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Hi,

The laws are changing to be in our favor over the banks. However, the battle is far from over. Banks are simply going to adapt and find new charges to levy against the consumer. As always, credit options are your best weapon against charges. When you have options, you control which banks get paid and how much you pay.

Best,
Scott

1. What do you feel is the reason behind the Social Lending phenomenon? (For example, ability to receive cash faster than if applying for a bank loan, etc.)

Peer to peer lending's has really taking off in the past 12 months or so due to several factors. The credit crunch has really restricted the availability of traditional bank loans and other forms of traditional credit, such as credit cards. As a result, consumers are increasingly turning to other sources for credit and peer to peer lending has emerged as a viable source of credit.

Cutting the banks out of the picture and putting a more human element (borrowers can post pics and tell their story) back into the lending process has been a breath of fresh air for both borrowers and lenders. On a related note, lenders and borrowers can target affinity groups that they are interested in, such as alumni groups. This feature has proven to be popular and is pretty unique.

Also, the fact that many consumers are able to get lower rates and many lenders are able to get rates of return that they can in money market accounts or CDs has propelled interest in P2P lending.

Consumer outrage about credit cards is at an all-time high. So are delinquencies, which hit 5.56 percent in the fourth quarter of 2008. That's a 60 percent jump since 2005.

It doesn't take a genius to notice that our financial circumstances have changed in the last few years. But, it does take some thought to recognize which strategies are still sound and which ones need to be changed. Today we're going to talk about one that may need to be changed depending on your circumstances.

For years credit card holders have had the option of buying 'credit card insurance' on their accounts. There are a number of different forms. Some pay your account if you die. Others pay if you're disabled. The one that we're going to consider pays if you lose your job.

Before we begin, let's take a moment to discuss why we buy insurance. In it's purest sense, we buy insurance to pay for losses that we cannot afford to absorb ourselves. Often these losses are sudden, unexpected or out of our control. Think car accidents or a home fire or burglary.

Typically, it's foolish to buy insurance for things that we can afford to cover. You wouldn't buy insurance to pay for your next tank of gas. Presumably you can afford it and the paperwork plus the insurance company profit would just add to the cost.

I'm following it since some time ago, when I discovered the 0% credit card offers and the possitive implications of accepting them, which was against the general knowledge that having credit card debt is bad.

I searched the web in order to find what's the catch, what was I missing. That's when I found your site, that corroborated my conclusions, and provided more tips. I even bought your books.

Great site, keep going!

Hugo

Many people constantly complain about being in debt but when you ask do you have a budget, do you know how much you owe, or when you suggest they cut back on expenses they look at you as if you are speaking a foreign language, or they just plain out refuse. I am always amazed at this, how can you ever get out of debt if you don't change your mindset, if you aren't willing to work hard and make sacrifices. There is no quick fix or cure all to get out of debt. It takes a long time to get in debt and you will not get out of debt overnight.

Many people do not know how to create a budget for themselves and many don't even know where to start. Luckily I was taught at an early age how to create a budget for myself. I knew how much money I spent and how much I had left. This skill helped me when I became an adult and got into debt. How did that happen you say? Well, although I knew how to budget my money I didn't have a clue about how credit cards worked. I thought it was free money but that is another article. Anyway, the first step to getting out of debt is creating a budget for yourself. The basic premise for creating a budget is to know what you have coming in and what you have going out, in other words, how much money you bring home and how many expenses you have (creditors, loans, utilities, cell phone, day care, dry cleaners, etc.). Make the budget flexible so you have room for unexpected expenses such as house repairs or car repairs. If you don't have an emergency fund or savings to cover these xpenses you can readily see in your budget what areas you can reduce expenses to get money to pay for those unexpected expenses.

Whether or not you are believe the news media about a declining US economy, one thing is for sure, debt collectors are actively filing suits to collect debts. One large collection firm based out of Atlanta has indicated that they file an average of 279 collection lawsuits per day. A lawsuit is often the final effort in the creditor's attempt to collect a debt. If the harassing and often illegal collection calls were not enough, once a person is sued the reality of the situation is realized. However, for the defendant, not all hope is lost.

Credit options are your weapon against the banks! The key to success is using your credit lines to save money--not to go crazy spending! (I know you won't go crazy spending because you're DebtSmart, but I had to mention that