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Debt Management

The Basics of Debt Management

Debt management is a buzzword that commonly gets thrown around but what is it really and what does it entail? More importantly, what can you expect to see in a debt management plan and how can you use this to your advantage? Likewise, where do you get proper debt management help if you are at a loss as to how to proceed from your current situation? 

Here are a few basics on debt management that are designed to help you understand about securing the right debt management help to help you erase your financial problems. 

Debt management is essentially a series of concepts and ideas implemented to arrest and reverse the continuing growth of personal debt. While debt is something that happens to everyone all the time, it becomes a particularly critical issue during these times when the economy is weak and jobs are hard to come back. In essence, debt management encompasses the following areas: 

  • Debt management plan. This is the actual step-by-step strategy that one executes to arrest debt growth. It should include payment schemes for multiple debts, including but not limited to prioritizing which ones should be paid off immediately, which ones can be re-negotiated to a lower rate, and which ones ca be deferred without incurring extra late payment fees from the creditors.
  • Debt management consolidation. This is one of the more infamous strategies towards debt settlement because it can be wrongly used and in turn, can backfire. Debt consolidation simple means securing a loan that is then used to settle all your debts so instead of looking at multiple payables, you are left with just one. The disadvantage with this approach is if its done only to temporarily resolve debt problems without addressing the root cause of the issue: poor spending habits. Debt consolidation should only be done once and as a last resort to debt problems and not on multiple occasions becoming a force of habit that worsens your debt situation. 

To get debt management help, there are plenty of organizations that offer debt management advice as well as an overview of the concepts and strategies that one can implement to minimize debt problems. There are also plenty of internet resource materials that explain these concepts in detail. Further, if you want to personally talk to a debt management professional, you can approach banks and financial consultation institutions to provide personal counseling for a fee. These are all geared towards making you learn the concepts of debt management and practice it in your everyday life. 

So check out these resources and improve your grasp of debt management concepts so you can use it to your full advantage in resolving your financial dilemma and reversing your fortune towards financial freedom. 

Debt Management

Are secured credit cards a good way to improve your credit?

This guest post was written by Jason Bushey. Jason runs the day to day operations at

If you don’t have a secured credit card, then you’re forgiven if you don’t even know what a secured credit card is. However, if you have bad credit and you’re having trouble getting approved for a credit card – even those cards made specifically for consumers with bad credit – then you should absolutely learn about the benefits of secured credit cards.

Why? Because secured credit cards are a great way to rebuild your credit. And in some cases, they might be one of the only ways to re-establish your credit history and dig you out of the hole that is bad credit. 

Secured credit cards are credit cards that require a security deposit. Essentially, you’re guaranteeing your credit line by putting up your own money in case you default. Depending on the credit card issuer, your credit line is 70% to 100% of your security deposit. These credit cards are for consumers with especially bad credit, or no credit at all. 

We know what you’re thinking (we think) – ‘This sounds like a prepaid debit card.’ 

Sure, they’re a little similar. However, there are a couple of significant differences between prepaid debit cards and secured credit cards, the biggest being that you can rebuild your credit with a secured credit card. 

That’s right, secured credit cards are a great way to rebuild your credit. Debit cards? Not so much… 

Here’s the deal; secured credit cards report directly to the three major credit bureaus, and in many cases they offer free credit monitoring so that you can watch your score improve with every month that goes by. 

Also, as your credit improves, some secured credit issuers will extend your credit line beyond your security deposit. And after a year or so of responsible spending and improved credit, odds are that very same issuer will approve you for an unsecured credit card, which will improve your credit that much more assuming you keep paying your bill on time every month. 

Again, these are the major differences between secured credit cards and prepaid debit cards: secured credit cards report to the major credit bureaus, and you’re working off an actual credit line (versus your own money). Thus, you can improve and rebuild your credit with a secured credit card. 

To be honest, there’s no other reason to carry a secured credit card other than to establish or rebuild your credit. This is what they were invented to do, and the result is the near-equivalent of a lifesaver when it comes to building credit or rebounding from past financial mistakes. 

It can be tough to get out of a deep credit hole, especially when you’re at the point in which the only credit cards willing to lend to you charge absurd interest rates. With secured credit cards, issuers have essentially nothing to lose when they approve you, and your annual fees are put towards some really helpful credit building tools like the aforementioned monthly credit monitoring. 

Prepaid debit cards, on the other hand, are quite the opposite. Don’t let prepaid debit card offers fool you – you really can’t build credit with a prepaid card. They may report to a credit bureau, but odds are they aren’t the ones that are going to help you in any significant way. 

So as you put together your plan to rebuild credit, you should strong consider applying to a secured credit card. Yes, the security deposit you have to put up could set you back a couple weeks, but the amount of money you’ll save on interest fees later thanks to your improved credit will be well worth it. 

Debt Management

3 Reasons Bad Credit Can Cost You A Job

One of the most discussed developments of recent years is allowing employers to essentially snoop on what once was considered sacred privacy.  Now in order to get hired, your personal credit score can be added in the vetting process, to judge applicants along with other standards.


Credit Widens Its Grasp On Consumers 

If it were not for bad credit, many people would just sail along in life oblivious to how important it is to get your financial life in order.  Many people are aware that their credit score, also known as FICO score, is important, when obtaining a loan.  Whether financing a car, furniture, or a mortgage to buy a house, your credit score is vitally important.  However, tying credit scores to employment can be devastating.

Imagine having just graduated from a top-notch college with a high GPA, ready for the world.  When you send your resume out showing you interned at a Wall Street firm, you expect job offers to come in by the boatloads.  Instead you get two stacks of rejection letters.  The explanation is your low credit score.  No doubt about it, you must contact a credit repair business immediately.  Your main question is why employers have the right to reject your application due to your low credit score. 


Credit Scores Are Linked To Trustworthiness

Like it or not, many companies equate whether you can be a trusted employee by your credit score.  In their estimation, if you do not have the discipline to pay your bills on time, you most likely will not work well on the job.  Unfortunately mitigating factors are not considered, nor are you given a chance to explain. 


Your Judgment With Use Of Credit Clouds It In Other Areas

Let’s say you apply for a bank teller position.  Based on your credit report they see you have problems managing your personal funds.  In turn, they will assume you will use poor judgment in handling hundreds of thousands of dollars if hired.  While this may represent an oversimplification of the facts, this is the logic you are dealing with.  Unless you find someone making hiring decisions and explain the special circumstances causing your low credit score, your job prospect is over. 


Financial Institutions Weigh Credit Heavily

When it comes to big banks, accounting companies, law firms and the like, they do not want to invest in someone with bad credit.  No matter the reason for your delinquencies, they do not want to chance it.  There are too many applicants with acceptable credit scores.  The HR departments of financial institutions tend to be very rigid about the characteristics they look for in filling positions.  If a person does not fit these cookie cutter characteristics, they will be shown the door.  They will not even offer you a chance to explain reasons your score took such a dip.  Bankruptcies and foreclosures, though very common in the recent recession, are also job killers. 


There has been a backlash in many states and several other states have pending legislation to block this practice.  At least eight states restrict the power of employers to check your credit report.  They are only allowed to perform a background check on applicants.    Many protest this is fundamentally unfair.  If applicants were unemployed and unable to pay credit obligations, they need a good job to begin paying again, which will boost their scores.  It is a Catch 22 for them.  Another problem is people neglect to check their credit reports periodically.  Some people denied employment found they were judged on errors, from the credit bureaus.  It is essential these problems be disputed to get them erased.  The last thing you need is incorrect information on your credit report stifling your chances at that great job.  

Debt Management

What is a Car Loan Calculator?

If you want to properly plan your purchase of a car, whether for personal or business reasons, in order to be sure that the payment terms are sound and workable, car loans calculators are effective ways of ensuring this. One cannot just go blindly into the dealership armed with nothing but the model and make of your preferred car. By taking care of the small details at the onset, you can be more confident of your options and choices even before you head out to actually make the purchase. 

A car loan calculator is essentially your car loan financial adviser. It is designed to give you relevant information from the get-go so you do not have to second-guess payment terms for the purchase. An effective car loan calculator should require nothing more than the price of the car of your choice as well as your preferred loan payment terms such as the duration. Once you enter these values, the loan calculator automatically calculates how much you are expected to pay on a monthly basis in order to settle the loan within your preferred duration. 

Moreover, a car loan calculator allows you to compare the loan rates and accessibility of most banks and financial institutions. Because car loan calculators are available online, you can already check various offers even before deciding on the purchase. This means that you are already getting a pretty clear idea of which loans are best for your chosen car purchase. All that you have to do is pay the bank or financial institution a visit to confirm the terms and you should be set for purchasing your first – or next – car. 

Do not get bogged down or feel limited by inadequate loan information that will allow you to make sound financial decisions on your next vehicle purchase. Use these car loan calculators to your advantage by finding the best deals with the most favorable payment terms so you can choose the option that’s ideal for your needs and for your wallet. By doing it this way, you are taking full control of your debt and loan situation without compromising your ability to purchase the vehicle that exactly suits your needs and wants. 

Debt Management

Is it better to invest or repay debt?

If there’s one positive that can be taken from the global financial crisis, it’s that more and more people seem to be thinking about how to make more of their money. Over the last year or two, various reports have indicated that many people are saving more, repaying more debt and taking more care over where and what they buy.

All of these things can help to improve your financial situation, but which is better – investing/saving or repaying debt? Should you focus more on savings and investments to increase your financial security, or should you pay off your debts first?

The answer to this depends on your circumstances. In some cases you might be able to do both, but sometimes one or the other might make more sense.

Saving / investing

Savings and investments can provide financial security by giving you something to fall back on in a financial emergency. What’s more, they can allow your money to grow faster than just keeping your money in a ‘standard’ bank account.

A lot of experts recommend keeping the equivalent of three months’ salary in savings. In truth, any amount of savings is better than nothing, but it’s a good idea to work towards this kind of savings target – to ensure you’d be able to cover your costs for a while if you lost your job, for example.

But what about your debts? If you’re focusing on saving but repaying your debts slowly, couldn’t that cause problems?

Repaying debt

Some experts recommend repaying your debts before you save, and in one respect this makes good financial sense. By concentrating on repaying debt, you’ll almost certainly pay less interest overall, because debt usually accrues interest faster than savings.

However, by completely neglecting your savings you could be putting yourself at risk. Let’s imagine you finished clearing your debts one day but then received a huge car repair bill the next day – you could be left wishing you’d put more money into savings.

With that in mind, a lot of people only focus exclusively on repaying their debt once they already have a good amount of money in savings/investments.

Some people may simply prefer to strike a good balance. Although it might cost you more in the long run, repaying a reasonable amount towards your debts while still putting some money into savings could well provide more financial security overall than focusing on one or the other.