More baby boomers facing credit-card quandary

Posted by administrator | 24/02/13 | Tagged Credit Card Debt

More baby boomers facing credit-card quandary
News from NBCNews.com:

Sandy Harsh never expected to find herself with $ 16,800 in credit-card debt and her retirement dreams drifting farther away.

Harsh, an IT professional from Tuscola, Illinois, is 62, around the age at which a lot of people start actively planning to retire to a white-sandy beach with a frozen margarita in hand.

Harsh’s debt snuck up on her as she helped her two daughters with college and living costs. She went back to school after a divorce and dealt with unexpected expenses such as big dental bills. Now she has about $ 300 a month in minimum payments, spread across three credit cards, and the balance never seems to go down because of all the interest she is paying.

“I totally did not think this was what my future held,” says Harsh. “I don’t want to leave debt to my daughters. I guess I’m going to have to work until I die at my desk.”

Harsh is not alone in her predicament. According to new figures from the New York City-based policy research organization Demos, Americans over 50 are struggling with a surprising amount of credit-card debt. Low- and middle-income households of older Americans who owed credit-card companies for three months or more have racked up an average of $ 8,278 in debt, according to Demos.

“What was surprising was older Americans were carrying so much more credit-card debt than younger peop…………… continues on NBCNews.com

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Credit card debt falls while delinquencies rise
News from Boston Globe:

LOS ANGELES — Ramped-up holiday season spending typically keeps some borrowers from making timely payments on their credit cards in the last three months of the year, and 2012 was no exception.

The rate of credit card payments at least 90 days overdue jumped to 0.85 percent in the fourth quarter from 0.78 percent a year earlier, credit reporting agency TransUnion said Wednesday.

That’s an increase of about 9 percent. The rate also climbed 13 percent from the third quarter, when it was 0.75 percent, the firm said.

Much of the growth in late payments on credit cards in the October-December period is due to higher spending for the holiday season, said Ezra Becker, vice president of research and consulting for Trans-Union.

When the bills arrive in January, many cardholders who missed payments start taking steps to catch up, which ends up lowering the delinquency rate in the first quarter.

‘‘For people who might have overspent themselves, they might not have the money right on hand to pay, but once they start to get their tax refunds and their year-end bonuses, you see that come back into line,’’ Becker said.

Still, that task is more difficult this year because most paychecks have been reduced since Congress and the White House allowed a two-year reduction in Social Security payroll taxes to lapse at the end of December.

In…………… continues on Boston Globe

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New retirement hurdle: Credit card debt

Posted by administrator | 22/02/13 | Tagged Credit Card Debt

New retirement hurdle: Credit card debt
News from MSN Money:

This post comes from Matthew Heimer at partner site MarketWatch.

It’s long been a mantra of retirement planning: No mortgage, no debt, no problem. But the combination of rising health care and housing costs, flattening wages and the recent crash and recession has made that goal harder to attain.

Over the last two decades, the share of people reaching retirement with mortgage debt has steadily risen. And according to a new report by the research and advocacy group Demos and the AARP Public Policy Institute (.pdf file), the same appears to be tr…………… continues on MSN Money

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Credit Card Debt Fell While Delinquencies Rose in 4Q: Report
News from American Banker:

Americans racked up less credit card debt in the fourth quarter but more people fell behind on their payments.

Average credit card debt per borrower fell 1.6% from a year earlier, to $ 5,122, while the share of borrowers whose loans were at least 90 days past due rose seven basis points, to 0.85%, the credit agency TransUnion said Wednesday.

That compares with an average 90-day delinquency rate of 1.06% and average credit card debt per borrower of $ 5,389 during the fourth quarter over a 10-year period starting in 2003.

“The fourth quarter traditionally results in higher credit card balances and delinquencies, much of it to do with the holiday shopping season,” Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit, said in a press release. “Both credit card delinquencies and balances are below historic norms.”

Borrowers in Alaska ($ 7,012), Connecticut ($ 5,820) and Colorado ($ 5,792) carried the highest credit card debt in the nation in the fourth quarter, while borrowers in Iowa ($ 4,048), North Dakota ($ 4,179), and South Dakota ($ 4,30…………… continues on American Banker

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FORMER GOLDMAN BANKER: You Should Know The Ugly Math Behind Your …
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South Florida Mortgage, Credit Card Debt Balances Drop Sharply
News from Huffington Post:

South Floridians are taking their New Year’s resolutions seriously when it comes to reducing their debt. Average credit card balances dropped a whopping 12 percent in January compared to a year ago, according to the consumer website CreditKarma.com.

The average credit card debt was $ 5,410 in Broward and Miami-Dade counties, down $ 746 from January 2012 when it averaged $ 6,156, Credit Karma reported.

Average mortgage balances also fell during the same time — dropping $ 10,862, or 5 percent. The average home loan in South Florida plunged from $ 205,809 to $ 194,947 in a year as some owners paid down the principal on their mortgages, Credit Karma found.

Recession-toughened South Floridians are still focusing on paying down debt — even as the economy improves, said Credit Karma CEO Kenn…………… continues on Huffington Post

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Control your credit card debts

Posted by administrator | 13/02/13 | Tagged Credit Card Debt

Control your credit card debts
News from Cincinnati.com:

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News from Pueblo Chieftain:

LINK : http://www.krdo.com/news/Springs-Pueblo-In-Top-5-For-Credit-Card-Debt/-/417220/18522008/-/lyvr7h/-/index.html

Colorado Springs and Pueblo rank 5th in the nation for the highest credit card balances.  It’s according to a study done by a leading website that helps consumers manage their money.

According to Manilla people who live in these two Southern Colorado cities have an average credit card balance of $ 2,100.

On top of that, they pile on mortgage payments, car payments and student loans.

“That’s how people get in trouble,” said financial planner Jane Young.

Young also write the blog, Your Money and Your Life.

Young said it’s easy to spend more than you realize and rack up credit card debt.  “The best thing you can do for yourself is understand your situation and live within your means,” she said.

If you are an impulse shopper, Young suggests putting yourself on a cash budget and only use your credit cards for emergencies.

“Take your credit card and put it in a bowl in the freezer,” said Young.  That way…………… continues on Pueblo Chieftain

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What Age Group Has the Most Credit Card Debt?

Posted by administrator | 09/02/13 | Tagged Credit Card Debt

What Age Group Has the Most Credit Card Debt?
News from Opposing Views:

by Van Thompson

Interest can cause credit card debt to double over time.

Jupiterimages/Polka Dot/Getty Images

Credit card debt has been increasing steadily, and the average credit card debt in 2012 hovered around $ 15,799, according to the U.S. Federal Reserve. But credit card debt is not distributed equally, and older Americans tend to have higher credit card debt than other groups. A number of factors play a role in this debt, including income and the total time a person has had to accrue debt.

Debt and Age

Americans over the age of 65, on average, owe the most in credit card debt. Policy research firm Demos puts the average debt for this age bracket at $ 9,283 in 2012. The 45 to 54 age group has the second-highest credit card debt, with an average of $ 8,408. The youngest Americans — those aged 18 to 24 — have the lowest debt at an average of $ 2,982.

continues on Opposing Views

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Rolling Card Debt Into Home Refinance
News from Fox Business:

Dear To Her Credit,

My husband and I have a huge credit card debt of $ 65,000. We also need to refinance our mortgage loans. Our first mortgage balance is $ 118,000 at 5.78%. Our payment is about $ 1,600 a month. We also have a second mortgage with a balance of $ 18,000 at 7.25%. The payment on that is $ 235 a month. Our total mortgage is $ 1,835 month. Should we refinance our mortgage and add in our credit debt, so we’re only making one payment each month? Or is there a better way? 

– Laurie

Dear Laurie,

If you bundled all your mortgage and credit card debt together and got a $ 201,000 30-year loan at this week’s average rate of 3.66%, your payment would be $ 921 — not including insurance and property taxes. That’s about half the amount you are paying on two mortgages right now, and it includes your current credit card debt.

Besides lowering your monthly payments, such a move would save you a bundle in interest. Right now, you are probably paying more interest on your credit cards than you are on your house! Before you run out and refinance, however, there are a few things you need to consider.

First, do you qualify to refinance your home at a competitive rate? Home values have dropped, as you know, and lenders are requiring borrowers to have more equity in their hom…………… continues on Fox Business

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Is Including Credit Card Debt in Mortgage Refinancing Smart?
News from Opposing Views:

by Ciaran John

You can cash out home equity to pay off your credit cards.

Hemera Technologies/AbleStock.com/Getty Images

When you refinance your home, you can often take out some equity and use it to pay down your credit card debt. When you do so, you simplify your monthly budget by replacing several bills with one, and you can potentially save money. However, there are both advantages and disadvantages to paying off credit card debt with a mortgage loan.

Default

Credit cards are unsecured, which means your lender has no claim on your home, your car or any other collateral if you default on the debt. Creditors’ rights vary greatly among states but in many instances credit card companies have the right to garnish your paycheck or bank account in order to collect past due debts. If you pay off your credit cards with a home loan, your home is on the lin…………… continues on Opposing Views

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How’s your financial fitness?
News from Scottsbluff Star Herald:

Valerie Salazar and her mother, Esther, were in trouble.

The two had about $ 10,000 in credit card debt, no savings and seemingly no way out.

Salazar said it was a dark time for the family because the money problems were eating at their savings and family ties.

“We did not have a comfortable relationship because of the financial troubles,” she said. “We could hardly sit down and eat dinner together without fighting over it.”

The Salazars are not alone. A job loss or health crisis could spell disaster for many Nebraskans. More than one in four Nebraskans live on the edge of financial ruin with debt and almost no savings to fall back on in the event of an income-depleting emergency.

According to a new report by the Corporation for Enterprise Development, 29 percent of Nebraskans have almost no money saved for the future or to cover emergencies. The state ranks 19th overall for financial stability amongst its residents, the report stated.

 This report, the 2013 Assets & Opportunity Scorecard, defines these residents as “liquid asset poor,” meaning they lack adequate savings to cover basic expenses at the federal poverty level for three months if they suffer a loss of stable income.

Included in this group are many who would consider themselves middle class…………… continues on Scottsbluff Star Herald

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Expert: Holiday shopping debt on decline

Posted by administrator | 03/02/13 | Tagged Credit Card Debt

Expert: Holiday shopping debt on decline
News from Standard Speaker:

With the perils of holiday debt, some people are returing to the old standard for shopping – cash.

Careful handling of money during the holidays is something that Terri Stocki, the certified education director at Consumer Credit Counseling Services of Northeastern Pennsylvania, says is becoming more common. Calls to the center for help with holiday debt have been on the decline in recent years, she said.

In previous years, Stocki said calls came streaming in during this time of the year from people who spent a bit more than they should have with credit cards. She attributes the decline in calls to changes in the credit card industry in the past several years.

“I think people today are more financially aware of where their money is going,” Stocki said. “With changes in education and changes in the credit industry, it made people more aware of the cost of credit.”

One of the changes under the Credit Card Act of 2009 states that the front page of credit card bills must state the true cost of making minimum monthly payments. Stocki said that by making the $ 20 or $ 40 monthly payment, card holders will pay far more over time in interest rather than paying it off in larger increments.

When it comes to paying off credit card debt, she recommends paying it off as quickly as possible.

But even though the calls about holiday debt have dro…………… continues on Standard Speaker

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Millennials likely to take debt to their graves
News from Marketplace.org:

If you want to talk to someone about credit card debt, talk to April Lesho, she’s had her fair share. And she’s got the collection of financial planning books to prove it.

She shows me her bookshelf with titles like “Debt Free by Thirty,” “Suze Orman’s The 9 Steps to Financial Freedom” and “Idiot’s Guide to 401k Plans.”

Those books seemed to have worked for Lesho. She’s now the proud new owner of a house in Washington, D.C. But she hasn’t always been so careful with money.

“By the end of college, I had about $ 30,000 in debt,” she tells me. “I mean, I spent at will. So you know if I felt like taking a trip, I took a trip. If I felt like getting a new stereo system, I did.”

This was at the University of South Carolina, where Lesho graduated in 2001 with a degree in sociology.

“Didn’t you think it was going to catch up with you someday?” I ask her.

“I just figured,” she says, “when I got a job, I would be able to pay that off. I didn’t realize how far behind I was getting. And how long it would actually take to climb my way out of it.”

“You know, for a sociology degree, 30,000 sounds about right,” says Lucia Dunn, professor of economics at Ohio State University. Dunn says the scary thing is that Lesho’s circumstances are pretty typical for millennials coming out of college.

“They just have a lot mo…………… continues on Marketplace.org

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Credit Card Debt: Study Predicts Millions Will Die In The Red
News from Huffington Post:

Millions of young Americans will die in debt to credit card companies, according to new research from Ohio State.

People in their late 20s and early 30s (born 1980 to 1984) carry significantly higher credit card debt than older generations and pay it off more slowly, the study found. They have about $ 5,700 more than people born 1950 to 1954, and $ 8,200 more than those born 1920 to 1924. And they’ll continue to charge well into their 70s, the study predicts.

Researchers examined Capitol One credit card data for more than 32,000 people from 1997 to 2009, including borrowers age 18 to 85. The study, which appears in the January issue of the journal Economic Inquiry, was the first to examine both sides of the equation — how people borrow and how they pay off their cards — allowing researchers to forecast payoff times.

It’s not surprising that younger generations carry more debt, given stagnant wages; the rising cost of basics, such a…………… continues on Huffington Post

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Action Line: Credit card debt reduction takes a plan
News from Tulsa World:

Tips for paying down debt in 2013 are offered by Bill Hardekopf, CEO of LowCards.com.

Total owed: Round up each of your bills with outstanding debts, including credit cards, mortgage, student loans, auto loans, personal loans and bank loans. Create a list of all the creditors with the monthly payment amount, balance, interest rate and credit limit for each. Verify the payment due dates and the status of the accounts.

Pay cash: If you carry a balance on credit cards month to month, stop paying for purchases and daily expenses with cards. You pay a high interest penalty on every purchase made. If you charge meals, entertainment or clothing, you will still be paying these off years later. Put away the credit cards and use cash for such purchases.

Seek lower rates: Credit card issuers don’t act on this as often as they used to, but it doesn’t hurt to ask. If you have received an offer for a card with a lower rate, ask your issuer to match it. Tell them you will be shopping around for another card if they don’t lower your rate. If your rate is lowered, add the amount you saved to your payment so you can pay down your balance faster.

Pay over minimum: Pay more than t…………… continues on Tulsa World

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Ask the experts: Should my credit card debt be retired, too?
News from Sacramento Bee:

Should I pay off credit cards before retirement? Where should I invest my IRA money? What are some go-to websites for financial beginners?

This week, those personal finance questions get answered by Walt Romatowski, a certified financial planner in Roseville, who’s one of our “Ask the Experts” writers.

I owe $ 40,000 in credit card debt (on eight cards). I am going to retire this year and have $ 40,000 after taxes in my savings account from work. Should I take this money and pay off my credit card debt?

You did not mention if you have adequate retirement savings and/or a pension that will provide for your normal spending during retirement, or if you have a mortgage or any other kind of debt.

Assuming that you do have adequate resources to cover your monthly expenses, it does make sense to pay off your credit cards, so that you can enter your retirement years with little or no debt.

You don’t need eight credit cards, but you should hold on to one or two major credit cards to cover life’s inevitable unexpected expenses and to maintain your credit rating.

Try to pay for most things with cash. When that’s not possible, make it a habit to pay off your credit card balances each month, so that your debt does not build up again.

Where do you recommend a retiree invest a Roth IRA?<…………… continues on Sacramento Bee

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Younger Americans might die with credit-card debt
News from Columbus Dispatch:

By  Theodore Decker

The Columbus Dispatch Tuesday January 15, 2013 6:53 AM

That Chanel handbag might be to die for, and perhaps you truly couldn’t have lived without that all-inclusive trip to Cancun.

But the credit-card debt that those purchases helped to build could be following you to the grave.

Ohio State University researchers say younger Americans appear to be taking on more credit-card debt than the generations before them and are proving to be slower in paying it off.

“If what we found continues to hold true, we may have more elderly people with substantial financial problems in the future,” said Lucia Dunn, an OSU professor of economics. “Our projections are that the typical credit-card holder among younger Americans who keeps a balance will die still in debt to credit-card companies.”

The study, written by Dunn and Sarah Jiang of Capital One Financial in McLean, Va., used data from monthly surveys to look not only at the amount of debt that consumers carried but also at the speed at which they paid it off. They wanted to determine how d…………… continues on Columbus Dispatch

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How to Restructure Credit Card Debt

Posted by administrator | 12/01/13 | Tagged Credit Card Debt

How to Restructure Credit Card Debt
News from Fox Business:

For consumers struggling to make ends meet and racking up credit card debt and barely making minimum payments, hardship programs might provide a welcome relief.

Many credit card companies offer these programs that target borrowers who have fallen behind on payments. They typically offer debtors lower interest rates as well as reduced payments, fees and penalties. In general, most hardship programs fall into two categories: short-term, which could be for a few months or up to a year, or permanent which is until the credit card balance is paid.

Credit card companies don’t publicize these programs because they hurt revenues due to the lowered interest rates. But for most banks, these programs are a better option than not getting any money back as a result of an individual’s default or bankruptcy.

Delinquency: Not a Good Strategy

There are a couple of things to keep in mind when approaching a credit card company about enrolling in a hardship program. Most creditors will want to look at your income and expenses so be prepared to explain your budget. The company will evaluate your ability to pay your debt to determine your eligibility.

They will also look at your account history, so it is a good idea to inquire about the program before falling behind on payments. Using delinquency as a strategy to get your creditor to work…………… continues on Fox Business

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