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Why it Really Pays to Consolidate Your Debts

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Bloomberg reported that credit card debt levels in the US recently exceeded the levels at the peak of the Global Financial Crisis. Consider that US consumer credit card debt hit an all-time high in June 2017 when it topped out at $1.02 trillion according to the Federal Reserve Bank. Major US banks and lenders in the form of JPMorgan Chase & Company, as well as Citigroup Inc. are vying for their slice of credit card customers with existing balances. In an era of extraordinarily low interest rates, customers are being enticed with credit card offers to try and get them to sign up with big banks and credit card companies. Fortunately, the status quo is far more favourable to US households in 2017 than it was in 2008/2009 when interest rates were significantly higher.

Additionally, the unemployment rate is at multi-decade lows, coupled with low inflation and an otherwise ‘booming’ economy. Back in 2008, the housing bubble burst and trillions of dollars were wiped off global bourses. The financial meltdown that ensued threatened to upend economic stability around the world. Were it not for bold initiatives by the Federal Reserve Bank, the Bank of England, the Bank of Japan, and the European Central Bank, a meltdown most certainly would have occurred. In the US, the crisis resulted in banks eliminating some $100 billion+ in credit card-related loans from their books. This all took place within a 2-year period. In February 2017, the total outstanding debt on credit cards in the US breached the $1 trillion level.

Credit Card Companies Happy to Lend Money Out

Concerns mounted as major credit card companies such as Synchrony Financial, Capital One Corporation, and Discover Financial Services posted results of write-offs (credit card debt that would not be recovered): unrecoverable bad debts in Q2 2017 increased sharply. Equally concerning is the fact that US household credit card debt is now at its highest level in history. Outstanding revolving credit card debt now exceeds the worst levels seen since April 2008 when it was also at $1.021 trillion. For those wondering why credit card debt levels are growing so rapidly, there are several factors to bear in mind:

  • Interest rates are at historic lows, despite the Fed’s push to raise the federal funds rate as inflation begins to rise
  • The US economy has turned the corner since the financial crisis and things are markedly better, although there is room for improvement
  • Lenders are eager to snap up as many borrowers as possible with low interest rate credit card offers

Lower Spending Limits on Credit Cards

However, it should be borne in mind lenders have put limitations on credit card balances. Nonetheless, it’s important to pay close attention to outstanding balances, and the interest-related payments that must be made. While interest rates are currently low, the APR (annual percentage rate) of credit cards ranges from 15% through 28% and this means that customers are paying interest on their interest. At such high rates, it’s important to manage credit card debt before it overwhelms your household budget.

 

One way to do this is debt consolidation – the process of grouping together similar debt like credit card debt and paying it off with a loan through another lender at a lower interest rate than the credit card debt. The benefit of debt consolidation is that you can immediately pay off high-interest debt with a low interest loan and use the money saved to pay down other debt or use as savings.

 

According to the New York Federal Reserve Bank, US household debt spiked over $1trillion in March 2017, a worrying trend. The bulk of US household debt remains locked in the following areas: mortgage debt, student loans, automobile loans, credit card debt, and medical debt. The rise in student loans and automobile loans is disturbing. Household income is not growing as quickly as the rising costs of medical coverage, and other expenses. At two thirds of overall household debt, mortgage debt is the most pressing concern. However, it is regarded as good debt since the real estate is an asset with a value proposition.

Debt Relief 101: What Is It and How Can You Achieve It On Your Budget

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Debt is an extremely normal part of anyone’s financial life. However, we can’t deny that having debt feels like a nerve-wracking experience as well. It’s frustrating to know that we have dues that can impede our savings. However, knowing that debt is a regular occurrence in our lives means we can experience debt relief as well. Here are some necessary things you need to know about debt relief and some easy ways to start achieving it.

Study, Assess Your Debt

Sometimes, it’s all about a matter of looking at your debt and planning accordingly. You can’t correctly understand just how much debt you have and how you can pay it without looking at everything properly.

  • Try to collect all your account statements within a specified period of time. Search online or call creditors to inquire just how much you owe them and if there are interest rates. Also, ask how much is the minimum pay requirements for each kind of debt you owe. Place everything on a spreadsheet to view accounts at once.
  • If there are questions about your debt that you need to be clarified, always feel free to ask your creditors. The more you know about your debt, the easier it will be for you to formulate the right strategy.

Remember, the first stage in having debt relief is to know your situation first. This means assessing all your debt properly.

Pay Above, Beyond the Minimum

It’s important to understand that creditors will try to make more money off you if you only plan to pay the minimum each month. This is because interest stays the same, and this is where the difference is. If you pay more than the minimum, not only will the total debt decrease, but the interest will be lowered as well.

  • Try your best to pay above the minimum to decrease the time you need to pay for your payments. The less time you have, the less you will have to pay in the long run.
  • Have a plan to get extra money for debt payment, gain access to those funds and make additional payments. The more you pay, the lesser debt youwill have in the long run. 

Try to Focus on the Lowest or Highest Debt

When you have a list of unsettled dues, things can sometimes get a bit overwhelming. To keep things in order, try to establish a debt priority. You can choose to focus on the lowest debt then followed by the highest one, or vice versa.  Both methods can work depending on your financial situation. Take a look at these two scenarios:

 

  • The debt snowball starts by identifying which of your debt has the lowest balance and focusing on this. The goal here is to remove this debt as quickly as possible. The quicker you do this, the more extra money you will have to focus on other debt. The trick is to realize that the “small” money you’re going to pay for the lowest debt will be used on other debt, given the lowest debt has been paid. This tactic “snowballs” until you get a lot of “extra” money to pay off the larger

 

  • The debt avalanche method is the opposite, where you choose to work with the highest interest rate instead. This will, of course, take a bit of time, but it will eventually decrease the total payment you have to pay each month.

Some people rely on the debt snowball because it’s a faster strategy to get extra money for their other debt plans. However, the avalanche system will probably help you save more money in the future – of course, provided you are willing to take your time.

Extra Income, Extra Budgeting

Sometimes, the best way to make more money for your debt is also to gain extra sources of income. Here are some methods to do these:

  • Try to ask for a raise from your boss. Some people are afraid to leverage on their abilities as an employee, and forget that they can actually try asking for an increase. If you explain your situation carefully, your boss may give you a raise – or give you tasks that can qualify as a raise.
  • You can also try selling older stuff that you’re not using. This will help you understand the inherent value of objects around you as well, helping you budget more efficiently when buying new things.
  • You can also try to get a part-time job to obtain extra income.

At the same time, you should also try to budget more and spend less. You should start becoming smarter as to how you balance your monthly expenses and things you do for leisure. There are ways for you to pay less by buying alternatives, opt for those options.

Conclusion

If the above items are any indication, then debt relief is, in fact,a possible thing. It just takes a lot of time and effort on our end. It may feel as if we’re not making any progress in the beginning, but if these tactics are paired with a good financial strategy, then you’re on your way to a brighter financial future.

Should You Invest in Forex?

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Forex trading has increased over the last few years. One reason for this is because of the rise of exposure to investors who now have more information at their fingertips than ever before.

The internet is largely responsible for the surge of investing information. It has shown the regular investor alternatives to grow wealth that were either unknown or simply unused previously.

What this means for Forex, short for the foreign exchange market, is that average people can invest in currencies previously traded mostly by large companies. But the question is, should you invest in forex?

1. Trades are on Paper Only

Trading of Forex is not regulated like futures or stocks. There is no governing body or clearing house to oversee trades or settle disagreements. Those who choose to trade Forex do it on agreements that are basically on paper only and recorded as computer transactions on the trader’s account.

Both parties have to agree to the exchange. What keeps them honest? Each should be a member of the National Futures Association, or NFA, which includes binding arbitration to help settle any disagreements. Those who even consider trading currencies should only do it through a firm who is a member of the NFA.

Trading takes place from 5 pm Eastern Standard Time on Sundays to 4 pm Eastern Standard Time on Friday and almost never has price gaps. In addition, there is really no such thing as insider trading. If you have a tip about a change in currency you can act on it without fear of repercussion.

2. No Commissions

With trading being done on paper only, there are no commissions in Forex trading. Dealers, not brokers, take on the risk in the trade and make money through the bid-ask spread. All gains are profits for the investor after the price clears the cost of the spread. However, scalping by dealers is rare and very difficult due to the nature of the trade.

3. Diversification

If trades are done on paper only with no commissions you may wonder why you should trade. One reason is because gains, or losses, made through the trade allow you to diversify your investments.

For example, if you feel the value of the U.S. dollar will drop you can trade for another currency that may rise instead. Some people fear that the dollar’s value will drop so they would prefer to have some currency of other another country whose currency is strong.

4. Appreciation

As the currency of another nation appreciates in value, your investment in that currency grows. Once you trade it again you will have made a profit.

Of course, there is risk that the value could also drop leaving you with a loss instead. This is why having an understanding of world events and their impacts on currency can be critical to trading Forex.

Newcomers to trading may find it a risky investment if they do not have knowledge of currency values. But if you are new to trading, try a virtual investment in Forex to get familiar with it before investing real money.

In the end, due to the volatility of some values of currency, Forex trading is mostly done by experts or those who understand the currency market.

Have you ever invested in Forex and if so, were you successful?

Understanding Day Trading Strategies

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Becoming a profitable day trader is possible. All it takes is the willingness to learn about proven day trading strategies and incorporating them into your daily trading. Warrior Trading, a day trading education site with a great track record can be the ultimate place to learn these strategies.

All it takes is a willingness to study hard and put in the time. The online courses can be viewed over video and you can spend time in a day trading chat room with veteran traders who are implementing these trading techniques in real time and with actual money on the line. Seeing them in action, calling out their positions and stops, is a great way to get better at day trading.

Read on to understand these day trading strategies.

Momentum Day Trading

When you take day trading classes, you want to learn first about momentum trading strategies from the best interactive brokers in the business. That is where you find hot stocks about to take off and ride the momentum during one single day of trading to decent returns. The small profits of 5-10% might not sound like much, but finding many of those stocks in a single day and playing them right is a great way to lock in profits.

Swing Trading

Swing trading is very similar to momentum strategies, but in that case, you tend to look at stocks that can make moves in a few days or a few weeks, as opposed to that day. A great way to look at this would be to examine mining company stocks in advance of big government regulations about to be passed that affect the mining industry. The movement in mining stocks could provide an opportunity.

Reversal Trading Strategies

If there are no hot stocks out there in the morning that you like, then the time is ripe for reversal day trading strategies. The reversal trading strategy can produce the highest profit/loss ratio out of all Warrior Trading strategies. It all has to do with tight stops. If you have a tight stop when you are buying at the bottom of the price or shorting off the top, it is easier to get the higher profit/loss ratios.

Of course, the most important way to implement these trading strategies is with a healthy understanding of risk management and how you need to stay unemotional and rational while trading. The volatility of day trading is an opportunity for profits, but only if you use it correctly.

5 Reasons to Reach Out to United Debt Counselors When You Need Debt Relief

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When every paycheck is spent just trying to keep up with bills and loan repayments, it can start to get you down. If you’re ready to live a life free of the crushing stress of debt, qualified debt counselors may be able to help. Here are a few reasons to reach out in an effort to start living debt-free.

1. You’re Swamped

Most Americans are dealing with some kind of debt trouble. Whether it’s college loans, taxes from freelance work, or credit card bills piling up, debt is something we all struggle with from time to time. However, when debt starts taking over your ability to live a normal life and enjoy things, that’s the time to reach out to a debt counselor. No one should have to put his or her life on hold or file for bankruptcy just to get a handle on mounting debt.

2. The Interest Just Keeps Piling Up

If you’ve been diligent about paying your bills and loan repayments on time and you’re still seeing no progress, it might be time to consult a trusted debt representative. When it comes to high interest rates and impossible terms, they have experience negotiating debt settlements with lenders to reduce your obligations to something you can actually pay back with time or with a lump sum saved up.

3. You Don’t Have the Time

Perhaps you’ve made a real effort to try and get your financial affairs in order. But, as with everything, sometimes life just gets in the way. If you’re working one or two full-time jobs, it’s not easy to come home after a long, hard day of work and turn your attention to debt. When you entrust debt counselors to help work to settle your debt, you’re delegating your financial burden over to a company that has the time and resources to advocate for you.

4. You Want to Start Saving

If you’ve been living with debt for a long time, there may come a time when you realize you want something more. Maybe you’re trying to buy a car or a house, and you feel your debt situation is getting in the way of your moving forward. If this is the case, debt counselors may be able to help. By working with the company to negotiate your debts down to a payable sum, you’re paving the way for a future in which you can start saving money for the things you want.

5. You’re Making a Big Life Decision

Whether you’re looking at making a big move, going back to school, or having kids, debt shouldn’t ever be able to affect a huge personal decision in your life. If you feel like you’re ready to move on to the next stage of your life, call a debt counselors today and schedule an appointment with a representative to talk about starting your debt settlement plan.