Wednesday, December 4, 2024

I want to thank everyone who watched my interview CN8 in New Jersey, Pennsylvania, and Delaware on January 3rd, 4th, 7th, and 11th! The show is "Real Life" hosted by Mary Amoroso and it airs at 6:00 PM daily.

After each show I received many great questions and many of these viewers allowed me to share their questions with everyone. I received questions about mortgages, debt counselors, consolidation, credit histories, bankruptcy, medical bills, credit cards (of course), and many other topics. Below are some of those questions and answers.

Question:
I have approximately $20k in credit card debt, the bulk of this is from one credit card @ 22% rate. I am not a homeowner, so I am considering the services of one of the non profit debt counseling companies, i.e. AmeriDebt, Cambridge Credit Counseling. I have been paying the minimum payments on my credit cards each month, but I need to be paying more. So far my credit report shows nothing abnormal. What will happen to my credit report/history if I use one of these credit counseling services?
 --Dan

Answer:
Dan,

Thanks for writing!

It's hard to tell exactly what's going to happen to your credit history if you use their services. I would try to resolve the situation with each creditor one at a time.

You can read about the experiences of one of my readers, with credit counselors, click here.

I would also look into getting the as much of that debt to a lower rate card--make the banks compete for your business! You can probably get better rates from other banks because you seem to have a good credit history. Read my article about getting better credit, click here

Good luck and please let me know what happens!

Regards,
Scott

Question
It's been a really rough year and I fell behind on some credit cards.  They were turned over to a collection agency and I have since settled and paid them off.

My question is how long can this stay on my credit history?  One agency indicated that it would be removed within 3 months?  Was this the truth?

Thanks,
Lisa

Answer
Lisa,

Thanks for writing!

According to the Federal Trade Commission, accurate negative information generally can be reported for seven years, but there are exceptions: 

Good luck and please let me know what happens!

Regards,
Scott

Question
Hi Scott,

My name is Frank and my question is how do a get a loan to consolidate all my debts. I have a debt of 15,000 dollars in credit cards. I have 3 major credit cards and 3 department store cards. I tried to get a loan from several banks but they all deny my requests because I do not have collateral. They asked me if I have a house or a car and I told them no. They do not approve any loan without collateral. What can I do? I can only pay the minimum payment and have been doing that for three years now, and my balance is not going down! Please help me. 
--Frank

Answer
Frank,

Thanks for writing!

The most important factor is the cost of your debt. If the rates on your credit cards are high then you certainly need to lower those rates.

You are correct in trying to consolidate your debt to lower rates however, since you cannot get a bank loan you may need to turn to new lines of credit.

Try reading my article "Getting better, cheaper credit--right now!" click here

Good luck and please let me know what happens!

Regards,
Scott
PS: Also try earning extra money, take a look at my articles, click here

Question
Dear Scott,
I am having a problem with my two Visa accounts. I have had them both for at least 6 years. I always used their balance transfer checks which were interest free, no fee, and had a grace period as long as I paid the balance in full each statement. For all of these years everything was fine. Each time I made a transfer I requested the same type of transfer and things were ok. I paid in full each time with no finance penalty. 

Now, in  the past two months I have run into them posting a finance charge because they have removed  those benefits. However, I was never notified in writing or any other form that they had removed that benefit on my accounts. And they verbally confirmed the promotion was available when I called to do the transfers. Now I have finance charges of $250.00 for something I had no idea was happening to my account. I did not know that they had removed  those  benefits. Even though they insist they sent me notice, I know I never received it because I keep all my correspondence to keep up with the rules.

I have always paid on time and never had any problems before, and I have a good credit rating. Why are they doing this to me and is it legal? If I could send you a copy of my dispute can you send  me  an address or fax to get assistance. I don't  know  who to contact?
--Maria

Answer
Maria,

Thanks for writing!

This has happened to me in the past. I've taken advantage of a transfer offer where I thought I didn't have any fees but when the bill arrived it showed a different story.

You've already called them to complain but I suggest you give them another call. I would tell them to "waive the fees or it will be the last time I use them." If the first rep that answers the phone can't help you then ask to speak to a supervisor. Be sure to remind them that you have other credit cards you can use if they don't do something.

I'm almost sure they're going to be able to show some type of fine print that allows them to charge you, however, in the worst case you can explain that you didn't know and that they need to reduce those charges at the very least.

If I couldn't get any result from calling I would starting looking for better cards. Check out my article on getting better credit, click here.

To see what else you may need to watch for in the future please take a look at my article, click here.

Good luck and please let me know what happens!

Regards,
Scott

Question
On her 18th birthday my daughter ran out & got 2 Credit cards which she maxed out very quickly (aprox. $600.00 per card). Last Xmas her aunt gave her a savings bond that she had (aprox. $800.00), she sent $400 per card, then maxed them out again! During the summer I talked her into letting me manage her money & debt. As much as I wanted to pay them myself, I didn't. I called the companies and started payment arrangements. One card we cancelled, one we kept active. After a few months I had her below the levels where she was getting hit with $29 (monthly) overlimit fees & $29 late fees. She thought she could handle it & took it all back. Yesterday I looked at one of her bills (which she won't discuss with me...I think she's embarrassed to let me see how far in the hole she is again). Her bill is up to aprox. $800.00 and growing with the above fees being added again. She also owes Blockbuster $125.00 and her cell phone bill is over $600.00. That's an incredible debt for a teenager!

She's trying to do the right thing and pay them, but sending only $40 or $50.00 per month just doesn't cut it, it doesn't even meet the minimum payments...the bills continue to mount higher & higher. What do you suggest? She's already ruined her credit, but what can she do to stop the bills from escalating and just pay them off?? Is it legal for these companies to continue to add their monthly charges when she is making an attempt??? (We live in NJ, if that matters) It really breaks my heart to see this happening. She's really trying, she even works 2 jobs to pay her bills but the hole is too deep!!! How can I help her (short of paying them off for her which I can't do, nor would I if I could).

Thank you for any suggestions

A very upset & worried mom.

Barbara

Answer
Barbara,

Thanks for writing!

Your question is worthy of an entire book for a response! I have three children myself however, the oldest is only 10, so I don't have worry about these problems yet.

The problem is that kids aren't taught financial management in high school. Even if there was a course, the kids still don't have any real money to manage. It's almost like having 8th graders learn about driving. They might be able to understand the academics but without practice they can really never learn.

I would try to help, as you have done, by teaching her how to get organized and make payments on time. Since you have done this, and it hasn't worked, then, I would ask her if she want to resolve the problem or is simply content to ruin her credit forever, and pay a HIGH price doing it.

I think she would want to get this resolved so it's time for a new plan. A plan that involves spending discipline. I never want to tell people how to spend their money however, if eliminating debt is the goal the answer is going to lie in three places: (1) reducing spending, (2) reducing the cost of existing debt, and (3)  paying more toward the debt (more income).

Ask her to read my article "9 Steps to Get Organized for Financial Success!"  click here

And, "7 Steps for Eliminating Your Debt" click here

Good luck and please let me know what happens!

Regards,
Scott

Question
Hi Mr. Bilker,

I have watched you on CN8.

I have about $8,000 credit card debt in 6 different banks. I had joined a  credit counselor program called Neway about 2 years ago and continued to be with them until now. When I first joined with them, Neway had asked me to make a monthly payment of $250. And then a month later I found out that Neway took my money instead of paying off my debt to my creditors. When I called to ask them why they hadn't paid off my debt, they told me that first payment is an initial fee that they keep. I was never informed of that before I signed up with them.

Is this a normal thing for all credit counselor programs? I feel like I got conned by them, but when I found out that the bank had lowered my interest rate drastically I decided to stick with the Neway.

Also, Neway charges a fee of $6 for each account which would add up to $36/monthly. My question is should I continue to be with Neway until I pay off my debt or should I drop them and start making payments on my own?????

When I saw you on the TV, you mentioned that I can call the creditors and try to negotiate the interest myself which I was not aware before. I would greatly appreciate it if you can give me advice on this. Thanks for your time. 

Regards,
Anne 

Answer
Anne,

Thanks for writing!

It's true that many of these credit counselors, or as I call them, "voluntary collection agencies" may charge fees. My feeling is that if they were saving me money and time, and I considered the fee reasonable for the service, then I would keep that service. However, there are certainly disadvantages inherent when using credit counselors.

You can read about the experiences of one of my readers, with credit counselors, click here.

Yes, you can negotiate lower rates yourself! Some credit counselors may not want you to know that secret. I've done this many times.

To learn more about how to "Lower your credit-card APR right now!" click here.

Lastly, I would also try to contact my credit card banks and say, "I'd like to continue paying you with my new low rate however, I don't want to go through Neway. Can I do that that?" With this strategy you eliminate the middle man and keep the all the financial deals the same.

Good luck and please let me know what happens!

Regards,
Scott

Question
I saw you on a CN8 TV show on Friday, and tried one of your suggestions, it helped. My problem is that I am being told that I have baby credit. I am 40 and have been paying cash for most of what I need I live with. The house and bills are in the name of my fiancée. Last year I got a Sears Card that now is maxed-out at the $500 limit at 21%. I also have a Kohl’s card with a $500 limit, bal. $475, at 12.5%, a Capital One Visa that has a $6 per/month member fee with a limit of $300 at 17.9%, and a Cross Country Visa that was the first card I got and had nothing but TROUBLE with from the start. I cancelled the card, and almost have it paid off. I am sure you have heard of this rip-off company, if not please tell your readers to steer clear.

I also have about $2500 of medical bills in collection and am fighting with my insurance company, but they won’t pay these.

I have made it very hard to get a loan for a car, but after many turn-downs I bit the bullet and took a loan for a 97 Taurus with payments of $199.81 per month. The interest rate is 23% with a balance of $10,789.74. This was the only loan I could get. The dealer told me this will help with my credit and I don’t have to keep the car for the full term of the loan. After a couple of years I will be able to trade it in and get a better interest rate. Is this so?

I tried calling Capitol One and using one of things you said on Friday’s TV show. Well, I called and told them that I had an offer for a card at 0% for 6 months, and they were willing to give me a much higher credit limit. The rep asked what the interest rate would go up to after the 6 months and I told him 15.9% and that if he could not help me out I would be taking their offer. He raised my limit to $1000 from $300 and dropped my rate from 17.9% to 15.3%. I transferred my Sears balance to Cap 1. Thanks, I think I did OK. By the way, there really was no other offer.

I would like to know if the companies on the World Wide Web that say they can guarantee to get you a personal loan for a fee would be a good way to get a loan to pay off the medical bills. We also need to put a roof on the house. We looked into refinancing, but it would not be to our advantage since we now have a variable rate at 7.125% and can only go up 1 point a year for a max of 5. Any suggestions on how I could get a personal loan would be greatly appreciated.

Thank You,
Mark

Answer
Mark,

Thanks for writing!

First of all I want to congratulate you for calling the bank and making them give you a lower rate! The great move you made was the balance transfer from the Sears card as soon as you got that lower rate--textbook perfect!

It is ironic that by using cash for most of your life you're penalized because you don't have a credit history. This is common, it's the usual catch-22, "you need the credit history to get the credit but you need the credit to have the credit history."

It is true that if you pay your car loan on time it will be positive for your credit however, 23% is too much. It is also possible that the dealer didn't give you the best rate. Check out one of my Q&A's, click here

I wouldn't wait to refinance that car loan. I would start contacting banks to see if any would be willing to grant you a new loan to pay off that 23% finance.

I would also look into getting cheaper lines of credit. Check out my article about lowering your credit card APR, click here. Having good credit cards improves the look of your credit rating, just don't overspend.

As for the medical bills, I would make arrangements directly with the medical providers. I'd ask for 0% finance terms with affordable monthly payments. I've had to do this in the past myself and they did work with me.

For personal loans I wouldn't deal with a company that charges a fee for a loan unless it's clear that they don't charge me any fees until I actually get the loan. "The best loan is the cheapest loan" so as long as the company delivers the money (that your buying by getting a loan) to you at a good rate then it's an option to consider.

Have you looked into getting a home equity loan for the roof repairs? If you have equity in the house then you may be able to get an equity line of credit, which is also a tax deduction. You can apply for one at:
http://debtsmart.financialcircuit.com/

Good luck and please let me know what happens!

Regards,
Scott

Question
I am $28,000 in debt. I pay my bills on time every month. The balances stay high. No one is willing to consolidate my balances to low interest cards because I have too much debt. What should I do?
--Shanece

Answer
Shanece,

Thanks for writing!

The balance stays high, as you probably know, because of the interest charges. The feeling I get is that your rates are high. I think high is more than 14%.

I wouldn't be so concerned about getting a single "consolidated" loan. Look into getting lower rates from many different sources. See my article about getting lower rates, click here

Also, have you tried to contact the banks to see if they'll lower your current rates? Check my article about doing this, click here

Good luck and please let me know what happens!

Regards,
Scott

Question
You may have addressed this question many times before, but I am new to your website after seeing you interviewed on CN8.

I am at a loss as to which way to turn. My husband started a vending business 6 years ago and bought the machines with expensive leases (Advanta leasing, for example). He actually owns the machines but was paying stiff monthly payments. As he gained and lost 'locations' throughout the years, he was often unable to pay the leases, prompting the companies to demand the payment or 'repossess' the machines. As a result he put lease payments onto our credit cards, commingling business with pleasure so to speak. As a result we have extremely high credit card bills totaling over 100K. Amazing that we could get this kind of credit, but my income is over 70K and his is around 50K. Some rates are around 9-12% and one is over 20%. 

As a result of not paying many cards on time we have ruined our credit rating and cannot get a loan or new card. We are tapped out on the equity on our home and one card company has even placed a lien on the home. Refinancing was considered but our rate is low already, plus I don't think we are creditworthy any longer. We are considering debt counseling such as Cambridge or Ameridebt. Would we be getting ourselves into deeper hot water going this route. Are these services legit and helpful? Many claim to be non profit org's and their fees seem to be minimal. Can I have your take on these? Is there info in your book about credit counseling services?

Thanks and my apologies for such a longwinded question. Looking forward to your response.
--Rose

Answer
Rose,

Thanks for writing!

It's true that many of these credit counselors, or as I call them, "voluntary collection agencies" may be able to help, however, there are certainly disadvantages inherent when using credit counselors.

You can read about the experiences of one of my readers, with credit counselors, click here

Now that I've just finished bashing credit counselors I still have to say that they are an option that you may want to consider. Just be sure you know all the details of what they're going to do, how much it will cost, and how it's going to affect you.

It sounds like you've really tried everything. The late payments and problems with your credit history, plus the $100,000 debt are certainly going to make it difficult, but not impossible, for you to find new credit. If you haven't applied for a new card recently then try and see if you can get a lower rate to transfer your balances. Take a look at my article, click here.

Lastly, with that much debt and no equity, you may want to look into your options for bankruptcy. I would contact a bankruptcy attorney and ask for his/her advice on a chapter 7 or 13. You can read more about the details of bankruptcy at:
http://www.nolo.com (click on "Debt & Bankruptcy" on the left menu bar)

Good luck and please let me know what happens!

Regards,
Scott

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