It shouldn’t come as a surprise that your creditors and lenders don’t really care much about you, only your money. I’m sure you have been shocked to see that a good portion of your monthly payment has been washed away on high finance charges and other arbitrary fees. Here are a few things to look out for, so you won’t be surprise the next time you open your statements.

Grace Period: These may vary by consumer and creditor, so while some people will have a little extra time to pay off their purchase, others may be slapped with the financial charge almost as soon as the first purchase is made. Luckily, credit card companies are now force to send out bills earlier so that you can avoid finance charges entirely, assume you have the funds to pay it off.

Weekend / Holiday Fees: If you ever paid your credit card bill over the weekend or had a bill due over the holiday such as Christmas, and paid it the following week, you’ll probably been hit with an extra processing fee. This can cause a lot of frustration especially during the holiday when money is scarce. With the Credit CARD Act of 2009, credit card companies are no longer able to charge you a late fee for payments after a holiday or weekend, but anything after that is fair game. Avoid this charge by paying a day or two in advance.

Charging overseas: Have you ever charged something overseas and were shocked to see on your statement how much more expensive the price was for that soda and sandwich. Some card companies won’t even wait for you to go overseas; if you purchase anything online from another country, like a sweet set of rims for your 2010 Nissan 350Z from Japan, and your payment is processed in yen, you’ll be hit just as hard as I was.  The way around the situation is to avoid online purchase from a foreign country if you don’t want to pay more than you already have.

Inactivity fees: Here are fee that we’ll be hit with at some point in time, assume you have a card that you haven’t used in an extended amount of time. Creditors don’t like being neglect and may generally charge you an inactivity fee as a wake-up call. Thankfully, these types of charges are now illegal. Companies have worked around the system by requiring you to make a minimum amount of purchases by year’s end. So either keep making those charges or close out the account to avoid the hassle.

If you haven’t notice already, many creditors are raising interest rates on credit cards these days to make it in the bad economy. With high interest rates reaching upwards of 30%, managing and paying off your debt with only minimum payments each month is nearly impossible.  One solution to attacking the problem is to reduce your interest rates.

It Can’t Hurt to Try:

Reducing your interest rate could take as little as one phone call and a few minutes of your time to save you hundreds, if not thousands of dollars across the life of your debt.  Credit card companies are often more willing to reduce the rates if you simply just ask. Though this process does not always work, it can’t hurt to try.

Before the Call:

Before you grab that phone and dial away, make sure you have all your statements and records on hand.  Though credit cards companies are sometimes reluctant in reducing your rates, having your records on hand will show them that you’ve been up-to-date on all of your accounts, which may play in your favor.

What Improves Your Chances:

• You haven’t asked to reduce your rates on this particular card before.
• Always pay more than the minimum payments each month.
• Your account is in good standing with a good track record.
• Your credit score is up to par.

What You Didn’t Want To Hear:

Don’t let “NO” discourage you from reducing your rates.  If they’re not willing at first, try back in a few days and you might get a different representative that is more willing to help you. Let them know that you have different options and that you’re willing to do a balance transfer to another card. Credit card companies will do whatever it takes to keep your business. Remember, PERSISTENCE will pay off.

One of the common terms thrown around nowadays is that of money disorders.  In a world where people are being committed to treatment centers for sex addiction it feels like every little problem can be blown up into a full on form of psychosis.  That is how I originally felt about money disorders until I did a little more research and took a closer look at some of the examples that were put before me.

Everybody enjoys buying new things.  While maybe some of us don’t enjoy the feeling of spending money we know we shouldn’t, we all love the feeling that a new toy can bring to us.  The toy varies with every individual, but the feeling is the same throughout.  For many people it’s clothes, for others it’s electronics, but for all it is a feeling that is seemingly indescribable, that new object that we cannot take our hands or eyes off of.

The problem arises when this feeling becomes an addiction, and this is where these money disorders begin to develop.  An addiction to spending is a serious thing that can develop into serious problems.  Just like a drug addiction, a money disorder can have physical and mental effects on a person.  Constant spending of money leads to high levels of debt at an alarming rate.  This can instantly result in high levels of stress, and everybody knows the negative effects stress has on the human body.

While many of you may remain skeptical about spending money as psychological disorder, consider this recent study done by the New York Times.  In the past few years the number of professionals sought for help in the areas of financial planning and so-called money disorders has multiplied tremendously.  This means that more and more people are recognizing their spending problem and are doing whatever it takes to fix this issue.  If so many people appear to be facing this dilemma it must be legitimate, right?

I have come to my own conclusion that this is a condition that is all too real for too many people in the world today.  Even if we cannot understand it, if the people who feel they are suffering from this conflict feel like professional help will get them back on the right financial track why shouldn’t we acknowledge this?  Getting out of debt and controlling one’s spending is different for almost every person.  Some people are fortunate enough to have the self control and discipline to control their spending while others are not.  This is a simple fact of life, so it is important that there are resources for everyone, regardless of their situation.
The current state of the economy makes this one of the most dangerous financial times we have faced so far in our lives.  This may seem scary to most people, but all it really means is that we must take more time to figure out what resources are best suited for helping us out.

In my role as the Debt Reduction Doctor I have seen many different forms of not enough money, and there is almost always a consistent approach to fixing this ailment.  It has always been my personal belief that nobody knows what is best for you better than you, so if you feel that you truly are facing a spending addiction then take the necessary means to fix the habit!

We have spent some time going over the different forms of debt in an attempt to help determine which form of debt is going to work out best for you as an individual.  Now, being the Debt Reduction Doctor is no easy task, and not every patient is going to be the same, so it is my job to try and figure out the best possible prescription for you as an individual.  Earlier we discussed the very different worlds of revolving debt and installment debt, and what each form brings to the table.  Neither is better or worse than the other, they are merely different, and it is up to you to determine which one better suits your lifestyle and particular needs.

Now, obviously both of these forms of debt have their own specific specialties.  For instance, installment loans can be a much cheaper alternative to revolving credit loans because of the lower interest rates and the consistency of the repayment schedule.  The stark difference in interest itself is enough to have many people steer clear of revolving credit altogether.  Installment debt is ideal for those seeking loans for large, expensive items such as a car or home.  The comfort of knowing that you are locked into a flat rate without any sudden fees or drastic changes in the interest rate is enough to keep most people satisfied.

The alternative to installment debt is known as revolving credit, and it is your pretty standard credit card opportunities.  You will pay a fairly high interest rate on almost anything you buy, and you can put yourself in a might big hole if you’re not diligent and responsible with your spending.  Revolving credit is also referred to as open-ended credit, meaning there is nothing to stop you except your potential credit limit.  This can be dangerous and lead you down a path you don’t want to be on, especially if your card has a high limit.

Now, there are advantages and disadvantages to both forms of debt here, and like I have stated several times before it is almost entirely dependable on your specific financial situation.  If you are looking to buy a car or a home, obviously an open ended credit account is not going to suffice.  However, if you just want to buy a new pair of sneakers, nobody is going to give you an installment loan for such a product.  Both forms of debt serve great purposes in the financial universe, they just serve two very different purposes.

It is often very easy to determine which form of debt to use for a particular object, but when it comes to paying them off it is all very similar.  While the payment forms may be different in terms of interest rates and payment schedule, it is crucial that you pay them off on time or else you will be busted with huge late fees that are going to add extended periods of time onto your payment plan.  It is critical that no matter what form of debt you are currently facing, you face it head on and refuse to let it control you.  Once your debt takes over you instead of you controlling your debt you are in a dark place that is very tough to get out of.
Even if it seems like an impossible uphill battle, there are ways out of it every time.  So if you are trying to weigh the pros and cons of different forms of debt remember, always choose what makes the most sense.

Often times debt is used as a blanket statement to refer to anything where you owe money.  Usually it is you owing money to large companies or corporations that are charging you outrageous interest levels and making you pay much more than you even borrowed in the first place.  This may seem unsettlingly familiar to many, and alas that is the world we live in today.  However, escaping debt altogether is similar to trying to avoid the sun.  Now, while this may seem possible, see Pacific Northwest, it is certainly something that you cannot do for long.  Debt is the same way.  It is part of our daily lives and can serve helpful purposes when used correctly.  The key is to find the correct way to use it.

Living in a recessionary period such as today, many people have less money than they need.  This means that people cannot afford to buy certain things without some financial help.  To put this into a clearer perspective, I am thinking about things such as houses or cars, the high end expenses that are going to leave your wallet reeling for years to come.  Now, without loans many of these items would be unobtainable for many of us, leaving us riding a bike home to our apartment. I would like to take this time to specify that I am not trying to say this is a bad lifestyle, just something not everybody would enjoy.  Anyways, borrowing large amounts of money to purchase these items is known as installment debt, and here is how it works.

Over an extended period of predetermined time, the individual in debt pays a portion of the total back to the loaner at regular intervals.  This usually is seen in the forms of monthly payments.  By the end of the predetermined time period, the debt and interest level are paid off, and the debtor is no longer the debtor.  Usually installment loans are going to give you fairly competitive interest rates and give the debtor the luxury of knowing how much money they will need to spend each month.  The rate remains constant until the debt is repaid at the end of the cycle.

Installment debt is one of the most casual forms of debt simply because of how easy it is to budget for.  The debtor knows each month exactly how much money they need to spend on this particular payment, so it is easy to plan around it in your monthly budget.
This form of debt is also convenient because the debtor knows exactly when it is going to be paid off.  If you face a thirty year home mortgage, you know the exact month and year when you will write that final check and be done with that payment altogether.  This is a very comforting feeling, for some, to have everything laid out in front of you so casually and in a perfectly straightforward manner.

The idea of installment debt may even be considered for somebody who might possibly have the necessary funds themselves to purchase a desired item.  While we have stressed over and over again that avoiding debt at all costs is crucial, this form of debt may be the exception.  Installment debt can make perfect financial sense if you are able to earn a higher, post-taxes return on your investment cash than you would be forced to pay on your installment debt.  This does not mean that this is the correct method for everybody, but it is certainly something else to consider.