Money Talk: Cheaper ways to pay down credit card debt
Dear Liz: I’m trying to pay off credit card debt and was told to call my issuers to negotiate a rate lower than what I’m currently paying, which is about 8 percent. One issuer lowered the rate to 5 percent, another refused to make any changes and a third told me the rates on all accounts were about to be raised 2 percentage points. What to do now?
Answer: The fact you could get any issuer to lower your rate in today’s environment indicates you have very high credit scores. People with less stellar credit have reported having their rates raised or credit limits lowered when they tried asking for rate concessions.
You could investigate the low-rate balance-transfer offers at sites such as CardRatings.com, CreditCards.com and the finance forum at FatWallet.com. Be aware that balance-transfer offers are getting less generous, however, so there’s no guarantee you’ll find another low rate when the current deal expires. You also need to factor in fees, because many balance-transfer deals add 3 percent to 4 percent to your balance.
Another option is to pay off your credit card debt with a three-year personal loan from your credit union or a social lending site such as Prosper or Lending Club. The rate you pay may be somewhat higher than you’re paying now, but it will be fixed, which means you won’t face a massive rate hike down the road — something that’s always a possibility with credit cards.
Dear Liz: With the rise in personal delinquencies these days, my husband and I are in the same boat as a lot of people with common surnames: We get daily robo-calls from collection agencies attempting to collect debts from individuals with names similar or identical to our own.
These are not our debts, and we check our credit report regularly enough to know that these also are not fraudulent charges made to our accounts or accounts opened fraudulently in our names. Is there a way to stop these calls?
Answer: Under the federal Fair Debt Collection Practices Act, you have the right to tell collection agencies in writing to stop contacting you, and they’re supposed to comply.
This, unfortunately, can be tougher than it sounds.
Some of the agencies employing automatic dialers routinely ignore the laws requiring that they identify themselves and provide you with contact information, including the firm’s name and address. If they leave a return phone number, you can try calling it or entering it into an Internet search engine.
If you get a name and address, you can write a letter telling the agency the debts aren’t yours and to stop contacting you. If the agency calls again, you can report it to the Federal Trade Commission or sue it in Small Claims Court for violating the Fair Debt Collection Practices Act.
Dear Liz: We want to have an estate plan that doesn’t cost a ton of money. We’re both in our early 40s and have no children. I’d label us middle class, with not much money left over after monthly bills. Lawyers want too much money to “help” us. Isn’t there a better solution?
Answer: If your estate situation is truly simple, you can draw up the documents you need with Quicken WillMaker software, which is available from the self-help legal publisher Nolo at www.nolo.com. The software costs about $50 and guides you through the process of creating wills and durable powers of attorney.
The do-it-yourself approach can work when your situation is straightforward, but you should consider consulting an attorney if your estate ever gets big enough to worry about estate taxes or if complications (such as children or contentious relatives) become a factor.
Liz Pulliam Weston is the author of the book “Your Credit Score: Your Money and What’s at Stake.” Questions for possible inclusion in her column may be sent to 3940 Laurel Canyon Blvd., No. 238, Studio City, CA 91604, or via the “Contact Liz” form atwww.asklizweston.com.