Debt Problems
New Credit Card Rules for Canada – Will They Change Your Spending Habits?
Credit card companies often keep the fine print really fine. A lot of people don’t read the fineprint and really don’t consider how much they’re spending on interest. One of the new regulations in Canada is the fact that Canadian credit card statements will now demonstrate how long it will take you to pay off your credit card balance if you just make the minimum payment.
A lot of people don’t read their entire agreement and a lot of people don’t quite understand the terms. Will seeing how long it’ll take you to pay off that credit card help you be more incented to pay it off sooner?
But I Can’t Give Up My Credit Cards, Can I?
People trying to get out of debt are nervous about getting rid of their credit cards. Some say they’ll need to keep one for emergencies or need it for buying things online. But if you continually rely on credit cards, it’s a sure sign that you’re spending money you can’t afford to spend. Pre-Paid credit cards could be a great solution for you.
Prepaid Credit./ Debit Cards
Pre-paid cards offer all the perks with none of the dangers that regular credit cards pose. You can have a pre-paid credit card or a pre-paid debit / ATM card. For a debit card, you have to pre-load them before using them so there’s no monthly bill and no interest charges! Simply load the card up with cash and use it the way you would normally use a credit card. There is a convenience fee associated with this so cash is definitely a better way to go but this type of solution could work great for going on holidays, putting yourself on a budget, and for putting your teenaged kids on a budget.
If you have a child who is a student living away from home, one of these loadable debit cards is a good way for you to send them funds in an emergency or as part of their living expense as well. They can most often access the funds within a few hours after you’ve loaded the card and you can often load it via the Internet or by dropping in to your local Western Union money transfer office.
If you sign up for a pre-paid credit card, it works very much like a regular credit card in that you pay interest and have a limit but the account has your funds in a savings account. The benefit of this type of plan is that it can help you rebuild your credit because if you make payments on time every month, it will start to report positive credit for you.
Living debt free is what you need if you want financial freedom. Living on a budget and cautionary spending are the first steps to getting there.
Where do you get pre-paid credit cards?
There are companies that offer pre-paid credit cards that allow you to pay a fee for a credit limit in return. Do shop around as the interest fees can be quite high.
In terms of pre-paid debit cards, there are at least a dozen options that you can find either online or at your local cheque cashing store such as Money Mart or Western Union.
Get rid of credit card debt as soon as possible! If you do buy a pre-paid credit card to rebuild your credit, use it very wisely and be careful you don’t fall into the old credit card trap that got you in debt in the first place.
Options For Homeowners Facing Foreclosure
Surely by now everyone has heard of the latest government programs addressing the sub-prime mortgage crisis; they may even realize that there are loan modification companies out there to aid in restructuring the terms of their mortgage. What most consumers do not know is exactly how the process works and what to expect during the process.
One thing that homeowners need to realize is that expecting their mortgage servicer to be on their side and patiently walk them through each step to freedom from foreclosure is a naïve, and even dangerous, supposition.
The Mortgage Crisis Spin
The U.S. government has put quite a spin on their efforts to resolve the current crisis regarding sub-prime mortgages. Television networks and news reports have jumped on the bandwagon, urging consumers to call their mortgage company and keep their home. They are all proponents of do-it-yourself loan restructuring, advertising the process as quick, easy and fail-safe.
What they are not being completely honest about is that a mortgage loan is a legal document. As such, the homeowners who signed it are legally bound and obligated to pay it back under the terms it was written. Attempting to restructure the loan without professional advice and the correct legal information can actually result in creating a worse situation for the struggling homeowner – and oftentimes the loss of the property anyway.
Do Your Homework and Get Help
The good news is that there is a lot of help for homeowners available and loan modification companies to help them. The first step in the process of negotiating new terms for a mortgage begins with research and preparation. Do your homework.
If you are currently delinquent in your loan payments, start by determining if this has resulted in extra and undue fees being added to the amount due. Usually these fees, which can range in the tens of thousands of dollars, will be added without your knowledge. You must know exactly what you are dealing with in order to turn around the situation.
The next thing you must research is the exact wording of your mortgage document and the black-and-white terms. There are some mortgage servicers who will attempt to stretch the definition of terms and take advantage of homeowners who do not understand the legal jargon. As well, the loan itself is probably not held by the financial institution you originally dealt with; it has probably been sold time and time again – an important consideration.
Threats to Do It Yourself Modifications
If you are considering going through the process of the mortgage modification process without benefit of legal counsel, be aware of some of the drawbacks.
Number one is that many times the mortgage servicer will add a release of liability clause to the new terms. This means that the homeowner is signing away the right to ever take legal action against the loan company, no matter the circumstances.
Unfortunately, the mortgage company truly does not care about the plight of the homeowner. They are looking out for themselves. The fact is, many of the consumers who go through a restructure of their loan end up in foreclosure within six months after the new mortgage has gone into effect.
Using loan modification companies as your advocate to prevent foreclosure is highly recommended. These firms have the knowledge and resources to investigate what company truly holds the mortgage and how to best deal with them and respond appropriately to the legal ramifications. If you are facing foreclosure, this is no time to try to do it yourself and risk losing even more.