If you ignore paying off some debts, you’re quickly going to find out that the company you were going to pay in the first place is more than likely going to hand it off to a third party.

Now, this is where the fun is going to start, where they are going to harass you by phone, e-mail and so much more.   Now, if you’re looking to just pay them in full, or maybe you want to send them a few bucks, there are some things that you should know first.

Call up and ask for a lower bill

Don’t pay in full just yet.  What you will want to do is call up, and ask them for their best offer.  Let’s say that you owe them $3,000.  Call them up, and say that you have $,500 in the bank.  Will you be willing to accept this, in exchange for a final payoff?  I usually start at 50-60% off, and what you will find is that most companies will accept.

Now, if the company accepts, make sure that you tell them to send you a bill with that final total, stating that this is the final payoff.  ALWAYS make sure that you get this in writing.  If you don’t, it could come back to haunt you.

You will also find out that you can send them a written request as well, if you don’t want to call them up.  What you can do with a letter is just write to them stating that you want to pay $xxxx instead of $xxxx.

Get the bill deleted

If you’re going to pay in full, make sure that you get the item deleted from your credit report.  Many people don’t know this, but they won’t cancel it off your credit report.  Make sure that you get them to delete the item off your credit report, so that it doesn’t hurt you in the future.

Keep in mind that most companies won’t need do this, but it doesn’t hurt to ask.  If they won’t remove it, get them to state that you have paid in full.  By doing this, it will show on your report that it has been paid in full, rather than nothing.

What if they don’t do this?

If they don’t remove, or state what they haven’t done, what you’re going to want to do is contact the credit bureaus.  Make sure that you save that proof, so that you can show them evidence on what the company was going to do for you.

If you have credit cards piling up in your drawer, or maybe you have some in your wallet that you just don’t want.  Before you call up,  and cancel them, you’re probably going to want to know what happens, and how it’s going to effect you, and your credit score.

The credit cards that you should never close:

Your first, and oldest card: Experts will tell you that you will want to keep your first credit card opened.  The reason this is, is because on your credit report, you’re going to see the “age” or your credit history.  It will go all the way back to your first credit card.  This could do some damage on your score.

A card with a balance: Let’s say that you have a credit card that has $5,000 on the card.  What you’re going to find out is that if you close it, this is going to do some damage as well.  Wait until you pay off the card, before you close the card.

Your only card: Why risk closing a card that is your only card?  Unless you want to stop using credit cards for life, you will find that it’s always a good idea to hold onto just one, so that you can have a backup plan, just in case something happen.  As we all know, you can’t predict the future.

Closing down your card:

Now, closing down other cards that don’t fit the criteria that are mentioned above, won’t really hurt you.  What you’re going to find out is that it can do more good.  When you close a card, not only will it lower the available credit available to you, it will also reduce your chances with identity fraud, because that is one less account on the street.

How can I close my credit card?

Call customer service: The best way to close your card is by calling the number on the back of the card.  Explain to them on what you want to close your card.  They will definitely try to keep you there with incentives, and more, but as long as you keep your cool, and stand your ground, you should be able to cancel.

Send a letter: Make sure that you also send a certified letter to ensure that your account is closed.  When writing this letter, make sure you include all the information that they need to know about your credit card, and your account.

It will take a few weeks, to a few months to show up on your credit report.  After a month or so, I would recommend that you get a copy of your credit report to ensure that your credit card has been closed down.

By following these simple steps, you should be able to close your card down quite easily.

Credit: flickr

Many Americans today have poor credit, and while that number tends to rise month, after month, you may fall into that category.  If you’re finding yourself in the “poor credit” category, you’re probably wondering how the heck you can get a credit card, as well as build your credit back up.

While there are many options to take, when you want to build your credit, I wanted to give you some tips on how you can find the best credit card for your wallet that will work for you, regardless of your credit score.

#1 Consider a secured credit card

These cards are your best bet, when you want to repair your credit.  As long as you have the deposit to give the bank, you’re going to get approved.  A deposit will vary from $200, and up.  Now, you can get this deposit back in the future when you cancel, but what you will find out is that the bank will want this money for collateral, so when you don’t pay your bills, the bank can dip into your account and pay themselves.

#2 Look for little fees

Sadly, just about all companies out there want to take advantage of those that have bad credit.  Why is this, you might ask?  It’s simply based on the fact that when you’re desperate to build your credit, you’re going to find that you’re willing to do anything.

You’re going to want to make sure that you look out for fees with your card.  What you’re going to find out is that many cards have fees, but you only want to pay a minimum.  I would recommend cards that either have a one time fee, or a very low annual fee.   Most legit banks will give you the first year for free.

#3 Get a major logo

Always make sure that you’re dealing with a legitimate bank.  Make sure that you’re dealing with a card company that is going to have the Visa, Mastercard, AMEX, or Discover logo.  By getting a card with these major logos, you’re going to find that you will be able to use the card anywhere.  The last thing that you want is to get a card that won’t be accepted at most stores.

#4 Always compare 3+ cards

Don’t sign up for the first card you see, because what you will find out is that it may be too good to be true.  What you’re going to want to do is make sure that you compare at least 3 cards.  Compare the fees, the deposit required and more.  By doing this, you can feel assured that you have picked out the best card for your wallet.

Having poor credit does stink, but you will find out that if you follow the steps above, and consider a secured credit card, you should be able to find one that is going to work for you.

Generally, when you think about a “cease and desist”, you may think about a larger company contacting you, because you’re violating some sort of trademark agreement, etc.  While this can be true in many circumstances, you will find that you can send out a letter like this, when you’re getting annoyed with certain debt collection calls.

When should I send out a cease and desist letter?

By law, you’re allowed to send a letter out, or you can contact them, if you don’t want them to contact you via phone anymore.  The best way to do this is by sending them a letter by certified mail.  When you do this, you’re going to tell them that you only want to communicate by mail.  This will work 99.9% of the time, because collection agencies obviously don’t want to break the law.

Now, if you want to write off a letter to a debt collection agency, here’s a simple template that you can follow, when you want this company to stop harassing you over the phone.

Writing a sample letter:

DATE
YOUR NAME
ADDRESS
CITY, STATE ZIP

DEBT COLLECTION COMPANY NAME
ADDRESS
CITY, STATE ZIP CODE

RE:  YOUR ACCOUNT NUMBER / INFORMATION TO PROVE ITS YOU

To whom it may concern:

Under the federal guideline collection laws (FDPCA), I’m requesting that you cease, and desist all further communication via the telephone, both at work, as well as in my home.  The phone numbers that you have been calling are <your number here>.  Also, please refrain from calling any family members, as well as friends.

If you don’t comply with these request, I will have to take further action, and not only report you to the Federal Trade Commission, but my state Attorney General’s office as well.

Sincerely,

Your name

Tips on sending it out

You will first want to make sure that you send it certified mail.  Always make sure that you get signature confirmation, so that you can prove that they received it.  Keep this for your own records.

Also, keep a copy for yourself, so if something does happen down the road, you will be able to prove to the FTC on what you have sent, along with proof that they have received it.

If the company continues to harass you / call you via the phone, stand your ground and take action.  This is the law, and if they break the rules, you will want to let the FTC, etc know, so that it doesn’t happen to anybody us.

Of course, this is a sample listed above.  Be sure to write it in your own words, and send it out as soon as you can.

If you’ve heard of this term before, you’re probably wondering what the deal is with “Phantom Debt.”  I wanted to give you a quick, little guide on how you can fight it, and also, what you can do about it.

What is phantom debt?

Phantom debt is simply a debt that you don’t owe, or a debt that never really existed.  Most of the time, it’s confusion within a debt collection office, or you  may find that it’s scammer.

What can I do about it?

First, you will have to realize that they are violating the FDCPA, which stands for the Fair Debt Collection Practices Act.  You can view more information about this act here.

What you’re going to want to do is have the debt collection agency verify your debt.  You will either want to contact them via the phone, or by mail.  You will want them to show you the proof that you owe the debt.  If they can’t accomplish this within 30 days, you’re going to find out that they can’t contact you in the future.

If you’re questioning the debt, you may owe it and you don’t know anything about it.  A great way to check is by requesting a credit report.  On your credit report you’re going to find out that a bad debt will pop up on it.  If there’s a debt there, it will give you all the contact information that you need, as well as who you need to contact, in order to get more information on it.

Again, if you don’t owe this debt, and it’s on your credit report, you’re going to want to dispute your credit report errors.

If you think it’s a scam of some sort, never send money, or keep in contact with them.  The best bet is to contact your attorney general’s office, as well as contact the FTC to alert them about the situation.  Yes, it’s illegal to create fake debt, and you will find that if happens to you, you will want to do everything in your own power to stop it.