Steps to pay down debt credit card faster

Posted by administrator | 24/06/12 | Tagged Credit Card Debt

Steps to pay down debt credit card faster
News from AZ Central.com:

Jun. 24, 2012 01:04 PM
USA Today

Q: I am 27, married and about to have my first child. I have $ 10,000 sitting in a 401(k) plan at a previous job. I owe $ 20,000 in credit card debt, with a 9.5% interest rate that is killing me. Should I take out some or all of my 401(k) saving to pay off my debt?

A: I generally would not recommend withdrawing money from your 401(k) savings plan to pay off your credit card debt.

First, there is a steep immediate cost: You will have to pay ordinary income taxes on the 401(k) withdrawal, plus a 10% penalty. This will likely reduce your balance by at least 25%, turning your $ 10,000 into $ 7,500 or less. Using this money to pay down your credit card would still leave you with a balance of $ 12,500 and if you have no other retirement account you will have zero retirement savings.

Second, there is a much larger long-term cost. By withdrawing the money now, you will not be able to take advantage of the long-term growth of your 401(k). For example, say your $ 10,000 was to grow at an average rate of 6% per year for 35 years. At the end of the 35 years your 401(k) would be worth $ 76,861.

So for every $ 1,000 you withdra…………… continues on AZ Central.com

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Worst Case Scenario For Credit Card Debt
News from San Francisco Chronicle:

According to The Christian Science Monitor, the average American household has about $ 14,500 in credit card debt. That’s actually down compared to the high of $ 18,000 in 2006. This may seem like a lot of money, and it is, but some people have much more than this and end up struggling to pay back the debt they’ve accumulated.

In the old days, you may have faced debtors prison as your worst-case scenario, these days you’re going to face the law too, just in a different way.

Garnished Wages and Seized Assets
After you’ve stopped paying your credit card payments for more than three months, your credit card company may contract with a debt-collecting agency to get their money. If the debt-collector doesn’t receive pay…………… continues on San Francisco Chronicle

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Discover Financial 2Q net income falls, revenue up

Posted by administrator | 24/06/12 | Tagged Credit Card

Discover Financial 2Q net income falls, revenue up
News from San Francisco Chronicle:

(06-19) 14:12 PDT LOS ANGELES, (AP) —

Despite concerns about the economy, Discover’s customers are using their cards more often and paying their bills on time at record rates.

The company’s profit fell 10 percent in its March-May quarter, as the credit card issuer freed up less money from reserves set aside to cover customers’ unpaid bills than a year earlier as its loans increased.

But credit conditions are improving. Late payment rates and customers’ loan defaults dropped sharply, reaching historic lows. Discover’s management expects that charge-offs, or loans written off as unpaid, will modestly increase over the next 12 months as the company widens its pool of borrowers.

The economic shakeout of the last few years has left credit cards in the hands of more affluent consumers who are better able to pay their bills in full each month, while those with lower credit scores and presumably less ability to pay are now less likely to use credit. Tighter underwriting standards also have pushed loss rates lower.

Discover Financial Services said sales volume on its namesake cards rose 5 percent during the March-to-May period to $ 26.1 billion, reflecting more card use by customers, as total retail sales rose 5.7 percent in the same period according to government figures. Credit card balances also grew nearly 4 percent to…………… continues on San Francisco Chronicle

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Texas jury convicts Calif. man in credit card scam
News from San Jose Mercury News:

FORT WORTH, Texas — A California man was convicted in Texas for participating in a multistate theft ring that planted illegal devices at gas stations, enabling the group to steal 38,000 debit and credit card numbers and then siphon $ 100,000 from bank accounts.

Aleksandr Goukasian, 52, of Los Angeles, faces up to life in prison when he’s sentenced at a later date. He was convicted Friday of four counts of unlawful possession of an electronic intercept device and one count each of unlawful use of electronic communications, engaging in organized criminal activity and fraudulently possessing or using identifying information.

Prosecutors in Fort Worth showed evidence that Goukasian’s theft ring planted skimmers — homemade electronic devices that intercept credit card information — inside gas pumps in Mojave, Las Vegas, Dallas, Fort Worth and Houston over a few months in 2010. Goukasian recoded gift cards with those numbers and used the gift cards to withdraw money at ATMs from hundreds of customers’ accounts, prosecutors said.

After Goukasian was arrested in a Fort Worth suburb, 13 skimmers with the same unique markings were discovered throughout North Texas.

His trial started June 12 but was delayed Tuesday when Goukasian did not show up for court. Officials found him nearly unconscious in his home, and he w…………… continues on San Jose Mercury News

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