Credit Barn - News

Most borrow for home improvements - study

Daily News — Fri, 11 Feb 2005 00:00:00 CST

An Post financial services subsidiary One Direct has revealed the majority of its borrowers cite house renovations and improvements as the number one reason for borrowing money.

A survey of more than 8,000 customers showed that 36% of customers borrowed for home improvements and renovations, 20% for debt consolidation funds, 16% to buy a new or second hand car and 13% to fund holidays.

Only 1% of borrowers said they took the loan to finance a wedding.

Some 36% paid off the debt in full within six months of borrowing and a further 44% paid off the debt in the next six months.

Consolidation Plans Can Help But Watch Out for Pit

Daily News — Tue, 08 Feb 2005 00:00:00 CST

Q U E S T I O N: My husband was laid off November 2003, went on disability and now he's looking for a job. We are at the point of not being able to pay our bills. Do you know of a trustworthy credit counseling company or a debt consolidation company -- someone that can reduce the interest rates, etc.? I need a company I can trust. Thank you for your time.

A N S W E R: As the New Year gets under way, many consumers have the same thought as you -- how can I pay down my debt and get on the right track for 2005? Your husband's unfortunate job loss makes this task more challenging and lends itself to your question about debt consolidation services -- also known as consumer credit counselors.

Consumer credit counseling agencies provide two basic services: consolidation loans and consolidation plans. A consolidation loan is a loan that combines and finances payments on other loans, while a consolidation plan is an arrangement in which a debt consolidator facilitates your bill payments and works with your creditors to reduce or eliminate interest and late fees. In the latter scenario, rather than paying each individual creditor, you provide the debt consolidator with one lump-sum payment that they then distribute to each of your creditors each month.

Home-equity loans hit record levels

Sid Stary — Thu, 27 Jan 2005 00:00:00 CST

Ruth Simon - Wall Street Journal
Taking advantage of rising property values, record numbers of homeowners are turning to home-equity loans as a source of easy cash.

Overall, home-equity originations climbed 35 percent last year to a record $431.3 billion, according to SMR Research Corp., a market-research firm in Hackettstown, N.J. Most of the growth has been in variable-rate lines of credit that are tied to the prime rate, currently 5.25 percent. Countrywide Financial Corp. originated $30.9 billion in home-equity loans last year, a 71 percent increase. In a conference call Tuesday, Wells Fargo & Co. said its home-equity volume jumped 45 percent last year.

When It Comes to Credit Cards, There's No Such

Daily News — Thu, 27 Jan 2005 00:00:00 CST

By Michelle Singletary - Washington Post
"Are you nutso?"
That was a question one reader posed to me recently. He thought I was wrong to advise a young woman not to transfer $13,000 of student

But I'm not nuts, just realistic. I recommended that the woman with the student loan debt not do it because those low-interest-rate cards come with too many loopholes that allow a credit card company to hike the rate if you even sneeze wrong.

"You give folks far too little 'credit' for being able to monitor their situation," the reader scolded me.

It's not that I don't think people can't handle credit well (many do), it's that folks sign up for these cards without reading or truly understanding the fine print, which states that minor missteps in the handling of their accounts can trigger increased rates -- significantly higher than the 8.25 percent fixed rate the woman in question was paying on her student loan.