Government Grants to Pay-Off Your Credit Card Debt: Blessings in Disguise

If you are hoping for a miracle in clearing your credit card debts, you will probably wasting your time.

But if you are diligent enough in looking for information in the right places, you might found something that could be very well your small miracle.

One of the small miracles in today’s recession is Federal grants for credit card debt.

What is Federal grants for credit card debt?

In essence, the Federal grants for credit card debt is Government grants that allow you to pay off all your credit card debts, should you meet the criteria and requirements.

The main purposes of this grant are:

• To stop you from drowning deeper into debt by taking new loans to pay off your previously taken loans.
• To help you sustain your credit ratings and reputation.

The best thing of Federal grants is obvious - It doesn’t require to be paid back.

However, there are certain criteria and requirements to be met to be eligible - the first and foremost criteria, you have to be a US citizen, as this grants only apply in the United States.

First of all, you need to know how to apply for one.

How to get Federal grants for credit card debt

In general, the requirements to apply for the grants are as follow:

1. Find the right Government Agencies and seek the information about the Government grants and funding programs - You can find such information from these Government’s sites: CFDA.gov and Grants.gov.
2. Have the needed information ready: proof of income, your loan monthly payments information, and your total amount of loan taken.
3. Along with the information the Government Agencies gather about your financial status, your application is then assessed to determine whether you qualify or not.
4. You will be informed regarding your eligibility, and if you are judged to be eligible, your debt will be cleared as the Government pays off the debt on your behalf.

Beware of scams

Just like anything that involves money, there are some organisations and companies that claim to help you getting the grant you’ve always wanted. They are too smart to know that, these days, people are often acting irrationally to get out of debt as soon as possible, by any means.

You homework is to keep your head cool and rational, while focusing your effort to find the right information. Again, the good places to start are these Government’s sites: CFDA.gov and Grants.gov.

Hopefully this post will help you with an opportunity to have a fresh start and build your personal finance the right way.

Image by Kevin Krejci.

Credit Card Minds

Many people think credit cards as the temporary solution for their long term financial problems. What I mean by financial problems is not financial hardship, but financial knowledge.

Credit cards main selling points are convenience, cashless and rewards. People sign for credit cards for those perks.

While credit card offers today is interesting - some offered 0% APR on Purchases, even 0% on everything - many people will eventually build up their credit card debts.

The question - why with all of the free and 0% offers some people still in deep credit card debts, that take years to clear and have to pay hefty amount of outstanding plus interest?

The answer - it is ‘humane’ that people always want more. Along with bad personal financial management, bad spending habit and wrong money mindset, here are why people stumble on credit card debts.

• You make more money, you spend more money
  People always want to get rich. However, people forget that being rich doesn’t mean you have a lot of money. For some, being rich is status - no matter how much debt they have. Some of status symbol is credit cards. Having a strong financial knowledge will help you to make more and spend not too much.
• You spend what you see and always want what you don’t see
  “If you have $100 in your wallet, how long will it last?” Most people will answer, “Right away!” Not many people have the strong will to spend carefully of their cash. Most of us need the cash to be ’secured’ from ourselves to investment instruments, such as deposits or mutual funds. Credit cards alleviate this problems.
• Convenience often makes you go loose
  Fast food is convenient - you can eat as you go. This, not considering the content of the fast food itself, will cause people to eat more, simply because of the convenience. This also applies to credit cards. Convenience in credit cards will likely cause you to spend more than you should.

I don’t recommend you not to have credit cards. Credit cards are actually very useful in our daily lives. However, I strongly recommend you not to have credit card outstanding debts.

Having a credit card today does offer you perks, such as:

• 0% is always a good deal
  0% APR on Purchases, 0% APR balance transfer, free annual fee, and even 0% everything - the competing credit card issuers mean benefit for us consumers.
• Convenient
  Convenience is credit cards main selling point - credit cards is easy to carry and secure - if anything goes wrong, call your issuers to block the cards.
• Reward is, well, rewarding
  Frequent fliers, hotel deals, dining deals, cash backs, and other rewards are lavishing frequent shoppers.
• Saving with credit cards
  You can save a lot of money if you know which credit card issuers offering what - Go to credit card comparison websites to learn more which issuers are the right ones for you.

I strongly recommend you to have the right mindset before applying for any credit cards, to get all the benefits of credit cards, such as savings, and avoid all the problems that most people with credit cards have, such as outstanding debts.

Scapegoating the Credit Card Industry

While the review itself is on the later side, I’m happy at this review I found for the movie “Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders” because it deals with an important aspect of psychology and finances.

For those of you who don’t know, MaxedOut is one of the many documentaries that came out over the last few years. If you’re interested in reading the review, you can click here to see it.

By the use of “predatory lenders” in the title, it’s pretty clear that MaxedOut describes the darker side of the credit card industry. Now, up front, I want to honestly say that I haven’t seen this movie, it just provides a wonderful introduction to my concept.

Having worked in the financial industry, I’ve seen from experience that customers often blame the industry for their problems. I’ll be the first to say, banks, credit card companies and check cashing stores are industries that can often maximize their profit at the expense of their customers. However, I don’t think that they are the biggest problem. I think our fundamental failing as a society is the lack of basic financial education that we provide. The biggest issue with scapegoating a particular financial industry is that we then avoid attacking the real problem.

Essentially, what we’re doing when we create negative stereotypes of financial institutions is undergoing the “Texas sharpshooter fallacy” (Texas sharpshooter fallacy — the fallacy of selecting or adjusting a hypothesis after the data is collected, making it impossible to test the hypothesis fairly.). We make our judgments on these industries based on the fact that people have bad experiences with them.

The other issue we encounter is a vast social ignorance when it comes to the damages that can be caused by something as simple as a credit card. We require licenses to drive cars and training to operate heavy machinery, but on the scale of human suffering, that small piece of plastic is just as dangerous and can ruin lives just as easily. For as long as there has been money, there have been people who didn’t handle it well. This isn’t new. However, as we’ve made the monetary system more complex we haven’t taught people how to properly use it.

Feel free to watch MaxedOut. I’m a big fan of documentaries myself and might look it up. There are indeed some genuine tragedies in the credit card industry. People down on their luck with no where to turn, who were brought there through no fault of their own will always exist, and they should be helped as much as possible. However, a great number of people with credit problems are people who make mistakes that eventually snowballed on them, or are just victims of poor choices.