Dump Debt Grow Wealth

A Tale of Credit Card Debt - How You Get Taken to the Cleaners

A good friend of mine sent me this yesterday and it was so well written, I thought it would be good to pass on to you.

What follows is a little long and dramatic, but I felt it was worth sharing because it alerts us to a few new, slick forms of credit card theft to watch out for these days.  

 

 

SCENE 1. 

 

This is a new one. 

 

People sure stay busy trying to cheat us, don't they? 

 

A friend went to the local gym and placed his belongings in the locker.  After the workout and a shower, he came out, saw the locker open, and thought to himself, 'Funny, I thought I locked the locker.  Hmm, ?' He dressed and just flipped the wallet to make sure all was in order.  Everything looked okay - all cards were in place.

A few weeks later his credit card bill came - a whooping bill of $14,000!  He called the credit card company and started yelling at them, saying that he did not make the transactions. Customer care personnel verified that there was no mistake in the system and asked if his card had been stolen. ? 'No,' he said, but then took out his wallet, pulled out the credit card, and yep - you guessed it - a switch had been made. ? An expired similar credit card from the same bank was in the wallet. The thief broke into his locker at the gym and switched cards. 

 

Verdict: The credit card issuer said since he did not report the card missing earlier, he would have to pay the amount owed to them. How much did he have to pay for items he did not buy?  $9,000! Why were there no calls made to verify the amount swiped? Small amounts rarely trigger a 'warning bell' with some credit card companies. It just so happens that all the small amounts added up to big one! 

 

 

SCENE 2. 

 

A man at a local restaurant paid for his meal with his credit card. The bill for the meal came, he signed it,and the waitress folded the receipt and passed the credit card along. Usually, he would just take it and place it in his wallet or pocket. Funny enough, though, he actually took a look at the card and, lo and behold, it was the expired card of another person. He called the waitress and she looked perplexed. She took it back, apologized, and hurried back to the counter under the watchful eye of the man. All the waitress did while walking to the counter was wave the wrong expired card to the counter cashier, and the counter cashier immediately looked down and took out the real card. No exchange of words -- - nothing! She took it and came back to the man with an apology. 

 

Verdict:  Make sure the credit cards in your wallet are yours. Check the name on the card every time you sign for something and/or the card is taken away for even a short period of time. Many people just take back the credit card without even looking at it, 'assuming' that it has to be theirs. FOR YOUR OWN SAKE, DEVELOP THE HABIT OF CHECKING YOUR CREDIT CARD EACH TIME IT IS RETURNED TO YOU AFTER A TRANSACTION! 

 

 

SCENE 3: 

 

Yesterday I went into a pizza restaurant to pick up an order that I had called in. I paid by using my Visa Check Card which, of course, is linked directly to my checking account. The young man behind the counter took my card, swiped it, then laid it on the counter as he waited for the approval, which is pretty standard procedure. While he waited, he picked up his cell phone and started dialing.  I noticed the phone because it is the same model I have, but nothing seemed out of the ordinary. Then I heard a click that sounded like my phone sounds when I take a picture  He then gave me back my card but kept the phone in his hand as if he was still pressing buttons.  Meanwhile, I'm thinking: I wonder what he is taking a picture of, oblivious to what was really going on.

It then dawned on me: the only thing there was my credit card, so now I'm paying close attention to what he is doing.  He set his phone on the counter, leaving it open. About five seconds later, I heard the chime that tells you that the picture has been saved. Now I'm standing there struggling with the fact that this boy just took a picture of my credit card. Yes, he played it off well, because had we not had the same kind of phone, I probably would never have known what  happened. Needless to say, I immediately canceled that card as I was walking out of the pizza parlor.

All I am saying is, be aware of your surroundings at all times. Whenever you are using your credit card take caution and don't be careless. Notice who is standing near you and what they are doing when you use your card.  Be aware of phones, because many have a camera phone these days.

 

FORWARD THIS TO AS MANY PEOPLE AS YOU CAN THINK OF. LET'S GET THE WORD OUT! JUST BE AWARE. Never let your card out of your sight.....check and check again!

I think that says it all, but in case you missed the point, there are many evildoers out there that want to harm you by stealing your information and credit cards.  Beware - it's hard to run a business if you are chasing bad guys...

I am yours in success,
Randall

The Rich Have “Secrets” They Don’t Want Me to Know

The Rich Have “Secrets”

They Don’t Want Me to Know

 

Sorry to say, but this is just not true.  The rich have no secrets because the ways they make their money and pay off their debts aren’t secret.  The truth of the matter is the only way to get out of debt and be really free is to spend less than you make and then put your money into assets and investments. 

 

If you want to be rich, do what they do.  If you want to be in debt and be poor, do what the poor do.   Now, I’m not saying that the rich don’t do things differently than most people, they do.  In fact the rich have a unique way of dealing with their entire life. 

 

So just in case you still think that the rich have secrets their not telling you, I’m going to tell you right now everything, and I mean everything, you need to know to be rich and financially free for the rest of your life. 

 

On the following pages are the top fifteen “secrets” of the rich.  I guarantee you that if you begin to think like the rich, act like the rich, and do what the rich do, you will become rich. You have no choice.  Enjoy the ride!

 

To set the context for this key I need to give you a little information.  I've known people who made some money, but I've never known anyone who got rich without examining their own values, priorities and beliefs. The way you become rich is to write down what you value. 

Then write down a list of the things you want and then things that you believe.  Then and only then write a list of what you are going to do with your incredible life. 

 

To help you with this first part of your new financial success diary, I have created the following starting point for your success lists.  If you need more room, and I hope you do, use another sheet of paper.  I use spiral bound journals to keep all of my lists is.  In fact I have created huge empires in airport restaurants in my spiral bound journals.  So can you.

 

10 Things I Value Are:

__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

10 Things I Want Are:

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10 Things I Believe Are:

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10 Things I’m going to do with My Incredible Life:

__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

Look at these success lists everyday and without you even knowing it, you will begin to take the actions and to make the decision you need in order to achieve all of the things on your lists.  This is one of the biggest “secrets” the rich have and it’s also “secret” number one.

 

Now that you have learned the first “secret” we can move onto the second secret of the rich.  You must have a life before you can have lifestyle. 

Having a lifestyle is “keeping up with the Joneses” and no truly rich person ever does that.  It’s just not important. 

Just like you cannot squeeze a watermelon into a banana peel, you cannot cram a rich life into a small mind. 

 

Onto the third “secret” of the rich.  In order for you to succeed you must have a burning desire and a true passion to succeed.  You have to have clear priorities and you never wait for the government to take care of you. 

 

No more excuses.  It’s time to kick butt and achieve!  Use the list below to write your top ten burning desires.  Then every day read these over and over.  You’re life will change as you attract the people, the projects and the money to achieve your burning desires.

 

 My Burning Desires Are:

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

No matter what they teach you in school, you must be able to track your results.  This is the fourth “secret” of the rich. 

 

Look at it this way:  If you’re an archer and are blindfolded, when you shoot your arrow you probably won’t be able to hit the target. 

 

The same goes for your results. You have to know what they are and you have to be specific about them.  Give them a time line, a financial amount, or something more personal about your health, or family.  You need to plan a success strategy for how you are going to achieve your result.

 

Here’s an example of what non-specific result looks like:

I want to have one million dollars in my bank account by next December.

 

Here’s an example of what a specific result looks like:

“I will have at least one million dollars in my bank account by next December which will come to me in various ways and amounts from time to time during the interim. In return for this money I will give the best possible service and knowledge of which I’m capable in the capacity of consultant, marketer, filmmaker, storyteller, communicator, and human being.

 

I believe that I will have this money in my possession.  My faith is so strong that I can see the money with my eyes and I can touch it with my hands.  It is now awaiting transfer to me at the time and in the proper proportion that I deliver the service I intend to render in return for it.  I am in the process of executing the plan to accumulate this money and am waiting for more parts of the plan to reveal themselves to me and I will follow all parts of the plan when they are received.”

 

What’s the difference between these to results you ask? 

 

Well, they do both talk to having a million dollars in the bank by next December, but the second result has an action plan involved and indicates the exact type of services to be rendered in order to achieve the result. It also speaks to the person writing it, their skills and how they intend to make the result happen.  It also admits that the person does not have the full plan, yet and they are waiting for the rest of the plan to be revealed.  One of the biggest steps you can take to create more wealth in your life is to admit that you don’t know everything and then find the people to fill your gaps and help you achieve you vision.

 

The specific result you just read is very personal to me as it was written by me when I had no money and had a nearly broken back.  I spent six weeks in bed healing from a severe back injury and during that time I came to realize that I and only I could affect the outcome of my life. 

 

I’ve never shared these words with anyone and I’m not 100% sure why I chose to write them here for you to read.  I think it’s because they helped me blast my life into the stratosphere and create the magnificent life I lead today.  I hope this insight ignites your rocket motors and helps take you to the stars as well.

 

On the next page you will see another entry point for your financial success diary.  Do not rush this part.  Take your time and think, really think about what you are going to write. When I tell you that the next words you write will affect your life forever, I know.  They will.  Your words are that powerful.

 

For this moment take all that you know, all that you are, and all the information you have written in your financial success diary so far and create your Measurable Result version 1.0 (they do change) on the next page. 

Use more paper if you need too and don’t hold back. This is that important and it will change your life if you write what you believe and believe what you write.

 

It all begins right here, right now.

My Measurable Result is:

__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

___________________________________________________________________________________________________________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

___________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

Next you need to burn your ships. There's an ancient story about a Greek general who landed his troops on an enemy shore, then burned his ships, so there could be no hope of going back. 

 

This is the scary point where you really do wonder about what’s going to happen next and if you have the “guts” to stick it out.  You do, we all do.  That’s the fifth “secret” the rich know (just get up and start doing it, whatever “it” is for you).

 

When you burn your ships retreat and failure are not an option! You can leave no room for failure.

 

Ah, now we get into the nitty-gritty of the “secrets.”  The fact is that no one will pay you more than your services are worth! You can fool some people for a long time, but sooner or later it all catches up with you.  You must make your services and your results far exceed the small fee you charge your customers or clients. With this philosophy the vast majority of people you deal with will make you rich!  That’s “secret” number six! (Always exceed everyone’s expectations.)

 

 

 

 

Rich people know they cannot live beyond their means. Wealth is accumulated, re-invested, used wisely and given away. It is never spent! If you want to achieve great wealth, live simply, invest wisely, enjoy it all!  It all comes down to KISS.  Keep it Simple, Stupid. 

 

The question to ask yourself is, “I am stupid enough to make a million dollars?”  I know it sounds like an odd questions to ask, but really, think about it.  Doesn’t it seem that the harder you try, the harder things get?  Start going with the flow and get out of your own way.  That’s rich people’s “secret” number seven.

 

Here is one of the granddaddy-of-‘em-all secrets:  Get rich slowly.  Generational wealth is built over time, not like the flash in the pan people we see on television everyday. 

 

The key to great wealth is to minimize income, while maximizing your assets. Income is taxed. Income gets spent -- think about all the cars, plasma TV’s, horses and houses people with huge incomes like to buy! Investing in true assets that are hard to spend (buildings, stocks, and collectible art, etc.) creates wealth that is not taxed, and isn't spent on a casual impulse.  (If you’re keeping score that was “secret” number eight.)

 

This next secret, “secret” number ten might blow you mind.  You should pay huge amount of income tax!  “Have I gone crazy,” you ask?  No, and I'm not talking about paying more taxes than you owe, but you should pay every cent the law requires you to pay. Rich folks don't worry about a few bucks here or there, they invest to make millions! If you can legally avoid taxes, do so!   Use the law to your advantage when you can. And if you’re thinking the truly rich jiggy the books to hide income, you’re wrong. It wastes their time and it’s never worth it in the long run.

 

Money is not attracted to narcissists, the miserly, or the down right mean.  They may get money, but they never hang onto it.  When you want to attract money to your life be clear about what you want and how you want it to show up in your life. Part of the truly rich people’s plan and “secret” number eleven is that you can’t take it with you. 

 

Once you’ve made enough to live on happily for the rest of your life what do you do with the rest of your money? 

 

Think of Bill Gates and the hundreds of millions he given away.  He will spend the rest of his life giving and taking care of others.  The same goes for Oprah and several other truly rich people.   Once you reach a point of having more money than you can literally spend in a lifetime, you need to prepare for the future… the future of your own family, the future of the planet, and the future of humanity. 

 

What will you do with your money and how will you make a generational contribution?  Take a day, a week, or a month to think about your answer.  Oprah worked for years before she was able to support her initiatives in

Africa

.  Now she’s opened The Oprah Winfrey Leadership Academy, has given multiple grants and is making a huge difference in people’s lives in

Africa

and around the world.

 

A note:  You should think big here.  In fact your answer should be so big that you might only ever achieve 50% of it during your lifetime.  That way you will always have something to work for and to leave some bigger than yourself after you are long gone.

 

 

What I Will Do With My Money Is:

______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

We’re getting down to the last few secrets of the rich.  Is your mind ready to explode yet?  That’s okay.  Re-read this section of the book every day.  It will help you set a new template for the rest of your life.

 

“Secret” number twelve is that the rich are employers not employees.  Being an employee is not a bad thing, but there are only a handful of employees in the world that ever become truly rich.  Most employees, according to research, save nothing and barely have enough to get by each month. 

 

One way you can become an employer is to begin working for yourself.  Keep your day job and use your list burning desires that you wrote down earlier to begin the process.  Now, combine those desires with your skills and begin your own business.  Start it part time and build from there.  There are 13-year old millionaires, so you can do this.

                 

I have owned my own business since I was 13 and while I had many ups and many downs; I never gave up the vision of what I wanted in my life.  Then one day all the stars lined up and the Universe gave me a perfect moment where I left my corporate job forever, burned my ships and set a new course.  Now I direct movies, write books, and help people get out of debt and stay out of debt forever.  What a great way to live.

 

“Secret” number thirteen the rich seem to know, but others do not is that they create their own opportunities rather than become absorbed in self-created debt. Think of yourself standing in a river and the water flowing around you is filled with so many fish you can literally just reach into the river and grab one, or two, or three, or more.  This is what being in the “opportunity flow” is like. 

 

There are so many opportunities that you’ll have a buffet of choices and can choose what you want, when you want.

 

They say perception is reality and whoever “they” are, they’re right, which brings me to “secret” of the rich number fourteen.  The perceptions of the rich are always attuned to positive outcomes and opportunities and they don’t have perceptions of lack, poverty, and debt.

 

“Secret” number fifteen might seem dull on the surface, but it is a critical piece of how the rich got rich and how they stay that way.  The rich and successful have all the proper legal and corporate structures set up where as most people have improper or no corporate structures set up to benefit them.

 

That’s it, as promised.  These fifteen so-called secrets are no longer secret at all to you.  You have all you need to begin thinking like the rich, acting like the rich and to become rich. 

 

Do what the rich do and you will become rich.

 

6 Easy Quick-Start Strategies that Help You Control the Amount You Spend

“We don’t have a trillion dollar debt because we tax too much; we have a trillion dollar debt because we spend too much.”
President Ronald Reagan

President Reagan was right and in order for you to stop being a debt slave you must stop spending more and more and more.

Here are 6 easy ways to help control the amount you spend:

1. Stay away from stores except when there are things you need to buy.   Impulse shopping equals more money spent.  And whatever you do, don’t go to Costco or Sam’s Club when you’re hungry.  There’s a reason they both have a battalion of grey-haired ladies all serving tasty food with those wonderful smells.  When you get to the store, buy what is on your list and leave.

2.    Always have a purpose or plan when you go shopping by making a list and sticking to it. People tend to spend less when the get only what is on their list and resist the impulse buy.

3.    Go to the store once a week, or only when you need to go.  Multiple trips to the grocery means you can spend up to 25% more money than you planned.

4.     If you are planning a social outing, leave the credit cards at home, then have fun, but take only cash.

5.    If you’re “down in the dumps” don’t go shopping at all.  There is no such thing as “retail therapy.”  This “therapy” gets you farther into debt and does nothing to build your financial future and can actually contribute to depression.

6.    Find a substitute for shopping. Do something other than go to a store.  Go for a walk, or hike, read a book or call a friend.  Your     life is not at the mall, it’s inside you.

To Shop or Not to Shop… That IS the Question
Stop right there!  Is that fabulous new blue sweater what you need, or just what you want?  The sweater better be fabulous because if you use a credit card to buy the sweater instead of paying cash, you’ll spend about 32% more for the sweater in the long run because of interest rates and fees than you would if you paid cash.

When you get the urge to spend, ask yourself these three easy questions:
•    Will this purchase help me meet my long-term financial goals?
•    Do I need it or can I do without it for a while
•    Will this purchase help make me money so I can pay off my debts faster?

If the answer is, “No” to any of these questions, pass on the purchase (for now) and put your money to better use, like paying down your credit cards.

Self-control (I know, it’s almost a four-letter word, but hang in there)
Developing your self-control doesn’t happen overnight, just as your spending habits didn’t either. When faced with a big problem many business people say “You need to eat the elephant one bite at a time and don’t worry about eating the whole thing in one bite.”  It’s good advice.  The way you change your habits and develop more self-control is to pick one simple spending habit you want to change each week over the next few months.   

Once you’ve picked a few habits you want to change, you need to develop a plan so you can measure your progress along the way. To make your plan have a better outcome for you I suggest that you also set a deadline for yourself to evaluate if the habit has been changed.

For example, your goal might be to save ten dollars a week, or cut your grocery spending by 5%.  See the Quick-Start Checklist:  Self Control at the end of this Key for how you can start controlling the amount of money you spend.

Just like working out, you need to practice your new habits daily. Do something every day to help you reach your goal. Research says it takes twenty-three days to form a new habit, so don’t panic, it does happen.

A great way to “force” yourself to have self control is to simply remove all of your credit cards from your wallet or purse, that way you MUST be on a cash (or debit card) only system from now on.  I do this every day and it really does keep the amount I spend in check.  If I can’t afford what I want, I wait until I can.

 If you are unable to take this step, because right now you are living on your credit cards, take as many credit cards out of your wallet or purse as you can.  By removing the ease of using credit, you remove your future debt.  You can do this, and it’s not too hard.  Yes, there will be times that are difficult, but if you do what’s easy, life is hard.  If you do what’s hard now, the rest of your life will be easy.

Your Money Rights - Debt Collection Rights

Ahh, debt collectors.  They have to rank just below ambulance-chasing lawyers.  I've had to deal with a few in my day and to the person, they are mean, intimidating, rude, pesky, did I mention rude, and just plain 'ol nasty.  That being said, they do perform a service in that if you owe a debt and do not pay, they are the ones charged with trying to get you to pay.

Being hounded by these vultures is bad enough, but when they start calling your family, your friends and even your neighbors to pressure you into paying, it gets even worse (this is illegal, but many of them do it all the time). 

Fear not!  There are several protections that the federal Fair Debt Collections Practices Act provides you that can put a stop to the harassing calls and emails and gives you rights when you are contacted by a debt collector.

The FDCPA applies to all personal, family, and household debt like your car payment, credit cards, loans, medical and insurance payments, bounced checks and the like.  The FDCPA not only applies to debt collectors, but also attorneys that try to collect a debt for their clients.  Here's the short list of what the FDCPA covers:

•    The collector cannot call you at an inconvenient time or place unless you give them permission (usually before 8:00am or after 9:00 pm)
•    They cannot call you at work if they know your employer does not want you contacted there.  They cannot contact your employer about your debt
•    They cannot contact you by post card or use an envelope that makes it clear they are collecting a debt.
•    They cannot contact you once you have requested not to be contacted again.
•    They cannot call you repeatedly in a short period of time.
•    They cannot threaten to ruin your reputation or harm you in any way.

Within 5 days of making contact with you the debt collector MUST provide you with written information detailing exactly  how much money you owe and to whom you owe it.  You must also be notified that you have the right to dispute the debt.

Okay, let's assume that you have been contacted by a debt collector.  How do you respond to them?  The FDCPA affords you many options for responding to a debt collector.  The choice you make all depends on you exact financial situation.  Depending on how much you owe, if you owe a debt at all, and how much money you have available to use you can:

•    Pay the debt if you agree that you owe it
•    Work out a debt payment plan
•    Settle the debt for less than you owe
•    Send the collector a letter within 30 days of them contacting you stating that you do not owe the debt.  Once they receive this type of letter they cannot contact you again except to send proof that you owe it.
•    Ask them for written verification that you do owe the debt.
•    Write them a letter indicating that you do not wish to be contacted again.  They must comply with your request, but they can send you a notice that you won’t be contacted again. (This does not mean that the debt goes away).
•    Dispute the debt.  If you don't think that you owe the debt send the collector a dispute letter.  You need to send it within 30 days of being contacted and they must suspend all collection efforts while they confirm the validity of the debt.
•    You can file for bankruptcy

As I said above, these debts do not go away. You can be sued for them by the debt collector or the first creditor so it's best to take care of these issues promptly.  No matter what you decide, you need to address the debts without emotion.  If the debt collectors get you frazzled, you are more likely to make an error in judgment.  Take the time to figure out the best way to handle the debts, reject the debts, or otherwise get the debt taken care of.

I am yours in success,
Randall

Snowball Strategy to Reduce Your Debt

There are a lot of people out there that are saying it almost impossible to reduce your credit card debt and still lead the life you want and have "all the nice things you need."  Now I'm not saying that reducing your credit card debt is a walk in the park, especially if you are thousands of dollars in debt but it's not as hard as everyone seems to make it out to be. 

It's sort of like going on a debt diet.  Imagine if you gained 10 pounds over the course of a year.  You shouldn't expect to lose it overnight, should you (I hope not).  The same goes for your "fat credit cards.  If you "gain weight" over the course of a year, you shouldn't expect to lose that debt fat overnight, but it can and does happen.  Here's one way you can cut your debt without any pain at all.

If you have more than one credit card, one debt dumping strategy you can use pay more than the minimum due on all of them if you can.  If you can't do that, pay just a little more than the minimum on the card that has the highest interest rate.  This is what I call the "Snowball Strategy."

And here's the snowball strategy...  Once you have paid more than the minimum on one card and then paid that high interest rate card off, take the amount of money you were paying on that high interest card and add it to the payment of your next highest interest card.  This way you actually start to double the amount you pay on the second card once the first card is paid off.  You will wind up paying off the second card even faster.

You can use this same strategy for all your cards until they are paid down or paid off.  Now, the success of this strategy also supposes that you don't continue to spend more and more on your cards so when you pay one off, just put in a drawer or safe deposit box and don't use it.  The fact is that you cannot be free in this country until you are our of debt.  Only then can you control your own destiny and that's very important.

Be well and I am yours in success.
Randall

Credit Addiction

Credit Addiction

Are you addicted to credit?  Are you a “shopoholic?”  Do you like to “shop-till-you-drop?”  Many Americans can be considered compulsive credit users which means that they spend more than they make and hope that someday they’ll make more to pay it all off.  The problem… That “someday” never comes and they stay in debt forever.

I was a compulsive credit user and my continuous urge to spend caused my first bankruptcy.  I was addicted.  I loved to spend, loved to shop and always had the “nice things.” 

Then I began robbing Peter to pay Paul, then robbing Paul to pay everyone else until it all went downhill and was $50,000 in debt. Does this story sound familiar?  I spent $25,000 alone on credit cards in less than three years and the funny thing is on the day that I declared bankruptcy I was approved for yet another credit card.  All this by the time I was 24!

When you’re a compulsive credit user you really have the mind set of “it’s only $15 a month, I can afford that.”  And then your “it’s only” payment goes up to $20 a month, and hen you get more credit cards and pretty soon you are paying hundreds of dollars a month just on your “it’s only” minimum payments. 

At one time I had over 20 credit cards all maxed out. It happens and it’s very easy to fall into this trap.

So how do you know if you are addicted to credit?  Take the Quick-Start Credit Debt Quiz on the following page to find out.

Quick-Start Quiz:  Credit Card Debt

Is the amount of credit card debt you have making your home or work life unhappy?

Do your debts cause you to hate yourself?

Have you ever lied to your creditors to get more credit?

Do you fear that your employer, family or friends will find out about your credit card debt?

Does the pressure of your debts distract you from your work?

Do you have difficulty sleeping because you think about your credit card debt?

Do you like to buy now and pay later?

Do you always carry a credit card with you?

Have you ever promised yourself to pay off your credit card debts, only to not follow through?

Do you justify your debts by telling yourself that you will pay them off when you get your big break?

How did you score? If you answered yes to three or more of these questions, the chances are that you may have a problem controlling your credit card spending and are going father into debt.

The free information on dumpdebtgrowwelath.com will help you get control of your spending, show you how to get out of debt, and will light a path for you to follow. 

I am yours in financial freedom,
Randall   

Randall Blaum Interviews Dr. Robert Manning on Debt

This is an excerpt from an interview I did with Dr. Robert Manning, one of the top experts in consumer debt.  Dr. Manning has testified in front of congress and is seen frequently on news programs throughout the world.

Randall:  Hi everyone, today we have a very, very special guest, Dr. Robert Manning, who is the research professor and director of the Center for consumer financial services. He is also the author of the widely acclaimed book, Credit Card Nation, which received the 2001 Robert Ezra Park award for outstanding contribution to sociological practice; he received the prestigious 2003 George K. Polk award for investigative journalism, and the 2004 Harry Chapan award for poverty research, while he was studying all of the information on debt and credit. Now, Dr. Manning is also frequently invited to appear in front of the U.S. Congress Committee hearings, for the U.S. Senate Banking and Judiciary House financial services committee, and his research has actually influenced the public policy debate on consumer debt in the U.S. Dr. Manning, welcome.

Manning:  Well it's a pleasure to be joining you, I am indeed the Director for the Center of Consumer Financial services at the Rochester Institute of Technology, and indeed recently testified before the Senate Committee as they reviewed some of the most outrageous policies of the credit card industry.

Randall:  And let's just start there. What are some of the most outrageous policies? Because most people, I think they just use their credit card and they get their bill at the end of the month and they don't really pay much more attention to it. So what's really going on behind the scenes?

Manning:  There are several key issues that the average person needs to understand. One, do they have a variable vs. a fixed rate? You see this term constantly thrown out by the industry. You've got a fixed rate for life and you find out they didn't like something that occurred with a payment to a creditor, with a completely different financial institution. And suddenly that fixed rate, interest rate went from 3.9 to 32 %. First there is no such thing as a fixed rate anymore. Second thing is, you don't have a relationship with that particular bank anymore as it relates to the cost and terms of your loan contract.  What's been called universal default, the bank's regularly scour every aspect of your credit report to look for some kind of negative information that they can use, in a sense like a black box, they don't tell you exactly what happened, you suddenly see that your interest rate has jumped up thru the roof. So interest rates today, they used to be very regular, fixed and predictable now have become part of the capricious policies of the credit card industry where they can essentially blame you, for the audacity of raising your interest rate as much as eight to ten times.

Randall:  So, even if you are "guaranteed an interest rate for life" that only lasts as long as they want it to last?

Manning:  Absolutely, that's one of the key issues we have been fighting against on my most recent testimony, including here and New York State. The state legislature has argued that they will try to fight the credit card industry, even if it means they don't have the statutory control over what's called federal preemption. And this is a key term that we hear all so often, because what's happened is that nationally chartered banks can only be regulated by the U.S. Congress. And so many people have asked what happened to the state (9:49) law, and what happened in 1978 was the Supreme Court basically said that the interest rate that a bank charges on its credit cards will be defined by the interest rate of the state, that they have their headquarters.

And as a result the banks have moved to places like Delaware, or in Utah, and even Arizona, which has the only interest rate cap at only 36%, and as a result they can literally charge anything they want, by exporting that interest rate to the state where you receive your credit card, which means that only Congress then can regulate them. And this same decision by the Supreme Court was reaffirmed in 1996 with a Citibank decision, which basically said that states could no longer regulate the cost of fees on your credit cards. So, it's just a matter of time before we see $50 late fees. And the federal preemption was extended even further in a district court decision that I was involved with that was litigated by the state of California, and basically the state was requiring the credit card companies to tell their clients how long it would take them to pay off their cards if they simply send in the minimum payment. And the American Banking Association fought that, and the banks won, so that now, federal preemption even includes issues regarding disclosure for how well consumers understand their credit card contract.

So the banks have been very successful in making the cost of credit skyrocket, more than triple since the deregulation of the banking industry in the early 1980's. And now even consumer information has become withheld because Congress is not forcing the banks to become more forthright about the terms of a consumer contract.

Randall:  Wow, so Arizona has a cap of 36% on their interest rate and that's great, but, what's the highest interest rate a bank could charge somebody?

Manning:  Well there is no limit in these other states. 36% tends to be the limit simply because Bank of America is headquartered in Arizona, and nobody has yet pushed it beyond that. Except for what are called sub (12:19) credit card. These are the most outrageous credit cards where you get an offer for $250 to $300, but then you find out that they have charged you anywhere from $150 to $200 in fees, and that's where the effective interest rate could be over 1000% per year.

Randall:  That's a pretty hefty loan. OK, so there are so many credit cards out there, and in today's world, and I'm getting down to the nitty gritty, but in today's world it is so difficult to live without some kind of credit card especially if you travel or go to school or something. So, can you give us some idea on maybe what is one of the best ways for people to find the best credit card for themselves, how do they avoid the 36% credit cards?

Manning:  Well I highly recommend the consumer read a site called creditcardratings.com, This is a site where the consumers actually rate the best cards for your particular situation. So if you are for example are looking for the best gift cards, or looking for that cards that offer you to get a free gift, if you are looking for the card that charges you the lowest interest rate and the low fees, you can actually log on and see what other consumers have to say about that particular card. So I strongly recommend creditcardratings.com, and you can actually apply for that particular credit card online as well.

Randall:  Now something that a lot of people don’t seem to understand is that there is a difference between a credit card, a charge card, and a debit card. Can you tell us what those differences are and how they might apply to different people, which one might be best for them?

Manning:  One of the most ridiculous aspects of our financial system is that if you pay your obligations in cash, and that includes a debit card.  You will have a very poor credit score. So some of the most credit worthy people in America is some of the most credit evaluations in the country. And so with a debit card, a lot of people don’t realize that just because it says visa or MasterCard on it, it doesn't come with a guarantee, it doesn't come with the fraud protection that a credit card has, and in fact if you use a debit card, which is linked to your checking or savings account, it's essentially like using a check, except as a courtesy to you as a client, your bank will offer you an over draft protection.

This is a very scary aspect because you could go over your account by as much as one or two cents, and end up being charged hundreds of dollars for each transaction. So debit cards do not mean that you are not going to end up borrowing money, and end up being charged for many fees, as well as high interest rates, and, you can actually through identity fraud, and theft, not only can your debit card be used for transactions, but its been used to actually drain your entire checking or savings account, and there is no protection for that fraudulent use, so consumers need to be very weary about debit cards. Credit cards on the other hand, are just an open line of credit, what's called a revolving line of credit, and consumers are given an interest rate, if they carry a balance. There are some cards that will charge you a finance fee, even if you pay off the balance each month. And consumers need to be very careful about what the fees are, and keep in mind, since 1996, the Supreme Court essentially lifted the cap on what a bank can charge on fees.

Fees have gone from $1.3 Billion to over $16 Billion in revenue to the credit card industry in 1996, so banks are constantly looking for ways to charge credit card users extra fees, and even a lot of the free things, like the itemized statement at the end of the year, now come with a fee. It is also very important to remember you may see Visa or Master Card on your credit card, but your contract is actually issued by a specific bank. So you don't go to Visa to complain if you have a problem, you actually have to call your Citibank or Chase Bank of America account; they are the ones who are actually pricing the cost of credit on that particular account.

A charge card on the other hand, is simply a promise to pay over a specific period of time, usually an American Express card and will come with certain protections with its use such as if your card is stolen, you won't be held liable for fraudulent use, but, you have to pay the amount in full at the end of the month.

To see more on how you can dump your debt go to www.dumpdebtgrowwealth.com and sign up for our public library.  It has videos, audios, and other materials that can help you dump your debt starting today.

I am yours in success,
Randall

Excerpt from Randall Blaum's Book, "Dump It!"

Greetings Debt Dumpers...

In the downloadable version of my Dump It! book (www.dumpdebtgrowwealth.com) there are 52 Keys to dumping your debt.  Here is a sample Key and a quick start letter to get creditors to prove you owe money. 

I am yours in success,
Randall

Key #2

What to do When You’re Having a Debt Disaster

Debt disasters are like being in the emergency room of a hospital and needing immediate care.  Debt disasters are being evicted, home foreclosure, having your car repossessed, not being able to buy food or anything that has an immediate impact on your housing, your health or your critical transportation, survival or family needs.

If you are facing one of the disaster situations above contact your creditors immediately, explain the situation to them and tell them you want to work out a payment plan.  You want to make sure they understand that you want to pay off the debt and that you need help in the short term.  Many creditors will cut your minimum payments down for a short while to help you out.  You will, however, have to stop using the card until things are back on an even keel. 

If the creditors play hardball, you may have to consider bankruptcy, but that is really a strategy of last resort.  For more information on bankruptcy, the new bankruptcy bill and how it can affect you and your family please see the last chapter of this book.  It’s important for you to know.

You do have some recourse when you get into this kind of situation that can buy you the time you need while you work on a solution.  Using the FDCPA, the Fair Debt Collection Practices Act, you can request from any creditor documentation of your debt.  It takes a few weeks for them to respond and while they are responding you have a little breathing room to get your plan together. 

If you know you owe the debt to a credit card company I suggest that you simply call them first.  Most companies are willing to work with you.  However, if they are not, or you are being hassled, send them your version of the Quick-Start sample letter that follows this key.

No matter what, you must own up to the fact that you do owe these debts and if you just don’t pay your debts you'll wind up in much worse shape than if you simply deal with the situation now, as hard as that may be. 

Now if you are facing eviction or foreclosure you may need a lawyer to help, but most creditors would rather deal with you in an honest and open manner and get the debt paid because it costs them a ton of money to go through the process of eviction or foreclosure and then to have to re-rent or sell your property.

Quick-Start Letter: Validating Your Debt

Today’s Date

Your Name
Your Street Address
Your City, ST 00000

Lending and Collections Guys
876 No Way Drive
Atlanta, GA 00000

Re: Acct # (your account number here)

To Whom It May Concern:

This letter is being sent to you in response to a notice sent to me on (date of the notice). Be advised that this is not a refusal to pay, but a notice sent pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (b) that your claim is disputed and validation is requested.

This is NOT a request for “verification” or proof of my mailing address, but a request for VALIDATION made pursuant to the above named Title and Section. I request that your offices provide me with competent evidence that I have any legal obligation to pay you.
Please provide me with the following:

What the money you say I owe is for;
Explain and prove to me how you calculated what you say my debt is;
Provide me with copies of any documents that show I agreed to pay what you say I owe;
Identify the original creditor;
Prove to me that the Statute of Limitations has not expired on this account
Show me that you are licensed to collect in my state
Provide me with your license numbers and Registered Agent

At this time I will also inform you that if your offices have reported invalidated information to any of the 4 major Credit Bureau’s (Equifax, Experian, TransUnion, or Innovis Data Solutions) this action might constitute fraud under both Federal and State Laws. Due to this fact, if any negative mark is found on any of my credit reports by your company or the company that you represent I will not hesitate in bringing legal action against you for the following:

Violation of the Fair Credit Reporting Act
Violation of the Fair Debt Collection Practices Act
Defamation of Character

If your offices are able to provide the proper documentation as requested in the following Declaration, I will require at least 30 days to research the documentation and situation and during such time all collection activity must cease and desist.

Also during this validation period, if any action is taken which could be considered detrimental to any of my credit reports, I will consult with my legal counsel. This includes any listing any information to a credit reporting repository that could be inaccurate or invalidated or verifying an account as accurate when in fact there is no provided proof that it is.

If you or your assigns fail to respond to this validation request within 30 days from the date of your receipt, all references to this account must be deleted and completely removed from my credit file and a copy of such deletion request shall be sent to me immediately.

I would also like to request, through this letter, that no telephone contact be made by your offices to my home or to my place of employment. If your offices attempt telephone communication with me, including but not I will have no choice but to file suit. All future correspondence and communications with me MUST be done in writing and sent to the address noted in this letter by United States Postal Service.

This is an attempt to correct your records; any information obtained shall be used for that purpose.

Sincerely,

Your Signature

Your Printed Name

Understanding Credit Card Debt and What They Don't Want You to Know

Understanding Credit Card Debt

The definition of credit card debt is: The unpaid balance on a credit card. This is not the minimum amount due, but is the total balance due on a respective line of credit. 

According to the public watchdog organization, US PIRG, 60% of Americans carry a balance on their credit cards and individuals and families now carry almost $10,000 in credit card debt.

Americans today have a total credit card debt of over $830 billion dollars and a total debt load capacity of over 2 trillion dollars.  That means that if everyone maxed out every one of their credit cards right now, Americans would be $2 trillion dollars in credit card debt.  That’s more debt than most country’s total gross domestic budgets.  And this debt load is literally killing us.  Maybe you know someone who’s in crushing debt, maybe it’s you? 

This crushing debt is causing more than just financial headaches.  It’s causing real headaches, too.  Financial stress is one of today’s biggest health concerns.  People don’t sleep well, they don’t concentrate well, and they eventually wind up getting sick from all the worry and stress, which costs the consumer and the health care system even more money, some of these costs are now being put on credit cards.  Talk about a vicious circle…

The more you know and understand how the debt system works, how to use credit to your advantage, and how to stay out of a debt disaster, the better off you’ll be and the more money you’ll have for the truly important things in life.

The only failure is not to participate in your own life.  Consider your current debt position as a great opportunity to learn more about you and how you want to live the rest of your life.

What “They” Don’t Want You to Know

The banks, credit card companies, and other financial institutions keep their secrets locked up tight, so tight that they deliberately obfuscate the truth from consumers and deliberately mislead consumers into making poor choices
when they choose credit cards. 

They do this by:

1.    Making the credit disclosure statement impossible to understand, even by highly-trained lawyers, let alone, uninformed consumers

2.    They bombard the consumers with billions (5.4 billion last year) of “pre-approved” credit offers via the US Mail and even more via the internet

3.    They tease one low rate “0%” and then in a few short months the rate soars to as much as 22%, or more

4.    They have dozens of hidden fees and charges that are not properly disclosed in a way that makes sense

5.    They are able to change your interest rate at any time for any reason, including no reason at all

6.    They lobby congress to change the rules and the law to benefit themselves (they spent over $50 million to get the new Bankruptcy Reform Bill passed in 2005 alone)

7.    They give credit cards to consumers (the poor, college students, and the already in debt) that are truly credit unworthy in hope that they will not be able to pay their monthly minimum payment to collect the extra fees

8.    Some creditors (pay day loan companies for example) charge as much as 1095% effective interest without revealing how this happens to the consumer (beware payday advance businesses)

These secrets are the glue that binds the credit card companies and banks together.  They get the unsuspecting consumer sucked in and then they change the rules without any warning.  It’s like this…  The credit industry is the only industry that can actually charge you more money for the products you buy than what you paid for the products originally through higher interest rates.

Beware and be forewarned.  Credit itself is not bad, but it can get you into a lot of trouble if you are not prepared.

I am yours in success,
Randall

Tips for Getting and Keeping Your Credit Cards Safe

Hello everyone.  Today's blog is short and is geared for all of you who  ever want a credit card, use a credit card, or even think of using a credit card.

Almost everyone is spending more than they should these days, but today's Boomers and grandparents are spending more as a whole demographic than ever before.  The same goes for college students, parents, and single mothers.  This could lead to some very large problems in that you may wind up with no retirement nest egg, have to be on the public dole, and basically not be able to live the life you want on your terms.

Credit card issuers go after just about everyone and they offer you many "Special Deals" that just don't pencil out in the long term.  Here are just a few tips for selecting a credit card.

Look out for special offers.  If you get a teaser rate don't believe that it will last any longer than 6 months or so. Read the small print, you'll find you might be singing up for a very high interest rate card without even knowing it.

Spend time shopping for the best deal.  I like www.CardRate.com.  Look for cards that have no annual fees and very low interest rates.

DO NOT purchase the insurance program these card issuers offer.  Often this is just not worth anything in the long term and certainly not worth the expense.

I get questions every day and to sum up what people ask about most, here are a few safety tips for using your credit cards, no matter your age.

Leave Home Without it. That's right, don't take your credit cards with you unless you know you will use them.  If they are in your wallet or purse you are more likely to spend more money, have your identity stolen, or worse.

Hide in Plain Site. Keep your credit card numbers and access codes secret.  Do not show or share them with anyone you do not have to.  Shred all receipts you do not need to keep for tax or other purposes.  Never through your receipts in the trash.  Dumpster divers are hoping you'll be dumb enough to simply throw them out.  Don't do it.

Keep your PIN secret.  Never, ever write this number down anywhere.  It can be like handing the keys to Fort Knox to a criminal.

For more information on how to get and use a credit card you can go to the FTC (Federal Trade Commission) website.  The FTC publishes consumer brochures and booklets about credit. It also can provide you with instructions for filing complaints against a lender. You can find these materials on the FTC Web site, or call (202) FTC-HELP. To contact the FTC by mail, write to the Federal Trade Commission, CRC-240, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580.  URL: http://www.ftc.gov

Be well, shop safe, enjoy life.  I am yours in financial success,

Randall