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Your credit score is an important part of your personal financial picture and can be a significant factor in your financial well-being. Today, credit scores are often referenced by lenders, insurance companies and sometimes even prospective employers. Yet getting reliable, free and secure access to personal credit scores has been next to impossible.

In the world of credit reporting and credit scoring the word “free” gets thrown around too liberally, especially when it comes to products and services marketed to consumers via retail websites. “Free” in many cases actually means “conditionally free”, which really means it ain’t free.

Through our partnership with Credit Karma, Debtmerica is proud to offer our users credit scoring and credit monitoring that is really, well, FREE. For the first time you can get a truly free credit score with no hidden costs, no obligations, and no credit card required.

This same level of service is something that less reputable firms have tricked users into signing up for in the past, offering “free*” credit reports which come with a bunch of fine print suckering folks into ongoing monthly fees. But Credit Karma is completely free. Not freemium, free. There are no monthly services or paid upgrades.

Register a Credit Karma account today and you’ll get the following absolutely free:

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View a simple, straightforward snapshot of your credit report. The information provided will help you better understand the key components impacting your credit score.

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See how your credit score compares to other consumers in your state.

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This simulation tool allows you to plan ahead to see how financial decisions, like applying for a loan or closing a credit line, may impact your credit score.

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Discover savings opportunities for your credit cards, mortgage, auto loan and more. Offers update each time you log in and are unique to your financial needs.

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Cash Back Programs Linked To Increased Credit Card Debt

Debt Consolidation

It's always hard to resist the rewards that are often associated with credit cards. If you earn 1% cash back, wouldn't it be logical to use your credit card more than other methods of payment?

An article on points out that financial experts have noticed that "reward schemes are not really worth it because the value of the incentives rarely offsets the amount spent by the cardholder." When people have the opportunity to save, they lose sight of the goal and actually end up getting in credit card debt.

This isn't to say every person with a credit card that has a rewards program is putting him or herself into debt. When used carefully, they can be an added bonus.

Many credit card companies rely on rewards programs like cash back to make money. The incentive increases credit card purchases, and keeps many customers in debt. Managing partner at Holborn Assets, Steve Gregory says, "Used unwisely, they create more profit for banks than any of their other retail banking activities."

Don't fall victim to cash back programs. The incentive to earn cash back is not worth the debt that it can cause.

For help getting out of debt, contact us today.

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Think Twice Before You Opt For Bankruptcy

You may feel defeated, perhaps even embarrassed. However, if you are facing financial difficulties, think twice before you opt for bankruptcy. Here’s what you might lose:

  • Privacy. When you file bankruptcy, the bankruptcy becomes a matter of public court record. Unless a document is sealed, all cases become available for public viewing.
  • Good Credit Rating. Filing for bankruptcy can adversely affect your credit rating. Credit reporting services regularly collect and report bankruptcy data to the public.
  • Personal or Business Assets. Even though you file for bankruptcy, some debts may not be discharged. A discharge is issued by the court and prevents creditors from taking action to collect the discharged debt. In general, most debts are dischargeable; however, it depends on what type of bankruptcy you file.
  • Income. Even though you have filed bankruptcy, there may be some debts you will be required to repay. Repayment may be taken from your paycheck for up to five years after the bankruptcy.

As the debtor, it is your responsibility to:

  • Attend credit counseling from a “government-approved organization” within 180 days before you file fir bankruptcy. Afterwards, you must file a letter of credit counseling completion when you file for bankruptcy.
  • Attend pre-discharge debtor education after you file for bankruptcy.
  • Know how much you are required to repay and to ensure that any garnishment on your wages is accurate. Therefore, if you are supposed to pay $200 monthly, and your employer only withholds $100, speak up. You don’t want to be paying a large sum six or twelve months from now when someone finally realizes the mistake.

Bankruptcy is generally a solution of last resort. Consider some alternatives, such as negotiating with creditors, selling assets or obtaining a debt consolidation loan. That’s where we come in.

We can offer assistance when it comes to working out your financial difficulties. Give us a call. We're here to help.

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2012: plan for the year ahead

The New Year is an 'obvious time for a financial review'. That's the basic point of a new press release from Think Money, which advises people on a few steps they could take at the start of a New Year to help them make sure they stay in control of their debts.

As it points out: "many of us will be entering the New Year with a lasting souvenir of last year, in the form of credit card bills and other debts."

Ideally, we'd all like to be debt-free this time next year. If that's not really an option, we'd like to see the amount we owe shrinking, and the press release suggest a few ways people in different situations could go about achieving that - starting with a good review of their financial situation.

An 'action plan' that could work for people with spare money involves overpaying those debts: paying more every month than they actually have to. This can get borrowers out of debt more rapidly, and can seriously cut down on the amount of interest they'll pay on the debt, because the interest just won't have as long to accrue on it.

Then there are the people who might benefit from debt consolidation - people who are repaying multiple debts, which means they're dealing with multiple lenders and making multiple monthly payments. Someone in that situation might find their finances are a lot more straightforward if they bring all those debts together into a single loan. In general, the quicker they repay that loan, the less they'll pay in interest.

Then there are people who sit down to look at their finances and find that they're likely to struggle with their debts in the year ahead. This can be a really difficult situation to be in, but a good way for people to start dealing with it is simply to talk to their lenders and find out how they'd advise them to go about it.

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New Federal Bureau Helps Consumer Debt Relief

There’s a new sheriff in town. It’s the Consumer Financial Protection Bureau (CFPB). And it was created about a year ago to ensure that financial products such as credit cards and loans work better for consumers who need debt relief.

According to the 2012 report “Consumer Financial Protection Bureau 101: Why We Need a Consumer Watchdog,” nearly 20 million Americans use payday lenders. Additionally, there is about $1.2 trillion in delinquent consumer debt. Here’s what else the CFPB cites:

  • One in five Americans over the age of 65 has been victim of a financial scam
  • 50% of claims against debt collectors cite harassment
  • The default rate on subprime mortgages issued in 2006 exceeds 50%

What does the federal government hope the Bureau will be able to do? The CFPB offers three things:

  • Education. To provide consumers with the ability to compare the "costs, benefits, and risks of different products effectively—and to use that information to choose the product that is best for them. Fine print and overly long agreements can make it difficult for consumers to understand and compare products.”
  • Enforcement. Specifically, the Bureau offers federal consumer financial protection laws that restrict unfair, deceptive or abusive acts or practices against consumers.
  • Research. The Bureau takes consumer complaints, researches consumer behavior and monitors financial markets for new risks.

Because many consumers are confused about the Bureau’s work, the government put together answers to some of the more frequently asked questions.

We can help you with your questions as well. If you need debt relief, we can help you reduce your debt for one low monthly program payment. Contact us and we’ll explain how.

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Keep Credit Card Debt from Piling Up in 2012

The holidays are over and the bills are beginning to roll in. You had a very merry holiday, but now you have to face the pile of credit card debt that you incurred. Where do you begin?

Make More than the Minimum Payment

You may have noticed a change in your credit card statement recently. Now when you receive it each month there is a federally mandated box on it that tells you how long it will take you to get out of debt. It comes in two sections.

Section #1 shows you how long it will take you to get out of credit card debt if you pay only the minimum amount due on your statement. Depending on how much you owe, that could well be 30 years – the amount of time for a typical home loan.

Section #2 shows what you'd have to pay per month to get out of credit card debt in just three years. That’s why you want to pay more than the minimum payment. 

Pay Before You Play

If you really want to get out of credit card debt, be sure to pay the card off before using it again.

Yes, it might be difficult, especially given the economy. However, if you really want to regain control of your finances put the card away and don’t use it again until the balance is at zero.

Don’t Use Credit Cards for Cash

Easy money, sure. However, beware the hidden fees and higher interest rate charges. According to, if use credit cards to withdraw cash you will likely see:

  • Upfront fees of two to four percent
  • A higher interest rate than on regular charges
  • No grace period, interest begins as soon as you receive the money
  • Your monthly payments going to the balance with the lowest interest rate

Keep in mind, that as the holder of the card, you do have the right to ask the card company to apply your payment to a specific amount and some card companies will cooperate. If you are lucky, you can get them to payoff the higher rate first. However, you’re better off not using the card at all.

Staying out of credit card debt can be tough. We’re here to make it easier on you. We’re just a phone call away.


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Knowing When It’s Time for a Debt Consolidation Loan

You’re in a financial crisis. Your debts have gotten out of hand. Your credit cards are maxed. Your car note is due. You owe back taxes. You don’t know where to turn. This might be the perfect time for a debt consolidation loan. 

Benefits of a Debt Consolidation Loan 

The first step is to understand how a debt consolidation loan can reduce your monthly financial commitment. 

Like any line of credit, the process begins when you complete an application and go through the normal approval process. Generally, it is easier to receive a loan secured by collateral such as a home. However, if your credit rating is good, you may be able to acquire an unsecured loan. 

With a consolidation loan, the lender agrees to pay off all your debts, thereby consolidating all your obligations into a single balance. In return, you repay the lender a single payment each month instead of having a bunch of different debts. Most people find that a debt consolidation loan is easier to repay because it enables them to focus on a single debt.

In addition, whereas credit cards and payday loans have notoriously high interest rates, a debt consolidation loan generally offers an affordable repayment plan with a reduced interest rate.

Finally, taking care of your debts offers you a more stable financial future and protects your good credit. A good credit rating will enable you to obtain other low-interest loans in the future.

Potential Downfall of Debt Consolidation Loans

While consolidating your debt may seem like the answer to your prayers, it is important to learn good spending habits. For some people, the desire to spend never goes away. And once their worries are combined into a single monthly loan payment, they get back into debt.

Don’t let consolidating your outstanding debts give you empty credit cards begging to be used. Use your debt consolidation loan as an opportunity to start over. We are here to answer your questions and assist you. Give us a call today.

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Credit Card Debt vs, Mortgages: Who Wins?

Credit Card Debt Vs Mortgage

As 2011 winds down, many people are finding themselves having a difficult time juggling their bills each month. Whether due to a job loss, illness in the family, or unexpected expenses this can be a difficult time for your family.

Feeling the pinch in your monthly finances may also mean making choices as to which bills you are able to pay each month. With credit card debt, home mortgages, and other monthly bills all competing for your dollar it can be hard to make a choice.

According to this December 7, 2011 article by Christopher Quinn in the Atlanta Journal Constitution, there is a new trend in how homeowners are choosing to use what monthly income they have available for paying down their debts:

More consumers are choosing to pay credit card debts while letting the mortgage slip, helping push credit card delinquencies to their lowest point in 17 years, financial services and risk management firm TransUnion said.

Historically, Americans protected their house payment and were more apt to be delinquent on credit card payments, said Charlie Wise, the company's director of research and consulting. But crashing home values and desperation have caused that to flip since 2008.

Consumers are making tough choices based on which asset gives them what they need in tough times.

"Consumers are protecting their credit cards. It gives them financial flexibility," Wise said.

The number of consumers current on credit card payments but delinquent on mortgages was 4.3 percent in 2008 but rose to 7.4 percent in 2010.

The shift in consumer attitude is not surprising, said Dan Immergluck, a professor of city planning at Georgia Tech and an expert on foreclosures. More people under foreclosure realize and accept they are losing their homes and so choose to protect their remaining financial tools.

Need some help with your credit card debt? Contact us for help with credit counseling or other debt relief services.


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College Students Seeking Debt Relief

Do you have a kid getting ready for college or already enrolled? Well then, class is in session. Sit down, face forward and pay attention… Today’s average college student is going to graduate with a loan debt of $25,250; that’s up a stunning 5% from last year and will cause many to seek debt relief in the future. This shocking trend is only gaining momentum with reports indicating that roughly two thirds of the class of 2010 had to borrow to cover their college expenses.

Headlines were recently made across the country as government, banking and private sources all concurred that America’s student loan debt now weighs the country’s credit card debt. When we view these debt figures alongside our country’s unemployment rate, it would seem that graduates are going to have a tough time finding the right job that will allow them to tackle their student debt.

Mark Kanrowitz, of told USA Today, "Students who borrow too much end up delaying life-cycle events such as buying a car, buying a home, getting married (and) having children."

This increase in student loan debt has caused the newly created Consumer Financial Protection Bureau to take notice and start asking for public feedback regarding issues borrowers may be having with private student loans. This feedback will be used to create a report to Congress about private student lending due in July 2012.

In a recent article by Business Week, Raj Date, an official with CFPB, stated that the private student loan market is one of the least understood in the consumer credit market. Date was quoted as saying, "Shedding light on this industry will benefit students, lenders, and the market as a whole.”

It is important to note that Private Student loans issued by banks do not come with the same guaranteed protections as U.S. Department of Education issued loans and these bank loans tend to have higher, variable interest rates.

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Purpose Driven Debt

Written by Harry Langenberg - Debtmerica COO

Purpose Driven Debt

We are all aware that America’s appetite for too much personal debt ran our economy into the ground recently. Since the great banking collapse of 2008 we have been bombarded with the message that taking on any type of debt is a downright bad idea. In fact, the very four letter word, D-E-B-T, now carries a stigma that stinks like rotten eggs. But as with any cycle of mainstream culture, our views towards debt may have deviated well past a fair trial. In fact, given the awful reputation that personal debt has these days, the jury is out on whether it could actually be an undervalued asset worthy of a second chance.

While taking on too much personal debt is generally considered toxic towards our financial well being, there are many cases where taking on debt is useful, sensible and can even be very rewarding. This blog challenges some of these negative preconceived notions towards debt and presents some positive reasoning behind spending decisions that help clarify the gray line between “Good Debt” and “Bad Debt.”

Debt may be considered good and beneficial when its use has the right motivational drivers behind it. Debt with a good purpose can help a small business grow and earn more money, it can improve a family’s quality of life or health, or it can secure one’s education or professional vocational skills. Debt is bad and strenuous when it has no constructive purpose. Bad debt is generally taken on for short-term gratification, carries little opportunity for gaining value in the long run, and often comes with ugly terms. Being able to differentiate between purpose driven debt and gratification driven debt is key to using debt as a tool for success, rather than falling through the trap doors.

Regardless of what type of spending we do, most of us will come to a crossroads where we decide whether a purchase is worth the obligation to pay it back. The more rational side of us will ask, “Do I really need this”, and “is it really worthwhile?” and the more gratification driven side of us, might conclude, “I deserve this” or “It shouldn’t take me that long to pay off.” The following are specific drivers of debt that have a good motivation and honorable purpose, often aiming to enrich one’s overall circumstances or quality of life:

Family and the Hearth

Investing in the foundation and future of your family’s well being is a wonderful purpose for considering debt, as long as the terms of the loan are stable and well within budgeted means. One of the first major purchases a married couple makes together is investing in a home for their growing family, where a mortgage is often obtained to secure the property. Another big purchase families make together is a family car to transport children to and from school and activities. Accessing an auto loan to buy a reliable and safe vehicle can greatly improve convenience and mobility for the family.

Career and Your Business

Your business or job is one of your major sources of income, thus it is important that you invest money into maintaining it and growing it when possible. Taking out a loan to start or expand a business with the intention that you will be making more money than you will be paying for the loan is an example of debt driven by a sensible purpose. Sophisticated companies are constantly borrowing to grow and make strategic investments. These same principles apply to individuals and entrepreneurs with the experience and know-how to advance their careers and businesses.

Education and Learning

Most people take out a student loan to finance their college tuition. A higher education degree should result in more career opportunities and a higher income level down the road. Purchasing tickets to a conference to educate oneself on a certain topic or borrowing to enroll in a vocational training course are examples of debts that are used to help secure one’s professional standing and income. Also, investing in your child’s education and hobbies is another example of purpose driven debt with long lasting benefits.

Protection and Security

Insurance is a great example of a product that provides different types of protection and is generally financed to some degree. Different types of insurance plans provide protection for one’s family, income, car, life, and home. We often have the option of laying down a big up-front premium payment to cover such protection for multiple months or years in advance. Choosing the full premium payment is simply not realistic for many families, and so taking on a monthly payment obligation to support these protective products just makes sense, as long as the terms are reasonable.

Health and Wellness

One of the most important things to consider is your health and wellness. Gym memberships improve your quality of life. When people work out they feel good, they are more productive at work, and exercise may even improve their personal relationships. Also, taking on debt for medical solutions, such as a vital treatment for a loved ones health, is priceless. You can’t place a dollar sign on someone’s health or life!

Although this blog is meant to change your perspective on the dreaded four letter word D-E-B-T, its intention is not to encourage readers to falsely justify frivolous spending. Unless you have a large bank account with a lot of C-A-S-H you need to consider the motivations and drivers behind each purchase. The key message here is to remember that whether we are making short term or long term spending decisions, we need to evaluate the purpose behind the particular purchase we are making, and examine the future benefits of the bounty.

So, whether you are at the check out counter ready to whip out your credit card to purchase that new pair of leather shoes or you are at the bank ready to sign on that dotted line to purchase a new home, remember to ask yourself these questions, “What am I trying to accomplish by bringing on this debt?” “What purpose am I trying to achieve over the short term or long term with this debt?” and “Are the terms of the debt I am taking on sensible and conducive to enriching my overall financial plan?”

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Surprise! 1 percenters have credit card debt, too

Income isn’t the only thing that separates the “1-percenters” from the rest of us.

As it turns out, the wealthiest of the wealthy — now at the center of coast-to-coast political protests by the Occupy Wall Street movement — also seem to manage their credit better, according to the Huffington Post.

Though America’s richest households (those earning $344,000 a year or more as of 2009) make 225 times more than the average median household, they also rely heavier on credit than the remaining 99 percent of the country. But because they manage their credit card debt better, the 1-percenters’ average credit score is 704, as opposed to the 99-percenters’ average of 637, the Post reports.

Higher scores — which are earned by paying bills on time and avoiding collection agencies, as well as maintaining a balanced credit portfolio — mean better rates and access when it comes to loans or new credit cards.

And in the long run, that might help reduce the income gap.

Meantime, the lesson for most of us is this:

Money alone doesn’t give you a higher credit score. It’s how you manage the money you have.

That’s where we come in. Contact us — we can help you resolve your debts and regain your financial balance.

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Top Articles to Help You Lead A Debt-Free Life

  • Debt Consolidation: “Debt Consolidation” is one of the most commonly misunderstood and misinterpreted personal finance strategies that consumers inquire about all the time. While some view it as a method of taking on new loans, others see it as a debt relief alternative. It is more important than ever for inquisitive consumers to have a very strong understanding of exactly what debt consolidation entails, and the impacts it can have on personal finances.
  • Debt Relief: Debt relief is defined as a partial or total forgiveness of debt. When the term is used by the government, it usually refers to the forgiveness of debt to underdeveloped countries. Recently, it has begun to refer to the millions of consumers who are overwhelmed with debt seeking financial relief from their unsecured debt.
  • Credit Card Debt: Credit card debt is an example of unsecured consumer debt, accessed through credit cards. Debt results when a client of a credit card company purchases an item or service through the card system. Debt accumulates and increases via interest and penalties when the consumer does not pay the company for the money he or she has spent.
  • Debt Settlement: Debt settlement programs use a third party to negotiate lower balances and interest rates on unsecured debt. This type of debt management plan helps provide consumers an alternative to bankruptcy while reducing your outstanding debt.
  • Credit Counseling: There are a numerous options for consumers who want to start getting their finances under control after accumulating large amounts of debt, which could inevitably lead to credit problems further down the road. Consumers who are in control of most aspects of their finances, but still feel like they could use additional help managing their debt burden, could certainly benefit from the assistance of a consumer credit counseling service.
  • How Do I Get Out of Debt?: Now that the national economy is beginning to recover and people are having a better time dealing with their personal finances, many consumers who found themselves sunk deep in debt over the last few years may be asking themselves the question, “How do I get out of debt?” Fortunately, there are a number of avenues consumers can take to get out of debt, each with benefits and drawbacks depending on how quickly people need to fix their financial problems.
  • 10 Tips to Avoid the Debt Trap: Have you ever thought about why so many of the people you know are struggling with debt? Do you ever wonder why banks keep lending to certain individuals, even when they are falling behind on their payments? Did you know that debt problems are a leading cause of major societal problems, such as stress, divorce and alcoholism?
  • Credit Management: Many consumers are finding themselves buried under a pile of mounting debt. With interest accumulating month after month in addition to late fees being charged, many consumers are finding it difficult to make just the minimum payments on their credit cards. Although this may seem like an endless battle, with a strict budget and some discipline there are credit management strategies and solutions that will allow consumers to reduce or even eliminate their debt.
  • Credit Card Debt Reduction: In recent months, many Americans have made a greater effort to seek credit card debt reduction and reduce the balances they owe, but some may not know where to start. Fortunately, there are several options available for consumers thathave a financial goal to achieve credit card debt reduction.
  • Credit problems: Paying down high levels of debt is one of the best ways to improve credit problems and increase one’s credit standing. But many people cannot do that so quickly, especially in this economy. About one-third of a credit score is based off of a credit utilization ratio, which is the total creditbalances divided by the total credit limits. A great target is to use no more than 30% of one’s available credit.

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