Credit can be a great financial tool when it is used wisely. Many times people use credit irresponsibly. Credit cards become a problem when we purchase items on impulse, buy things we cannot afford, or live a lifestyle that is way above our current income.

It is important to get in the habit of using credit responsibly. The first step in establishing this habit is to understand the cost of credit. Did you know that if you had a balance of $500.00 on your credit card and only paid the minimum balance every month it would take you almost seven years to pay it off?* The total interest would end up costing you $404.64. That means your $500.00 purchase on your credit card actually cost you $904.64! When you make a purchase on your credit card, an Annual Percentage Rate (APR) is charged. An APR is the percentage rate calculated on a yearly basis. Some banks have higher APRs than other banks. Before you apply for a credit card, find out what APR the bank is charging.

Being responsible with your credit means not spending beyond what you can afford. When you use your credit card, keep an index card in your wallet and write down the purchases you make. That way there will be no surprises when your credit card statement arrives in the mail. You will also be able to keep a handle on what you are spending. Make sure you are charging only what you can afford to pay.

Be cautious of the discounts that many stores offer if you sign up for their credit cards. Have you ever been to a clothing store and the clerk asked if you would like to open up an account and save ten percent on your purchase? Those cards usually carry high interest rates and, in the long run, will cost you more than the ten percent you saved on your initial purchase. If you choose to apply for one of these cards, be sure to inquire about the interest rate and grace period.

Always pay off your credit card balance in full every month. Since you will already know the balance due before you get your statement (because you wrote down your purchases on the index card), put money aside to pay the bill. When you get the credit card statement, pay it on time. By paying off your credit card balance in full and on time, you should be able to avoid some interest charges, late fees, and potential debt.

If you are having trouble disciplining yourself to pay off your balance every month, consider getting a card that requires you to pay the full balance every month.

Get in the habit of using credit responsibly while you are young and it will help you in your future. Be proud on graduation day, not only because you made it through college, but also because you made it through college debt free!

*Figure is based on minimum payment of 3% of balance and 1.75% interest per month; may vary by bank.

The official release will happen in a March issue of Forbes® Magazine, but DMB Financial was just named one of the Top 5 debt settlement companies in the entire United States!

We couldn’t be happier for our hard working settlement, client services, accounting, support staff and sales personnel. Thanks to all the great clients who voted with their feet and made DMB Financial their #1.

We’re also celebrating two new milestones. As of January 10, 2010 we’ve saved over $123,000,000.00 for more than 13,000 clients nationwide. We’re looking forward to another mega year of restoring financial freedom to thousands of Americans!

Millions of Americans are facing growing debt problems and, for many, entering into a debt settlement program is an effective means of becoming financially independent. All debt settlement companies are not created equal, however, and making a wise decision on which company to do business with will determine if you become debt free or remain debt ridden.

The major difference between debt settlement companies comes down to the client payment, account settlement, and company fee model the company uses. Some companies employ such lopsided arrangements that the Federal Trade Commission has named debt settlement as one of 5 industries it will study in-depth in 2010. What does this mean for the average person looking for a solution to debt problems? It means do your research and choose wisely when looking for help.

The vast majority of debt settlement companies take a considerable percentage of the total debt owed up-front. These types of companies also charge their total fee in the first 6 – 8 months of the program. Therefore once the company has collected their fee they have little or no incentive to see the client through to complete debt resolution and settlement of all accounts. As a result, most clients drop out of these programs in disgust with few or no actual settlements having taken place, but not before the company has milked them of hefty program fees.

There are a few debt settlement companies, on the other hand, that prefer to operate with a more fair and responsible payment and fee arrangement. These companies charge a reasonable up-front enrollment fee, and charge clients a percentage of the money they were able to save the client through successful negotiation and account settlement with creditors. Therefore it is in the interest of the company to get the best possible settlement arrangement for their clients, as their fee is derived from the total savings amount rather than the total debt owed.

Most reputable debt settlement companies are also accredited members of The Association of Settlement Companies (TASC), a trade organization working towards reform and standards for the entire industry. TASC accredited companies have been independently evaluated by a third party to conduct fair and responsible practices in debt settlement.

Deciding on which debt settlement company to enter into a relationship with should not be made lightly. But by doing your research and understanding the business model these companies utilize, you can find a responsible and ethical professional to help you reach your debt resolution goals.

Summer will be here before you know it. There’s no better time of year to reward yourself and your family with an exciting week or two away from the stresses of everyday life. And although paying off the bills from that vacation may not be quite so exciting, you can keep the budget pain to a minimum through careful planning. Some tips for the thrifty vacationer:

·     Don’t take a vacation you know you can’t afford. That warning may seem obvious enough, but it’s amazing how many people blithely commit themselves to a trip or a destination that’s going to end up clobbering them in the wallet. Even worse, many pay for their expenses with a credit-card cash advance—then, months or even years after that vacation is only a dim memory, they’re still repaying that advance at exorbitant interest rates.

·     Don’t be so smitten with your destination that you overlook how you’ll get there. The economy resort that looks like a pretty good deal may not be quite so good if your airfare ends up costing more than the accommodations. A vacation spot you can drive to may not be quite so exotic, but it could spare you from a major dent in your bank account.

·     Think about roughing it in the great outdoors. Do you really need the fancy amenities of a costly hotel? Instead, stay at a campground for as little as $20 per night. Most campgrounds offer all the basics: electricity, bathrooms, and showers. And the kids will love it! (Well, they might complain about the lack of a TV unless you bring one along.)

·     Consider a motel as a lodging alternative. If camping out isn’t to your taste, check out some motels near your destination. You should be able to find at least one with a weekly rate—and after all, why spend a big chunk of your vacation cash on a place to sleep? Save it for the fun activities you’ll be enjoying while you’re awake.

·     Don’t eat every meal at a restaurant. Eating at restaurants is convenient, but it can really add up. Try to vary the Denny’s routine with some home cooking. If you’re going to camp out, find out if your campground has a grill. If you’ve decided to stay at a motel, look for one with a kitchenette—or at least a microwave and a refrigerator.

·     Try not to overload your days. It’s natural to want to see and do it all, but trying to cram too much into every day can lead to exhaustion. Better to start with your top-of-the-list places and events, then move on to a few others only if time permits and the kids aren’t too cranky by then.

So enjoy your well-deserved summer vacation. Come back refreshed and rested—but preferably not broke.

It seems like a gift sent from heaven, a panacea for all of your financial headaches when you find yourself overburdened with debt. Just file bankruptcy (Chapter 7) and voilà! All of your debts will be forgiven and erased; all those nasty debt collectors will have to stop those harassing phone calls that have been making your life miserable. What a relief.

But if you’ve been considering that course of action, you should be aware that bankruptcy is far from a panacea. Quite the contrary, the truth is that it’s accompanied by some substantial drawbacks.

— First of all, the filing will appear on your credit report for as much as ten years. That means every time you apply for credit, you’ll probably have to go through the same tedious routine of explaining the reasons that prompted the bankruptcy. And even then, your potential creditor may not be convinced. Obtaining credit in these harsh economic times can be a major challenge even for someone with a spotless credit record.

— Once you’ve filed for bankruptcy, you’re going to lose all of your property except what the law exempts. That isn’t going to make for happy days.

2005 Act Changed Everything

Despite these rather harsh penalties, many debtors used to find that, on balance, bankruptcy really did seem like a pretty good deal—until quite recently. Then, in October 2005, Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act, and suddenly the party was over.

The act requires that a debtor enter into consultations with an approved consumer credit counseling service—the idea being that people must pay their debts if at all possible, rather than resort to bankruptcy as a first course of action. If a debtor is still determined to file, he or she must first get certification from that credit counseling agency.

“But wait, there’s more!” as those late-night TV commercials like to tell us at ear-splitting volume. Provisions of the 2005 act also include the following:

— More documentation from the debtor is required before a filing will be accepted.

— Subsequent filings are actively discouraged.

— The waiting period between Chapter 7 bankruptcy filings has been extended from six to eight years.

— Final discharge of the obligation is withheld until the debtor completes a course in personal financial management.

Magic bullets just don’t exist. When you add up all the negatives, you can readily see that filing for bankruptcy is a long, arduous process littered with roadblocks at every turn. That’s why entering into a debt settlement program is a better choice for many, letting experienced debt negotiation specialists settle with their creditors for less than they owe. It’s certainly a viable alternative for peace of mind and a fresh start.

You know that old saying, “When the going gets tough, the tough get going.”

You know that old saying, “When the going gets tough, the tough get going.” One way the tough “get going” is to keep their eyes and ears open as new trends emerge and opportunities unfold. That’s good advice for anyone who’s trying to keep their head above water in today’s tough economy – and that means just about all of us.

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