Credit Archives - Page 2 of 3

Budget, Credit, Debt, Parachute Services

April is Financial Literacy Month!

Financial Literacy Month is a national observance held every April to promote financial education and responsibility. Financial Literacy Month is a great time to learn more about financial literacy and to start taking steps to improve your financial well-being.

Financial literacy is the ability to understand and manage personal finances, and includes the awareness and knowledge to make informed financial decisions. Financial literacy can be improved by seeking to understand basic financial concepts such as budgeting, saving, and investing.

Financial Literacy Month is a great time to start taking steps to improve your own financial well-being. Here are some tips to get started:

Set financial goals.

What do you want to achieve financially? Do you want to buy a house, save for retirement, or start your own business? Once you know what you want to achieve, you can start making a plan to reach your goals.

Create a budget.

(…and stick to it!). A budget is a plan for how you will spend your money. It can help you track your spending and make sure you are not spending more than you earn. You can’t make progress toward your financial goals if you don’t know where your money is going each month.

Save money.

Start by setting aside a small amount of money each month and gradually increase the amount you save as you get more comfortable with it. Set up auto pay to direct deposit a realistic amount to a savings account out of each paycheck.

Start thinking about investing.

Investing money is a way to grow your money over time. There are many different ways to invest, so it is important to do your research and choose an investment strategy that is right for you. Contact a financial planner or advisor for specific advice and guidance.

Get help.

If you are struggling with financial literacy, there are many resources available to help you, both online and in your community. You can take a financial literacy class, read books or articles about financial literacy, follow reputable financial sources on social media, subscribe to financial newsletters, or listen to personal finance podcasts. Meeting with a financial professional is a great way to assess your own situation, and work together to create a plan on how to achieve your personal financial goals and stay on track moving forward.

Parachute Credit Counseling is dedicated to promoting financial literacy and well-being, and to help minimize the stigma associated with debt. We offer many different services to assist individuals and families achieve their personal financial goals, and to provide financial education.

More information on Parachute’s Workshops and Events to promote financial literacy:

Workshops & Events

Essential information compiled by Parachute to promote making wise budgeting choices and maintaining good financial health:

Educational Articles

Contact us at (716) 712-2060 to speak with a certified financial counselor and review your personal situation and create a plan to take specific steps to improve your own financial literacy. We are offering appointments all through the month of April, and beyond!

Credit, Debt, Parachute Services, Uncategorized

Can I Negotiate Credit Card Debt?

Many of us have been there… our credit card debt is mounting. The increased interest rates aren’t helping matters, and we are starting to feel like we need a plan.

When you are first starting out on your path to become debt free, it can be very overwhelming. After internet searches, and reading some articles, you see that debt management and debt settlement come up often. But what is the difference and how do you know what is right for you?

Debt Management Plan (DMP)

Debt Management Plans (DMP) are typically offered by non-profit credit counseling agencies (like Parachute!) It’s a plan between you and the credit counseling agency designed to repay your unsecured debts in full within 5 years or less. The agency will negotiate with your creditors to lower your interest rates, lower monthly payments, and stop fees. One monthly deposit is made to the credit counseling agency, then your funds are distributed to your creditors every month. You don’t have to be behind on your debt to enroll, and since the companies offering DMPs are typically non-profit, the fees for service are low. You will review your finances, credit and goals with a certified credit counselor who can help you understand your options.

Debt Settlement

Debt Settlement is when your debt is settled for less than the full amount you currently owe, typically in one lump sum payment. You usually cannot settle your debts without being significantly past due, or in default. Any amount of debt forgiven over $600 is considered taxable income by the IRS. For example, if owe $8,000 on a debt, and the creditor agrees to a settlement amount of $5,000, you will owe taxes on the $3,000 forgiven by the creditor. You can negotiate a debt settlement yourself, but there are for-profit companies that you pay to hold your money to save up enough to settle the debt, and to help with negotiations. Fees can be high, and you risk further damaging your credit and lawsuits from creditors that are not willing to settle or wait until you’ve saved enough money to pay the settlement.

What is the difference between a DMP through a credit counseling agency and a Debt Settlement Company?

Credit Counseling Agencies that offer Debt Management Plans	Debt settlement companies
Usually non-profit organizations	Usually are for-profit companies that charge a fee for their services. Generally, these companies cannot charge you until after they perform services
Advise you on managing your money and debts and help you budget your payments	Offer to arrange settlements of your debts with creditors or debt collectors
Reach agreed upon payment plans or agreements with your creditors to ensure that the creditors will not pursue collection efforts or charge late fees while on the plan	Often have no up-front agreements with creditors. Some creditors will not negotiate with debt settlement companies
Usually do not negotiate any reduction in the amounts you owe – instead, they can lower your overall monthly payment	Typically offer to pay off your debts with a lump sum payment that you save up in an independent account that you control
Do not advise you to stop paying your debt, but may help negotiate your monthly payments	Usually advise that you stop paying your creditors until a debt settlement is negotiated with creditors, which may damage your credit and result in your being sued
Payment plans do not usually have tax implications	Debt settlement may involve debt forgiveness, which may have tax implications

As always, your financial situation is unique to YOU! There is no one-size-fits-all solution to resolve debt. In fact, these are only two options that we’ve highlighted here.

In order to start your debt free journey, we encourage you to speak one-on-one with a Certified Financial Counselor who will thoroughly review your income and expenses, explain your credit report and score, analyze your debts, and provide you with expert action steps to resolve your debt. Parachute is here to help! Contact us to start your debt free journey! 716-712-2060 or www.parachutecreditcounseling.org

Dare to be Debt Free!

Budget, Credit, Debt, Parachute Services, Uncategorized

Parachute Celebrates National Consumer Protection Week

Looking to protect yourself from fraud, identity theft, and scams? Wondering about the best way to improve your credit, shop for a used car, or how to maximize your security online?

Parachute has information for you during National Consumer Protection Week (NCPW) — March 5 – 11, 2023 — and any time of the year. NCPW is a time when government agencies, consumer protection groups, and organizations like ours work together to share information about consumer rights and help people learn to spot, report, and avoid scams.

Go to parachutecreditcounseling.org for more information. Also, visit ftc.gov/ncpw to learn how to get free consumer education materials and read the latest from consumer protection experts.

As always you can reach out to us directly at 716-712-2060 or www.parachutecreditcounseling.org for your help and education on all things credit, budget and personal debt!

Credit, Debt

Is credit counseling a good idea?

Credit counseling involves meeting on-on-one with a certified credit counselor employed by a non-profit consumer credit counseling agency, and can be extremely beneficial if you are struggling with or overwhelmed by debt. Part of a credit counselor’s job is to help you evaluate your specific financial situation, and to offer personalized guidance on budgeting, credit, and debt repayment options. Some potential benefits of debt repayment through a credit counseling agency can include rebuilding your credit, reducing interest costs and monthly payment amounts, and having a concrete action plan to follow to work toward achieving your financial goals.

Credit counseling can be a great option if you:

Are struggling with monthly minimum payments for multiple unsecured accounts, and a reduced payment amount can be afforded within your budget
Have high interest rates and your creditors will not work with you directly to reduce them
Want to resolve your debt issues in a limited and fairly short term timeframe (5 years or less)
Are looking to understand how to better manage your finances
Need some additional guidance toward taking the best steps to achieve your financial goals
Are considering bankruptcy but want to discuss alternative options first

Debt repayment through credit counseling may NOT be the best option for you if:

Most of your debt is secured or otherwise ineligible – ex. student loans, mortgages, auto loans, home equity loans/lines of credit, etc.
Your debt amount is relatively small and can be paid off directly in a short period of time
You have the ability to make larger than minimum monthly payments
You still cannot afford household and living expenses even with a lower monthly debt payment

Whether or not you choose to repay your debt through a repayment plan with a consumer credit counseling agency, meeting with a credit counselor is a great recommendation for anyone struggling with debt, because an expert can take a look at the entire financial situation and help come up with an action plan on how to move forward. Many credit counseling services, including initial consultations, are free, so there is no harm in at least hearing what a certified credit expert may recommend. Do your research, and remember that there are no quick fixes or shortcuts when it comes to your finances. It’s a process, but one that can really be worth it!

Credit, Debt, Parachute Services, Uncategorized

Consumer Credit Counseling Service of Buffalo is Now Parachute Credit Counseling

Parachute Credit Counseling provides services to help clients “dare to be debt free”

BUFFALO, NY (December 7, 2022) – Consumer Credit Counseling Service of Buffalo announced it has changed its name to Parachute Credit Counseling to illustrate the agency’s commitment toward being a guide on their client’s journey to “dare to be debt free.” Clients will still get the same quality service they have relied on for more than 50 years, but now with a new look.

“We wanted to change our name and logo to reflect our mission of making our clients feel empowered and not embarrassed about their debt,” said Parachute President & CEO Noelle Carter. “It takes courage to make that leap and we are here to be a parachute – a guide – on the journey to financial stability and becoming debt free.”

Parachute Credit Counseling mission is to be the most trusted guide on an individual’s journey to becoming debt free. With the right tools and a strategically mapped out plan, clients can make a smooth soft landing on the other side of debt.

Parachute Credit Counseling is a nonprofit agency offering financial counseling, debt management, student loan counseling, financial coaching, credit report review, reverse mortgage counseling, pre-purchase homebuyer counseling, delinquency housing counseling, and small business credit counseling. The agency offers services in 18 states and the District of Columbia.

For more information about upcoming workshops and the services Parachute offers, visit the website at (insert new website here) or call 716-712-2060 to set up an appointment at any of the locations.

ABOUT PARACHUTE Parachute Credit Counseling, formerly, Consumer Credit Counseling Service of Buffalo, Inc. is a nonprofit agency established in 1965 to provide the best strategies to help people master their credit. Parachute is a member of the of the National Foundation for Credit Counseling and an A+ member of the Better Business Bureau. It is also a certified HUD counseling agency, licensed budget planner through the NYS Department of Financial Services, Executive Office of the U.S. Trustees approved for certified bankruptcy counseling sessions and accredited by Council on Accreditation of Services for Families & Children (COA), Inc. Parachute is based in Buffalo, NY, but offers services in Arkansas, Alaska, District of Columbia, Florida, Georgia, Hawaii, Illinois, Louisiana, Massachusetts, New Mexico, New York, North Carolina, Ohio, Oklahoma, South Dakota, Tennessee, West Virginia, Washington, & Wyoming.

Credit

Should I Get a Credit Card?

Opting for a new credit card is a decision that will impact your financial health in one way or another, so it should come with a careful analysis of your personal financial spending habits and goals. Credit cards can be useful when they are used responsibly, but they can also be harmful if proper care is not taken to use them only when it would make sense to do so.

When does getting a credit card make sense?

If you want to build or rebuild credit history. Without sufficient credit history, lenders will likely see you as a higher risk. If you have limited or no credit, consider a secured card. To build or rebuild credit with a credit card, it’s important to make 100% of your payments on time 100% of the time, and to keep your credit utilization ratio low. The general recommendation is under around 30%, but people with high credit scores tend to keep it closer to around 10%.
If you need help financing a purchase or paying off debt. Some credit cards offer introductory periods of 0% interest on purchases and balance transfers. If you are able to pay the debt or major purchase during the promotional period, you will have essentially gotten an interest-free loan.
If you want to reward your spending. Using a cash back or travel rewards card responsibly can help you save money by being rewarded for the things you purchase the most (think: gas or groceries).
If you want added payment security. Credit card issuers typically offer a zero liability policy on fraudulent credit card charges, whereas if you use a debit card attached to your checking account, there aren’t as many protections. Banks or credit unions may require written confirmation of the error and investigations can take much longer, which means your own funds may be tied up for a longer period of time.

When may getting a credit card NOT make sense?

If you want to increase funds available to you. Generally speaking, applying for more credit to get out of debt or to make additional purchases is not ideal. If you’re using credit cards for things that you aren’t able to pay off right away, you may end up paying a significant amount of interest on those balances.
If you’ve recently applied for a major line of credit. If you’ve recently applied for credit for something significant (mortgage, auto loan, etc.), a credit card application will add an additional hard inquiry on your credit report. This may also raise some red flags to lenders, who may suspect that you may need additional credit in order to keep up with payments on the major line of credit.

The bottom line is that you should carefully analyze your personal situation and weigh your options. Opening a credit card account could be a great step toward reaching your financial goals, but keep in mind that managing it requires diligence and responsibility.

To speak with a Certified Financial Counselor and receive guidance and recommendations on appropriate steps to take to improve your credit situation, please give us a call at (716) 712-2060. We would be happy to help!