April 2009 | Finance for non-Finance Professionals

freedom-from-debt I read this funny quote on a magazine and wrote it down on the front page of my planner:

A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.

Funny. But, ironically true. Loans can help us in our dire needs and more often, in acquiring what we so desire. However, during payback times, we sometimes find ourselves in sticky situations where we regret taking those loans. Okay, do not take me wrong on this. I am in no way against loans, as long as you are able to pay and you use them for good intents and purposes.

The danger is, getting loans can become a bad habit and will wreak havoc on your finances and your whole life. Usually this happens little by little. It begins with unnecessary purchases using your credit cards, then followed by an ‘untimely’ purchase of a new car via a car loan or through a lending company, or borrowing money for a extravagant celebrations, and more. Then you wake up in the morning to find your mail boxes filled with demand letters.

Here’s how you should deal with that sticky situation: Get out of it!

Easier said than done. But you can get out of that pesky situation. It is doable.
For one, you might want to try debt consolidation for your larger loans and those bills that endlessly badger every end of the month. By consolidating these things, you can better manage your debts. So that, rather than paying off several separate bills each month, you loan from one among legitimate debt management companies who will arrange a low-interest and flexible repayments for you. Yeah, that can be arranged. Now, I see the sign of relief in your eyes. Debt consolidation is a good idea for freeing yourself from bad loans and other debts. Also, the key here is finding the right finance counselor or debt management expert to help you.

What’s next? Break the habit! Be contented with what you have. Save for the rainy days, and spend only on your needs and let that 54-inch take the back seat for awhile –that is, do not spend on wants unless you have money to spare. Lastly, educate yourself. You might want to peruse more info on debt collection basics and how to improve your credit score.

“Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.”~Benjamin Franklin

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bad credit credit cards I do not want to sound pessimistic here, but it seems there are no clear signs as to where our economy is going. While politicians continue to debate on which more appropriate course to take, many of us are tripling out efforts to make both ends meet.

To me, although the government and some of the biggest financial institutions are to be blame on the current financial predicament we are all in, we are (on the individual level) to be blamed mostly from our financial woes.

The root could be traced with bad credit loans, and then followed by undisciplined use of the credit cards. I am not entirely against these plastics, but rather on the inappropriate use thereof.

We love convenience, luxury, and things that we do not actually need. In fact, it all begun there. Bad credit loans, unpaid bills, unmanageable mortgages, and bad credits are but results of satisfying our appetites for the good stuff that we cannot actually afford.

Then when we have almost completely mess-up our finances, we get another a lifeline via credit cards for bad credits? Are we just trying to make worse?

However, I must admit (and before I am accused of pontificating here) that in a recession like this, bad credit credit cards can somehow serve their good purpose, at least temporarily. What I mean with good purpose is, paying for obligations that may not otherwise be met by our current income. With a bad economy coupled by your own bad credit history, these type of credit cards are sure haven of rest.

Nevertheless, this time (or should we have exercised the same in this first place when we got our first plastic?) caution and prudence must be strictly observed. The key here is taking the time to compare interest rates, APR (Annual Percentage Rate), Cash Advance Features, miscellaneous fees (such as application, late payment charges, annual fees, foreign transactions, etc.), Rewards and Bonuses. In this case, you might want to check out the credit cards comparison that BadCreditOffers.com publishes.

Common sense dictates that you cannot solve a problem by creating another problem. Vis a vis, you cannot repair a bad credit history, or your growing debts by getting more bad loans and/or wanton credit card usages. Discipline is not an option, but a must these days if one wants to survive, better yet, thrive in this crisis.