Steve Rhode - Money Coach, Holistic Business Coach
Steve Rhode - Money Coach, Holistic Business Coach
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But First...

Important News - Credit Card Minimum Payments Are Going Way Up

Due to a crackdown by the Office of the Comptroller of the Currency (OCC), most banks and credit-card issuers will increase the required minimum monthly payments over the next 12 months or so to their new much higher levels.

While the goal is to help people pay credit card debt off faster the reality is that this will force more people over the financial edge. It couldn't happen at a worse time. Now that the new bankruptcy law has been passed millions of people will be trapped by this combined legislation. It is almost the perfect financial storm. The government doubles minimum payments and makes it harder to file bankruptcy.

I had a wonderful conversation today with Kristine, a reporter, about this very subject. It occurred to me as we spoke that even if you can digest the doubled credit card payments that are to come, you'll still have to make a lifestyle reduction to make up for the higher payments. Plan now for a tighter budget by taking a look at my expense reduction online guide.

This new banking legislation means that my client this morning that makes minimum credit card payments of $2,000 a month, a year from now will have to pay $4,000 a month. Yeah, right.

According to a recent article in BussinessWeek, monthly payments on many cards will double, to about 4% of balances, say card experts. Barbara J. Grunkemeyer, deputy controller for credit risk for the OCC in Washington, explains: "We were concerned that people were making smaller and smaller payments, but not making any headway in paying off loans."

Please alert everyone you can this is coming. Forward this email to a friend and ask them to forward it on as well. We've got to spread the word before people get taken by surprise.

The Worst Enemy You Have in Getting Out of Debt

I'm trying not to be big brotherish here. When people visit my site I don't know who you are but I can see in general where people go from the logs. But so can every site.

Recent web logs have reaffirmed my long standing belief in that old expression, "You can lead a horse to water but you can't make him drink."

Many people visit my site everyday looking for information, answers and solutions but they are constantly defeated by the worst financial enemy they face, themselves.

I can answer all the questions in the world, write all the books and do all the interviews but none of this is going to make one bit of difference unless you actually take action. When it comes to website visitors, the number of people that visit a topic page is much, much greater than the number of people that click on a link on that page to take action.

That's what I do know. I also know how difficult it is to take action when faced with financial problems.

Just recently I had a lovely conversation with Jim. By the way he sent me this nice email I thought I'd share with you since you are a friend.

"I have just started my journey out of the madness of debt. I have tried many times before on my own, but I just keep getting deeper in debt. It wasn't until I called Steve and he answered the phone himself. That I heard this calm reassuring voice letting me know I could do this and he would be there whenever I needed to talk. I thought it was hopeless but now I have hope. I am sure anyone else who makes the call will feel the same way.

Thank you Steve, it's wonderful to work with someone you trust and respect."

I bring this up because one of the points that came out in my conversation with Jim was that his lack of financial discipline in the past was the key to his backsliding and all of his previous failed attempts to break the cycle of debt.

If that sounds like you, then I strongly suggest that you go to ManageMyBills.com and enroll in their program so you will have your own dedicated personal money manager that will take care of ALL of your bills for you. Imagine, never having to pay another bill and getting out of debt at the same time. Nirvana.

If you are saying to yourself right now, "I can't afford something like that." Ask yourself how much it really costs you to never break the cycle of debt. It's worth looking into.

The FREE Q&A of the Day

These are the most recent questions submitted to my free assistance program. If you would like to submit a question, it is easy to do.

The Most Recent Questions

Michelle Asks...

Q: How would I go about consolidating all my bills together, then getting a loan to pay them? Then after that paying the loan off in a low percentage.

A: Michelle, unless you've got some sort of collateral to put up to guarantee the loan you probably don't have snowballs chance in hell of getting a good low interest rate loan to consolidate your bills. However, you can get the same result with a different approach. One way would be to take advantage of a low rate balance transfer to get out of debt for 0% interest. Instructions here.

If you own a home and have some equity in it you could consider refinancing your mortgage and taking some cash out to get out of debt. This can be a good approach as long as you don't repeat the same patterns that got you in trouble to begin with.

The other way would be to work with ManageMyBills.com and let the folks there pay your bills for you and guide you out of debt. Using that approach you would not write any more checks to your creditors and your get out of debt plan would be on autopilot. With their help you can wind up getting out of debt in the shortest period of time without increasing your payments to your creditors using their accelerated debt free approach.

Jen Asks...

Q: We have credit card debt and are trying to decide whether to consolidate that debt and get rid of the cards so we only have one payment, or use some of the equity in our home so we can write off the interest and have a lower interest rate on the money we borrow. We want to end the credit card debt forever and just want to know the best way to do it. We had NUMEROUS unplanned expenses when we moved, and it just caught up with us.

From a logical and mathematical point of view, getting the home equity loan can make great sense. It works well because the total monthly outlay will be less, the interest rate will be lower and the interest can be tax deductible. However, on the other side, you are swapping one debt for another and putting a bigger burden on your home. If you fail to make the new higher mortgage payments you could lose your home in foreclosure. That higher risk has a monetary value also. When you combine risk with mortgage interest rates you might find the true cost of the home equity loan is more than you can stand.

If you do decide to go the home loan route consider just refinancing to one mortgage and taking the cash out. It might be cheaper for you than a first mortgage and then a home equity loan.

In that case see my answer to Anna from a previous question on how to best pay down the debt yourself. As of right now, according to the poll on Anna's question, 50% of respondents feel tackling the smallest balance first is a good idea. Visit the page, see the advice and vote for what approach you think is better.

Mortgage Lenders You Can Visit Online

Chris Writes...

Q: First, Jerry is sure you will do right by me, even if he didn't ask you to.

Second, do you think there might be a point in our working together; is there a way that you might be able to help me to resolve this in some reasonable, humane, and doable manner?

A: Not quite sure who Jerry is but of course I'd try to do right by you.

Getting out of debt is 90% emotional stuff and 10% technical. The numbers are what they are.

You can be confident that you can lean on and trust me to guide you down a path that works for you. The biggest misconception people have is that their situation can be resolved in some expected way. Funny, life doesn't work like that.

When we work together I will guide you and you can lean on me when you need to. Of course, if you don't feel 1000% comfortable that we should work together, then lets not. You won't hurt my feelings and I have no desire for you to embark on a journey that does not feel right for you.

Duane Asks...

Q: What is the best way to find out and improve my credit score.

A: Read this.

Marlene Asks...

Q: My husband & I are both working part time to supplement our income. We both receive social security and have a huge mortgage on our home along with a home equity loan, credit card debt with the usual monthly bills e.g. heat, phone, food, gas, insurance (both health, life & car) Our home is 50 years old in fair condition. We paid our home off once but found it necessary to re-mortgage. I am afraid that as we age we will no longer be able to work and then what? We cannot afford expensive advice and really appreciate someone like you willing to help the little people.

A: I had an aunt that was a dwarf. I love little people. (Grin)

This whole issue of paying for advice always gets under my skin. Do we really want to be penny wise but pound foolish? What is the cost to you of no advice? Do you really want to sacrifice the rest of your financial future just to not pay for advice?

Let's both agree here that what I am doing is answering a question based solely on the information in the question. I would hate to see you base your remaining financial life on my generalized answer.

No work means no income. There will come a time that you will not be able to work so can you reduce your current expenses now to fit within your future income. You might want to try doing that now before you are forced to do it latter. Income reduction advice here.

I have no idea how much you have saved or have in investments but from your question it could be not much.

When the income reduction comes, and it will, you could consider a reverse mortgage where you can draw the remaining equity out of your house on a monthly basis to help pay for expenses. You might want to contact some of companies below and ask them if they do reverse mortgages and what the terms are.

Mortgage Lenders You Can Visit Online

I very concerned about your statement, "We paid our home off once but found it necessary to re-mortgage." That can be a huge warning sign that your lifestyle is exceeding your current income. Yikes.

Please contact someone to get specific advice on your situation before it is too late. It doesn't have to be me. If you are looking for financial planning advice consider Private Wealth Advisers. Paul Bennett is a Certified Financial Planner, a heck of a nice guy and he believes as I do in a holistic approach to money planning. Bonus for all the ladies, my wife thinks he is a 10+ hottie as well.

Your Money Coach For Comfortable Success,sm

Steve Rhode

The Only Way I Can Offer This Free Service

I have always wanted to be able to help as many people as possible without money getting in the way of getting help.

My free Q&A assistance is subsidized by the small amount of revenue I generate from advertisers. While I have always resisted advertisements on my site, there is no doubt that it does allow me to offer more services for free.

I encourage you to visit the advertisers below. My site receives a few pennies when you do. If you do not see any advertiser links below and you would like to help me continue this free service, please visit my site and visit the advertisers.

My site receives no compensation from the banner advertisers unless you take advantage of their program. I have selected top quality programs with good benefits. I always keep my eye out for good money saving and beneficial links for you. The text links you may see below or on the left side of my site are displayed without my selection.

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