Credit Card Management Services, Inc. d.b.a. Debthelper.com Becomes Licensed in Pennsylvania to Provide Debt Management Services
May 23, 2009 — During this economic crisis, with more people struggling to pay off their debt, Credit Card Management Services, Inc. Dba Debthelper.com is now able to service thousands more.
As of today, Debthelper.com has become licensed in the State of Pennsylvania under the Pennsylvania Debt Management Services Act (63 P.S. § 2401 et seq.) as a Debt Management Company.
For consumers that are currently past due on their accounts, the debt management plan will provide the immediate benefits of lower payments, late and over limit fee suspension and account re-ages.
Debthelper.com (www.debthelper.com) is an IRS Approved 501c3 Non-Profit Florida Corporation dedicated to our mission of providing consumers in the State of Pennsylvania compassionate and professional, financial counseling and education in an ethical manner with efficient, timely and problem-solving support.
Since being formed in 1996, Debthelper.com has helped guide tens of thousands of people throughout the country out of financial difficulty. With this official recognition, Debthelper.com is now eligible to provide the following for Pennsylvania Residents:
- Debt Management Programs
- Budgeting and Spending Plans
- Credit Report Education
- Pre-Filing [Credit Counseling for Bankruptcy*
- Pre-Discharge Debtor Education*
Debthelper.com counselors are certified by either the Center of Financial Certification (CFC), by the National Association of Certified Credit Counselors (NACCC), and/or are Exam-Qualified in the HUD-HECM Network. To locate Debthelper.com Reverse Mortgage Counselors in the HUD-HECM National Network go to www.hecmresources.org.
Credit Card Management Services, Inc. Dba Debthelper.com is accredited with the Better Business Bureau (BBB) and adheres to the organization’s high standards of ethical business behavior.
As a member of the Association of Independent Credit Counseling Agencies (AICCCA), Debthelper.com adheres to AICCCA’s strict code of practice. Debthelper.com is ISO:9001 compliant as audited by Bureau Veritas of North America (BVI).
Credit Card Management Services, Inc. Dba Debthelper.com is approved by the (EOUST) United States Department of Trustees to issue certificates of completion of credit counseling or a personal financial management instructional course in compliance with the bankruptcy code. Approval does not guarantee or endorse the quality of a provider’s services.
Credit Card Management Services, Inc. Dba Debthelper.com is approved by the Department of Housing and Urban Development (HUD) to provide comprehensive housing counseling services.
For additional information on freeing yourself from debt, contact Debthelper.com today. Debthelper.com complies with all state licensing requirements to ensure state mandated regulations be adhered to.
Contact: Licensing and Compliance
Credit Card Management Services, Inc. Dba Debthelper.com
community@debthelper.com
561-472-8005
Insider Secrets About Bill Collectors
Divorce = Debt. Tips & Tricks You Need To Know
By JENNIFER LANE
Yes, I used to work for the dark side as a collection agent. As a former insider I know what pushes collectors into giving you the best deal. There are a few simple rules to playing the collector’s game, and you will always end up winning.
Collectors get paid on commission and are desperate to hit their numbers or they will lose their jobs. Where I worked I used to get 20 percent commission, but I had to collect almost $17,000 in gross dollars before even hitting commission. The credit card company took almost half of every dollar the agency brought in. I had to collect four times my base salary in order to overcome that threshold.
This meant collecting a net amount of $8,400 before I even saw any extra money, and most months I did it without a problem. Keep in mind though, that means getting at least 10 consumers to pay before it even really counts. Whenever someone would collect a payment through a check by phone we would ring a bell loudly and cheer. It was exciting, but the truth is consumers don’t really pay debts because they are sick of some collector bugging them. Consumers pay off debt when they want to clear up their credit usually to buy a house or a car, but sometimes just for the sake of a higher score.
All collectors knew when a consumer called in it usually meant they had the money to pay. If they didn’t have any money to pay, then we thought that they must not be too smart. That just makes a collector think you have the money to pay. So if you don’t have the money to pay, don’t ever call a collection agency. You won’t get sympathy, or a listening ear. You are wasting the collector’s time and yours, too.
Even if by chance you get a collector like I was, you would just attract more attention to yourself because it would instill a glimmer of hope that you had the money to pay. At that time, I would hope for your money to pay for the things I had wanted, a nice wedding, and a trip to San Francisco. I would persist in calling you every day. Then I would get you on the phone realizing that you were broke and I’d be so mad that I wasted my time. You’d be mad because you would have gotten called every single day and had several messages on your machine regarding a “personal business matter.”
The purpose of that is to understand the collectors mindset so when you do have the money, you can get them to do what you want. The goal is to have the collector at your mercy, rather than to have it the other way around. Some collectors love tormenting consumers, so what can you do to torment them back? The answer is simple. When you have the money to pay off your past due debt in full, think of a strategy to get the best settlement possible.
Let’s say you owe a debt of $5,000. You also know those scoundrels at the credit card companies added $2,000 in interest and late fees. Why allow them to make even more money off of you? You shouldn’t. The truth is when a debt goes into collections; your credit is already damaged. Even if you pay it off in full with all the added fees, your credit report is still going to reflect that black mark that it went into collections in the first place.
You are better putting that extra money into your savings account and striking up a deal with the collection agency to settle the account for less than what you owe. The best time to call the collection agency is at the end of the month when collectors are sweating to surpass their goals and get as much money as possible. Some months I was desperate. I was always afraid if I got even one month where I didn’t hit my goals that I was going to end up getting canned.
Your job as a consumer is to play on that fear. Make your first call to the collection agency on the 25th. Tell them you really want to pay your debts off. You are looking to clean up your credit and you have money in hand. Tell the collector that you only have $1,000, but you are willing to do a check by phone right this instant. The collector is going to tell you that there is no way they are going to settle the account for 20 percent. The collector will probably offer you a counter settlement. Most likely it will be between 60-70 percent. Don’t wait for the collector to speak their offer. Tell the collector, “Fine,” and hang up.
Less than a minute later your phone will ring. Don’t answer it. Let the collector leave a message. Don’t call back just yet. Chances are after not hearing from you back from you, the collector will call you on the 26th. Don’t pick up. Listen their message and their offer, and don’t believe a word of it. On the 27th, call the agency back and make a firm offer of $1500. They will most likely say no to a 30 percent settlement, but now they know you want to pay. They know you may have a little more money, too. Again, when the collector declines your offer say, “Fine,” and hang up again.
Don’t call the agency back. I am certain by the 29th you will receive a call. Once the 29th approaches answer the collector’s call. Hold firm on your offer of 1500, and at this point the collector will be desperate. The collector will still probably reject it, but will come back with a counter offer. This time listen to the counter offer. Negotiate and get it down to at least 40-50 percent of the balance owed. I can almost guarantee this is possible. I was able to accept settlements as low as 40 percent but only at the end of the month.
At the agency I worked for all the settlements I made were at my own discretion. I didn’t have to ask a manager ever; I just had simple guidelines to follow. From the beginning of the month until around the 23rd, I was only allowed to offer anywhere between 60-90 percent settlements. Honestly, I settled most around 60-70 percent, but some collectors are as flexible. Perhaps that is what made me successful, I don’t know, but I do know that consumers have more leeway with collectors than they may know.
www.debthelper.com is a non profit organization that helps people with debt and bankruptcy.
Jennifer Lane is a certified credit counselor and is taking questions I can answer in upcoming articles. Please feel free to e-mail your questions to me at jlane@debthelper.com.
Change in Terms: Credit card reform, is it in your best interest
Relief is on the way – but at a price.
The Credit Cardholders’ Bill of Rights Act of 2009 has landed on President Obama’s desk after passing the House Wednesday.
When signed into law, it will affect the pocketbook of every man, woman – and yes, teenager – who uses credit cards, only to find interest rates inexplicably jacked up and teaser rates that seem to last just minutes before ballooning to double digits. It will revolutionize the market by restricting when and how a card company can raise an individual’s interest rate, who can receive a card and how much time people are given to pay their bill.
“The legislation will level the playing field for consumers by eliminating ‘gotcha’ practices such as double-cycle billing and anytime-any reason interest rate hikes,” said Greg McBride, senior financial analyst at Bankrate.com in North Palm Beach.
It’s not without a cost: “Even consumers with very good credit will see lower credit limits, higher rates and higher fees than they have been accustomed to in recent years,” McBride said.
Yet, consumers with good credit say they already have been targeted for lower credit limits, sharp rate hikes or both.
Patrick Johnson, 28, of North Palm Beach, a biomedical equipment technician, said HSBC Master Card took too long to process his online payment, then said he was late and raised his interest rate to 29 percent. “It will be years before I pay this off,” he said.
Rafi Davidoff, a Delray Beach resident and recent college graduate, said his Royal Bank of Scotland credit card shot up from 6.99 percent to 15.99 percent without notice.
“When I called them to ask for the reason why my interest rate went up, they said in order for them to stay in business, they raised my rate,” Davidoff said.
Other frustrated consumers have complained to the Florida Attorney General’s Office in increasing numbers. There were 836 credit card complaints in all of 2006; there have been 640 already this year.
Banks, which opposed the legislation, say they will need to make up the cost somewhere, and cardholders who pay off their balance in full each month could see new annual fees and lucrative rewards programs canceled. Credit could become harder to come by, too.
That may happen sooner rather than later. Most reforms will not take effect for nine months. “In the meantime, brace yourself,” McBride said.
McBride points out that since the Federal Reserve approved similar new rules for the credit card industry in December, card issuers have been rushing to raise rates and cut credit limits before those regulations take effect in 2010.
Nick Bourke, manager of the Safe Credit Cards Project at the Pew Health Group, insists that companies already offering transparent pricing won’t have to drastically change how they do business. Lenders probably could cover costs with small annual fees in the $15 to $20 range or increase upfront interest rates, he said.
“Nothing requires pricing to go up and benefits to go down,” Bourke said. “The only thing that is required is that the price offered actually reflects the cost of using the card.”
Johnson is hopeful the new legislation will change some credit card practices, but, he said, “I don’t have too much faith in it. I am sure there will be loopholes.”
ARE YOUR credit cards the worst investments you have going these days?
According to a SmartMoney.com poll, about 50% of readers are using cards that charge more than 12% interest on outstanding balances. And 17.5% are paying 18% or more. With an interest rate like that, you’d better be paying off that balance in full each month.
It’s no surprise that so many people carry such expensive credit cards. After all, there is a whole industry of card issuers out there devoted to using hidden fees and interest rate gymnastics to gouge you as best they can. Consider this: According to Gerri Detweiler, author of “The Ultimate Credit Handbook,” some credit card companies are actually starting to get rid of card holders who pay off their balances each month. “Instead, the card issuer might try to move you to a card with an annual fee or a debit card,” she says.
The key to getting a better credit card deal is figuring out how much a given card really costs you.
Rates
Whatever you do, don’t kid yourself when it comes to those tempting introductory offers. Sure, you may think you’re going to pay off that balance in full by the time that low rate bumps up to a frightening 18% APR or higher. But those institutions are banking on the fact that you won’t. And get real — they’re probably right.
You also want to make sure that the interest rate touted on the card offer doesn’t only apply to the juicy balance you’re going to roll over. Some card issuers actually charge you two interest rates — one for your transfer balance, and one for new purchases, says Detweiler.
Rates can also increase sharply if you’re late on a payment. “I’ve seen rates jump from 12% to 19.8% when an account is as little as one day late,” says Detweiler. That’s often a permanent rate change, so if you fall into that trap, you’re probably going to have to change cards altogether. (But you should first give your card issuer a call to see if you can return to the lower rate.)
Grace Period
If you do pay off your balance in full each month, make sure you get a card with a grace period (the amount of time you have to pay your bill before you start accruing interest) of 25 days or longer. Believe it or not, some cards start charging you interest at the time of purchase, so even if you pay off your balance each month, you’re still going to owe your card issuer some extra cash.
Other cards have sneaky grace periods that only cover you for 20 days from the transaction. With these cards, if you wait to pay your bill until it’s actually due, you’ll still owe interest.
Don’t be fooled by the grace period, however. If you carry a balance, you pay interest on that baby 365 days out of the year (or at least until you pay it off).
Fees
With more consumers getting smart about paying off their monthly balance, card issuers have gotten slyer with their fees — from transfer fees to over-the-limit fees. That’s why you need to actually read the fee disclosure, which should be listed in a box on the credit card offer. Here are some things to look out for:
Annual fees. This one is simple — if you’ve got a good credit rating and pay off your balance in full, don’t pay one. There are enough good cards out there that don’t charge this fee that it can be easily avoided.
Closure fees. Some cards will actually charge you a fee for closing an account, says Detweiler — sometimes as much as $50! This is highway robbery at its worst, and the only way to avoid it is to know up-front whether the card issuer charges this fee.
Late fees. Late fees can be charged if your payment is just one day late and can also lead to an increase in your interest rate.
Fixed vs. Variable. You may be offered a choice between a fixed and variable rate, with the fixed rate being slightly higher. But unlike your mortgage, it really doesn’t matter much. Why? Because a fixed rate really isn’t fixed at all. All “fixed” means is that when your interest rate changes, your card issuer needs to warn you 15 days in advance.
In contrast, a variable rate can change without notice. Most variable rates, however, are tied to a national interest rate like the prime rate, so you shouldn’t be caught completely off guard. The bottom line is that you should make sure you understand how the rate is calculated and keep an eye on your bills. But you should be doing that anyway.
The President on Credit Card Tactics: “Enough is Enough”
Chris Lardner and her husband Scott own a small family business. Together they have three children, two daughters in college at Regis University in Denver , and a son in 7th grade. As a result of the economic downturn they resorted to paying for some of their daughters’ education with a credit card. As she approached the card limit, Lardner contacted the college to change the card on file, but the school charged another payment to the original card, which then put her above the limit. As a result the credit card company more than tripled her rate to nearly 30 percent.
So it was only appropriate that Chris introduced the President at his town hall in Rio Rancho, New Mexico this morning, where he emphasized his commitment to signing the Credit Card Bill of Rights into law by Memorial Day. He talked about the letter Chris wrote him last week:
She said: “If we conducted business this way, we’d have no business,” she wrote. “And if this is happening to us, I can only imagine what’s going on in homes less fortunate than ours.”
You all know what Chris is talking about. I know. I remember. It hasn’t been that long since I had my credit card, sometimes working that a little bit. (Laughter.) We’re lured in by ads and mailings that hook us with the promise of low rates while keeping the right to raise those rates at any time for any reason — even on old purchases; even when you make a late payment on a different card. Right now credit card companies charge more than $15 billion a year in penalty fees. One in five Americans carry a balance that has been charged interest rates above 20 percent. Sometimes they even raise rates on outstanding balances even when you’ve paid your bills on time.
Now, I understand that many Americans are defaulting on their debt, and that’s why these companies claim the need to raise rates. One of the causes of this economic crisis was that too many people were living beyond their means with mortgages they couldn’t afford, buying things they couldn’t pay for, maxing out on credit cards that they couldn’t pay down. And in the last decade, Americans’ credit card debt has increased by 25 percent. Nearly half of all Americans carry a balance on their cards, and those who do have an average balance over $7,000.
So we have been complicit in these problems. We’ve contributed to our own problems. We’ve got to change how we operate. But these practices, they’ve only grown worse in the midst of this recession, when hardworking Americans can afford them least. Now fees silently appear. Payment deadlines suddenly move. Millions of cardholders have seen their interest rates jump in the past six months.
You should not have to worry that when you sign up for a credit card, you’re signing away all your rights. You shouldn’t need a magnifying glass or a law degree to read the fine print that sometimes don’t even appear to be written in English — or Spanish. (Applause.) And frankly, when you’re trying to navigate your way through this economy, you shouldn’t feel like you’re getting ripped off by “any time, any reason” rate hikes, and payment deadlines that seem to move around every month. That happen to anybody? You think you’re supposed to pay it this day, and suddenly — and it’s never on the end of the month where you’re paying all the rest of your bills, right? It’s like on the 19th. All kinds of harsh penalties and fees that you never knew about.
Enough is enough. It’s time for strong, reliable protections for our consumers. It’s time for reform that’s built on transparency and accountability and mutual responsibility — values fundamental to the new foundation we seek to build for our economy.
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Credit and Debit Cards, What You Need to Know
A generation ago, it wasn’t all that unusual to be out for dinner with friends or at the register with a cart full of groceries and realize you didn’t have enough cash to cover the bill. But today, you’re likely to pull out a debit or credit card and not think anything of it.
It’s hard now to imagine a time when those noncash options weren’t available — especially if you were born in the 1970s or later. Credit cards have been around since the 1950s, and debit cards were introduced in the mid-1970s. By 2006, there were 984 million bank-issued Visa and Mastercard credit and debit cards in the United States alone.
Though the two types of cards may be used interchangeably, there are notable differences between them. Let’s start with debit cards.
Debit cards are linked to your bank account so the money you spend is automatically deducted from your account. They provide a convenient alternative to cash, especially if you do a lot of shopping online. Debit cards can also help you budget. Use your card to pay your bills and day-to-day expenses and your monthly statement will provide a good snapshot of how much you spend per month and where it’s going. There’s another benefit as well: Unlike credit cards, your bank balance goes down with each debit card transaction, so you’re less likely to overspend. (Many banks offer “overdraft protection” that allows you to exceed your balance. But you’ll end up paying interest, and maybe extra fees, on the money you borrow from your overdraft account.)
With so many benefits to the debit card, why use a credit card at all? There are three main reasons: You can spend more than you have — or postpone paying, at least — and you typically get better rewards and better protection than you do with debit cards.
Credit cards basically allow you to use someone else’s money (the card issuer’s) to make a purchase while you pay the money back later. If you do so within the billing period — generally, 15 to 45 days — you can avoid paying any interest on it. The problem arises, of course, when you don’t pay the balance in full and are charged interest as well. That can quickly add up. If it takes you two years to pay off a $500 balance, for example, and you’re being charged 18 percent interest, you’ll end up paying nearly $100 more in interest.
If you use them responsibly though, credit cards can offer other advantages. They help build your credit, as long as you pay your bills on time. Some also offer rewards that you can use to get gifts, cash back or discounts for products, services and special events. They also provide more protection if someone steals your card or bank information. If you notice a fraudulent charge on your credit card account, you can call the card issuer, make a dispute claim, and the charge should be removed from your balance. But if thieves steal your debit card information and use it, it may take weeks for the bank to investigate your claim and replace the lost funds. In the meantime, you may have to deal with a dwindling bank balance or bounced checks.
Federal law also protects you if you need to dispute charges on a credit card, but not if you use a debit card or other forms of payment. If you paid cash or used a debit card, the retailer already has your money. So you have a lot less leverage, and there’s no guarantee you’ll get that money back. But if you pay for something with your credit card and aren’t happy with the purchase, your card issuer can legally withhold payment from the retailer until they resolve the dispute, and you won’t be charged.
Let’s say you’ve decided you want a credit card, which one should you get? The answer depends largely on whether you plan to pay off the balance each month.
If you know you’ll probably carry a balance, look for a plain-vanilla card with no annual fee and the lowest annual interest rate available. (Any interest you pay on a carry-over balance will offset any perks you could get through a rewards card.) You can compare several low-interest credit cards at creditcards.com and bankrate.com, which both provide updated information on dozens of different cards. You can also apply online for cards through either site, but limit your applications to one or two to avoid hurting your credit.
Be aware that card issuers can raise your interest rate after you’ve gotten the card. So check your monthly statements. (You should be aware, though, that the Federal Reserve has just passed rules that will take effect in mid-2010 limiting the card issuers’ ability to raise your rate, unless you’re late with a payment.)
Call the card issuer if your rate has increased to try and negotiate a lower rate, or consider transferring your balance to a lower-interest card. (Billshrink.com lets you see how much more you could earn in rewards or save with a lower interest rate if you switched to various other credit cards, based on your credit score and how much you spend each year.)
If you plan to pay your bill in full each month, seek out a card that provides rewards you actually want — whether that’s cash back, frequent flier miles or points redeemable for gifts. The interest rate shouldn’t matter, since you won’t be carrying a balance. But look for those with no annual fee. Generally speaking, if you plan to use your card a lot, cash-back programs may be the best bet. It’s easy to get the refund — either through a check or a credit on your account — and you can use that money for anything. Many large banks also offer debit cards with rewards, so it can be worth shopping around for them too.
For most people, using both a debit card and credit card makes sense. The key is not to spend more than you have with either. If you can do that, you’ll be able to enjoy the benefits that each provide.
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Top credit card issuers back debt repayment relief program
New ‘hardship’ debt management plan created, with lower payments
By Jeremy M. Simon
Ten of the largest U.S. credit card issuers have agreed to make it easier for troubled cardholders to repay their debts.
That change was announced today by the National Foundation for Credit Counseling, a major nonprofit consumer credit counseling group. In fall of 2008, the NFCC issued a “Call to Action,” asking creditors to make changes that would lower the cost of consumer participation in debt management plans, or DMPs — programs administered by accredited consumer credit counseling agencies to help families drowning in debt work out reasonable long-term repayment plans with creditors.
The 10 issuers supporting the “Call to Action” are American Express, Bank of America, Capital One, Chase Card Services, Citi, Discover Financial Services, GE Money, HSBC Card Services, U.S. Bank and Wells Fargo Card Services. Of the top 10 issuers, only USAA is not included. (Although USAA is a top 10 issuer by market share , it was left off the list because it is not a top 10 creditor for NFCC member agencies.)
Essentially, the plan creates a second tier of debt management plans for people in particular distress, allowing them a lower repayment rate.
According to the NFCC release, “For more than 40 years, consumers have avoided bankruptcy and benefited from repayment programs commonly referred to as ‘debt management plans’ (DMPs) through which creditors provided some repayment concessions, including waiving late and over-the-limit fees and a reduction in interest rates. However, in these tough economic times, fewer consumers have sufficient income to be eligible for, or the ability to maintain, a traditional DMP, often leaving bankruptcy as the only option.”
What the changes would mean
Ten of the largest credit card issuers have agreed to adjust their “debt management plans” that allow struggling consumers to get structured repayment plans. The chages include:
“Hardship” cardholders — those who are dealing with a recent job loss or other especially challenging circumstance — would owe a minimum 1.75 percent repayment rate.
Other consumers would have a monthly minimum repayment rate of 2 percent of their balance. Under existing DMPs, that rate can reach as high as 3 percent.
This means that a hardship consumer with $20,000 in debt would face a minimum payment of just $350 instead of one as high as $600, while the minimum payment for other consumers would be $400.
Some level of savings would be encouraged, not discouraged.
That number appears to be growing. Overall, delinquencies are continuing to rise, and major issuers are choosing to charge off more and more of their holdings. For example, Capital One said its net charge-off rate for U.S. card holders — the percentage of loans that the issuer has given up on collecting — rose to 9.33 percent in March, up by 1.27 percentage points from February.
When it comes to struggling borrowers, the plan “makes the repayment of the debt more affordable and more relative to today’s reality of what consumers are struggling with,” says Gail Cunningham, senior director of public relations for the NFCC.
Under the new system, “hardship” cardholders — those who are dealing with a recent job loss or other especially challenging circumstance — would owe a minimum 1.75 percent repayment rate, while other consumers would have a monthly minimum repayment rate of 2 percent of their balance. Under existing DMPs, that rate can reach as high as 3 percent, Cunningham says. That means that a hardship consumer with $20,000 in debt would face a minimum payment of just $350 instead of one as high as $600.
This isn’t the first attempt to encourage consumer enrollment in DMPs. In October 2008, banking industry representatives and consumer advocates introduced a proposal that would have enabled creditors to forgive up to 40 percent of the principal on credit card loans and stretch repayment plans over five years. However, the Office of the Comptroller of the Currency (OCC) ended up rejecting the plan in November.
The new, tiered DMPs offers benefits to both consumers and lenders, the NFCC says. The new program would enable tens of thousands of borrowers to join a DMP, adding $677 million of unsecured debt to new DMPs each year, according to NFCC’s Cunningham. Furthermore, $135 million would be returned to creditors annually, she says.
In addition to helping borrowers erase their debt, the new DMP plan also encourages them to set aside funds for a financial safety net. “We’ve plugged in several of the basic building blocks of financial stability under this plan,” Cunningham says. In the past, debt management plans demanded every spare dollar be applied to paying off debt. Allowing people to build some emergency savings would prevent them from falling back into debt easily.
Think you could use help from a DMP? For borrowers dealing with their own personal debt woes and interested in finding a DMP, the NFCC recommends dialing (800) 388-2227 to get connected with a local agency.
“We anticipate that our phones lines will be flooded once the message gets out there because people are going to wonder, ‘Does this apply to me?'” Cunningham says
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