Ask for Modified Credit Card Payment Plans

If you’re finding it difficult to keep up with your credit card payments, you should know most of the credit card companies are willing to work with cardholders. Each company has it’s own method of modifying your credit card payment plan, but here are some examples of what you might be able to do if you talk with your credit card companies:

Lower Interest Rates and No Late Fees

Many credit cards will temporarily offer you a lower interest rate with no late fees to help you get back on your feet. This will allow more of your monthly payment to go toward principal balance and less toward interest. To avoid late fees, the credit card company will likely require that the payments are made automatically through your checking or savings account.

Lower Minimum Payment and No Late Fees

Some cards will temporarily offer a lower minimum payment. Usually, if you send less than the minimum payment you’ll get hit with finance charges and late fees because it’s considered unpaid. On an alternate repayment plan, you can send a lower minimum payment without fear of getting socked with fees. The temporary lower payment is good for six months or twelve months, depending on the company who sets it up for you. If you get this option, they may also require that your payments are made automatically through your checking or savings account.

Credit Card Settlement

In some cases, people with high credit card debt might want to consider settling the debt. Credit card companies will often accept an amount of money that is smaller than the total balance owed to close the account and considered it paid off, if they feel you are in danger of bankruptcy. If you file bankruptcy, often the credit card companies won’t get anything from you at all, so it’s in their best interest to agree to settle the account. In order to settle though, you usually need to have the money available up front to pay it off as soon as they agree to your settlement amount. You can no longer make payments – you just have to pay the amount in full to close the credit card account. This option has a negative affect on your credit score usually, although some people find that simply removing large amounts of debts from their credit report through settlements ends up helping their credit scores.

On Time Credit Card Payments Increasing

Pat yourselves on the back America. According to a report from the AP, more Americans are paying their credit card payments on time, a sign that the economic recovery is beginning to take hold on main street.

Reports from major credit card issuers like Bank of America, Capital One, Discover and American Express all showed small declines in delinquency rates in March from February.  Delinquency refers to when payments are received over 30 days late.

Despite the good news the data on charge-offsthe amount banks write off because they assume they will never receive payment, is more mixed, with some banks having to write off and some less.  In 2009, banks wrote off a record $83 billion dollars of debt.  But the consistent rising of on-time payments mean that write-offs will likely trend downward as the year progresses.

via the NYTimes.

Take Your Vacation on Credit

When you're in the midst of preparing vacation plans, the cost will certainly be at the forefront of your thoughts. It's best that you not carry a large amount of cash, so set that cash aside and put it towards credit used for vacation expenses. Using a credit card for purchases such as lodging, shopping, eating out and car rental can be a great money saver. Some of the best priced deals are found on the Internet where you can find lodging packages that include discounts on area restaurants, events, and theme parks.

Lodging can be unbelievably inexpensive if you make your reservation online by credit card. Websites such as Expedia.com, CheapHotels.com, and PriceLine.com save considerable amounts of money. By taking advantage of these website offers, you may never pay over $80 for a room.

Car rental is a popular choice for those who use the airlines to reach their destination, and then rent a vehicle there. Once again, making reservations online in advance can not only save money but also ensure you reserve the vehicle you want, rather than getting what's left over.

Whether you're flying or driving, you can only take so much food with you on vacation. Remember to use any package discounts you may have received with your lodging reservations. Check in advance for your favorite restaurants in the area to help choose ahead of time where'd you like to eat.

Activities such as theme park passes are items that can be purchased online in advance. Making these purchases in advance also affords you to take advantage of pre-season discounts or special holiday offers. Many attractions offer Family Packages which may include dining, shopping or lodging discounts.

Taking your vacation on credit can take away the worry of cash on hand so you can truly enjoy your time. Lodging, car rental, airfare, food, and entertainment are only a few of the ways to use credit for your vacation expenses.

Same-As-Cash Installment Plans Rivaling Credit Cards

As credit card companies reduce consumer spending limits and people become more conscious of how much they’re spending on credit cards, same-as-cash installment plans and online payment alternatives gain in popularity.  Some of the more popular online payment method alternatives to credit include eBillme, Bill Me Later, PayPal and ShopText

eBillme lets customers make purchases using their banking account without entering thei rbank card or checking account number on the store’s website.   The company promotes itself as a secure payment option that does not require a credit card.

Bill Me Later was purchased by eBay for $945 million in October.  It’s an online payment option offered by about 1,000 retailers now, and more on the way.  Bill Me Later will require the name, address, birthday and last four digit of a shoppers social security at checkout, and then authorizes or denies credit within seconds. If approved for the “credit” the consumer is sent a bill, which is due on a certain date or can be paid with multiple payments, often in a same-as-cash (no interest) period.

Unlike a credit card, which offers a specific line of credit, “we make decisions based on [a single] transaction,” said Bill Me Later spokeswoman Sara Parker.  Using Bill Me Later requires good credit, but helps people who are trying to be disciplined with their credit card use.

ShopText is looking to give consumers a way to order the things they see on TV or online by texting on their mobile phones.

PayPal is one of the leading online payment systems that allows people to choose to pay from their bank accounts or credit card without revealing their financial information to the retailers.  Paypal also offers credit to qualified users and is tied in to the user’s Paypal account.

I think we can expect to see more same-as-cash or online installment plan methods of paying that don’t require the use of a credit card in the future.