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2008 Wrap-Up & Looking Forward To 2009
WRAP-UP 2008 AND THE FUTURE:
Everybody is at least antsy and some even more stressed about the economy. The working force stress is trickling right up to the management which is being forced to deal with more personnel issues rather than focusing on goals. A work force that is anxious and even frightened, unsure and often emotional about the future is way counterproductive.
Let’s think about that some and ponder a bright future together. We recognize that many spent the holidays in rather desperate ways, the poor, the unemployed, the sick, and even the worried. We all mentally sort of measure the scale of reality against our hopes for a better future. For many people, this past year has been way out of whack. In the midst of an economic disaster that virtually touches everybody, hope is sometimes hard to come by. Mostly, as you have seen in the news, anxiety has flooded the market.
Let’s look back a bit…imagine the holidays after the Japanese attacked Pearl Harbor, some 18 days before Christmas, and America was plunged into a horrible world war. Further back, the lean Christmases of the Great Depression were beyond what most of us can now imagine.
Americans are tougher than they think. It doesn’t take a world war to get us in motion. Shared hardships and tough times make us that much tougher. Remember too that the differences that often divide us tend to disappear when things are bad. As always, we should hark back to the words, “United we stand, divided we fall.” We’ve truly never “fallen” before and it’s our belief that we never will.
Our advice (from the older generation here at Meditec) is: “Don’t fear anything, just go forward and everything will work out. Let your plans for the future move forward with even more clear purpose and intent.”
IN THE MEANTIME, CREDIT IN THE NEWS AND SOME GOOD ADVICE:
For years, obtaining and maintaining good credit was a necessity to get on in the world, whether buying a house, a car, or getting a credit card. Lack of regulation and greed have totally shifted the playing field so that no matter how good credit may be, it isn’t good enough for the lenders.
Recently, the news featured the lower credit card limit pronouncements. Credit-card issuers are hit by economic pressures just like the rest of us. With the financial subprime meltdown (all the regulatory and greed factors imploding), everybody gets caught in the trap. People with good credit scores and solid histories are targeted too. Most banks are cutting their credit limits to everyone. They’re worried that you might be able to pay your tab. Smaller credit lines spell trouble for consumers: The lower limits shrink consumer ability to spend and to be able to cover emergencies should they arise.
What can you do?
* Lower your card debt. Big balances make consumers prime targets for credit-card companies looking to reduce credit lines.
* Watch your mail. When your card issuer lowers limits, they must notify you. Typically that must be done by mail (unless you’ve agreed to on-line only notification). If you didn’t pay attention, you might find yourself “over your limit” (which you didn’t even know about) and a fee is of course charged as an “over the limit penalty.”
* Review your monthly statement. Watch for changes, lowering your limit, interest rate increases, and new penalties.
* If you note an interest rate increase (particularly now when interest rates are falling dramatically), call your card company. The author was astonished to learn that on one card it noted 17.99% but when the company was contacted, they said, “Oh, we can lower than to 9.99. Is that what you wanted”? Duh!
* Check your credit report. Credit card issuers (and everyone else who lends you money) use your report to make their decisions, whether new or old loans (unless they are fixed). They look for late payments, sudden buildup of debt, looking to see if you use one card to pay another.
You get one free credit report per year from any or all of the three major agencies (EQUIFAX, EXPERIAN AND TRANSUNION). The three of them have provided a site for the free report. Visit:
ANNUALCREDITREPORT.COM
* Carefully review your report. If it contains errors, report them to all three credit bureaus. They must make the changes or annotations according to the information you provide.
* Shop around. If your credit limit gets cut, don’t cancel the card, that will DECREASE your credit score. Shop around for better offers. Don’t balk about lower limits as they will increase based on your usage and payment history.
FEDS ARE FINALLY PUSHING THROUGH CREDIT CARD LEGISLATION:
Crackdowns are designed for fairness to limit rate changes and fees. New rules would ban certain financial institutions from engaging in unfair credit card practices. These regulations go into effect July 1, 2010, (not nearly soon enough).
Steps taken by the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration represent the most significant reform in decades. The government will ban banks, credit unions and savings associations from a number of “practices.”
* Raising interest rates on existing balances unless a payment was received more than 30 days late
* Charging a late fee if a borrower was given less than 21 days to pay
* Applying payments so that the debts with higher interest rates get repaid last. You know those specials that are 2.99% until 2012? The payments go first to those lower rate transfers or charges, then apply what’s left to the higher interest balances.
* Subprime market: This segment caters to borrowers with poor or mediocre credit histories and fees that reduce the credit available to them would be restricted.
CREATIVE FINANCE OPTIONS:
Stressful economy spawns very creative people into providing solutions. Many websites have cropped up offering all kinds of loan processes to deal with the credit crunch, both personal and business.
One of these is a peer-to-peer lending solution: Here are a few: Lendingclub.com, prosper.com, raise capital.com and zopa.com. These facilitate loans between individuals. For instance, in one case 25% of borrowers are individuals running or looking to start new businesses. The sites facilitate loans from $1,000 to $25,000.
Community banks: Local banks and credit unions are more stable than lots of the big ones.
Also, if you need to sell your house, don’t be afraid to sell it “on contract,” where you take as much down as a buyer can afford, and you carry the contract so the buyer makes payments to you (or an escrow account) and you pay your mortgage servicer. Millions of dollars worth of real estate was handled this way through the “crash” in the 1980s.
MEDITEC’S CONTRIBUTION:
If you are interested in changing your life and career goals with the training programs we offer, but are stressed financially, we are committed to finding a finance program that will work for you. So, don’t wait, JUST DO IT!!
