Jeff Michael: Repair Your Credit and Knock Out Your Debt
I highly recommend this book because I wrote it.
Edie Milligan: Tips from the Top: Targeted Advice from America's Top Money Minds
I have about a dozen entries in this book.
« January 2007 | Main | March 2007 »
I've been too busy for regular posts lately, but I wanted to point out that today the NFCC's (National Foundationg for Credit Counseling) talking about their "national individual consumer membership program," whereby they plan to compete directly with their own member agencies. This is where the NFCC goes from being a not-very-good trade organization to being actively bad at it.
A friend pointed me toward plasticeconomy.com, an interesting site devoted to helping people reduce their credit card debt. What I haven't figured out yet is how they do that. They provide some credit education on the site, sure, but the main feature is a tracking tool called "TrackCards," which "lets you track and manage credit card debt through a simple, easy to use interface." I haven't gotten deep into that yet, so I don't know if it's really helpful or how you "manage" anything from a website that's not connected to your credit card accounts in any way. I ran the "demo" and got some really screwy and useless charts and graphs (it had one of the debts entered as a negative number, and another listed as 108% of the total debt. ?)
Still, there's some helpful stuff on the site, and these guys are fighting the good fight. Interesting to note that they've funded the site with grants from B of A, Citi, Chase, and Experian... I suppose if you were a misguided commie you'd accuse them of being on the take from evil creditors, but me, I'd rather the creditors pay for this kind of thing than the debtors. (Same with credit counseling, natch).
The creator of the excellent autoDogmatic blog posts here about the ongoing decline of subprime lending and how it could affect the rest of the credit world. He also links to his "Mortgage Lender Implode-O-Meter" which is great if you're looking for an excuse to hit the bottle.
As rightfully depressing as this is, I'm not completely convinced the world is going to end. That subprime lending wasn't a smart way to make money is a predictable fact; this'll really hurt that sector of the industry, but I'm not sure how it will affect the rest of the economy. The main thing I'd take away from this, as far as my blog is concerned, is that it's going to get tougher to get a mortgage if you have bad credit. Take heed if you ever want to be a homeowner, and do whatever you can to improve your credit score and keep it high.
Some news about AADMO's upcoming conference showed up in the comments here, so I thought I'd move it to its own post:
The American Association of Debt Management Organizations (AADMO) will convene a panel of the credit counseling industry to address problems with the Uniform Debt Management Services Act ("Uniform Act"). The panel will meet on February 19, 2007 at the Four Seasons Hotel in Austin, Texas.The Uniform Act has become law in Delaware, Rhode Island and Utah. It is also under consideration in Colorado, Hawaii, Missouri and is expected to be introduced in an additional six to eight states this year. The Uniform Act will become effective in Utah on July 1, 2007.
The Delaware Uniform Act, which took effect on January 17, 2007 has created problems with licensing keeping the state from issuing actual licenses in favor of temporary "conditional" licenses. Similarly, the Uniform Act in Rhode Island takes effect on March 31, 2007 but the state has not yet issued applications for licensing.
"If the state issues applications in the next few weeks it is inconceivable, by any stretch of the imagination, that Rhode Island will be able to fully review and investigate dozens of lengthy applications and issue licenses by the law's effective date of March 31st. The credit counseling industry must find immediate solutions to the current problems with the Uniform Act", said Mark Guimond, Executive Director of the AADMO.
"The quick progress of the Uniform Act's enactment is causing extensive compliance challenges. The states aren't prepared for the new law and we're being told that some of the legal requirements simply can't be met by any agency. Before this becomes an even larger problem, all concerned parties need to find solutions together", added Guimond.
This panel will also develop a strategy to work with the National Conference of Commissioners on Uniform State Laws (NCCUSL) to gain their approval and support of the industry's proposal. Information about the panel may be obtained from AADMO at 281-361-2325.
I got a credit card offer that was an affinity card tied to a charitable organization to which I belong. The interest rate is better than what I currently carry, but I wanted to know just how the charity benefits from my use of the affinity card.
The Wikipedia entry on affinity cards is predictably useless, but Bankrate has a pretty good article covering the basics of affinity cards.
And here's a good article by the Better Business Bureau advising caution when considering such a card.
The offer I have carries no annual fee and a decent interest rate, so it passes the initial smell test. But they offer no info on how this will benefit the charity. I've decided I'll apply by phone and ask them what kind of donations the charity will get from my activity. If the card carried a high rate or an annual fee, I'd probably pass altogether, but so far it looks like a good deal. If I'm happy with the benefits offered to the charity, I'll probably sign up.
I promised late last year to review Control Your Money NOW! (www.cymnow.com), but got delayed. With holiday spending and travel, December just wasn't a good month to start. So I waited and used cymnow for the month of January.
I'm giving this site a big thumbs up. For one thing, the service is only $15 for a year which is less than I've paid for other software packages in the past. (Sure, some budgeting software lets you do things like write checks and access your bank account. But I don't need that; my bank offers online banking. I just need the budgeting tools... so why should I pay extra for all those features I never use?)
It also works. For me, anyway. I'm a near-chronic web user, so it's great to have a budgeting tool that sits among my bookmarks. As I'm going through the sites and blogs I regularly read, I can pop in to cymnow and fiddle with the numbers.
My wife and I have been working on our kitchen; new countertop, sink, etc. I used cymnow to help set a budget for the kitchen project, and we're nearly finished with the work, and everything is paid for without using credit cards. All this in January, a month when we'd normally be recovering from the financial drain of the holidays.
A lot of people don't believe in budgeting. I was talking to my financial advisor recently, and she said flat-out that she doesn't think budgeting tells you anything useful. I'm telling you that's just plain wrong, and cymnow is a quick way to prove it. Spend some time plugging in your spending, and you'll be left with hard numbers. Those numbers may shock you. They definitely woke me up to some frivolous spending and helped set aside money for kitchen improvements.
Check out cymnow; you can get a sample report or read the faqs on the site for more information.
I guess financial columnist Liz Pulliam-Weston, who is usually a pretty reliable authority on debt recovery, is trying to cross herself off the list.
Recall I had a big problem with one of her columns late last year, and now here's another. This one isn't nearly as bad as the one in October, but it still reflects a problem.
A reader has asked her what to do about her $24,500 worth of credit card debt. The reader is an ideal candidate for credit counseling, but Weston only offers that suggestion as a last resort while warning the reader that a Debt Management Plan "could affect your credit". I'm so tired of debunking that myth that I don't even want to go over it again.
Also, the reader might be a good candidate for a debt settlement; $24,500 is plenty large enough to negotiate down. Of course a settlement would affect one's credit, but Weston could have at least floated the idea along with an appropriate caveat.
What's more, there's no advice to this reader about 1. making him/herself more financially literate, 2. ceasing credit use until the situation is resolved.
It's interesting that the word bankruptcy doesn't come up... here someone is $25k in debt and can't afford to make the minimum payments... I know what an attorney would advise. I thought Liz approved of bankruptcy, but she doesn't mention it. She does mention credit counseling, so I guess she's suggesting the debtor frog-march him/herself down to a credit counseling session that she doesn't think will do anyone any good.
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