Think Twice Before Gifting Your 18 Year Old with a Credit Card

Owning a credit card by an 18 year old brings in galore of feelings of freedom, power and affordability, but often the accompanied senses of responsibilities, sensible spending and financial maturity is underestimated and ignored, which results into the existence of several credit card debt relief options and credit counseling services. Thus it is but common for the maximum number of parents to worry about their 18 year old children and their growing wants and demands that undoubtedly include the possession of a personal credit card. The same thought perhaps have moved the lawmakers to make it much harder for young adults of age 18-20 to obtain their own credit cards, according to the Credit Card Act of 2009. Under this act, anyone falling under the age group 18-21 has to meet few extra requirements before being eligible to hold a line of credit. They either have to give evidence of their high monthly and regular income in order to pay off the bills, or must have someone over the age of 21 with sufficient income and credit who will co-sign the clauses and terms with the card holder.

This is where the decision and duty of the parents come into play. The new age teenagers and young adults have a heightened level of awareness and information about all aspects and sources of consumerism, and have gathered knowledge of how to harness and exploit the same for gaining material luxuries and finding hedonist pleasures. What can be a greater and easier way than possessing a credit card in this respect! Thus the parents have to take a strict call on deciding whether it’s the right time to consider gifting a credit card to their otherwise grown up children or do they still need more lesson and wisdom of handling this responsibility. Unless you are blessed with an extraordinarily hard working, sincere and ambitious kid who would not rake his income for credit card, you have the power to acquiesce or deny their request. The fact is that, if your child’s income fails to satisfy the requirements of regular credit card payments, and does not meet the standard that creditors deem as satisfactory for handling the expense, then probably he/she should not have any business owning a credit card, and you too as a parent should understand the situation without being rushed in with parental emotions which can harm your child in the long run. On other hand, credit card should not be denied to a child who has taken care of his/her financial responsibilities and is not dependent on parents’ money; someone who has the credibility to pay off the loans regularly and can take charge of his/her own wants and needs. 

So the parent can exercise their sense of judgment by denying and restricting their undeserving children from owning a credit card if they lacks maturity and financial stability to handle their money wisely.

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What to pay first: high interest or high balance credit card?

A very common question that comes up all the time when a person wants to start getting their credit card debt under control is whether to pay the high interest credit card first or to get rid of the high balance credit card first! This is a situation which does not fall under the domain of help provided by the debt relief companies by services like credit card debt consolidation or credit counseling etc. At one end if you are anxious about having high interest credit cards that costs you every month and compounds the monthly amount you owe, if you are not paying off the entire balance. For some the interest rate may go up to even 30% on the amount borrowed which basically means agreeing to pay one third more for everything you bought on the card or more depending on how long you owe. While on the other hand, you have a credit card, with such an overwhelming balance that no matter what are you paying, the balance does not seem to ever go down. Thus even if you have a low interest rate you may be paying a lot of interest because of your high balance. 

So deciding about which one to choose to pay over the other can be the trickiest question of the moment especially for those who are not particularly great in handling their personal finances. The card holder tends to feel whether he will lose out on picking the right option first! As every dollar counts and is to be used most effectively, however, sadly enough these thoughts of saving penny never occurs at the times of our frivolous spending sprees! Anyways, this is the situation when a consumer often feels most frustrated and puzzled about their personal finances. The answer actually does not exist in this particular condition as the decision varies to either choose the credit card with highest interest rate or to choose the card with the highest balance depends upon the financial urgency and situation of the card holder. For example for someone who is neck deep in credit card debt, it is most important to take an immediate action than choosing between the two options which actually have a similar consequences at either cases.

 

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What Happens If A Debtor Has To Deal With More Than One Collection Agency For The Same Debt?

Getting trapped in the dirty vicious cycle of debt and its equally painful consequences has become the part and parcel of every American’s financial reality. In many cases even the most efficient debt relief companies fail to provide a perfect debt solution to the debtor to whom none of the options like debt settlement, debt consolidation or credit counseling prove helpful. In such conditions, when all the major debt repayment plans decline, the debtors have to solely deal with the creditors or the collection agencies at his own risk applying his individual skills and knowledge in negotiating with the creditors and debt collectors. The process of debt collection is always associated with fears, harassments and financial insecurities. However, one has to be aware of few facts and information regarding original creditors, collection agencies and junk debt buyers who are also known as the secondary debt collectors.

As a matter of fact, when your original creditors realize it too expensive and time consuming to extract debt from you due to your financial deterioration, they think it rather profitable to sell your debt to a collection agency at a comparatively lower cost. Now this time the debtor faces challenges of confronting a debt collection agency and its extraction methods. Thus if you are contacted by more than one collection agency for the same debt, it implies that the original creditor has given up on you and have hired a secondary or even a tertiary collection agency. In many cases when even the first collection agency sells off your debt to a new or a second agency, it indicates that the second collection agency has paid even lesser than the price with which the first collection agency has bought your debts. Thus it is time for the debtor to use some brain and contemplate easier ways to settle his debts and reduce the payments in case the debts have travelled down from the original creditor and the first collection agency to the second or third one, in which case the debtor may find himself at the receiving end than the debt collectors.

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Claim Your Dues When You Are In Debt

With debt becoming a household name now, an individual is more likely to become a prey to it than he realizes. No doubt that we gain a certain amount of relaxation from various available debt relief options, debt settlement companies and credit counselors, but only to some extent, as we find ourselves helplessly sweeping in more and more debts with our uncontrolled financial habits and blunders. However, debt has become a vicious circle and thus many a times we find that we too can claim our dues from people who have earlier borrowed from us in the name of friendship or relation. For example there are people who hesitate to file a lawsuit or personal injury claim against an institute or organization which owes him/ her certain amount of money or payment, out of fear and humiliation from neighbors or fellow workers. At times filing a compensation claim, in case of an injury at workspace or outside, or for a faulty piece of hardware, is much easier for us than asking back our own money from a friend or relative who have once borrowed the same in their emergency.  
While being in debt is easier, claiming our justified dues is getting tougher, especially on personal levels, when people feel that asking it back would lead to embarrassments and hidden bitterness. But at times when the burdens of debts are becoming heavier, claiming back one’s dues from all sensible and legible sources is the most logical step towards relieving oneself of some deficiencies.

Without escaping the situation, try to sort out a diplomatic yet wise way out to talk to your friend about your present financial crisis which forced you to ask for the money back from your friend. It is better to be transparent and honest to your borrower than holding disregard and pretence for the same person for not remembering to pay back the favor at time of your need.