Thursday, October 26, 2006

Abusing Collectors

Collectors seem to be able to dish it out but can't take it. Take a look at this article. The district attorney for Araphoe County in Colorado seems to have mistreated a collector. The story is that a debt collection attorney for Central Credit Corp. Jonathan Steiner alleges that he was threatened by Chambers with a grand jury investigation when he tried to recoup some bad check funds from Englewood City Councilwoman Laurett Barrentine, a member of Arapahoe County's Republican Party. Barrentine claims that the bad checks were a result of identity theft, and that she is not responsible for the $320 dispute. Central Credit Corp. dropped the collection account against Barrentine – primarily from threats of the aforementioned grand jury investigation. After filing a complaint, now the district attorney faces possible discipline ranging from a reprimand to disbarment. Its nice to know there is still justice, isn't it?

Wednesday, October 04, 2006

Another Reason Open Creditcard Accounts Can Ruin You

Consumer Report’s reveals things you might want to know about your financial privacy:

  • Data brokers are willing to sell even your most sensitive information to paying customers, some of them crooks.
  • When credit bureau employees asked to see their own files, they received scant information. One report contained 31 errors.
  • The federal government is a steady customer of the data collectors, but there’s no way to know what it collects or exactly how much it pays.
  • Pretexters, who lie to get information about you and sell it to anybody, operate largely free of regulation.

Tuesday, October 03, 2006

Congress Giving Collectors More Power

Patrick Lunsford of is reporting, "Changes in the FDCPA have been approved by the U.S. Congress and sent to the President to sign into law. The amendments were part of the Financial Services Regulatory Relief bill which was passed this weekend.
Some of the key changes include clarification around “mini-Miranda” disclosures and legal codification that allows agencies to collect during the 30-day validation period. " The industry already practices collection during this period, but this change in the law makes it legal. Yet another reason to stop borrowing money, and avoid medical catastrophes at all costs. Soon those who rack up so many medical bills that they must file for bankruptcy, will have no relief and will be hounded by collectors for a lifetime unless they are fortunate enough to find someone else to bail them out. Creditcards no longer carry risk for the lender with the collection power congress is granting.

Creditcards are more important than religious freedom?

"Thou shalt have no gods before me ... except for MasterCard, Visa and American Express.
That's the way the United States Bankruptcy Court for the Northern District of New York is reluctantly interpreting the controversial U.S. bankruptcy reform law that went into effect last October. The court says those going through bankruptcy may not tithe to their church or make other charitable donations ... until after they have paid off credit card companies and other creditors. Before the new law went into effect, bankruptcy court judges were required to permit debtors to tithe a portion of their income on a regular basis. The 2005 law could have a major impact on the large number of Christians and members of other faiths that are called upon to tithe a portion of their income on a regular basis. More than two million Americans filed for bankruptcy protection in 2005, and hundreds of thousands will do so during 2006. " says a report on

This is an infringement on religious freedom. They are rewriting the laws of the Old Testament. Seperation of church and state is being used to build the profits of creditcard companies.

Monday, August 07, 2006

Need a Reason to Avoid Creditcards?

If you aren't convinced that you need to avoid creditcards and all debt, for that matter. Read this recent series in the Boston Globe.
No Mercy For Consumers
Dignity Faces a Steamroller
Enforcers' Might Goes Unchecked
Regulators, Policy Makers Rarely Intervene

If these articles make you realize the outrageous nature of the power of lenders today, write the Boston Globe and let them know what you think about the articles. Also forward copies to your representatives in Washington and let them know what you think of their lack of responsibility for protecting citizens from injustice.

Monday, June 26, 2006

Creditcard Issuers Still Fighting to Rip You Off

There is currently legislation being considered that would take away more of your consumer protection against the shennanegans of credit card companies. Take a look at this. In case I didn't tell you, creditcards are the ticket to bankruptcy, even if you are financially conservative.

Friday, June 23, 2006

Have You Been Ripped Off By Universal Savings Bank?

They have a program for creditcards that offers a free computer if you open an account. They claim the computer is more valuable than it really is, and sets up holders of these creditcards to pay much more for the computer than they would have ever agreed to pay. If you have been exposed to this program or have a friend or relative who has, then you might want to talk to this law firm. They are pursuing this and need witnesses.

Thursday, June 22, 2006

Lawsuits Galore Against Creditcards

When Congress passed the bankruptcy bill in 2005, what were they thinking? Look at the large number of lawsuits!

Citibank forced to make changes in its marketing practices and cease billing card holders for products never ordered, and is caught allowing mortgage fraud. Class action against MBNA certified for breach of contract, fraud, and other claims. FIRST USA settles for $84.9 million in a class action suits over charges that the bank had illegally hiked interest rates on consumers. FleetBoston loses case over violations of Truth In Lending. NextCard gets closed by the Office of Comptroller of the Currency.

There are many many more cases that show a steady pattern of abuse of customers. On 17 May 2005 there was a US Senate Bank Committee Hearing on Abusive Credit Card Practices. Link to full hearing, download PIRG's testimony, download Credit Card Reform Platform released at hearing by PIRG. In this session MBNA's General Counsel testified that MBNA does not use "universal default", while there were simultaneously many complaints from cardholders to the contrary on many consumer websites claiming the very things that describe universal default. What has Congress done since then? NOTHING!!!

What is the answer? Don't use creditcards folks! Don't make yourself vulnerable to these oppressors. Proverbs 22:7 is holding true even now.

Wednesday, June 21, 2006

More Hidden Charges on your Creditcards

When you make charges on your creditcards in a foreign country, there are fees hidden in the currency exchange. Exchange rates fluctuate all the time, but the charge is made to your account in U.S. Dollars. When that is done, the bank charges a 1% currency-exchange fee, then on top of that, they most likely tack on another 2% for overseas purchases. The fees are extremely difficult to find on your statement because they aren't listed. They also don't make it easy to see in the cardholder agreement either. Like many other creditcard company policies, they aren't clear. Sometimes they aren't even expressed to you until you complain about them. reports that there are currently a number of lawsuits over this currency exchange policy. However, don't believe their propoganda that creditcards are still cheaper. If you understand what simply having the account open is costing you, it is cheaper to avoid creditcards.

Monday, June 19, 2006

The Perfect Storm

The ruthless unfair business practices of credit card companies, may come back to roost when merchants who accept creditcards fight back. A lawsuit was filed back in Sept. 2005.

Friday, June 16, 2006

Premiums on Creditcards

Here is an example website that could be the king of deceptive advertising. When you do, however, take a close look at the fine print. Be careful not to let yourself be tempted. Even the creditcards fine print won't give you all the information you need. Remember that there are numerous trap doors which will invalidate the deal after you have opened the account. The creditcards fine print has a lot of conditions to the offer. In the end, I think you'll find that the creditcards actually use this as a vehicle for selling things over their retail price. Remember with whom you're entering into a contractual relationship; companies with a background of fraudulent dealings, largely ignored by our government. (see how Citigroup helped Enron commit fraud.) These companies are plagued with Class Action lawsuit judgments against them so much, they seek to deprive you of the right to a fair hearing in a court of law in their adhesion contract by putting in mandatory arbitration clauses. This is going too far. It has become legal loan sharking.

Thursday, June 15, 2006

Bankruptcy Law in Shambles

What happens when the creditcard industry writes the laws? According to judges, its called anarchy. See this article. Creditcards are the modern tool of empire building, instead of guns. The more we use our creditcards, the more power we give our creditcards.

Wednesday, June 14, 2006

Deceptive Advertising

The banks that issue creditcards are somehow above the law, it seems. They can put tons of deceptive ads on TV, in magazines, and in our mailboxes without consequences. See what this blogger found when he analyzed one of his creditcard offers. If you don't believe creditcards are the kiss of death financially, you need to take a closer look at who you're doing business with.

Tuesday, June 13, 2006

Credit Ratings Protect Creditcard Companies

Think about it. We fret over our credit rating, and even strategize on how to make our credit rating as high as possible. When you really get into this, you discover that the credit bureaus don't work for a government agency, aren't interested in consumer protection, and in effect will ignore everything you tell them unless the law requires a response. Even then their response is nothing more than what is legally required.

The credit bureaus work for the banking industry. Those are the customers that pay their bills. The information found in your credit report is going to be slanted, if at all possible, to allow the bank to charge you higher interest. The mistakes on credit reports are to their benefit, and they could care less if they are errors. Correcting your errors takes aggressive and highly motivated action on your part before they are corrected, unless you are lucky, or a celebrity, or special VIP flagged by the bureau.

Those who use credit reports to determine the credit worthiness of a potential renter or otherwise judge the character of an individual - remember this. Credit reports are inaccurate.

Monday, June 12, 2006

Another Secret Profit Stream for Creditcards

Merchant fees, another way consumers who are conned out of their money, regardless of whether they use creditcards...

"Credit card companies do not want merchants to charge credit card users more than they charge other customers, even though the merchant pays a fee of 2 to 3 percent (merchants negotiate an exact percentage with their banks) to process credit payments. In some countries this fee may be significantly more. If customers were responsible for this fee, it would often discourage credit card usage. Some critics have observed that this results in what is effectively a hidden tax on all transactions conducted by merchants who accept credit cards since they must build the cost of transaction fees into their overall business expense. The end result is that cash consumers are essentially subsidizing credit card holder purchases. The cost of the convenience enjoyed by card holders and the profits taken from transaction fees by the card industry (which has come to rely increasingly on this revenue stream over the years) is partially offloaded onto the backs of the cash consumer. Critics go on to say that further compounding the issue is the fact that the consumers most likely to pay in cash are the least able to afford the additional expense (card holders are more likely to be affluent, non-card holders less so)." Wikipedia Article

The argument that using cash is subsidizing profits this way, is just propoganda to encourage the use of creditcards. The less creditcards are used, the less the subsidy would need to be. Consumers who use creditcards pay a lot more than they realize for that convenience, in many hidden ways.

Saturday, June 10, 2006

Issuing Creditcards by Deception is a Way of Doing Business

As I mentioned in a previous post, Citigroup has a track record of being anti-consumer, and even has involved itself in fraudulent business practices. Unfortunately, Citigroup is not alone. American Express, and many other companies are doing the same now. It is amazing what kinds of patterns you'll find if you do a little digging. One of the groups, World Financial Group, is an outlet for many financial services companies that tolerate deceptive and fraudulent activity.

My discovery of the problems with creditcards, is just part of the picture. I have to say though, that creditcards are the most successful tool for the industry that I can see. As Edward Yingling of the American Bankers Association says, "But I think it is generally understood that those that use the revolving part of the credit card are kind of the sweet spot". Take a few minutes and look at this video slot by Frontline. (If you are on dailup, try this link) Deception is a way of business.

Friday, June 09, 2006

Sue Issuers of Creditcards for their Reports to Credit Bureaus

Are your creditcards playing havock with your credit report? First get rid of them. Then clean up your credit report. You might even be able to get agressive with your cleanup in small claims court. See this website for details.

I don't usually recommend being litigious, however, if you don't defend your legal rights and you let these companies trash your finances by trashing your credit report, it enables their abuse. It harms your family. The biblical way to approach this kind of disagreement is to approach the party and attempt a resolution - by all means do that first. What you will most likely find is that they won't cooperate. If you can't come to a resolution and they won't submit to biblical principles in their treatment of you, then the scriptures allow you to sue. It is a last resort.

However, you may want to consider the wisdom of these scriptures.

Isa 59:44
No one sues righteously and no one pleads honestly.They trust in confusion and speak lies;They conceive mischief and bring forth iniquity. NASU

1 Cor 6:7
7 The very fact that you have legal disputes among yourselves shows that you have failed completely. Would it not be better for you to be wronged? Would it not be better for you to be robbed?TEV

1 Cor 6:1
If any of you has a dispute with another, dare he take it before the ungodly for judgment instead of before the saints?NIV

This is a tough spot to be in. Just avoid creditcards altogether, because you entagle yourself with those who have intent to trap you. Once your trapped, there is no sure way out of your dilemma.

Thursday, June 08, 2006

How To Get Out of Debt - Another way

This website has a seminar about eliminating creditcards. Consider some of their options for eliminating creditcards from your life, if you haven't already.

Wednesday, June 07, 2006

Should We Prosecute Banks for Suicides?

How many suicides are prompted by excessive debt? With issuers of creditcards seeking out those who are likely to default, so they can collect more fees should be held responsible. Here is an article that agrees.

Tuesday, June 06, 2006

A College Education on Creditcards

Creditcards are sold to college students, even though 24 states have passed legislation between 1999 and 2001 limiting solicitation, they are still targets. The issuers of creditcards want to get them young. If they see creditcards as part of life, they'll see creditcards as a necessity.

Teach your children, starting in first grade, that creditcards are NOT money. Teach them that creditcards are to be avoided. It is going to take an exaggeration of this because there is so much advertising on TV and in the mail, not to mention the attitudes taught in our public schools when economics are taught. Then there is peer pressure to deal with. As parents, we must counter the trend. A teenager with creditcards can bankrupt their parents. It is documented in court cases that parents are held responsible for their minor children's debts - regardless of the illegal contracting of the minor.

Monday, June 05, 2006

Think Creditcards Have Better Fraud Protection?

Consider this case where a hacker accessed millions of accounts at major creditcard companies and how these creditcard companies took a rather nonchalant attitude toward the problem. What makes this such a large number of accounts is the consolidation of the creditcard industry. It also explains their complacency toward the problem.

Citigroup has been consolidating into every area of banking, and sharing customer information across businesses. To top it off they have been lobbying congress on issues that allow them more freedom to share customer information, rather than protect it. Since the 1999 Financial Services Modernization Act, banking has destroyed the intent of the 1933 Glass-Steagal Act prohibiting banks to participate in both wholesale and retail banking, which came out of the Great Depression to protect us from a repeat of the depression. It has also neutralized the 1927 McFadden Act that restricted interstate banking. This is not a consumer friendly operation.

It has also ventured into the MLM business, widely fraught with fraud, to sell investments. It is on a mission to consolidate power, and siphon off the wealth of Americans. That is why they issue creditcards. Creditcards have become the tool to accomplish their mission. They don't care one iota about fraud protection, it is only a public relations tool.

Friday, June 02, 2006

Creditcards an Invitation to Fraud

Just take a look at a website called Ripoff Report. The sheer volume of complaints by people is staggering. It is convenient to use creditcards, but it is also convenient for thieves to make fraudulent charges and it is easy for the issuers of creditcards to make unauthorized charges. Don't kid yourself, it is up to the issuer of creditcards to determine whether charges are fraudulent. If they disagree with you, they win, period. You are not in control.

The most deceptive part of all this is the Universal Default clause in agreements for these creditcards. They can determine you have defaulted on our agreement by simply having a falling FICO score. In a default, all deals are off. Your interest rate skyrockets, fees fall from the sky, and your credit gets trashed if you aren't careful. It is a trap, that is extremely profitable for the issuers of creditcards. It is the ultimate ripoff because Congress won't do anything about it, nor will the OCC who oversees the banking industry. You're on your own. You should just close all your creditcard accounts. Creditcards are financial traps.

Thursday, June 01, 2006

Paying Off Creditcards Makes a Difference

Do you want to get back at the issuers of creditcards? Pay off your creditcards. A Wall Street Journal writer, Robin Sidel, reports that issuers of creditcards suffer when customers pay down their balances on their creditcards.

Wednesday, May 31, 2006

Truth In Advertising?

Issuers of creditcards obviously are above the law. Watch some of their commercials on TV. The ads have nothing to do with opening accounts for creditcards. They have everything to do with promising that you are financially smart if you open your account with the company advertising. They use premiums such as putting a 1% amount of each purpose in a savings account, but they fail to tell you about the fees you will most likely pay that will more than offset that savings. There is a lot of psychological manipulation in these ads. I wouldn't be surprised if they have spent millions on psychological research to come up with these approaches. Protect yourself and hit the mute button on your TV when these ads come on. Creditcards will make you business savvy, creditcards will make you sexy, creditcards will make you smarter, creditcards will make you wealthy, creditcards will help you save more money, creditcards, creditcards, the magic financial panacea to your financial problems.Write the TV station and complain about the deceptive ads.

Tuesday, May 30, 2006

Trends in Creditcards

1. Industry Consolidation. In the 1990s there were 10 issuers of creditcards. Today, we are down to 5. The business hasn't been growing lately, so the issuers of creditcards are trying to steal business from each other. Now they are buying out competitors, and that means less competition. That is bad news for customers.

2. Growth in Small Charges. To grow the outstanding balances on creditcards, there is going to be more of a push to allow small charges. An MSN Money column says, "Research firm TowerGroup predicts the volume of small electronic payments -- 'micropayments' -- will grow to $11.5 billion by 2009 in the U.S. and $40 billion globally." Why do you think so many people have creditcards in their wallets, creditcards in their drawers, creditcards next to their phones, creditcards in purses, and more creditcards coming in the mail? Issuers of creditcards are pushing to replace cash. This is another trap to avoid.

3. Credit Card Fraud. Security of your account information is poor. Visa found only 17% of the 231 large merchants it questioned were following payment card industry guidelines regarding customer data security. You hear about some kind of identity theft every day in the news. This is a compelling reason to avoid creditcards altogether, and to monitor your credit report using an alert service to notify you when your credit is checked.

In addition, the issuers of creditcards are always updating their bag of tricks to trip you up into defaulting - so just close your account - or eventually get duped.

Sunday, May 28, 2006

The Wise Use of Credit?

Here is a short film from 1960 to teach about the wise use of credit. (Windows Media File) It seems that things have changed a bit. Banks don't rely on Character, Capacity, and Capital anymore. They issue creditcards to anyone who will have them. They now target those who have just filed bankruptcy - not to help them, but because they know they can't file bankruptcy again for a long while.

The movie suggests that wise consumers read the fine print. We simply don't do that anymore. Creditcards are issued based on signing the disclosure, which serves as the contract. Creditcards have a clause that says you agree to the terms of their contract that will be forwarded after the account is opened, with the creditcards in the mail. If you ask to see it before you open the account, they will refuse to disclosue it. So a wise consumer, according to this movie, would refuse to open the account.

The movie suggests that we borrow to make large purchases instead of saving for them first, but acknowledges that some people do. It is funny how they didn't even mention creditcards. It is also interesting that mortgage terms were as much as 25 years! Today, they can be interest only - or perpetual for a lifetime. It is easy to see that our standards have deteriorated. Lending has become predatory, because the banking industry can't be profitable unless it makes more money off the loans it makes. Creditcards have become the cashcow of banking. That means making riskier loans to justify higher charges, in combination with changing laws to boost collection power. Creditcards are the key today for banks.

Saturday, May 27, 2006

What is Money?

I'm having fun with these old films. This one is about Money (Windows Media File). When you watch this you'll hear the narrator tell you that money has to be something of value, and that our money is backed by gold and silver in the treasury. Folks, our money is simply a promissory note based on the faith in our government to redeem it for it's face value. Our fractional reserve system has diluted the gold and silver backing to 10% of the face value. I have even heard that it is possible that those reserves no longer exist, and the currency is simply backed by faith. The gold and silver are supposed to be collateral for the certificate we use to exchange it for goods and services. It has turned into a promissory note instead. Our money is based on debt. That debt is never really paid, and is cancelled, in part, by printing more money.

Why has the government done this? So they can print more money when they need it, and use a hidden tax called inflation that everyone pays equally, rich or poor, in the dollars they spend. By printing money, they skim off the value of the money already in circulation. That is the problem with a fiat currency, which is what this is called.

Friday, May 26, 2006

Learning our Lessons

Not many years after the depression, the solution to addressing the problems of life's financial emergencies was to borrow as illustrated in a movie from 1935 called "Financing the American Family"(Windows Media File). Seems we didn't learn our lesson from the depression. This is our banking system is leveraging its political power, setting the problems we have today in motion. Lending to families to pay off houseold debts, as portrayed in this film, is the solution for them to get out of debt. Are we morons? Borrow money to get out of debt? That is like an alcoholic having a martini to beat his alcohol addiction.

This sounds a lot like the pitch for mortgage loans today. They lend us money to get out of debt, while "responsibly" reminding us to live within our means, we are enabled in our addiction to living beyond our means. This is like giving a drug addict a fix, while telling him to stop using drugs. Then encouraging him to come back for more when he gets into trouble again. "We're here to help.", they say. This paradigm has gotten out of hand, now they issue creditcards to people in bankruptcy. Highschoolers are encouraged to carry creditcards. College students are not grown up unless they have at least one or more creditcards.

Thursday, May 25, 2006

Borrowing Power

Take a look at this old TV commercial. (Real Audio File) It starts out with a shady character that ends up being the hero of the commercial. Think maybe this was a Freudian slip? The shady characters of banking have convinced us that using credit cards is necessary, and that borrowing money to buy things is not only necessary, but financially savvy.

Wednesday, May 24, 2006

Needs vs. Wants

One of the major problems we have in our financial education these days is distinguishing between needs and wants. Our banks have greatly influenced our financial education by posing as the expert source for learning money management. That is like letting the fox watch the Hen house. They are going to encourage us to borrow money, use credit cards, spend everything we make to boost the economy.

Here is a video (Real Audio File) that is an excellent example of how we are mislead. This is the video's claim: Shopping is a necessary part of everyday life, full of choices and decisions that can greatly impact our lives. This film delvs into why we shop the way we do, and what we can do to be smarter shoppers. Despite the fashion sense of the two main characters, this film contains great lessons like determining your wants versus your needs.

The truth is this video leaves you believing that the secret to distinguishing between needs and wants lies in the fact that you might or might regret the purchase when you get home. If that isn't a way to encourage uncessary spending, I don't know what is. A "need" isn't what most people think it is. A need, in the economic sense, is used for survival - Food, Clothing, and Shelter. It isn't designer clothes, a dinner at and expensive restaurant, or a million dollar home. It is merely the basic product that provides the necessary function to satisfy that need. Everything else is what we want.

The video is correct in the sense that we do make buying decisions based on psychological desires to attract the opposite sex, or fulfill our dreams. That is where we get into trouble, and that is the motivating factor that is leveraged by advertisers. That is how they have turned wants into "needs" in our minds. They've confused us, and we make poor economic choices as a result.

Tuesday, May 23, 2006

Debt Counselors Need Counseling Too!

It is pretty ironic when the place you go to get financial counseling, the very government approved agencies that become your financial guide when your in trouble, get in financial trouble themselves. That sure instills confidence doesn't it? Maybe they just don't get it. They have faith in this flawed fiat currency method of money management - it just doesn't work. What do you expect? The banks are the source of grants, and they are essentially pressuring the agencies to push people away from bankruptcy, even when it is justified. So they have to keep coming back. We may have to watch the whole charade collapse, leaving bankrupt households with a legal barrier to bankruptcy, because there is no court mandated counseling available, and we let them spiral into our homeless population.

Just stay out of debt folks, for all practical purposes there is no safety net since the new Bankruptcy Law has taken effect. Only if you are fortunate enough to navigate your way through the mire, will you get the fresh start you need. That is getting more difficult every day. It isn't worth the risk.

Monday, May 22, 2006

Tricks of the Trade

Credit card contract formation methods should be illegal. You are asked to sign the agreement before you see it, by signing the application. What are they hiding?

Here are some especially problematic terms that can be in your contract: Two-cycle billing. This uses two months of balances to come up with the average daily balance. It can be a big problem for borrowers who only rarely keep balances from one month to the next, because they'll end up paying two months interest for one month's debt. Universal default. This means your card company could raise your rates if you're late on somebody else's bill somewhere else.

If your credit history profile changes at all, they can view that as a signal to raise your rates. Over-limit fees. If you have a $5,000 credit limit and you use your card to buy something that costs $5,010, don't expect the charge to be denied. Instead expect your issuer to charge you a fee of $30 or more. Maybe you think that's worth it for the convenience.

Due times, not just dates. Many, if not most, issuers now consider a bill late if it arrives on the due date after a certain time of day -- typically before the mail is delivered. Then you can get busted for being late, a situation that can jack up your rate to levels over 20 percent and add another $30 or more in fees.

-- Crunch your own statements. Issuers say they could end up spending as much as $57 million to provide customers with customized minimum payment and balance disclosures, but most customers say that's what they want, according to a new report from the Government Accountability Office.

Individualized disclosures like that would let you know how long you'd have to make those minimum payments before you'd bust your balance to zero, and how much you'd pay in interest in the meantime. Don't hold your breath waiting for those statements. Go to an online calculator such as the bankrate Web site to get your own answer.

Go to the Reuters website for the full story.

Friday, May 19, 2006

Asset Protection

Often times, the reason we find ourselves deep in debt is due to a catastrophe of some type. According to research done at Harvard University, 50% of bankruptcies are due to medical bills. This means we must plan ahead for these unexpected events. One way to do this is to do some asset protection. This is especially needed if you get a judgment against you that could wipe you out.

We live in a very litigious society, and high-net-worth individuals are good targets. So the secret to real asset protection? Don't own or control anything. This isn't as simple as it sounds, but a book written by Jay Adkisson, "Asset Protection" is one of the best I've found. Be cautious, because there is a lot of illegitimate strategies that could land you in jail, or at least in the poorhouse. Jay is a highly respected attorney that is combating the fraud at his website This is an area where you have to stay one step ahead of legislators and court rulings, because the law is extremely creditor friendly.

Wednesday, May 17, 2006

Student Loans Just As Bad

Most people think student loans are a good investment. What they don't know about Sallie Mae, student loan guarantees, could be hazardous to their careers and financial future. Be sure to watch the video at the link I've provided here.

To quote Elizabeth Warren, "It's a market in which the protection goes to the lender. And the students get served up like turkeys at the Thanksgiving dinner."

Credit Card Calculator

One of the things that people need to pay closer attention to is how long it would take for them to pay off their credit card balance. Of course calculating this assumes you stop charging to your account and make the same payment every month until it is paid off, which is something that would only happen in a perfect world. But this calculation does give you a sense of what that debt is costing you. Here is a calculator. When you see how long it is going to take, add up the total dollar amount of the payments, then subract out the amount of the original charges, and you have the interest you paid. If this doesn't get you mad, something is wrong.

Tuesday, May 16, 2006

Secret History of the Credit Card

It has been awhile since I mentioned this, but it is an excellent introduction to the problems of using credit cards. Frontline really does some hard hitting journalism, since they are not as sensitive to advertisers than news on the typical commercial TV stations. This report is shocking, if you have never heard about "Universal Default."

Monday, May 15, 2006

There is Hope

For those of us in debt, sometimes it seems like we can never overcome the monster that rules our lives. It is possible though. See stories of those who have. Dave Ramsey's Financial Peace University is a way to have a support group that helps you overcome the behaviors that keep us in debt. If you don't want or need a group, he has this plan and how to make it work for you in a book.

Saturday, May 13, 2006

Opt Out of Credit Card Junk Mail

If you are not using credit cards, you probably still get loads of junk mail of preapproved credit cards, especially if you have just filed for bankruptcy. Go here to find out how to stop the madness, and remove the temptation to open an account "just for emergencies."

Friday, May 12, 2006

Don't Think Debt Is A Problem?

The Center for American Progress has just released a report that finds:

  • Debt has expanded by 30.3 percentage points to 108.4 percent of
    income – the first time since the Federal Reserve started conducting
    this survey that debt exceeded income.
  • Despite low interest rates, debt payments surged to new highs. In
    2004, the typical family spent more than 18 percent of its income on
    debt payments – the largest share since the Federal Reserve started
    collecting these data.
  • The share of heavily indebted households continues to rise. The share
    of households with debt payments greater than 40 percent of income
    rose from 12.8 percent in 2001 to 13.7 percent in 2004.

As a society, we are getting caught in a death spiral of debt. Save yourself before it all comes crashing down. Get out of debt!

Thursday, May 11, 2006

Gold at $700 an Ounce - What Inflation?

This message reached my inbox today from Downside DC, a grass roots effort to hold Congress accountable to the laws they create.

"Gold reached $700 an ounce on Tuesday.
The media, being economically ignorant, mentions oil, Iran, and sunspots as possible causes.
We're just kidding about the sunspots. But it is important to note that no one in the media knows to mention an increasing money supply as the most likely cause of soaring gold prices.
However, the Federal Reserve, at least, must be concerned about an increase in the money supply because . . .
  • They raised the interest rates at which banks borrow from the Fed yesterday
  • They've stopped reporting M3, the best indicator of monetary inflation

We're not trained economists ourselves (though we did sleep at a Holiday Inn Express last night), so what follows is merely our layman's understanding. And if we're wrong, someone will surely correct us, and we'll let you know. But, as we understand it, there are two ways the Fed creates new money . . .

Method #1:
Banks borrow from the Fed using outstanding loans as collateral. The Fed issues an order to the Treasury, new money is printed, and loaned to the banks. The banks then loan out this new money to their customers. These new loans, in turn, can be used as collateral to borrow yet more money from the Fed. When the Fed thinks the money creation caused by this pyramiding of debt is moving too fast, they tend to raise their interest rate to the banks. This gives the banks less incentive to borrow from the Fed, which slows the bank portion of the inflationary spiral. This is what happened yesterday.

Method #2:
The Fed buys government bonds, and the Treasury prints new money to give to the Fed to finance these purchases. So this new currency stays at the Treasury, the Fed gets the bonds as so-called collateral to "back" the new currency, and the Treasury uses the new currency to pay the government's bills. (Yes, our currency is "backed" by debt, and not by real assets like gold.)
Eventually all of this new currency works its way through the entire economy bidding up prices for food and gas and everything else. Including the price of gold, which is the best hedge against inflation, because it is very scarce and has instrinsic value. So . . .

Gold hits $700, the Fed raises interest rates, and stops reporting M3. What does it all mean? It probably means the money supply is soaring and the Fed wants to slow the portion of it that goes through the private sector (the banks), but maintain the portion that is helping fund the government.

Why does the Fed want to maintain the monetary inflation that funds government? Simple . . .
Congress has two ways to fund its deficits. Borrow money or print it. Increased borrowing equals increased demand for money. Increased demand for money drives up the interest rate Congress pays to borrow. This increases the debt still further. The Treasury fights this by printing new money, using inflationary Method #2. But this lowers the value of the dollar. Big lenders, like China, respond by increasing interest rates to compensate for inflation. Either way, the government's interest expense is bound to soar as long as deficits continue to mount.
The Fed is trying to hide this for as long as possible by not reporting M3. Problem is, the gold price gives them away.

The price of gold does not lie. But it is a late indicator.

And you can bet that gold is also being bid up right now because investors no longer have M3 to give them advance warning of monetary inflation. They're hedging. And all of this is very destabilizing.

The best way to stop this viscious cycle is to return to sound money -- dollars backed by gold reserves so that new dollars can only be created as fast as the gold supply increases, which is always very, very slow. Barring that, we can gain some increased stability by making the Fed report M3 again. This could be very important to your economic well-being, which is why we keep harping on it. Congressman Ron Paul has a bill that will do this, and we need to keep hammering on Congress to pass this bill. Hit them again! You can do so here.

Credit Card Signature

When credit card companies try to collect from you by taking you to court, they rely on your signature on the application as proof that you agreed to their contractual terms. First of all you didn't see the terms before you supplied your signature, and second they can't be sure it really is your signature. They didn't make sure it was.

John Hargrave at decided to test the signature security on credit cards. You might find this shocking. If that isn't enough, he did it again, which was even more shocking than the first.

Think the credit card companies are worried about fraudulent charges? Think again.

Tuesday, May 09, 2006

New Movie Documentary about Credit Cards

There is a new movie that is probably being sold on video and/or DVD that would be good for anyone interested in this topic to see. the website is There are some interesting clips on the website. If you think credit cards are a necessary financial tool that you can't live without, you definitely need to see this.

Why Credit Card companies are Loan Sharks

I haven't mentioned this in awhile, but I think it is worth mentioning again. If you think you understand what is in your credit card agreement, you are mistaken. There are a wide array of tricky twists and turns in the agreement that many attorneys have difficulty decifering. One such twist is called "Universal Default" which means that when the credit card company periodically checks your credit score, if it drops from the last time, you have defaulted on your agreement and all bets are off. Your premiums are canceled, your interest rate goes sky high, and whatever else they can take away from you is taken because you didn't uphold your side of the agreement. See more about this in a story done by Frontline and PBS called "The Secret History of the Credit Card."

Monday, May 08, 2006

Teenagers Under Attack

Teenagers are targeted by credit card companies. They are being taught to become dependent on having a credit card, and that it is a sign of maturity to have and use a credit card. As a result they learn to live with debt. As I mentioned before Junior Achievement is telling 1st graders that credit cards are money. We are grooming future candidates for bankruptcy.

Friday, May 05, 2006

Credit Card Companies Target The Bankrupt

According to a report from Los Angeles NBC Channel 4, credit card companies are sending credit card offers to those who have filed bankruptcy. This just goes to tshow you that they want to find people who will default. As mentioned in previous posts, they make 75% of their profit from people who default. That is probably why they pull tricks like creep the due dates on accounts so that people who don't pay attention, assume it is due the same time every month and get caught with a late payment. That late payment defaults you on the agreement and your interest rate goes up, you get high late fees, your miles are cancelled, and you lose any premiums you might be getting. This is nothing short of predatory loan sharking. Why is it legal?

Thursday, May 04, 2006

If You Are Getting Sued - Know What To Do

You likely will not find an attorney to help you get out of paying a debt - they don't do that. They'll defend you, but the first thing they'll do is negotiate a settlement, even if you don't owe the debt. That is fine, if you can afford to settle. If you can't you will have to defend yourself and force the creditor to prove you owe the debt. In the case of credit cards, they are hard pressed to do this according to strict court procedure, and if it is a collection agency that purchased the debt it is even harder for them to prove. You must use this as your defense, that they must prove their case. A great resource for this is a book titled "Beating Up On Debt Collectors" Click here for the book

There is also a book you might consider called Thou Teacheth My Hand To War

Mental Hurdles that Oppress Your Checkbook

Most of us are fairly ignorant when it comes to making financial decisions. No one is born with the skills. Fortunately educators are responding to this in various states. However, they are letting the fox in the hen house. Here is an example of how the subtle nature of these programs teaches kids to be consumers, not savers. Banks are teaching our kids how to manage money - do you think they are going to teach them that credit cards are to be avoided? Somebody needs to teach our kids not to borrow money.

Wednesday, May 03, 2006

Is Your Back Against the Wall?

Are you at the point where you have creditors hounding you? Not the original creditors, but its been long enough that your account has gone to collection agencies? And you can't seem to find the resources to pay up? In that case, it may be best to start enforcing your rights as a debtor, and hold them off as long as possible. Here is one of the best resources I've found to do that - better than hiring an attorney (who will be seeking a quick resolution). Cick here for the Book

Tuesday, May 02, 2006

How to Sell Stuff to Pay Off Debt

What I did to raise money to pay debts was to go through my house and find things I could sell to get the money I needed. Click here for eBay! It is free to sign up, and they have free tutorials on how to list items. If you need to raise money to pay off debts, you need to consider this easy way to turn stuff in your house into money to pay off debts.

Monday, May 01, 2006

Utah Moves Against Consumers

Here is a sign of the times.  Utah passes a new law that bars class action suits against credit card companies.  Are you mad yet?

Sunday, April 30, 2006

You Just Gotta Get Mad!

Over the time I have had this blog, I have been ranting and raving about the banks and credit card companies and their abuses of consumers. Well, I think that goes to show that if you are going to see any change in your own finances, you have to recognize the problem, admit it is affecting you, and get mad about how you're being treated as a consumer and vote with your pocketbook.

That is why I stopped using credit cards. I got mad. Since then I have curbed my spending tremendously and my family relationships have improved. I am starting to rule over my money instead of my money ruling over me.

If you are in a bind right now, you need to get mad first, before you do anything. If you aren't motivated, you'll just keep making the same mistakes. One thing you can do to overcome your debt is to start selling things out of your house, stuff you already own. I did this and have raised thousands of dollars to pay down bills. You can do this too. Just consider getting your hands on something to teach you how. You can get a book on eBay for Dummies or something like it or you can get serious by taking some thorough training and do it full time. The link takes you to a guy who made $8 million selling on eBay and is sharing his secrets for doing that. I have been making some good money myself just selling stuff out of my house.

Go here for more on blogging.

Friday, February 10, 2006

Myths about Debt has listed 10 myths about bankruptcy.

Speaking of myths, what leads to bankruptcy is believing the myths about debt. So... here is my list of 10 myths about debt.

1. Debt consolidation saves interest, and you have one smaller payment. The truth is debt consolidation is dangerous because you only treat the symptom of a deeper problem - addiction to a lifestyle you can't afford. You also increase the amortization time to pay off the principle and you pay a LOT more interest when all is said and done. If you pay it off early, you paid a much higher interest rate if you paid "points" on the loan.

2. Debt is a tool and should be used to create prosperity. The truth is that debt adds considerable risk to you financial well being, and may not bring prosperity but bankruptcy. It isn't used by wealthy people as much as people think. Forbes magazine lists the "Forbes 400" richest people in America. In a survey of these people, 75% indicated that the best way to build wealth is to pay off all debts and stay out of debt.

3. If I loan money to friends or relatives or cosign on a loan for them, I am helping them. The truth is that loaning money strains the relationship, and can destroy it. The only way around this, if you want to help, is to do an interest free loan and be willing to forgive it if they are unable to pay. When you cosign on a loan, you'd better put it on your balance sheet as if it is your loan and keep room in the budget to make payments, because you may have to start making the payments. Also, it will show up on your credit report and affect your credit score.

4. Cash Advances, Payday loans, Rent-to-own, Title pawning, and Tote-the-note car lots are needed to make credit available to the lower-income people to help them get ahead. The truth is these loans are at interest rates that will send them to bankruptcy faster than anything else. These are predatory lenders designed to make fortunes robbing the poor of basic necessities.

5. Car payments are a way of life, you'll always have one. The truth is we borrow to buy a car because we can't afford the car in the first place. Staying away from car payments and driving a dependable used car is what the average millionaire does. That is probably how they became a millionaire.

6. Leasing a car is what sophisticated people do, because of the tax advantages and the declining value of a car. The truth is if you calculate the real numbers you will find that it is by far the most expensive way to operate a car, including the tax benefit. They also entice you to get more car, since the payments may be lower than on a car loan. You would spend even more.

7. You should get a credit card to build your credit. The truth is a credit card is more dangerous to your credit rating than its worth. Not to mention the agreements are impossible to avoid default in some small technical way that allows the credit card company to siphon off your hard earned money with higher interest and fees. You also can still get a mortgage to buy a home without having used a credit card. You paid rent on time, right? The idea is to minimize debt, not pave the way for more debt.

8. You need a credit card to rent a car, check into a hotel, or buy something on the Internet. Hogwash! The truth is you can do all that with a debit card. These days the merchant doesn't even have to know the difference. For merchants who do take debit cards, you may still find it cheaper to tell them it is a credit card, because the debit card fees are usually higher. However, don't use a credit card because it is debt, and is riskier to your financial well being. A debit card won't get you in debt.

9. A debit card is riskier than a credit card. The truth is VISA has a zero liability policy, you just have to report the fraudulent activity within two business days. If you miss the deadline, you are still only liable for up to $50. Plus, if you want to avoid the hassle of getting a potentially large sum of money back while they "investigate". Simply isolate the debit card to it's own checking account and limit the amount of funds that can be withdrawn. Make sure you write a letter to the bank and keep record of it. Tell them that you want the "overdraft" account they automatically open for you closed. That way any charges that overdraw the account will be rejected, and there is no check bounce fee.

10. If no one used debt, our economy would collapse. In reality it would prosper more than it is. The pain of going cold turkey would be hard to swallow, but would pay off in the long run. This is taught in our schools by economics teachers, which brainwashes our children into believing it is good for them to spend and borrow to keep the economy healthy. That is like saying to a drug addict - "keep taking drugs, so you don't feel the pain of withdrawal". The fact is we are addicted to debt, and breaking an addiction is very painful.

There are so many other myths, I could go on. However, this is my list of 10 debt myths.

Tuesday, January 10, 2006

Credit Card Minimum Payments Raised

Now that the new bankruptcy law is in effect, if you are hanging on by a thread, and making minimum payments on your credit cards, you are in for another attack from the credit card companies. Minimum payments are being raised, by law. It is kind of a belated Christmas present from Credit Card companies.

Good luck. I hope you aren't stretched that thin.