Mystar credit and debt help blog

New credit card rules encourage consumers to contact Mystar.

The new rules on credit card statements kicked in a few months ago, and they're already giving credit card holders a push toward getting their debts under control. 

New disclosure rules require credit card statements to show how long it takes to pay off the card's balance by making only the minimum payment each month at the current interest rate.  Credit card statements will also list a toll free number to call to provide cardholders with contact numbers for Credit Counseling companies.    

Cardholders are going a step further and looking for a BBB accredited and certified credit counseling company that's not somehow "linked" to their credit card company.  They're calling Mystar at (877)284-6545. 

A credit counseling on-line survey from April shows that the new disclosures are prompting consumers to take action in dealing with their debt.  As many as 25 percent of the people interviewed for this survey said that the disclosure has inspired them to take action.

The statement changes are part of the Credit Card Accountability Responsibility and Disclosure Act of 2009, and went into effect for most account holders on their March card statements.  These new statement disclosures are a wake-up call for people who are paying interest rates higher than 15% and paying only the minimum amount each month.

The survey also shows that almost 60 percent of card holders are already paying as much as they can afford each month towards their credit card balances.  So, paying more than the minimum is out of the question for more than half of those carrying credit card balances.  Consumers in this position urgently need their interest rates reduced.  Mystar credit counseling can help reduce these rates.  Avoid the "hand-picked" agencies your credit card companies suggest and choose a company you can trust.  Mystar will talk with you for free!  Mystar will review your situation for free!  Mystar will let you choose what's best for you!  No pressure.  No sales.  No false claims of debt settlement and/or relief.  Mystar provides honest, polite, professional and knowledgeable credit counseling and debt management.  Call Mystar at (877)284-6545 or (317)284-6500.  On the web at www.mystarhelp.com.

Some facts to consider ....

• average credit card debt per household: $16,007.00
• average number of credit cards held by cardholders: 3.5
• average interest rate on credit cards 15.31% 

Mystar is located at 7271 N. Shadeland Av., Indpls, IN 46250.  Call Mystar today, you'll be glad you did.  Mystar (877)284-6545 or (317)284-6500. On line @ www.mystarhelp.com.   

   

Fraud in debt Settlement Industry -- Steer Clear

Debt settlement firms rife with fraud: GAO

WASHINGTON

Thu Apr 22, 2010 5:49pm EDT

Related News

·  

Tue, Apr 6 2010

WASHINGTON (Reuters) - A big percentage of debt settlement companies lie to and defraud people who contact them asking for help with credit problems, according to a GAO report and law enforcement authorities who spoke at a U.S. Senate Commerce Committee hearing on Thursday.

Sen. Jay Rockefeller said he expressed "disdain and contempt" for practices that the Government Accountability Office found when they had investigators posing as ordinary consumers with debt problems contact 20 debt settlement firms.

The investigators were told that they had to pay fees up front to begin the settlement process, that they should stop payments on credit cards even if they were current and that the company's settlement success rate was as high as 100 percent.

In contrast, the typical success rate -- according to the GAO -- was less than 10 percent.

The GAO report said that a growing number of for-profit debt settlement companies -- which negotiate for consumers with creditors -- have emerged amid stubbornly high jobless figures. One result has been hundreds of thousands of allegations of wrongdoing by the companies, and a growing number of legal actions filed by federal and state authorities, the GAO said.

Phil Lehman, a

North Carolina assistant attorney general, said it was common for debt settlement companies to make "grandiose" promises and mislead consumers about fees.

Commissioner Julie Brill of the Federal Trade Commission said that large fees for little result was not uncommon. "The GAO's disturbing findings are consistent with what the FTC has found," she said.

John Ansbach, general counsel for the debt settlement company EFA Processing, defended the goal of the industry while acknowledging the need for more disclosure requirements and other regulation.

"We work very hard to help folks," he said, adding: "I think there are some significant issues in the industry and we need to address them."

Ansbach argued against banning upfront fees, however.

"Eight-five percent of our industry said they will go out of business if there is an advanced fee ban," he said.

That interested Sen. Claire McCaskill, who said: "If doing away with advance fees does away with these companies, (it's) probably a good thing."

(Reporting by Diane Bartz; Editing by Phil Berlowitz

Mystar Financial Solutions is a Debt Management Company Not A Debt Settlement Company,

Call for help with Credit Card Debt and you will be glad you did.

317-284-6500 , 1-877-284-6545 (toll free)

www.mystarhelp.com

 

 

8 major benefits of new credit card law

By Leslie McFadden - Bankrate.com

On May 22, President Barack Obama signed the Credit Card Accountability, Responsibility and Disclosure, or Credit CARD, Act of 2009 into law. The legislativion will improve consumer disclosures and end some egregious practices in the credit card industry but stops short of capping interest rates and fees. Most of the provisions go into effect Feb. 22, 2010, unless otherwise stated.

Here's an overview of the major changes the law will enact.

1.Retroactive rate increases

Issuers can't raise rate on an existing balance unless a promotional rate expired, the variable indexed rate increased or you paid late by 60 days or more. No longer will they be able to punish borrowers for late payments on unrelated accounts under the practice of universal default or due to "anytime, any reason" clauses.

If the cardholder does tirgger the default rate because of a 60 day delinquency, the bank must restore the lower rate once the cardholder demonstrates six months of consecutive on-time payments. This provision takes effect in August 2009.

In general, rates can't be raised in the first year after issuance, and promotional rates must last at least six months. exceptions include expiration of a promotional rate, termination or completion of a workout plan, a change in the index rate or a 60 day delinquency.

Caveat: Issuers can raise rates at any time for any reason on new balances with 45 days' advance notice. Cardholders will still need to read correspondence from their creditors.

2. More advance notice of rate hikes

Consumers get 45 days' notice before key contract changes take effect, including rate increase. Under the current Truth in Lending Act, cardholders only receive a 15 day heads up. This change takes effect Aug. 20, 2009.

Caveat: This provision doesn't apply to credit limit changes. If your issuer slashes your limit, notification isn't necessary unless the reduction would trigger a penalty, such as an overlimit fee.

The new rules also don't cap interest rates. The increase rate can still be triple your existing APR.

3. Fee restrictions

Cardholders will not face overlimit fees unless they elect to allow the creditor to approve overlimit transactions. Issuers can't charge more than one overlimit fee per billing cycle.

In general, banks can't charge consumers a fee to pay their credit card debt, a cost some cardholders encounter for payments made by telephone or internet. They can impose a fee to expedite a payment.

Payments recieved by the due date - or the next business day, if the bank doesn't accept mailed payments on the due date - won't trigger a late fee. If the cardholder pays at a local branch, the payment must be credited the same day.

The new law limits fees on "fee-harvested" subprime cards as well. In the first year after issuance, nonpenalty fees cannot take up more than 25 percent of the initial credit limit.

4. Restricts card issuance to students

Consumers under age 21 who can't prove an independent means to income or provide the signature or a co-signer aged 21 or older won't get approved for credit cards. The provision protects young people who lack the means or the knowledge to handle credit card from miring themselves into debt, but could backfire by pushing students to payday lenders and pawnshops, says Greg McBride, senior financial analyst at Bankrate.com.

According to a recent Sallie Mae study, college students carried an average balance on $3,173 on their credit cards last year, a record high since the first analysis in 1998. A whopping 82 percent revolved a balance each month.

5. Ends double-cycle billing

The new law bans double-cycle billing, the practice of basing finace charges on the current and previous balance. Under this method, the issuer could charge interest on debt already paid off the previous month.

6. Fairer payment allocation

A close look at your card agreement will likely reveal a clause that explains the payments will be applied to lower-rate balances first. Not so anymore. The Credit CARD Act requres above-the-minimum payments to be applied first to the credit card balance with the highest interest rate.

7. More time to pay

Card companies must send statements 21 days before a payment is due. Current law requires a mere 14 days' notice. This provision goes into effect Aug. 20, 2009.

8. Gift card protections

The legislation includes protections for gift cardholders. The new law prohibits gift cards from expiring for at least five years. Issuer cannot assess inavtivity fees unless the card has gone unused for 12 months.

Location of article: http://www.bankrate.com/finance/credit-cards/8-major-benefits-of-new-credit-card-law-1.aspx

For More Information regarding Credit Card Law and Credit Counseling. Visit www.mystarhelp.com or call

317-284-6500.

Getting help with your debts with a debt managment plan (DMP)

Mystar Financial Solutions, Inc.

A Debt Management & Credit Counseling Company

(317) 284-6500

The Federal Trade Commission offers the following advice regarding credit and debt counseling, management and consolidation:

If you or someone you know is in financial hot water, consider these options: realistic budgeting, credit counseling from a reputable organization, debt consolidation, or bankruptcy. Debt negotiation is yet another option. How do you know which will work best for you? It depends on your level of debt, your level of discipline, and your prospects for the future.

Credit Counseling & Debt Management Plans

Credit Counseling: if you're not disciplined enough to create a workable budget and stick to it, can't work out a repayment plan with your creditors, or can't keep track of mounting bills, consider contacting a credit counseling organization. Many credit counseling organizations are nonprofit and will work with you to solve your financial problems. But be aware that, just becasue an organization says it's "nonprofit", there's not guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, which may be hidden, or urge consumers to make "voluntary" contributions that can cause more debt.

Most credit counselors offer services through local offices, the internet, or on the telephone. If possible, find an organization that offers in-person conunseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operates nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends & family also may be good sources of information and referrals.

Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their Counselors are certified and trained in the areas of consumer credit, money, debt management and budgeting. Counselors discuss your entire financial situation with you, and help you develp a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow up sessions.

Debt Management Plans

If your financial problems stem from too much debt or your inablility to repay your debts, a credit counseling agency may recommend that you enroll in a debt managment plan(DMP). A DMP alone is not a credit counseling and a DMP is not for everyone. You should sign up for one of these plans only after a certified credit counselor has spent time thoroughly reviewing your financial situation and has offered you customized advice on managing your money. Even if a DMP is appropriate for you, a reputable credit counseling organization still can help you create a budget and teach you money management skills.

In a DMP, you deposit money each month with the credit cousseling organization, which uses your deposits to pay your unsecured debts, like your credit card bills, student loans, and medical bills, according to a payment schedule the counselor develops a with you and your creditors. Your creditors may agree to lower your interest rates or waive certain fees, but check with all your creditors to be sure they offer the concessions that a credit counseling organization describes to you. A successful DMP requires you to make regular timely payments and could take 48 months or more to complete. Ask the credit counselor to estimate how long it will take for you to complete the plan. You may have to agree not to apply for - or use- any additional credit while you're participating in the plan.

Debt Consoliation

You may be able to lower your cost of credit by consolidating your debt through a second mortgage or home equity line of credit. Remember that these loans require you to put up your home as collateral. If you can't make the payments - or if your payments are late - you could lose your home.

What's more, the costs of consolidation loans can add up. In addition to interest on the loans, you may have to pay "points", with one point equal to one percent of the amount you borrow. Still, these loans may provide certain tax advantages that are not available with other kinds of credit.

Protect Yourself

Be wary of credit counseling organizations that:

• Charge high up-front or monthly fees for enrolling in credit counseling or a DMP
• Pressure you to make "voluntary contributions" which is another name for fees
• Won't send you free information about the service they provide without requireing you to provide personal financial information, such as credit card account numbers and balances.
• Try to enroll you in a DMP without spending time reviewing your financial situation.
• Offer to enroll you in a DMP with out teaching you budgeting and money management skills.
• Demand that you make payments into a DMP before your creditors have accepted you into the program.

Visit www.ftc.gov for more information.

Credit Repair Fraud

All consumers now can obtain a free credit report once a year through the Federal Trade Commission at www.annualcreditreport.com or can be ordered toll-free at 1-877-322-8228

Everday, there are companies nationwide that appeal to consumers with poor credit histories. For a fee, they promise to clean up your credit report so you can obtain a car loan, a home mortgage or even get a job. Unfortunately, many of these can't deliver. After paying these companies hundreds or thounsands of dollars in upfront fees, these companies do nothing to improve your credit report and many simply vanish with your money.

The truth is, no one can legally remove accurate and timely negative information from a credit report. The law does, however allows you to request a reinvestigation of information in your file that you dispute as inaccurate or incomplete. There is not charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or not cost. According to the Fair Credit Reporting Act, you are entitled to a free copy of your credit report anytime you've been denied credit within the last 30 days. You can also dispute mistakes or outdated items for free. Ask the credit reporting agency for a dispute form or submit your dispute in writing along with any supporting documentaion.

If you decide to respond to a credit repair offer, your BBB suggest you beware of companies that:

• Do not tell you your legal rights & what you can do - legally for free
• Recommend that you not contact a credit bureau directly
• Want you to pay for credit repair services before any services are provided
• Advised you to dispute all information in your credit report or take any action that seems illegal, such as creating a new credit identity by obtaining a federal employer identification number to use instead of a social security number. If you follow illegal advise and commit fraud, you may be subject to prosecution.

It's a federal crime to make false statements on a loan or credit application, to misrepresent your Social Security Number and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses.

If you have a complaint about a credit repair clinic, contact your BBB, your state attorney general's office and the Federal Trade Commission.

Mystar Financial Solutions Inc. is a BBB accredited business

www.mystarhelp.com or call (317) 284-6500 or (877) 284-6545

 

How Debt-Settlement Companies Skirt the New FTC Rules/ Avoid the Scams

Earlier this year, the Federal Trade Commission issued strict new regulations to protect consumers from deceptive companies claiming to help settle their credit-car debts. The ruling prohibits companies from charging upfront fees for debt-settlement services, for example, or from misrepresenting their services, such as by making telemarketing promises to cut clients' debts in half or to free clients from debt in only 12 to 24 months.

Despite the new rules, consumer groups warn that plenty of illicit debt-settlement business continue to thrive on the Internet , uncontrolled by the government. "The aount of consumer harm in this issue is unbelevable," says Christopher Viale, CEO of Cambridge Credit counseling, a nonprofit that tries to arrange low-cost debt resolution for consumers. "There's $40 billion to $50 billion wrapped up in these types of programs, and there is on ly 2% success rate."

Companies seeking upfront fees certainly exist. Dailyfinance called one company, chosen at random, that advertises its services on Twitter. In a phone interview, a representative at a debt-settlement firm in Arizona said the company could settle credit-card debts for as low as 20 cents on the dollar, that it guarantees its services and that it would need an advace fee of $5,000 to start the settlement process. However, under the new rules, companies are prohibited from doing all of those thing on the phone.

The Latest Loopholes 

Debt-settlement companies offer to help people work their way out of heavy credit-card debts by barganining with the credit-card companies: They agree to set up reasonable payment programs with consumers in return for reductions in total debt. The threat is that credit card companies will get nothing if they don't cooperate, but industry figures indicate these settlement companies rarely are successful in winning concession from the big banks. In a presentation to the FTC this week, Cambridge Credits' Viale outlined some of the ways debt-settlement firms flout the new regulations. Some pose as attorneys who represent debtors and claim they can charge a retainer fee in advance because FTC rules don't cover legal fees, he says.

But FTC regulations specifically state that legal fees are not exempt from the regulations unless the sales pitch is made in person by the law firm, and not over the phone. As a result, some debt-settlement firms are now sending notaries and other officials to meet potential clients in Starbucks and Dunkin' Donuts outlets to get around that restriction, Viale says. The Association of Attorneys for Debt Resolution didn't return a call requesting comment.

Thinly Disguised Marketing

In another twist, some companies sent text messages inviting debtors to participate in a survery about how to get out of debt. They then claim they're not telemarketing, but merely conducting a survey. How widespread is the subterfuge? Before the rules took effect in September and October, some 1,000 firms were involved in credit card settlement, Viale says. Of those, only 20 to 30 have agreed to comply with the regulations, he adds. Overall, the FTC "has not done a good enough job to warn the public" about debt-settlement agencies' new strategies, Viale says. An FTC spokesman declined to comment on Viale's complaints but confirmed that the agency had received a letter from Viale.

The FTC did file lawsuits against two firms in December, but that was for activites that happend before the new rules took effect. The agency spokesman says the FTC has taken no enforcement action against violations since the new rules were issued. The message for consumers: Tread very carefully when dealing with a debt-settlement firm.

 Above Article by Charles Wallace from the Dailyfinance.com

Seek out a Reputable Credit Counseling Company

Getting help with your debts requires you to get with a Trusted Credit Counseling and Debt Management Company. The Company should be in your State or if possible in your city. They should be State Licensed and Bonded and should be Accredited by the Local BBB .

Choosing a non-profit company does not guarantee that they are a good Company , they should be checked for hidden "Voluntary Contributions " and other Charges , they are not always regulated by the State . They also have 800 #s , thus they could be out of your State. For profit companies also should be checked carefully for their fees and other charges.

Mystar Financial Solutions is a Trusted Company in Indiana that can help with your credit card and other debts. Their Fees are Regulated and their Service is excellent.

Make 2011 the year that you start on a plan to get out of debt and protect your financial future.

Call 317-284-6500 or www.mystarhelp.com