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  • New York investigating college credit card offers

    New York investigating college credit card offers. New federal regulations may have been designed to prevent young adults from piling up credit card debt, but some lenders may be circumventing those rules.

    According to a report from Bloomberg, the state of New York has launched an investigation into the marketing practices of various credit card companies. Attorney general Andrew Cuomo has sent a letter to every college and university in the state and requested that they submit any exclusive contracts they have with credit and debit card companies.

    Specifically, the state wants to determine whether marketers have gotten personal contact information for students without their consent, and are sending them offers that could result in their piling up credit card debt. The Bloomberg report said the state will soon begin the process of reviewing the contracts that grant lenders exclusive rights to market credit cards at a given university.

    “Today’s students are facing a growing mountain of debt that can burden them long after graduation,” Cuomo said. “As the new school year begins, we want to make sure that colleges and universities are doing all that they can to help students avoid financial dangers.”

    The report said Cuomo conducted a nationwide investigation in 2007 into such conflicts of interest, which specifically target college students for credit card debt. That found that payments and perks were being paid to colleges and financial aid offices. As a result, about a dozen lenders and 28 colleges cut their financial ties.

    A report from Consumer Affairs said that Cuomo’s letters also included requests that schools adopt policies that would help their students avoid credit card debt. The investigation also concerns deceptive credit card marketing practices that may not spell out the dangers of accumulating a significant amount of credit card debt in a number of ways. These include solicitations at student centers, school athletic events, orientations, buildings with classrooms and other locations around campus.

    The average college student now graduates into the real world with thousands of dollars in credit card debt spread across several accounts. However, provisions of the Credit Card Accountability, Responsibility and Disclosure Act now prohibit many of the practices of lenders that may have led to such situations in the past, such as banning the offering of promotional items like free t-shirts for enrolling.

  • Delinquency and default drops across the board in July

    Delinquency and default drops across the board in July. Many consumers may have had an easier time making their payments toward their credit card debt in July after an extended period of not being able to do so.

    According to the latest Credit Card Index results from Fitch Ratings,the rate of accounts with delinquent credit card debt, both long- and short-term, declined significantly in the first month of the year’s second half. The company said that this was the result of all major lenders reporting drops in delinquency.

    The percentage of consumers who were between30 and 60 days behind in paying down their credit card debt dropped for the fifth month in a row to a total of 5 percent, from the 5.13 percent observed the month prior. The rate of those whose credit card debt was more than 60 days delinquent also fell, in this case for the seventh consecutive month, to 3.76 percent from 3.86 percent in June. That total was a 19-month low. All major lenders that Fitch tracks, with the exception of Washington Mutual Master Note Trust, reported lower delinquency rates in July.

    Similarly, Fitch said, defaults on credit card debt also fell in July, to 9.65 percent from 10.58 percent in June. This was the first time that rate dropped below 10 percent in 15 months, but was the second straight month it improved. However, the index – which measures the total rate of balances that lenders have to abandon as being irretrievable and strike from their records – is still more than 60 percent higher than the historical average of 5.88 percent. Fitch said Bank of America, Chase, Capital One, Citibank and Discover Financial all saw declines in their default rates.

    “The trends are encouraging, but card defaults are still elevated historically and are expected to remain so,” said Michael Dean, the managing director for Fitch. “Unemployment will continue to weigh on consumer credit quality throughout the rest of this year and well into 2011.”

    While these drops may indicate that consumers now have more money to put toward paying off their credit card debt, they could also signal that consumers – particularly those without regular employment – have been unable to get credit for so long that they have simply fallen out of the system.

  • Consumers paid off most credit card debt since March 2009

    Consumers paid off most credit card debt since March 2009. It seems more consumers have been able to reduce their credit card debt recently, as charge offs dropped from June to July.

    According to a new report from Standard and Poor’s Ratings Services, the final numbers related to charge offs – the amount of accounts lenders write off as irretrievable – for the month of July dropped a full percentage point from June’s 9.7 percent to 8.7 percent. This was the first time since March 2009 that S&P found the rate of seriously delinquent credit card debt slipped below 9 percent.

    “Contributing to the declines, in our view, are reduced spending and more saving by consumers, along with the increasing difficulty and expense for borrowers to get and maintain credit,” Kelly Luo, a credit analyst at Standard & Poor’s, said.

    The report noted that outstanding credit card debt owed to the lenders S&P tracks dropped 1 percent from June to $341.9 billion. That represents a drop of 17.1 percent from the July 2009 total.

    Often, consumer credit is tied to unemployment figures, and the continued high rates of joblessness may be contributing to the drops in credit card debt as consumers can no longer qualify to borrow.

  • Facebook to expand its Credits system

    Facebook to expand its Credits system. Given how Google’s profit increases have ground to a halt in recent months, Facebook has begun to aggressively expand its Credits payment system. This includes a new process that will allow consumers to use its online currency in lieu of taking on credit card debt.

    According to a report in the San Francisco Chronicle, Facebook will now start selling gift cards for its Credits system in brick-and-mortar Target stores, and will make them available in amounts of $15, $25 and $50. And while consumers will be able to continue to use this currency as they have in the past – to buy advertisements on the site, or make payments for games like Farmville – their options will also be expanded.

    The report said that one option Facebook is currently exploring and may implement in the near future would allow users to make payments at selected third-party ecommerce with their Credits rather than taking on credit card debt to do it. This process could not only help consumers scale back the amount of credit card debt they take on, but also give them added convenience. Sites may allow consumers to simply click a “Pay With Facebook” button, rather than fill out all their information.

    In addition, the report said that consumers may be able to store their payment information with Facebook when they take on credit card debt to buy Credits online. If so, that could also be used in conjunction with the new Pay With Facebook function, in a way similar to how PayPal works.

    The social networking giant is expected to make between $1 billion and $1.5 billion on brand advertising revenues alone this year, the Chronicle said. But this new revenue stream, which will roll into Target stores nationwide starting September 5, could make it a few hundred million dollars more. A former executive at the company told the paper that this business alone could end up being a third of its revenues by the end of the year.

    Facebook has over 500 million users worldwide, and many of those are people in their teens or 20s. This market is one that the company has successfully targeted in the past, and one which would be very attractive to third-party business partners looking to increase their exposure.

  • Debtmerica Applauds New FTC Rules and Proudly Launches a Performance-Based Debt Settlement Program

    The Debtmerica team is eager to participate as an industry leader under the new and consumer aligned debt settlement environment

    Los Angeles (Vocus/PRWEB ) September 2, 2010 — Debtmerica, LLC, a nationwide leader in offering debt settlement services for consumers, today launched its new 100% performance-based debt settlement program which is aligned with the new Federal Trade Commission’s regulations. Consumers enrolling in this exciting new program, named “Performance100™”, will not pay any fees until settlements are reached with consumer’s creditors. Debtmerica intends to pilot this new service through its most experienced and qualified debt settlement consultants and anticipates a complete transition well in advance of the October 27, 2010 deadline as mandated by the Federal Trade Commission. The performance-based program will be available to any client that inquires.

    “We feel that these new regulations will get rid of debt settlement firms that are not able to deliver the services they advertise, leaving the honest, legitimate, and financially stable firms to serve the needs of consumers,” says Jesse Torres, co-founder and CEO of Debtmerica.

    The FTC announced its final rule on July 28, 2010, which will apply to all providers of debt settlement services and mandates enhanced disclosure requirements by the end of September. One other aspect of the regulation prohibits debt settlement providers from accepting fees from a consumer for debt settlement services prior to the actual settlement of enrolled debt balances with the consumer’s creditors, which is to take effect in October. Unlike other firms that adamantly opposed the FTC banning advanced fees, Debtmerica has taken a proactive and leading role by making preparations for months to transition its business model to one that simply makes better sense for the industry and consumers.

    Debtmerica’s additional co-founder and COO, Harry Langenberg, states, “We are very excited about the future of the debt settlement industry since the recent FTC ruling was released. We believe these requirements are going to help clean up an industry that has been running wildly out of control. Our mission has always been to deliver an effective product for consumers in need of debt relief and for the past two years, it has been very difficult to operate in a marketplace that was ridden with unscrupulous and fee-addicted companies. Now debt settlement providers will be held accountable both legally and financially to make their programs successful, and if they cannot, they will be out of business.”

    Today, Americans owe approximately $2.5 trillion in consumer debt – not including mortgages. The average American with a credit file holds more than $10,000 in credit card debt. Debt settlement is a much needed and effective form of debt relief that allows providers to negotiate directly with creditors on the consumer’s behalf to resolve the consumer’s unsecured debt balances. Unfortunately, it is has been challenging for consumers to select reputable providers and some companies took advantage of these consumers which left many individuals in a worse position than they were prior to entering the program.

    “At Debtmerica, compliance and adherence to the rules is our first order of business. It is our goal to help foster an industry of reputable and compliant providers for those consumers looking for options of debt relief and root out those companies misleading consumers.” says Torres.

    Debtmerica Relief, headquartered in Orange County, CA, provides assistance to families who are experiencing financial difficulties and hardship. Its focus on negotiated debt settlement provides a very powerful solution with the ultimate goal of helping its clients become debt free and remain so. To date, the Debtmerica Team has enrolled over 10,000 clients into debt resolution programs and helped clients get back on their feet financially.

    A Member of The Association for Settlement Companies (TASC), Debtmerica was recognized in 2009 and 2010 as an Accredited Organization in Compliance with TASC Best Practices Standards. Debtmerica was honored in 2009 as one of the “Best Places to Work” in Orange County by the Orange County Business Journal (OCBJ), and was also ranked #3 in the OCBJ’s “Fastest-Growing Companies” in Orange County. Additionally, Debtmerica recently made rank on Inc. Magazine’s 2010 Inc. 500 list as one of America’s fastest growing private companies.

  • Cost of bankruptcy on the rise

    Cost of bankruptcy on the rise. As millions of consumers across the country struggle with credit card debt and other monthly payments, many have been forced to consider filing for bankruptcy. And the price of doing so is on the rise.

    According to a new study from the American Bankruptcy Institute Law Review, the cost of filing for either Chapter 7 or 13 bankruptcy has risen 55 percent since Congress passed reforms to make it harder to do so in 2005. Citing data from cases in Florida, Illinois, Georgia, Maine, Utah and West Virginia, the study found that fees and expenses for attorneys and trustees, filing costs and credit counseling services have led to the increases. In addition, they have reduced the total amount creditors make against the money they’re owed.

    The study found that Chapter 13 filings now cost consumers $4,077 on average, up from $2,930 in 2005. Similarly, the price of a Chapter 7 case jumped from $900 to $1,399.

    While bankruptcy may seem like an attractive option for consumers who are deeply in debt, many experts say that seeking such protection should only be considered as a last resort.

  • Airline miles still moving cards

    Airline miles still moving cards. While credit card issuers were expected to pare back rewards in a cost-cutting measure after the implementation of the Credit Card Accountability, Reliability and Disclosure Act, many have not. That strategy is paying off for them.

    According to a new report from Fox Business, cards that reward consumers with frequent flier miles for every dollar of their credit card debt have been growing in popularity.

    As a result, issuers are looking for ways to improve such offers while keeping an eye on their bottom line as more consumers try to eliminate credit card debt. David Gold, senior vice president at Chase, told Fox that despite the Credit CARD Act, interest in the accounts has been robust.

    “Over the years, the frequent flier mile has been pretty valuable,” he told the news service. “The value is there.”

    Often consumers will exchange the convenience of being able to compile frequent flier miles for slightly higher rates on their credit card debt or some sort of annual fee. But a recent study found that consumers who use these plans, particularly those that offer double or triple miles, may not be the best value. Consumers may want to shop around to determine which type of rewards card is best for them.

  • Debtmerica Revisits Inc. 500|5000 List, Ranking in the Top 500

    Los Angeles (Vocus/PRWEB) August 27, 2010 –Debtmerica, LLC, a provider of debt resolution programs for consumers, achieves a ranking of #184 on the Inc. 500|5000 list of America’s fastest-growing private companies. Previously ranked #748 in 2009, this is the second year that Debtmerica has been included on the prestigious Inc. Magazine list. The firms are ranked based on their percentage of revenue growth from 2006 through 2009.

    “This honor is a big pat on the back to all the staff of Debtmerica that have worked cohesively to support our clients and our mission. We are blessed to have strong management capabilities throughout the firm and a very motivated team. Most importantly, we appreciate our partners and our clients that have chosen to work with Debtmerica in a very competitive marketplace. Without them, we would not have made it on this list,” says Harry Langenberg, Co-Founder and Managing Partner of Debtmerica.

    Comprised of the top 5,000 fastest-growing privately-held companies in the nation, the Inc. 500|5000 list offers an extensive look at America’s entrepreneurs. The average annual revenue growth of Inc. 5000 companies has decreased from 106.3 percent last year to 45.8 percent. With an annual growth rate of 1,549%, Debtmerica has grown considerably faster than the average during this time period.

    Inc. Magazine breaks down their list further to show the top 100 fastest-growing companies by region and industry. Debtmerica places high on both lists as the 13th fastest-growing company in the Los Angeles region and the 13th fastest-growing company in the Financial Services sector.

    Debtmerica also attributes its major growth and success to its constant emphasis on integrity, compliance and customer service. Striving to remain at the forefront of industry rules and regulations, Debtmerica is a member of AFCC – a nonprofit trade association for the debt settlement industry that protects the interests of consumer debtors and lobbies on behalf of its members and the industry as a whole.

    Jesse Torres, Co-Founder and Managing Partner of Debtmerica, states “Debtmerica is looking forward to remaining an industry leader in the years to come, not only from a growth perspective, but by also setting a good example of utilizing best practices. Our clients, partners and staff are all stakeholders in our growth and compliance, and their interests are our main priority.”

    About Debtmerica Relief

    Debtmerica Relief, headquartered in Orange County, CA, provides assistance to families who are experiencing financial difficulties and hardship. Its focus on negotiated debt settlement provides a very powerful solution with the ultimate goal of helping its clients become debt free and remain so. To date, the Debtmerica Team has enrolled over 10,000 clients into debt resolution programs and helped clients get back on their feet financially.

    A Member of The American Fair Credit Council (AFCC), Debtmerica is recognized as an Organization in Compliance with AFCC Best Practices and Standards. Debtmerica was honored in 2009 as one of the “Best Places to Work” in Orange County by the Orange County Business Journal (OCBJ), and was also ranked #3 in the OCBJ’s “Fastest-Growing Companies” in Orange County. Additionally, Debtmerica made rank on Inc. Magazine’s 2009 Inc. 5000 list as one of America’s fastest growing private companies.

  • Credit card solicitations skyrocket

    Credit card solicitations skyrocket. The number of offers attempting to convince American consumers to take on credit card debt that were sent out between April and June marked a significant increase from the previous three-month period.

    According to a report from the financial news website The Street, which cited statistics from Synovate Mail Monitor, credit card issuers sent out 640.3 million credit card offers during the second quarter of the year. This was a jump of 83 percent over the 349.1 million they sent out in the first quarter of the year, which was largely paced by two companies. Chase sent out four times as many offers in this period, and Citi’s total nearly tripled.

    Companies sent out 1.12 billion offers in the first six months of 2010 in an attempt to get consumers to use their company to take on credit card debt, compared with just 1.39 billion sent all of last year. Of those sent from January to June, 71 percent contained some sort of introductory reward or rate, which was the highest such percentage seen since Synovate began tracking this data 22 years ago, the report said.

    Credit card lenders are likely sending out these offers because they have an improved view of the national economy thanks to lower rates of delinquency and charge offs seen in recent months.

  • Credit card debt hits eight-year low

    Credit card debt hits eight-year low. The amount of credit card debt the average consumer now carries has slipped below $5,000 for the first time in close to a decade.

    According to the latest quarterly findings from TransUnion, consumers cut theirpersonal credit card debt by 4.1 percent in the second quarter of the year. That figure fell from the $5,156 seen last quarter to $4,951, marking the first time the average consumer’s debt was below $5,000 since the first quarter of 2002. Further, that number was a 13.4 percent drop from the same period in 2009, when it was $5,719.

    And as consumers pared back debt on their credit card, the rate of total delinquency dropped slightly in the second quarter, by 0.92 percent. However, that was a decline of 17.1 percent over the first quarter, and 21.3 percent from the same period a year ago.

    Credit card spending in general also declined in the second quarter, and given these numbers, it seems more consumers put the money they would have spent towards paying down their total debt.