Charge Offs

Posted by & filed under Chapter 7.

What is a Charge Off?home-restore-your-credit-

Past blog posts have explained the importance of your credit score.  Your credit score can have an impact on your ability to get a job, insurance rates, residential leases and utilities.  There is a myriad of information on your credit report, from creditor names, payment history, recent balance, account status and balance history.  All of this information is used to help determine your credit score.

When we pull our client’s credit report and review it with them, the term charge off often needs to be explained in more detail.  This blog post will explain what a charge off is, what a charge off means and the impact a charge off has on your credit score.

The term “charge off” can usually be found under the status section of your credit report.  It will normally say something along the lines of “account charged off” or “$1,000 written off”.  After 180 days of not being able to collect on an account, a creditor may list the status of an account as charged off.  The creditor has given up on being repaid according to the original loan terms.  The creditor has given up on being repaid under the original terms of the loan and written the loan off their receivables as a loss.  Now, some of our clients think that this means the debt is no longer owed.  This is NOT true.

Most creditors will sell this “charged off” or bad debt to a debt collection company for pennies on the dollar.  At this point, the collection agency will attempt to collect on the unpaid portion of the debt.  Now, the debt will be reported as “charged off” on one spot on your credit report and in collection on another spot – two dings to your credit report.  Both of these dings will stay on your credit report for seven years from the date of your first missed payment.

If the debt is sold to a collection company then you no longer owe the original creditor and any payments you make should be to the debt collection company.  If you pay the account then the status of the account should be changed to show that it was a paid charge off or paid collection.

A charge off will generally have a negative impact on your credit score; however the extent of the impact is often dependant on other factors as well.  If your credit score is low due to your debt to income ratio then paying off the debt will likely increase your credit score.

If you are unable to pay the debt in full, you may be able to negotiate with the original creditor to have the charge off removed from your credit report.  While the original creditor may not be able to delete the account entry and the payment history will still show up, it may be able to change the status to a more desirable status such as “paid in full”, “paid as agreed”, “account closed” or “closed”.

As always, make sure you check your credit report for accuracy.  Check out our other blogs to see how to dispute inaccurate information.

 

 

Stop Co-signing!

Posted by & filed under Chapter 7.

STOP CO-SIGNING ON AUTO LOANS!!

A number of our clients come into the office because of a lawsuit they are facing.  Now, some of the time the debt isn’t even “their debt”.  Rather it is debt from them co-signing on an auto loan for a son, daughter, brother, sister, relative or friend.

What is co-signing?

Co-signing is a term used to describe when more than one person signs for a loan.   Frequently, if someone has poor credit, an auto lender will ask the person to get a co-signer because their credit is not good enough to get the loan by themselves.

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Perhaps the most famous “co-signer”, MC Hammer supported numerous friends and family with his earnings until he went broke.

At the request of an auto lender like Gateway Financial, Credit Acceptance, or Reliable Auto Finance, the person will typically ask a parent, brother, sister, relative or friend to co-sign the loan.  This allows the person to get the vehicle they want.  However, it’s a terrible idea for the person who co-signs.

The person who co-signs on the loan is not getting any benefit.  They do not get any money and they do not get to use the vehicle.  The only benefit is they are doing a “favor” for someone else to allow them to drive a better vehicle.

Now, it sounds like a nice thing to do for someone you care about.  Why not let them enjoy the benefits of your good credit?  The problem becomes when the person loses a job, gets in an accident and fails to pay on the auto loan.

Now, missed payments are going to start hindering your credit score.  You’ll probably start receiving calls from the auto-loan company and they may even repossess the vehicle.  If the vehicle is repossessed you will now have a repossession added to your credit report.  The vehicle will be sold at an auction and both the co-signer and original person will be liable for the auto loan deficiency.  The auto loan deficiency is the difference between the amount owed on the vehicle and what it sells for at auction.  For example, if you owe $10,000 on the vehicle when it is repossessed and it sells at an auction for $4,000 then the auto loan deficiency is $6,000.

Both people who signed for the loan are each 100% responsible for the $6,000 and the creditors are often quick to start collecting.  This means the auto lender can try and recoup all of the funds from one of you individually.

You can be sued first!

Our clients are often amazed when they are the first one sued by the auto lenders even though they are the co-signer, not the primary signer.  The auto lender is well within their rights to sue either party for the auto loan deficiency.  Often times the auto lender will sue the co-signer because they have better credit and are more likely to pay the debt back.

If neither of you are able to pay the debt back then the car company may attempt to satisfy the debt in other ways such as garnishments or seizures of property.

These collecting attempts can be stopped by filing for bankruptcy.  However, even if you file for bankruptcy, the primary signer will still be liable for the debt.

Stop Co-signing!

While the original intent was to help out a friend, it leads a number of people to contact our office because they are being sued for large sums of money.

We rarely, if ever, recommend people to co-sign loans for anyone – the rewards rarely outweigh the risks!

If you have co-signed on an auto loan and owe a large debt, contact our office at 248-237-7979 to set up a free consultation.

Why You’re Not Getting Arrested for Student Loans

Posted by & filed under Debt Help, Detroit Lawyers pllc, Michigan Bankruptcy, student loans. 

If you've been on social media in the last week you've probably heard about Paul Aker. He claims he was arrested by US Marshals because he owed student loan debt (who doesn't?).

There is STILL no Debtors’ Prison

arrested for student loan debtI’ll let you get caught up on the facts that were reported in the original story here.  I’m more concerned about what WASN’T reported in the original story. Although they only had a couple minutes in that video clip, I had a hard time believing the story as Mr. Aker told it. The problem? THERE IS NO PRISON FOR OWING A DEBT. In fact, Mr. Aker never even went to prison. He was taken to court for violating a judge’s order to appear.

What you don’t know about this story is that Mr. Aker repeatedly told the US Marshals Service that he would not be appearing in court to answer a summons relating to a 2006 lawsuit. Court records show that Paul Aker was sued in 2006 for $2,600 in unpaid student loan debt. When Mr. Aker failed to appear for that lawsuit (after receiving notice) the judge had no choice but to rule against him for the full amount.

So even though the debt was originally federal student loan debt, refusing to obey a court order to appear is a criminal offense. It was a criminal offense for 10 years before the US Marshals arrested him and took him to court (not jail).

What Lessons Should We Learn from This?

arrested for student loansTake ANY court summons you receive seriously. It doesn’t matter how you feel about the debt. Ignoring anything you receive from the court isn’t going to help you in the end.  Hiring a lawyer will always be your best best, but even appearing on your own will at least avoid a default judgment or having a bench warrant issued because you failed to appear.

In fact, many of our clients make their financial situations worse by coming to us only AFTER a creditor has starting garnishing their wages. Sometimes we’ll see the original complaint (that turned into a default judgment) and realize they could have avoided the entire debt if they had responded in a timely manner.

Ultimately, it looks like Aker was arrested due to a lack of communication with the court and not because he owed $1,500 in student loans to the government. To be clear, however, I do feel bad for Paul Aker. His defaulted student loan debt is just one small slice of a trillion dollar student loan problem in our country. Americans currently owe over $1.2 trillion in student loans. Only 1/3 of those borrowers are actively paying their student loans down while another 20% are either in default or delinquency.

What are Better Student Loan Options?

If you have federal student loans you have better options than waiting 30 years to get arrested. The National Student Loan Data System (NSLDS) has a website at www.nslds.ed.gov where you can check the status of all your federal loans. It’ll break down your different loans by semester and type and give you the current status (forbearance, deferment, default, in repayment, etc).

The hardest part of student loans is often finding all the information. When your student loans bounce around from different servicers it’s hard to keep track of who you owe. That’s why you should always start with the NSLDS website. The information should also be on your credit reports along with any private student loans you may owe. Once you’ve rounded up all the information about your different loans you’ll be able to decide what repayment options you have.

We’ve written about the different Income Based Repayment options before, but there are also statutory reasons why your debt may be forgiven or discharged as well. You may qualify for a Public Service forgiveness program, closed school, or other discharge based on your circumstances.

There are also bankruptcy options that we may be able to help you out with. Most people are aware that student loans are tough to discharge in bankruptcy, but too many people are under the false belief that it’s always impossible. Either way, talking to someone about the options specific to your student loan debt is always a better choice than “getting arrested for student loans.”

Advice to Kanye West

Posted by & filed under Chapter 7, Debt Help.

 

Kanye West leaving building in Beverly Hills after incident- fight with a person- a few minutes before the police showed up- Jan 13, 2014 X17online.com

Although most of what hip-hop artist Kanye West says must be taken with a grain of salt, he recently announced that he was $53 million dollars in debt on a social media site. While this may seem outrageous, Mr. West is experiencing the same issues many consumers face on a much larger scale. In fact, as an article on Time indicated, Kanye’s $53 Million in Debt makes him a typical American. Its estimated that West earns around $22 million per year, which means his debt is approximately double his annual salary. Working with many individuals in the Metro-Detroit area, we find that this disparity is often the case.

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West would be unlikely to fit in our standard Chapter 7 services offered to our clients due to his income, assets and wife’s enormous earnings. However, if we weren’t filing a bankruptcy case for West, we would at the very least offer some sound financial advice to him in exchange for a pair of Yeezy Boosts. These tips are applicable to all individuals struggling with debt.

1. Limit Large Luxury Purchases: West has recently purchased a Mercedes-Maybach which has the MSRP of well over $200,000. In addition, along with his wife, he bought a $20 Million estate in Hidden Hills. By moving into a more modest apartment and driving a Ford Fusion or Chevrolet Malibu, West would have the ability to use some of the funds to pay down a portion of his debt.

2. Consolidate Credit Card Debt at a Lower Interest Rate: While we aren’t privy to the nature of Kanye Wests’ $53 million of debt, we would advise him to explore his options to lower the interest rate on the millions he owes. If the debt is low interest around the prime rate, his annual payment would be around $3 million. However, if the debt is similar to standard credit card debt with interest rates of around 15%, that number would increase to well above $10 million. If West consolidated on a low interest or no interest card, he could reduce his obligation significantly. These cards are available to all consumers who qualify and we encourage our clients to explore them.

3. Invest Funds and Save: As stated above, West earns around $22 million per year from compensation for his music, fashion line and endorsements. West should seek the guidance of a financial advisor and invest intelligently. Even in times of financial distress, we strongly encourage our clients to continue to invest in retirement plans and other low risk investments.

4. Live Below Your Means: Despite facing $53 million in debt, West lives like an individual with reserves of cash. West continues to fly on private planes for $50,000 and recently rented out Madison Square Garden for a fashion show. When facing significant debt, we advise our clients to create a plan to live below their means. This includes spending less on food, entertainment and transportation.

5. Be Compensated for Your Work: Kanye West has just released an album and is not selling the it to the public. The album is available on a streaming service, but at this time it is impossible to purchase. As a result of this, the album has been pirated over 500,000 times in 48 hours. This approach is leaving money on the table that could be used to pay down his debt.

If you are experiencing debt issues or are considering bankruptcy, please contact our office at 248-237-7979 to speak with a licensed debt professional.

10 Questions with a Client – Part 2

Posted by & filed under Chapter 7, Detroit Bankruptcy, Detroit Lawyers pllc, Uncategorized.

Periodically our office likes to reach out to our clients to give others an idea how the process of filing bankruptcy works with our office. Allowing others to tell their story helps give potential clients a good idea of how a bankruptcy works and may help dispel common misconceptions. We have taken out all identifying information to protect the client’s anonymity.

1.      Tell us a little bit about yourself?

We are 28 and 31, married, employed, and had over 60,000 in credit card debt was out of control, and the high interest rate was making it difficult to pay down. We had been on debt for probably five years, just paying minimum payments on our credit cards. We were getting nowhere and couldn’t even afford an apartment. We had to live with family.

2.       What experience caused you to contact our office for debt help?

After 5 years of constant credit card debt, We first sought out debt management, but it’s not what it seems. You not only pay the company a large sum, but while paying this monthly fee (ours was going to be $1300), you also have to pay your creditors at the same time so that you don’t go into default. They negotiate rates with creditors and new monthly payments, but it all takes time. We just couldn’t afford to pay them and our creditors the same amount each month. So we thought we would see if we qualified for bankruptcy so we could end the suffering. I searched for a law firm on the Internet and was so happy to find Detroit Lawyers.

3.      What was your understanding of bankruptcy before you worked with our office?  

At first we didn’t think we would qualify, and we really didn’t know too much. There is a lot of misinformation on the Internet. We talked with others who had gone through bankruptcy and they all had similar stories of the process; qualifying, filing, court hearing, and then a discharge (pending you qualify for one).

4.      Explain the process of your initial consultation.

The initial consultation was free. Everyone was really nice and it was a smooth process. While my husband was out of town, I met with Scott and he answered a ton of questions for me. I filled out a small form of our debts. He looked over my form and thought he could help us file chapter 7. But at this point, we were fine with whatever chapter we qualified for. This was our last hope.

5.     What did you have to do to get the case filed?

Scott did all of the work filing our case. It was simply filling out our debts and assets. We verified the information in the petition and signed it. It was a super easy process.

6.       How was the court hearing?

We were nervous, but it turned out to be what everyone had said; very simple and quick. You simply answer questions on the record and you have the chance to see other hearings before you go up for yours. I think the whole process took less than 10 minutes after we were called.

7.      How did you feel when the case was concluded?

Relieved. There was no better feeling in the world, than to have your life back and actually feel like you have a life again.

8.      What would you tell others in your position?

Don’t read anything on the Internet! Only get your information from your attorney have them answer all your questions.

9.      What is the most common misconception going into this process?

Perhaps the most common misconception is that you need to “make a certain amount in order to qualify.” We were thinking we made too much in income, and we didn’t. There is a lot more that goes into it to see if you qualify.

10.     How has your life changed since after you filed?

We no longer live with family! We have our own apartment and we aren’t suffering with credit card debt any longer. It was the best decision we ever made!

 

 

10 Questions with a Client – Part 1

Posted by & filed under Chapter 7, Detroit Bankruptcy, Detroit Lawyers pllc, Michigan Bankruptcy, Uncategorized.

 

Periodically our office likes to reach out to our clients to give others an idea how the process of filing bankruptcy works with our office. Allowing others to tell their story helps give potential clients a good idea of how a bankruptcy works and may help dispel common misconceptions. We have taken out all identifying information to protect the client’s anonymity.

  1. Tell us a little bit about yourself?IMG_0047

I am 33 years old and I live in a suburb of Metro Detroit. I work as a project manager at a local advertising company. I have a bachelor’s degree from a large state university. I own a home in Metro Detroit with a mortgage.

  1. What experience caused you to contact our office for debt help?

I racked up a pretty large amount of credit card debt in around my time in college and have been paying the monthly minimums for almost ten years. I made some poor decisions and it came to the point where I could no longer pay off the monthly minimums. The credit card companies issued the accounts to collection agencies and began to send me letters incessantly. I owe over $20,000 in credit card debt and can’t even begin to pay them down. I did a consult with a debt settlement program and they were unable to work with me because the monthly minimum was too high.

  1. What was your understanding of bankruptcy before you worked with our office?

I always thought it was for people that were dead broke without any assets. I never imagined I would be in the position where I would need to file bankruptcy. Frankly, I was embarrassed to even be associated with the term.

  1. Explain the process of your initial consultation.

Reluctantly, I met with Drew at Detroit Lawyers after searching for debt help online. I really didn’t even want to come in, but Drew assured me it would be a “no strings attached’ free consultation just for informational purposes. I did not believe I would move forward. When I came in, it was very lay back and just like talking to one of my friends. I explained to Drew my situation and he outlined my options. We quickly concluded that a Chapter 7 bankruptcy was the best most cost effective option for my future. I would discharge all of my credit card in three months and get to keep my home and my car under the same terms.  Even at a young age, I felt assured that bankruptcy was not a “death sentence” and that I could obtain credit in the future.

  1. What did you have to do to get the case filed

I had to get together my deed, mortgage documents, paystubs, bank account statements, car title and a few other things. It took me about three days to gather everything. I returned with the documents and we were able to file the case a week after my initial consultation.

  1. How was the court hearing?

It was in downtown Detroit in the financial area near Cobo Hall. The actual hearing took about 3 minutes. There were about 4 other Debtors in the room.  The Trustee basically just asked me a few questions to verify all the information I submitted was truthful, accurate and complete. He also asked me a few questions about the value of my home.

  1. How did you feel when the case was concluded?

When I got my discharge, I felt a relief. I realized I no longer had to pay every penny of my discretionary income to credit card bills that I have owed for ten years.

  1. What would you tell others in your position?

Explore your options. Don’t resign yourself to a life of paying monthly minimums forever if you know you can never get out from under it. One of the things my attorney told me was to treat yourself like a business and make the smartest financial decision without any emotion involved.

  1. What is the most common misconception going into this process?

That everyone knew that I filed bankruptcy and that I couldn’t keep my home and my car.

  1. How has your life changed since after you filed?

I have a savings account! I am able to spend money for my hard work on things other than old credit cards. I am able to partake in activities I have not been able to in the past.

Credit Cards After Bankruptcy

Posted by & filed under Uncategorized.

Many of our clients tell us they are never going to open another credit card again once they file for bankruptcy.  While this may help prevent them from incurring debt, it is not the best way to rebuild your credit score after you have filed for bankruptcy.  In order to rebuild your credit after bankruptcy you’ll need to open credit cards to reestablish and build your credit score.  Every day we are inundated with credit card offers.  Whether it is from commercials on TV, email offers, or offers at the store.  However, not all credit cards or credit card offers are the same.  Today, we will look at the different types of credit cards and the impact they have on improving your credit score after bankruptcy.

Standard Credit Card

One type of credit card is a standard credit card or major credit card.  These cards will have a Visa, American Express, Discover or Mastercard logo on them.  These credit cards can also be used where ever the card is accepted.  Even amongst the major credit cards there are a number of differences.  Some credit cards are balance transfer credit cards, some have rewards programs with cash back or airline miles and some have retail rewards cards.

Merchant Credit Card

A second type of credit card is a merchant or store credit card.  These are the types of card that are usually offered at major retailers such as Nordstrom, Macy’s, Target, or Costco.  Normally, they will not have a Visa, American Express, Discover or Mastercard logo.  Another feature is that they can normally only be used at the particular store that issued the credit card.

Secured Credit Card

Another type of credit card is a secured credit card.  Secured credit cards require a cash deposit which becomes the credit line for the account.  So, if you put $500 in the account, you can charge up to $500 on the secured credit card.  Be sure to shop around for the best available secured card.  The interest rate, fees and required deposit are all things you should examine prior to opening a secured credit card.

Rebuilding Credit After Bankruptcy

As mentioned earlier, after bankruptcy you should look to start rebuilding your credit by opening credit card accounts.    If you can, it is best to open three to five major credit cards after bankruptcy.  If you can’t, open a standard or major credit card right away then look to open a secured credit card.  The amount of cards should not include a store or merchant credit card as these cards are not always reported to the credit bureaus.  And, if they are not reported to the credit bureaus, they will not be reestablishing or increasing your credit score.

By having between three and give major credit cards it gives the bureaus a sufficient amount of data to evaluate your credit worthiness.  Anything lower than three will not give them enough information and anything over five may prove difficult to manage.

Lastly, and most importantly, remember to make your credit card payments on time every month.  That is the biggest factor to reestablishing your credit and improving your credit score.

For more information on rebuilding credit after bankruptcy, call a licensed bankruptcy professional at our office at (248) 237-7979.

 

Convert Your Case in Bankruptcy

Posted by & filed under Chapter 13 Bankruptcy, Chapter 7, Detroit Lawyers pllc, Michigan Bankruptcy.


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Can I Convert My Case?

Whether you file a Chapter 7 or a Chapter 13, situations often change and converting your case to a different chapter is often the best option. This blog post will highlight when you should consider converting your case and how to go about the conversion. As always, it is best to consult with a bankruptcy professional before making any decisions in your case. If you already have counsel, you should contact them immediately. If you represent yourself or are no longer represented, our office offers free consultations. Contact Detroit Lawyers at 248-237-7979.

Converting from a Chapter 13 to a Chapter 7

In a Chapter 13 repayment plan, monthly payments must be made to the Trustee in order to advance the case to discharge. Oftentimes, it is no longer necessary for Debtor’s to be in a Chapter 13 Plan. Below are some examples:

Reduction of Income: Many times an individual has to file a Chapter 13 is because they make too much income to file a Chapter 7. If you receive a reduction of income or lose your job, it might be in your best interest to convert the case to a Chapter 7 and discharge your debt in 90 days.

Example: Debtor A was making $75,000 and filed a Chapter 13 bankruptcy with a payment of $300 per month. Debtor A paid on your plan for 7 months, but was laid off. Debtor A now may able to convert his case to a Chapter 7 and discharge all his debt without having to go on the court ordered payment plan.

Surrendering Secured Debt: Another reason to file a Chapter 13 is to keep a home or car that has built up a large arrearage. If you are in a Chapter 13 repayment plan and no longer want the property, you can surrender the property and convert to a Chapter 7 to eliminate the remainder of your debt.

Example: Debtor B was facing a foreclosure on his home that had an arrearage of $10,000. He filed a Chapter 13 and was paying back the arrearage over 5 years in a Chapter 13 plan. This winter, he decided that it was too cold in Detroit and was going to move to Florida. Debtor B can convert to a Chapter 7, surrender the home, eliminate the rest of his debt and go enjoy the Florida sunshine.

Current on Secured Debt Arrearage: Similar to above, if you are in a Chapter 13 repayment plan and you cure the arrearages on a home or vehicle before the plan is through, you can convert the case to a Chapter 7 without facing recourse from the Creditor.

Are you eligible to Convert? It is important to consult with an attorney concerning conversion as there are a number of factors that will determine if you can convert. This includes if your income is low enough to file a Chapter 7, if all assets are going to be able to be protected in a Chapter 7 and if you have not filed a Chapter 7 in the previous eight years.

Steps to Convert Your Case from a Chapter 13 to a Chapter 7

  1. File a Notice of Conversion with the court. Once the court receives the Notice, the court will send a notice to your employer to stop any active payment orders. Any funds that accidentally come in post confirmation will be refunded to the Debtor.
  2. File Amended Schedules with the Court: You must file an amended Schedule I and J to reflect your current monthly income and expenses.
  3. File Disclosure of Attorney Fees (If applicable)
  4. Pay the difference of the filing fee between a Chapter 7 ($335.00) and a Chapter 13 ($310.00): You must pay $25.00 the court.
  5. Attend the Chapter 7 341 Meeting (regardless if you already attended a Chapter 13 Meeting)
  6. Complete your Online Debtor Education Course: This must be done 45 days after the 341 Meeting is held. We suggest using Debtoredu.com.

 

Converting from a Chapter 7 to a Chapter 13

Although it’s rare, there are a few instances when it would be beneficial or required to convert to a Chapter 13:

  • If the US Trustee issues a “Presumption of Abuse” and finds that your monthly income is too high to file a Chapter 7, they may file a Motion to Dismiss your case based upon your income. You would then have the option either to contest the motion or voluntarily convert your case to a Chapter 13 where you will be subjected to a five year repayment plan.
  • If you fall behind on your car or mortgage payments, it may be necessary to convert the case to a Chapter 13 in order to pay down the arrearages over time to avoid repossession or foreclosure.

Steps to Convert your case from a Chapter 7 to a Chapter 13

  1. File a Motion for Conversion with the Court: This should outline the reasons you are converting and show that you can pay your Chapter 13 Plan. The motions are usually approved.
  2. File Amended Schedules with the Court: You may have to amend some of the schedules to include any income changes and any new debt.
  3. File Chapter 13 Plan
  4. Attend the Chapter 13 341 Meeting (regardless if you already attended a Chapter 7 Meeting)
  5. Attend the Chapter 13 Confirmation Hearing (if necessary)
  6. Complete your Online Debtor Education Course: This must be done before the conclusion of the plan.

Rebuild Bad Credit with Credit Cards

Posted by & filed under Chapter 7, Credit Score.

A GuiIMAG1069de for Credit Cards

Reestablishing your credit can be a daunting task, but it doesn’t have to be! Believe it or not, one of the most effective—and efficient—ways to rebuild your credit is to reenter the credit world. Although you may be thinking, “Credit cards are what got me into this mess in the first place,” opening up a new credit card can also pull you out of it, and put you on the right path to developing a positive credit history.

The question that remains, then, is, “Which credit card should I choose?” The best options are the credit cards that offer the most benefits/rewards, with no annual fee, and a low annual percentage rate (APR). We did some research for you, and we’ve provided a breakdown of our top-choices in the list below.

Cash Back

Cards that offer cash back rewards usually do so by contributing a set percentage of cash back on all purchases, or purchases made at specific places such as, a gas station or restaurant.  If you’re interested in opening up a card for this purpose then some good choices would be:

  • Citi Double Cash Card: This card has no annual fee and a 0% APR on purchases and balances transfers for up to 15 months. Not only does it offer 2% on all purchases, but it also gives you your credit score on each statement which is a good way to ensure you stay on track and don’t start falling behind!
  • Discover It: This card has no annual fee and a 0% APR on purchases and transfers for up to 12 months. It offers 5% back in cash on certain interchanging categories and 1% back on all other purchases (if you’re big on online shopping this would probably be a great choice for you).

Balance Transfers

If you’ve found yourself carrying a balance on a credit card that you know you won’t be able to pay off any time soon then you of course would want to try avoiding getting charged interest each month. A way to prevent this could be to transfer over your balance to a different card; this is essentially to help you get caught up and completely clear your balance(s). When opening a card with the intent to transfer over a balance you would want to try your best to avoid any balance transfer fees; some credit cards that offer this are:

  • Chase Slate: This card doesn’t charge anything to transfer over a balance as long as it’s done within the first two months from initial sign up. There is also no annual fee and it allows up to 15 months to pay off your balance with a 0% APR.
  • Digital Credit Union Visa Platinum: This card has a $0 balance transfer fee and no annual fee. It offers a borrowing rate of 8.5%, which is less than half of what the average borrowing rate usually is. However, when signing up you will be required to open a savings account with a minimum of a $5 deposit and you’ll need to become a member of an associated nonprofit organization.

Travel

If you think of yourself to be a frequent traveler then you would want a card that offers rewards you could make the most of. For instance, some cards offer mile rewards based on how much you spend while others may offer hotel rewards that could get you discounted prices for things such as, nightly stays, parking, dinner(s) etc. Some cards we feel that offer several traveler rewards perks would be:

  • Barclaycard Arrival World: The APR on this card ranges between 16%-24%. One of the biggest perks is this card has no annual fee (usually travel cards require an annual fee after the first year of enrollment). The Barclaycard offers two miles for every $1 spent on travel and dining and one mile for every $1 spent on anything else. There’s also a 5% bonus when you redeem miles for travel spending.
  • Chase Sapphire Preferred: This card has a 16% APR and a $95 annual fee after the first year. When signing up you get the opportunity to earn 40,000 points if you spend up to $4,000 in the first three months. Every $1 spent on travel and dining earns you two points and each $1 spent on anything else earns you one point. This card also offers 20% off travel when you redeem your points for things such as, air fair or car rentals.

Students

Many parents of college students are usually nervous when it comes to their child entering into the credit world; it holds a lot of responsibility and sometimes students don’t understand how something as simple as one missed payment can have a vast impact on their credit. Luckily, however, there are credit cards out there that can help students, or anyone for that matter, manage their cards responsibility.

  • Northwest FCU FirstCard: This card has an APR of 10%, no annual fee, and no balance transfer fee. The good thing about this card is its $1,000 credit limit; this can help individuals avoid getting themselves into any major debt trouble.
  • Discover It Chrome for Students: This card has a 0% APR for the first six months and afterwards it ranges between 13-22%. There is a 2% cash back reward on up to $1,000 spent at certain places and a 1% cash back reward on everything else. There is also a $20 cash back reward at the end of each school year if you receive a GPA of 3.0 or higher.

Although it may seem that credit cards offer nothing but stress and financial struggles, they do offer a helping hand when it comes to reestablishing your credit. As seen, there are cards that offer plenty of benefits and rewards, unfortunately though, these tend to go overlooked. It’s time to find the card best suited for you and utilize all that it offers; if they’ve already taken from you then why not at least obtain from them what you’re entitled to!

Although it may seem that credit cards offer nothing but stress and financial struggles, they do offer a helping hand when it comes to reestablishing your credit. We’re always happy to discuss your credit card debt, and/or how to effectively rebuild your credit through the use of credit cards, and other efficient methods, either over the phone or in our office during a free consultation!