Anyone looking into their options when dealing with debt that is too hard to handle on their own has limited options when looking for outside assistance. Your legitimate options will generally be narrowed down to bankruptcy, credit counseling and debt settlement.

You MUST do your research into ALL three of these options by discussing them individually with reputable service providers.

Debt Management Plans (DMP’s) & Credit Counseling Services:

The core benefit when enrolling in a DMP is lower interest rates on the existing debts you have with creditors who participate in managed plans. This translates into lower and more manageable monthly payments.

When it comes to DMP’s and Credit Counseling Companies who support them, my experience is that not all firms are created equal. While the interest rate concessions that DMP providers arrange with your creditors are generally predetermined and will not vary from one service provider to the next, the service and attention to YOU, their client and customer, can vary greatly! The difference in consumer education and hands on tools that are provided as well as the care and compassion rooted in their management and employees can make all the difference in a positive experience and outcome!

When consulting with a credit counseling firm, you also need assurance that you are not talking with someone whose goal is to sign you up into a program that you are not suited for. Many of these firms want to beef up their numbers in order to collect a monthly fee and increase their fair share and grant contributions from creditors, without enough regard for how suitable a candidate you are for their program.

For these reasons and more, I recommend anyone gathering information about DMP’s offered through a credit counseling organization contact:  Safe Guard Credit Counseling – Direct Dial: (800) 673-6993. I am sure there are other companies who offer similar services around the nation that could meet the high standards you will be greeted by at SafeGuard.

So why single them out for you to contact and schedule a free consultation?

• I have been to their offices.
• I know, like & trust their management team.
• I have reviewed their counselor training materials.
• Their fees are fair & their people care about assuring you can be a success when working with them.

SafeGuard is who I have trusted, and continue to trust, when referring people to find out if a debt management plan could work for them.

Disclosure: None. Consumer Recovery Network, Debt Bytes nor Michael Bovee receives any form of compensation for referring consumers to Safeguard.

CBS Money Watch Blogger gets it wrong!

Click here to read how wrong.

With quotes like the following, you should really click the linked blog above for the full read:

“Of course, the U.S. congress passed the CARD Act as a measure to “protect” consumers from the fee-generating schemes employed by greedy credit card issuers aimed at targeting defenseless consumers. PAHLEESE! I’m not buying it.”

“The real losers here are the millions of folks who use credit cards…”

“If you think banks credit-card fees are the source of your financial troubles, then you have the mind set of a money LOSER.”

While Mr. Martin ends his brief article with sound advice, everything but that last paragraph leads me to question the depth of thought he lent to the topic prior to his missive.

• Mr. Martin, are you aware of the pernicious practice of rate jacking a consumer on purchases already made and budgeted for, thereby increasing the costs of that purchase (often dramatically)?
• Are you aware of the now widely documented and recognized arbitration scam used by major card issuers and foisted on the American public?
• How about that card issuers securitized and sold to investors credit card receipt portfolios and that this practice, as quoted by the FDIC, accounted for half of their funding source, a practice which enabled  unhealthy expansion in credit (remind you of sub-prime mortgage backed securities anyone)?
• Have you seen any of the investigative reports on credit card practices done by Frontline which establish these practices as having been developed to profit off the backs of low income and middle class Americans?

I can only hope some of what he wrote was tongue in cheek, but it does not appear so.

While I would tend to agree with the underlying message of your words suggesting consumers become more constrained and informed in how they approach spending and budgeting, and agree that this premise should extend to governments and politicians, please do not suggest that banks are innocent in their enabling the credit fueled boom/bust we are experiencing.

• Did consumers create the sophisticated loan programs that are not done blowing up in our nations face? No. How could they? They are money LOSERS in your words.
• Were banks bailed out having the costs pushed onto the American taxpayer (that would be you and your CFP clients)?
• Are banks done failing and being taken over by the FDIC as a result of their risk taking?

Mr. Martin, how many people do you speak to every day that lost a portion of their income in the current recession and who made every effort to communicate with their creditors openly about the need for a payment restructuring whose plight falls on deaf ears, only to then have their rates jacked from 8.9% to 29.9?

Mr. Martin, are you heavily invested in bank stocks? Did you personally, or in your capacity as a financial planner encourage others to; invest in pools of securitized debt obligations?

SAGBXEF2GMZA

Today we’re pleased to bring you a guest post from nationally recognized personal finance experts Ken and Daria Dolan of Dolans.com.

President Obama has signed the Credit Cardholder’s Bill of Rights, a set of rules that will change the credit card industry.

We don’t want to be cynical, but when we read news story after news story that “this sweeping legislation would reform and revolutionize the credit card industry” … we were not exactly, well, believers. After all, the credit industry has been rigged against consumers for a long time with thousands facing card cancellations, jacked up interest rates and hikes in fees as we speak.

So we dug into the law to find out if this is actually good news for us consumers or another toothless attempt from Washington that will fall flat.

Here are the major components of the new law, starting with the three provisions that have already gone into effect.

1. Banks must mail your bill at least 21 days before the due date.
2. Banks must provide at least 45 days notice before implementing any significant increase in fees or interest rates.
3. Banks are prohibited from increasing fees and/or interest rates without informing you, the cardholder, that he/she has exceeded their credit limit or has missed a payment.

Be sure that you check your statement’s due date to ensure that you are getting the required additional time to pay your bill.

Now let’s look at the rest of the provisions, which don’t kick in until February 2010.

Existing Balances

Issuers cannot retroactively change the rate on an existing balance unless the account is 60 days delinquent. If a customer is delinquent and the rate is raised, the rate must be lowered again if the cardholder pays the minimum balance on time for six months.

In response to this provision, we expect credit card issuers to increase rates for customers who carry balances right away, so pay the balances off ASAP if you can. Otherwise, be sure to make payments on time.

Teaser Rates

Issuers cannot raise interest rates for the first year after an account is opened and promotional rates must last at least six months.

Some limits on teaser rates are great, but the onus is still on you to be aware of when your low rate expires!

Payments

A consumer payment above the minimum applies first to the balance with the highest interest rate.

This is a no-brainer that should have been this way all along. This change alone will save consumers big bucks in interest!

Over credit limit fees:

Issuers cannot charge “over-limit” fees on credit cards unless the consumer has signed up to allow such transactions.

Save your money. If possible, use only 20% or less of your total available credit limit across all of your credit cards combined. Your credit rating will thank you.

Minors

For consumers under 21 years old, a credit card issuer must get the signature of a parent or another party to take responsibility for the debt, or it must obtain proof that the under-21 consumer can repay credit.

We hope this new rule will go a long way toward stemming the growing tide of college students who are in debt over the head. We recommend you help your college student get an “emergency only” credit card with a set credit limit.

Fees

Issuers cannot charge fees to pay by mail, phone, and electronic transfer or online, except for expedited service.

Disclosure:

Cardholders must get 45 days notice of change in terms.

It’s always been critical to read both the small print in your current agreement (or new ones sent along) and all inserts in your credit card bills. With this new rule, you won’t have the credit card company to blame if you miss an important change to your card rules.

Gift Cards

All gift cards must have at least a five-year life.

The new law also tackles some sneaky gift card tricks. It eliminates the practice of declining values on gift cards and hidden fees that punish cardholders for not cashing cards within a certain amount of time.

The gift card industry racks up billions of dollars for retailers and issuers every year. And millions of dollars worth of gift cards go unused each year.

Who doesn’t have a gift card stuck away somewhere that they haven’t yet used? Use it!

Not-So-Rewarding Programs

As you can imagine, the credit card industry is NOT happy about these changes.

They claim these rules will make it harder for consumers to get credit, that cardholders who pay their balance in full will see higher fees, and that rewards programs may be canceled.

We’ll see on the first two items.

We do believe we’ll see changes to many of the “rewards” programs currently offered as companies tighten their belts.

Take a hard look at any rewards program in which you participate to calculate if it makes sense to cash in the points now in case the purchasing power declines or the program is canceled or changed.

Score One for the Little Guy

Bottom line: This new regulation is a step in the right direction and will end many abusive practices.

Be a vigilant consumer … you are the ultimate police dog to ensure that your credit card issuer is complying in every way with the new legislation.

Here’s more help taming the debt beast and living credit smart:

• 7 Simple Steps to a Higher Credit Score
• 10 Steps to Debt Free Living
• Important Changes to Your FICO Score

Ken and Daria Dolan have spent 20+ years helping people like you live debt free and credit smart.   Read their newest report, “8 Secrets Your Credit Card Company Won’t Tell You,” FREE!