Export Finance

On February 22nd, 2010, the Credit Card Accountability, Responsibility and Disclosure (CARD) Act took effect. The CARD Act had one major purpose: to attempt to put a curb on credit card practices and set limits to the fees that credit card companies charge consumers. It was created with consumers in mind, setting limits to the amount of credit that will be available to them in this recession “for their own good.”

Due to the life changing CARD Act, a number of financial institutions have modified their business models by reducing potential risk to cardholders. They have dropped or restricted some borrowers with a poor financial history, tightened up credit lines, and are marketing less. Analysts predict credit limit reductions to have two main impacts for the collection industry.

One result of the CARD Act has been the setting of restrictions on the average size of accounts that are placed for collection. This, coupled with debtor’s behavior these past couple of years, where people generally spent savings and maxed out personal loans and home equity, raises eyebrows and concern, because for many consumers, credit cards are the only short term credit that is available to them at this moment.

Another huge effect of the CARD Act is a result of the provision that debtors aren’t able to pay off one credit card debt utilizing another card. While this may help consumers to be more fiscally responsible, this obviously has massive ramifications for the collection industry. Researchers and leaders in the field hypothesize that the best way to deal with the enormous changes that have ensued is to remain flexible and to be creative. In addition to the same old telephone calls and collections letters, the internet can be looked into as an option for payment.

Experts also remind us of a few ideas that we, as collection professionals should keep in mind about the CARD Act. Extra payments must go to pay off the accounts with highest interest balances first. The CARD Act also gives consumers the ability to set their own credit limits that might be less than those set by the creditors, and marketing credit to college students and giving credit card access to people under twenty one will now be severely restricted.

Mallory Megan works for Rapid Recovery Solution and writes articles on medical collection agencies. Free reprint avaialable from: What Every Debt Collection Agency Should Know About The CARD Act.

In article one in my series on mutual funds, I very quickly covered the very basics. I wrote about securities, which in layman’s terms is something that represents money. I told you about two kinds of securities, stocks and bonds. I laid down the basics about stock markets and bonds markets, and noted that if you wanted to invest in or sell stocks and bonds you are going to need the help of a dealer or broker.

In article two, I got to the basics of mutual funds, which are set up like corporations or trusts. I let you know that mutual funds pool money from a number of different investors and invest it in different types of securities. I also mentioned that mutual funds have a fund manager that buys and sells the fund’s investments.

Mutual funds have the capacity to invest in all sorts of securities, the most common ones they invest in being stocks, bonds, other mutual fund shares, and things called derivatives (these include forwards, futures, options, and swaps.) A derivative is a security whose value is based on the underlying value of the stock it is based on. Take an option for example.

One type of option might be the right to buy additional stock from a company at a set price. If the value of the stock is high, and you have this option to buy stock for a very low price, you can see that this option is lucrative, and that it might not be so lucrative if the same stock plummets in value, a value even lower than you have the right to buy it for.

Certain types of funds are known as specialty or sector funds. These funds will go out and invest only in certain things. One fund may invest mostly in the shares of a certain industry, like technology or financial services. Some mutual funds may invest in mostly American securities, mostly foreign securities, or both. Most mutual funds are continuously monitored by someone called a portfolio manager and their assistants. These people will invest the funds’ assets according to its investment objective, trade securities in order to make the most money, and check on the ongoing performance of the current investments.

Mallory Megan works for Rapid Recovery Solution and writes articles on credit collection agencies. Check here for free reprint licence: Mutual Funds For Beginners Part Three.

We have been living in a dreadful credit crunch since the first half of 2007, and people have been thrown into a state of monetary chaos.

The main reason for people being in this financial chaos is largely due to changes in their paid employment. Many companies have entirely gone to the wall and those still trading have been forced to change working hours etc. of their workers.

Employers have often had to ask employees to accept a cut in their income in order to try and keep the company afloat until things in the business became more normal once again.

Others have seen their hours of hours worked cut from the usual five days a week to only three or four. Others who relied on paid overtime to sustain their standard of living have seen this decreased or even abolished altogether.

Money coming in to the family home may be down but food still needs to be put on the table. Eating is an essential part of life, and other utilities such as gas and electricity need to be paid. Heating and light are essentials of life.

Many are now finding that after paying for the absolute essentials of life, it is now an almost impossible task to pay other financial commitments such as credit cards, personal loans, car loans, etc.etc

Many individuals who should have done something to alleviate their financial situation delayed doing so thinking that the credit crunch would end suddenly and their income would return to the pre credit crunch situation.

If these individuals are homeowners there is a way out of the crisis in which they find themselves and this is via the bad credit loan route.

This option is only available to homeowners and as these bad credit loans must be secured non homeowners have only debt management available to them.

Homeowners are still eligible for bad credit loans which are secured on their property at 50% loan to value for people with very bad credit registered against their name and who have defaults, county court orders and even mortgage arrears. For those with less serious adverse bad credit loans are available at 60% LTV.

Many think that bad credit loans are no longer available in the recession, but for homeowners these bad credit loans still exist, and they are a way to tidy up a poor financial position

Learn more about bad credit loans..