  Or just the ones that are savvy about the loopholes and caveats credit card issuers can take around these rules?  Take a look at just some of the changes, and their loopholes:

Interest Rates and Fees

·     No rate increases for the first 12 months after opening an account.

However, rate hikes are allowed if you’re more than 60 days late with a payment.

·     No more over-limit fees, unless the card holder opts in.

Credit card companies have been contacting card holders asking them to opt in for over limit fees in exchange for lowering that fee.  What card holders aren’t being told is that there is no longer a fee for going over your limit, the charge will just be declined.

Statements and Notifications

We all  have goals to eliminate debt and a credit card debt elimination strategy is key because it is a huge portion of debt in America.  I recently watched an interesting documentary on frontline called “The Card Game.” It told the story of our current credit crisis through the eyes of the banking and credit industry.

I was surprised to hear the brutal honest truth these people talked about credit card “game” in America.  It was said they specifically went after the less fortunate population who did not have access to credit before.

This new market was specifically targeted and given access to credit and loans they could not afford to pay.  And, because of little or no regulations were in place, the risk for these people and the banks were very high.

The idea was to get these people, most of whom are financially illiterate, to get trapped into these loans and lines of credit so the credit card and banking industry could catch them in a web of debt.  This is the genius of this game, because they made so much money on high interest rates and penalty fees, it is ridiculous.

Now, the credit card companies and banks will tell you that people are responsible for their own financial well-being.  But, though that is partially true, I would like to say they knew they preyed on these people and they ruined a lot of lives just to make more money.  And, in the end who bailed them out…the tax payers?

A mortgage is the biggest debt most of us will ever acquire in our lifetime however it can be reduced with these few tips.  Some are quite aggressive and we think the rewards are well worth it.

Tip #1) Pay your payment early rather than late.  Most loans are calculated on a per diem rate.  This means that your loan will charge you for every day you use the money in that month at the rate of the current balance.  The math looks like this:Principle Balance of $225,000 x interest rate 5% divided by 12 and then by 30 days = $31.25 and you have the daily rate of interest factor.  Then you simply multiply the number of days in between payments by the factor. 30 x $31.25 = $937.50 but if you paid 5 days early $31.25 x 5 = you would save $156.25 and when you pay less interest your balance goes down. Every time the balance is reduced you start with a lower bench mark. Remember: Balance x Rate divide by 360 (12 months x 30 days) and you will get your per diem. Then the per diem x the number of days in between payment.