Our personal finance article for today has been long awaited by many INQUIRER.net readers.
Credit card debt is a common problem. Being mired in debt does not mean a person is evil – it only means that person has not managed money well in the past. That’s all…
So, what to do when you’re already in the clutches of a debt collector? Being badgered by someone to pay credit card debt is depressing and demeaning especially when they start talking to your officemates, your relatives and even your boss! This article lists down ways to deal with it, but my favorite tip is to call them first before they call you.
Tell them of your situation and let them know how much you can pay them monthly for the next several months or years. More often than not, they will listen and allow you to stick to your debt payment plan since at the end, all they want is to get paid.
I confirmed this with someone who works as a debt collector who naturally requested for anonymity. Since debt collectors only earn income when they collect, they would rather reach an amicable settlement rather than have a screaming match with people on their call list.
“This is a highly stressful job because people at both ends of the line become allergic to each other. That’s why we are so much more lenient when the credit card holder shows that he is willing to pay rather than those who slam the phone the first time they hear of us,” he said.
These guys actually have the authority to give cardholders some breathing room. “They (the credit card companies) give us a sheet that shows how much their payables are, how much interest the bank is charging, how much penalty our company can add. We then can sometimes play around with the penalty part. If removing a few percentage points can ensure that he will pay, then that’s what we do,” he said.
Unfortunately, he said some credit card holders are boorish and avoid responsibility for their debt. “It’s not unusual for people to go to courts and that will increase their penalties even more,” the debt collector said.
So What Chocnut?
This just in from HSBC – 0% interest on balance transfers. Transfer has a limit, though, only up to P12,000 and only for one year. The bank says in the advertisement that there are no handling fees and no hidden charges.
Let’s deconstruct the ad. HSBC is willing to give new cardholders 0% balance transfer rate so to get more cardholders. It expects new customers to use that card to spend on many other things. It’s not clear what will happen once you charge other purchases and become a roller. So be careful.
Read more blog posts here on how to tame the credit card beast and turn it into a friend.
Ron Nathan writes today about how Wall Street’s woes surrounding the sub-prime market in the United States is affecting the local stock market. Pinoy Investor says the market is in a technical correction and its time to buy!
Here’s the full report on what a stellar performance GMA7 turned in during its trading debut Monday.
Daxim Lucas of the Philippine Daily Inquirer says banks’ bad loans to total loans ratio went up in May. Here’s why the bad loan ratio of commercial banks matter to you: how do you think banks recover the losses they have from writing off non-performing loans? That’s right, the borrowing rates they charge you.
Read about the ongoing saga of well-heeled investors who got caught in the Performance Investments Products Corp. scam here.
In every strata of society, there are people who commit fraud and act with malice towards other people. Be more careful with your investments. Stay clear of smokes and mirrors. If you can’t understand the investment scheme, then don’t invest. My earlier smell test on Deutchfrancs will also hold true for PIPC. Get away from anything that stinks.
ForceAnalytics wrote about PIPC in his blog and got an irate comment from a reader. Somehow, I thought I had seen those comments before? Hehe.
My favorite food blogger also wrote an incisive post about it and got even more irate readers to comment. Read marketman’s post here.
Then, another deplorable scam: Illegal recruiter victimizes Leyte teachers, deans, lawyers.
Finally, I love what Digerati Life has written today about how to shrug off a market slide.
1. Think like a contrarian.
2. Act like a contrarian.
3. Be well hedged or have a well diversified portfolio.
4. Don’t fall for the media hype. (yeah, I agree)
5. Anticipate possible buying opportunities
6. Realize that market pullbacks are healthy for the long term.
Are you ready to be a contrarian?
July 17th, 2008 at 10:20 am
I mismanaged my finances when I was issued with 2 credit cards. That was roughly 5 years ago. My payments basically paid the interests while the principal sum remained unpaid. Imagine, if I have just saved those card payments, I would have a fat savings account by now. Earlier this year, after realizing that endless cycle of card payments which often cut a huge chunk off my paycheck, I decided to cancel all my credit cards and entered into a program where my unpaid dues will be settled in 24 months at 1.5% interest per month. 18 months more to go and I’m free!
October 8th, 2007 at 2:15 am
[...] tilit wrote a fantastic post today on “Comment on Insider stories from a debt collector by tilit”Here’s ONLY a quick extractDebts are good but credit is better— I am not an Economist, just a teacher of young rich boys and I know what to tell the good old boys…stop bullying the market, give chance to those who are just starting… what am I saying, well, … [...]
October 6th, 2007 at 5:47 pm
It was just amazing how some people would think about the super hype- life of the metro-dwellers. I am glad there’s no bandala anymore…. that means we may no longer be deprived of what we have worked for.. this is the age of the free, we should take advantage of it but one should not be addicted. Debts are good but credit is better— I am not an Economist, just a teacher of young rich boys and I know what to tell the good old boys…stop bullying the market, give chance to those who are just starting… what am I saying, well, none actually! I’d like to believe if we are credible as a person then who will not trust us if borrow from time to time but there this effective way of restructuring our loans, some can be written off but some should really be paid. I have never been into an investment market but if we live by the maxim.. perhaps we will never be deprived nor deprive others of what they deserve. If we just live simply, others will simply live. I got the adage from Mahatma Gandhi-ji…. if we say no to things that are beyond our means or brands that is not ours, what do we need the money-smart thoughts…
August 3rd, 2007 at 11:35 pm
What’s funny in all these is that BPI was just too happy to give me a credit card.. with a huge credit limit (despite Citibank’s cancellation of my card)… and yet when I opened a checking account, the dagger look is carved in their perfectly plucked eyebrows heheheh
And one of the ironies here is: one way you can only look good to them (again) a.k.a. racking up points to increase credit score is when you are a good payor of bank loans hmmmm eh di ka nga papautangin eh kasi nga may bad marks sa credit history mo eh heheheh… so paano na yan?
so ako … nangungtang ako sa BDM or BDP….
Banco de Mama or Banco de Papa… (pero pati dun mauubus na rin credit scores ko heheh)
August 3rd, 2007 at 6:48 pm
My wife is due on Dec for our first-born. The thought of me not being able to provide a bigger house or a newer car in the future to my family because of a mistake I made when I was still single and young is really scary and embarassing.
I really do hope, that there IS hope for people like me.
Thanks Salve, would wait for your response.
August 3rd, 2007 at 4:20 pm
Hi Ms. Salve. Thank you for your reply and clear explanation. Now I understand the reasons for the rejection of my credit card applications. Can you give me the steps on how I can improve my credit score? How many years does it take to clean my name from this bad marks on my credit history? Again, thank you you very much for your help.
August 3rd, 2007 at 3:54 pm
raff, the reason for this is that your credit history has black marks against you. Noet says the record is unfortunately permanent, but there should be a system for the BAP Credit Bureau to allow changes in the credit score to improve as you improve your financial decisions over time. I will let you know what I find out from the bankers on this. Regards.
August 3rd, 2007 at 10:25 am
Hi Ms. Salve. I am a credit cardholder wherein my account has been in a collection agency, wherein I pay my monthly due on time. Though this card has already been block for usage for almost 2 years now. I have a question, I tried to apply for new credit cards with other banks, unfortunately, all of my applications have been disapproved. Is there a way for me to find the reason for this? or where can I get my credit report, in order for me to analyze my credit rating. Thank you very much for your help.
August 3rd, 2007 at 6:13 am
dear ron and peter, let’s go ask the central bank and some bankers for their comments. will get back to you on this… no one should have to be scarred for life after trying to do what is right. After all, everybody makes mistakes…
August 2nd, 2007 at 7:05 pm
I can emphatize with you Peter…i have fully settled dues with Citibank since 2002. But that has scarred me for life, so it seems. When I applied for checking account with BPI, the horrified look of disdain from one officer to another is so palpably embarassing…..
Recently, i was trying to take out a loan to finance my new love (foreclosed properties)… Again the same “you-dont-have-the-money-you-swindler hoar” look
hit me like I had just killed the banker (press that button its yours! )
I only have the letter to show these bankers that I have already paid for everything… I just wish now I dont lose the letter or else… the Scarlet Letter A is forever etched on my chest…
praytell how shall I wither from my misery my liege?
August 1st, 2007 at 11:18 pm
Thanks Salve. I will let you know when I get myself out of this mess I made.
August 1st, 2007 at 11:41 am
salve, the US gov’t couldn’t stop their tech bubble burst, can the Chinese gov’t stop their stock bubble? I don’t know when and how deep but it will happen. That market is overheating.
August 1st, 2007 at 11:24 am
[...] bloggers: Get Rich Slowly has an answer for Peter who is worried about his credit score (well, in a way). Yeah, its not the end of the world when your [...]
August 1st, 2007 at 9:22 am
Thanks for the welcome Salve! I’ll be visiting this blog now that I’ve discovered it! I love how you’ve laid it out.
Btw, I grew up in Makati…. my barkada is still there!
August 1st, 2007 at 5:59 am
peter, it’s possible to heal this “scar” but it will not be easy. The banking system’s credit scoring system is not that sophisticated so clearing your record of previous mistakes will be a bit tedious. Remember that you are working here with three different systems. The bank itself, CIBI and BAP. I suggest you ask Citibank to allow you to provide CIBI and the BAP with a copy of that certification. Then make sure your credit reputation remains clean from now on. Do let me know what happens and if there is anything else I can do to help. Good luck!
August 1st, 2007 at 5:58 am
danny, thanks! feel free to ask questions anytime
August 1st, 2007 at 5:58 am
pinoy investor: hehehe. they say the Chinese won’t allow that to happen before the Olympics. After that, duck and look for cover but make sure you pick up good finds on the street!
July 31st, 2007 at 9:18 pm
[...] Money Smarts: Insider stories from a debt collector [...]
July 31st, 2007 at 8:48 pm
I applied for the 1% (add-on) personal loan from Citibank last week to use for our home improvement. Now my loan agent is telling me that the loan was disapproved because I had a past due record with my Citibank credit card.
I called up the credit card officer and they said that they did post a record of my past due status. I told them that I was past due because I went to Malaysia for a long while and was not able to pay nor contact them. But the moment I came back, I have settled the full amount. They said all they can do is to provide a certificate or full payment to the loan agent.
Is there a way that my past due status be removed from record? I did paid the full amount even if they were not hounding me yet. I know there is mistake in my part, but it was a really stupid but honest mistake.
Now they are saying that that record can be seen by other banks as well so no good applying loan with other institutions.
Am I scarred forever?
July 31st, 2007 at 6:45 pm
Love your blog
July 31st, 2007 at 3:47 pm
Disclaimer: It’s time to buy if you believe the SONA. I believe mr. bearbull more than ate glue. If you want to be a contrarian, wait for the Chinese bubble to burst before buying.
My symphaty to the rich victims of PIPC. Consider it a tuition fee in investment education (more expensive than Wharton). You can get free education by reading money smart. Bloggers here have PhDs in the graduate school of hard knocks.
July 31st, 2007 at 2:34 pm
@DIGERATI LIFE: I didn’t realize that :). Its great that you could drop by! Please feel free to jump in and share your thoughts and insights through the blog. There are a lot of people here who would appreciate inputs from you.
July 31st, 2007 at 2:24 pm
Wow, I truly appreciate the mention. I’m actually a faithful reader of Inquirer.net. I was born and raised in Manila (till quite a late age) and my parents still live there….