Credit nightmares related to cars continue to infiltrate news headlines. In a shocking development, the Pennsylvania Attorney General has received a spate of complaints recently involving car trade-in scams. A trade-in happens when someone buys a new car but still has an old car they don’t want anymore. The car dealership takes over ownership of the buyer’s old vehicle, paying off the loan and passing along some trade-in savings to the buyer, often in the form of a discount on the new car purchase.

 

But in Pennsylvania, and in other areas of the country, a very unfortunate scam is unfolding, which makes the simple, time-honored tradition of a trade-in become a credit nightmare for car buyers. In this scenario, instead of paying off the trade-in vehicle as promised, the car dealership simply lets the car sit on the property until it is repossessed by the lender. And unfortunately, it looks like the car buyers didn’t get anything in writing about their trade-in deals, so they have some lengthy legal battles in front of them to try to fix their credit nightmares.

 

If you are releasing a vehicle to a car dealership for a trade-in, make sure that the paperwork to buy the new car clearly states that a trade-in is part of the deal. The value of the vehicle being traded and the lender information should be clearly outlined in your contract. And if you think you’ve been the victim of a trade-in scam, contact your state’s attorney general.

 

Get car loan quotes quickly at LowerMyBills.com. LowerMyBills.com lets you compare auto loan rates from multiple lenders, so you know that you’re getting the best deal. 

 

A while ago, we reported on the Celebs and Credit blog that Michael Jackson’s Neverland Ranch outside of Los Olivos, California was in danger of foreclosure. Jackson’s annual upkeep bills for the circus-like ranch, which includes a train, an amusement park and a small zoo, have historically been in the neighborhood of $4 million. In recent months, Jackson fell behind on the $23 million mortgage, which had swelled to include late payments and late fees.

 

Celebrity Foreclosure Notices Not New to Jackson

 

Michael Jackson famously began receiving notices of foreclosure on his parent’s home a couple of years ago. Then, in 2007, the celebrity started receiving foreclosure notices on the Neverland Ranch. Reports this month state that Neverland, set to be sold at a public auction on March 19^th, has been saved. According to USA Today, the celebrity avoided foreclosure by refinancing his home loan. The ranch, consisting of more than 2500 acres, has been estimated to be valued at less than $12 million.

 

Get information about refinancing a home loan to avoid foreclosure at LowerMyBills.com. LowerMyBills.com lets you compare rates from multiple lenders online. That way, you know that you’re getting the best deal on a home refinancing loan. 

Everyone probably knows now that there’s been a cut in the interest rate as a way to stimulate the economy.  In a time of economic uncertainty it wouldn’t be surprising if a lot of people are frozen in place economically.  Thought he cut in the prime rate is designed to spur on economic activity, people might be afraid of making big economic decisions in this climate.  

So start small.  One of the advantages of the cut in the prime rate is it gives you some negotiating power with credit card companies if you are currently in a variable rate plan.  Variable rate plans have dropped a whole percentage point due to the rate cut.  The average is from 14 to 13%.  If you have a variable rate card, you may think there’s nothing you really need to do.  

This isn’t true.  For variable rate cards, it may take three months or even longer for the rate drop to take effect.  That’s three months of a whole percentage point of interest being added to your credit card bill.  What are you waiting for?  Call your credit card company and negotiate for the lower rate to be instigated immediately.  

Fixed rate cards do not have it so easy, but negotiation is still a possibility.  The same is true for both variable and fixed rate credit cards: if you have a good history with the credit card company, you’ll be in a better place to negotiate.  If you’ve defaulted time and again, you can’t be surprised if a credit card issuer refuses to lower a rate.  The least you can do is try, and now that interest rates are lower, credit card negotiations could work in your favor.  

If you look at the terms secured and unsecured credit, you might think that “secured” implies a better type of credit card.  Actually a secured credit card is for a weaker type of credit card applicant.  Secured cards are aimed at people who have had trouble getting another type of credit card due to bad credit, short credit history, or some other financial mishap, such as a bankruptcy.  

A secured credit card works something like a debit card, rather than a traditional credit card.  With secured credit, you deposit money into a separate account.  You are not borrowing a creditor’s money, but instead borrowing off money you’ve already deposited.  Why bother paying interest on money that you already have?  Because paying off a secured credit card can have the same affect on your credit rating as paying off a standard credit card.  A credit report registers an unsecured or secured credit card in the same way.  Just using a debit card will not elevate your credit rating.

So secured credit is a good option for those people whose credit rating has tanked and even possibly unable to open up a bank account.  A prepaid credit card is like a traveling bank account where you can deposit a paycheck and other checks just as you would to a bank account.  When signing up for a prepaid secured credit card it’s a good idea to see if there are any fees associated with direct deposit.

Unsecured credit cards are everything else: what are typically referred to as credit cards.  Instead of depositing money into account, the account starts with a zero balance.  You borrow money from the creditor and then are charged interest for the privilege.  The less interest you pay, the more of your monthly payments will go to your overall balance.  

One drawback to an unsecured credit card is that you cannot deposit money into the account, raising your credit limit automatically.  For most, this is not a problem, as the credit limit on an unsecured card is generally higher than a secured card and will go up over time.  

If you’re in the market for a secured or unsecured card, Experts on Credit has plenty.  Look under prepaid cards for secured credit cards, and every other category for unsecured credit cards.