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Saturday, October 15, 2005

iWorld

With his customary fanfare and flair for the theatrical, Apple Computer Chief Executive Steve Jobs on Thursday announced the release of the video-enabled iPod, the latest tweak on the music recall device everyone seems to have today. With Jobs' latest bold move, the entertainment industry is again on notice that the relationship between producer and consumer is changing more quickly than ever; and that, regardless of market share and gross capitalization relative to other corporations in the space, Apple continues to enjoy an almost mythic high ground among devotees of the cutting edge.

As with other Apple products, the introduction of the video iPod will likely terrify the business world of personal entertainment technology. The rollout ads and at least some of Jobs' presentation were impressive. One ad for the new iPod showcases a video starring U2 (fast becoming Apple's house band); the camera pulls back slightly to frame up the video not in the spatial context of an actual performance but as an image on the screen of the New Device. And justhatfast, entertainment changes.

Microsoft, Apple's eternal bete noire, was late to the party, having introduced mobile video in 2004, about two years after the introduction of the iPod. In a story in yesterday's Seattle Post-Intelligencer, analysts told reporter Todd Bishop that sales of Microsoft's Portable Media Center "have been sluggish and consumer awareness is low."

Bishop asked a tech-savvy lawyer what he thought of the Microsoft product. "Never heard of them," the lawyer said. But he was hot to maybe buy the new iPod.

This begins to explain the differences one encounters when comparing Microsoft and Apple; both are visionary companies with enviable track records and reliable products; both are immediately recognized around the world; both are adapting technology to the human experience in compelling ways. But in the look & feel world of marketing, in the way the public experiences the product, Apple comes out on top.

Why? Let's call it the JNSQ Factor. Those four letters are fom the words in the French phrase "je ne sais quoi," which more or less literally translates to "I know not what," an expression used to describe the ineffable, ephemeral, something quality that makes a person, an idea, a performance, a device stand apart from, and usually above, the competition.

Apple has always held down that lofty perch. From the beginning, when the Macintosh was introduced, Apple set the pace for weaving art and computer technology in a way Microsoft couldn't hope to achieve. One reason for this is very much rooted in what each company is and what each company sells.

Apple's stock in trade is the development of the computer and tangible devices -- objects that, like all objects, summon a personal identification with the owner, a sense of individuality, a personality. Apple's core products reinforce our proprietary instincts, our embrace of things -- things we can hold and touch and manipulate and feel. Microsoft's business is software, arrays of code and markup language, ones and zeroes designed to improve efficiency, enhance productivity, streamline operations -- all utterly necessary in the modern world, but in the end not seen being as personal, as individual, as downright cuddly as that work of art sitting on your desktop, blinking every so often to remind you just how cool it looks.

JNSQ for sho. It's that extra element in an Apple product rollout that a Microsoft rollout doesn't seem to have. That edge. That mystery. That cool, elegant visual vocabulary that appears to owe as much to Zen-monastery simplicity as to the technology that embodies that simplicity. Want proof? Walk through an Apple retail store, like the one hard by the campus of the University of Washington. Watch people handling the new products. They play with them like at any consumer electronics store, of course. But there's often an extra lingering glance, the sweep of a hand across the monitor that's less the act of a consumer than it is the act of a suitor, one truly desirous of the object of his or her affections.

Sorry -- you don't feel that way about software, no matter how enabling it is. It's hard to fall in love with tags and code.

Not that Microsoft isn't subject to people's emotional reactions. One problem for MSFT is the still-lingering perception of the company as technological bully, that perception arising from the landmark civil trial in which the U.S. government sued the company for stifling competition, and despite a settlement in the case in 2004. With baggage like that trailing and preceding you, as well as a longstanding reputation for playing hardball with everyone from competitors to your own contract workers, it's hard for the public to embrace you, even if your product is in every facet of their daily lives. It all comes down to perception.

Apple has always played up its reputation as the mouse that roared; Microsoft has always positioned itself as an unstoppable force. Little guy vs. big guy. David vs. Goliath. And the public has voted, about 30 million times at last count, for the iPod from the little guy, while the big guy's Portable Media Center goes wanting. Reason? It's partly, or even mostly, human nature: People respect Goliath but their hearts, and regions south of their hearts, are with the underdog.

Apple's made missteps too -- can you say "Lisa"? Ironically enough, the video iPod Jobs rolled out this week was the result of a change of mind; as recently as last year, Bishop reported Friday, Jobs had come to the conclusion "that video may be the wrong direction to go." Jobs presumably got religion when he saw the market-share bite that Sony's PlayStation enjoys, and considered the prospect of a groundbreaking distribution deal with Disney (and by extension the best programming on ABC).

And Apple innovates more frequently (almost too frequently). That's great for running rings around the competition, but it can be pleasantly maddening if you're a Macintosh devotee. Apple zealously tweaks and upgrades hardware and operating systems so often it can be hard to keep up. Case in point: I bought a new iMac computer with 75GB, Bluetooth wireless mouse and 17-inch all-in-one display for about $1,900 in February. By July, if memory serves, Apple had dropped the price: had I waited, I could have bought a 20-inch iMac for the same as my 17-inch five months earlier. Then they did it again: When Jobs announced the video iPod, he also took wraps off the new iMac, which features a remote control for access to music and images from across the room, and a built-in web camera -- all for about what I paid, months earlier, for less.

That's the cost of keeping up. And the 30 million who ponied up for the iPod understand that, and they're willing to pay even more. They can't get enough. They're in the gym and at the coffee shops and in their cars and on the street, listening to whatever they want whenever they want, every one caught up in their own little world.

But not really. It's Steve Jobs' world, actually. We just boot it up.

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Fixed-Rate credit cards are not fixed forever. Rates can be changed at any time, as long as the card issuer provides 15 days advance notice of the change in terms. Fees may also increase. These "Change in Terms" notices are usually included with your monthly statement.
Your interest rate may dramatically increase if you make late payments. For example, some issuers will raise your interest rate to the maximum after one or two late payments. Consequently, your 12% credit card could quickly turn into a 25% credit card.
Your credit card issuer may also raise your interest rate after conducting a routine credit report review. If your overall credit history has deteriorated, the issuer may raise your interest rate, even though you've never made a late payment on the card in question.
The 25 day grace period only applies when you pay-off your entire balance due each month. If you only pay the minimum payment, interest is immediately accrued from the moment you charge something to your credit card. Some companies are also shortening the grace period to 20 days, and some cards have no grace periods.
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Debt1consolidation.com can simply be from a number of unsecured loans into another unsecured loan, but more often it involves a secured loan against an asset that serves as collateral, most commonly a house. In this case, a mortgage is secured against the house. The collateralization of the loan allows a lower interest rate than without it, because by collateralizing, the asset owner agrees to allow the forced sale (foreclosure) of the asset to pay back the loan. The risk to the lender is reduced so the interest rate offered is lower.

Sometimes, debt consolidation companies can discount the amount of the loan. When the debtor is in danger of bankruptcy, the debt consolidator will buy the loan at a discount. A prudent debtor can shop around for consolidators who will pass along some of the savings. Consolidation can affect the ability of the debtor to discharge debts in bankruptcy, so the decision to consolidate must be weighed carefully.

Debt consolidation is often advisable in theory when someone is paying credit card debt. Credit cards can carry a much larger interest rate than even an unsecured loan from a bank. Debtors with property such as a home or car may get a lower rate through a secured loan using their property as collateral. Then the total interest and the total cash flow paid towards the debt is lower allowing the debt to be paid off sooner, incurring less interest. In practice, many people are in credit card debt because they spend more than their income. If that habit continues, the consolidation will not benefit them much because they will simply increase their credit card balances again.

Because of the theoretical advantage that debt consolidation offers a consumer that has high interest debt balances, companies can take advantage of that benefit of refinancing to charge very high fees in the debt consolidation loan. Sometimes these fees are near the state maximum for mortgage fees. In addition, some unscrupulous companies will knowingly wait until a client has backed themselves into a corner and must refinance in order to consolidate and pay off bills that they are behind on the payments. If the client does not refinance they may lose their house, so they are willing to pay any allowable fee to complete the debt consolidation. In some cases the situation is that the client does not have enough time to shop for another lender with lower fees and may not even be fully aware of them. This practice is known as predatory lending Certainly many, if not most, debt consolidation transactions do not involve predatory lending.

Credit card debt is an example of unsecured consumer debt, accessed through plastic credit cards.

Debt results when a client of a credit card company purchases an item or service through the card system. Debt accumulates and increases via interest and penalties when the consumer does not pay the company for the money he or she has spent.

The results of not paying this debt on time are that the company will charge a late payment penalty (generally in the US from $10 to $40) and report the late payment to credit rating agencies. Being late on a payment is sometimes referred to as being in "default". The late payment penalty itself increases the amount of debt the consumer has.

When a consumer has been late on a payment, it is possible that other creditors, even creditors the consumer was not late in paying, may increase the interest rates the consumer is paying. This practice is called universal default.

If the customer is carrying an amount of debt that is so high that it is over their credit limit, then they might be charged an over-the-limit fee of up to $39 until their balance is paid down to below their credit limit. This, too, may add to the consumer's debt.

Sometimes the late fees, over-the-limit fees, high annual percentage rates (APRs), and universal default overcome consumers who frequently do not pay off their debt, and the customer declares bankruptcy. If a customer files for bankruptcy, the credit card companies are required to forgive all or much of the debt, unless such discharge of debt is successfully challenged by one or more creditors, or blocked by a bankruptcy judge on legal grounds irrespective of creditors' challenges.

Because forgiveness of debt reduces likelihood of profit and continued survival, the companies are generally willing to offer another deal to the consumers in danger of bankruptcy. This deal consists of reduced APRs, removal of past late fees and penalty charges, and reaging the accounts so that the credit agencies see them as late accounts.A credit card is a system of payment named after the small plastic card issued to users of the system. A credit card is different from a debit card in that it does not remove money from the user's account after every transaction. In the case of credit cards, the issuer lends money to the consumer (or the user). It is also different from a charge card (though this name is sometimes used by the public to describe credit cards), which requires the balance to be paid in full each month. In contrast, a credit card allows the consumer to 'revolve' their balance, at the cost of having interest charged. Most credit cards are the same shape and size, as specified by the standard.

A user is issued credit after an account has been approved by the credit provider, and is given a credit card, with which the user will be able to make purchases from merchants accepting that credit card up to a pre-established credit limit. Often a general bank issues the credit, but sometimes a captive bank created to issue a particular brand of credit card, such as or Banks issues the credit.

When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates their consent to pay, by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a Personal identification number (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a Card not present (CNP) transaction.

Electronic verification systems allow merchants to verify that the card is valid and the credit card customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or Point of Sale (POS) system with a communications link to the merchant's acquiring bank. Data from the card is obtained from a magnetic stripe or chip on the card; the latter system is in the United Kingdom commonly known as Chip an PIN, but is more technically an EMV card.

Other variations of verification systems are used by eCommerce merchants to determine if the user's account is valid and able to accept the charge. These will typically involve the cardholder providing additional information, such as the security code printed on the back of the card, or the address of the cardholder.

Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees, and the total amount owed. After receiving the statement, the cardholder may dispute any charges that he or she thinks are incorrect (see Fair Credit Billing Act for details of the US regulations). Otherwise, the cardholder must pay a defined minimum proportion of the bill by a due date, or may choose to pay a higher amount up to the entire amount owed. The credit provider charges interest on the amount owed (typically at a much higher rate than most other forms of debt). Some financial institutions can arrange for automatic payments to be deducted from the user's bank accounts.

Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid.

For example, if a user had a $1,000 outstanding balance and pays it in full, there would be no interest charged. If, however, even $1.00 of the total balance remained unpaid, interest would be charged on the $1 from the date of purchase until the payment is received. The precise manner in which interest is charged is usually detailed in a cardholder agreement which may be summarized on the back of the monthly statement. The general calculation formula most financial institutions use to determine the amount of interest to be charged is APR/100 x ADB/365 x number of days revolved. Take the Annual percentage rate (APR) and divide by 100 then multiply to the amount of the average daily balance divided by 365 and then take this total and multiply by the total number of days the amount revolved before payment was made on the account. Financial institutions refer to interest charged back to the original time of the transaction and up to the time a payment was made, if not in full, as RRFC or residual retail finance charge. Thus after an amount has revolved and a payment has been made that the user of the card will still receive interest charges on their statement after paying the next statement in full (in fact the statement may only have a charge for interest that collected up until the date the full balance was paid...i.e. when the balance stopped revolving).

The credit card may simply serve as a form of revolving credit, or it may become a complicated financial instrument with multiple balance segments each at a different interest rate, possibly with a single umbrella credit limit, or with separate credit limits applicable to the various balance segments. Usually this compartmentalization is the result of special incentive offers from the issuing bank, either to encourage balance transfers from cards of other issuers, or to encourage more spending on the part of the customer. In the event that several interest rates apply to various balance segments, payment allocation is generally at the discretion of the issuing bank, and payments will therefore usually be allocated towards the lowest rate balances until paid in full before any money is paid towards higher rate balances. Interest rates can vary considerably from card to card, and the interest rate on a particular card may jump dramatically if the card user is late with a payment on that card or any other credit instrument, or even if the issuing bank decides to raise its revenue. As the rates and terms vary, services have been set up allowing users to calculate savings available by switching cards, which can be considerable if there is a large outstanding balance (see external links for some on-line services).

Because of intense competition in the credit card industry, credit providers often offer incentives such as frequent flier points, gift certificates, or cash back (typically up to 1 percent based on total purchases) to try to attract customers to their program.

Low interest credit cards or even 0% interest credit cards are available. The only downside to consumers is that the period of low interest credit cards is limited to a fixed term, usually between 6 and 12 months after which a higher rate is charged. However, services are available which alert credit card holders when their low interest period is due to expire. Most such services charge a monthly or annual fee. credit card's grace period is the time the customer has to pay the balance before interest is charged to the balance. Grace periods vary, but usually range from 20 to 30 days depending on the type of credit card and the issuing bank. Some policies allow for reinstatement after certain conditions are met. Usually, if a customer is late paying the balance, finance charges will be calculated and the grace period does not apply. Finance charge(s) incurred depends on the grace period and balance, with most credit cards there is no grace period if there's any outstanding balance from the previous billing cycle or statement (ie. interest is applied on both the previous balance and new transactions). However, there are some credit cards that will only apply finance charge on the previous or old balance, excluding new transactions.

For merchants, a credit card transaction is often more secure than other forms of payment, such as checks, because the issuing bank commits to pay the merchant the moment the transaction is authorized, regardless of whether the consumer defaults on their credit card payment (except for legitimate disputes, which are discussed below, and can result in charge backs to the merchant). In most cases, cards are even more secure than cash, because they discourage theft by the merchant's employees.

For each purchase, the bank charges a commission (discount fee), to the merchant for this service and there may be a certain delay before the agreed payment is received by the merchant. The commission is often a percentage of the transaction amount, plus a fixed fee. In addition, a merchant may be penalized or have their ability to receive payment using that credit card restricted if there are too many cancellations or reversals of charges as a result of disputes. Some small merchants require credit purchases to have a minimum amount (usually between $5 and $10) to compensate for the transaction costs, though this is not always allowed by the credit card consortium.

In some countries, like the Nordic countries, banks guarantee payment on stolen cards only if an ID card is checked and the ID card number/civic registration number is written down on the receipt together with the signature. In these countries merchants therefore usually ask for ID. Non-Nordic citizens, who are unlikely to possess a Nordic ID card or driving license, will instead have to show their passport, and the passport number will be written down on the receipt, sometimes together with other information. Some shops use the card's PIN code for identification, and in that case showing an ID card is not necessary.

Authorization: When the cardholders pays for the purchase, the merchant performs some risk assessment and may submit the transaction to the acquirer for authorization. The acquirer verifies with the issuer—almost instantly—that the card number and transaction amount are both valid, and informs the merchant on how to proceed. The issuer may provisionally debit the funds from the cardholder's credit account at this stage.
Batching: After the transaction is authorized it is then stored in a batch, which the merchant sends to the acquiring bank later to receive payment (usually at the end of the day).
Clearing and settlement: The acquiring bank sends the transactions in the batch through the card association, which debits the card-issuing bank for the transaction amount, and credits the acquirer for the transaction amount minus the interchange fee.
Funding: The acquiring bank pays the merchant. The amount the merchant receives is equal to the transaction amount minus the discount rate charged by the acquiring bank to the merchant for the service.
The entire process, from authorization to funding, usually takes about 2-7 business days. However, many merchant card processors offer next-day deposits to customers subject to type of banking account.

In the event of a chargeback (when there's an error in processing the transaction or the cardholder disputes the transaction), the issuer returns the transaction to the acquirer for resolution. The acquirer then forwards the chargeback to the merchant, who must either accept the chargeback or contest it.

Commodity money is any money that is both used as a general purpose medium of exchange and as a tradable commodity in its own right.

Commodity based currencies are often viewed as more stable, but this is not always the case. The value of a commodity based currency as a medium of exchange depends on its supply relative to other goods and services available in the economy. Historically, gold, silver and other metals commonly used in commodity based monetary systems have been subject to regular and sometimes extraordinary fluctuations in purchasing power. This not only damages its stability as a medium of exchange; it also reduces its effectiveness as a store of value. In the 1500s and 1600s huge quantities of gold and even larger amounts of silver were discovered in the New World and brought back to Europe for conversion into coin. As a result, the purchasing power of those coins fell by 60% to 80%, i.e. the prices of goods rose, because the supply of goods did not keep pace with the increased supply of money. In addition, the relative value of silver to gold shifted dramatically downward. Such discoveries of huge sources of gold or silver are a thing of the past, and lend to their supply stability. More recently, from 1980 to 2001, gold was a particularly poor store of value, as gold prices dropped from a high of $850/oz. ($27.30 /g) to a low of $255/oz. ($8.20 /g).It should be noted that gold was not a currency at this time, and was fluctuating due to its status as a final store of value — that is, the price never goes to zero as fiat currencies inevitably do. The advantage of gold and silver, however, lies in the fact that, unlike fiat paper currency, the supply cannot be increased arbitrarily by a central bank.

It is also possible for the trading value of a commodity money to be greater than its value as a medium of exchange when governments attempt to fix exchange rates between different commodity monies. When this happens people will often start melting down coins and reselling the metal used to make them. This has happened periodically in the United States, eventually causing it to move away from pure silver nickels and pure copper pennies. Shipping coins from one jurisdiction to another so that they could be reminted was sometimes a lucrative trade before the advent of trusted paper money.

Commodity money's ability to function as a store of value is also limited by its very nature. Copper and tin risk rust and corrosion. Gold and silver are soft metals that can lose weight through scratches and abrasions, but this is nothing by comparison to fiat currencies, where billions of dollars can be injected ("printed") into the market within moments.

Stability aside, commodity-based currencies may have a tendency to restrain growth in a very active economy. For example, in order to maintain the price level, the supply of money in an any economy must be equal or greater than the volume of goods and services produced. If commodities are used as money, then the total production can easily outstrip the supply of those commodities, which leads to price deflation. The lower prices of goods would signal to their producers to reduce the supply of goods, hence restoring the price level. As such, production within commodity-based economies tends to be limited by the supply of the commodity currency.[citation needed]

This problem is compounded by the fact that money also serves as a store of value. This encourages hoarding (in other circumstances known as "saving")and takes the commodity money out circulation, reducing the supply. The supply of circulating commodity currency is further reduced by the fact that commodity moneys also have competing non-monetary uses. For example, gold and silver are used in jewelry, and nickel and copper have important industrial uses.

Commodity based currencies also limit the geographic extent of the trading market. To make large purchases either a large volume or a high weight or both of the commodity must be transported to the seller. The cost of transportation of the currency raises the transaction cost and makes long distance sales less attractive

Anonymous said...

Q: How does your Debt Settlement program work?
A: When you enroll in our debt settlement program, we set you up on a monthly payment that is as much as 50% lower than your current minimum monthly payment. In the meantime, we negotiate with the credit companies to get them to agree to substantially lower the amount you owe. Once you have saved enough money and a creditor has agreed to a pay off (normally 40 to 50 percent of what is owed), we pay off the credit card company with a lump sum settlement.


Q: What are the indications that I may need to join your Debt Settlement program?
A: Our debt settlement program is only for people facing financial HARDSHIP. This means people who are late on paying their debts, have lost their job, have little or no ability to pay their debts in the future and are facing a possible bankruptcy. We do not advocate that any person default on their debts. This program is not designed to negotiate debts for people who have reasonable means to pay off their debts. If you have the ability to pay your debts in the normal fashion, by paying minimum payments, then you should honor your debts and do so. This program is NOT for people who are gainfully employed, have high credit ratings and can meet their monthly debt obligations.


Q: What other debts, besides credit cards can I settle using your Debt Settlement program?
A: We are also able to deal with medical bills, personal loans, repossessions, department store cards, gas cards, and accounts in collections. Since we negotiate with your creditors, we are unable to work with mortgages and cars because they will be able to recover the property in the event that you do not pay according to the terms they stipulate. Student loans also might as well be considered "secured debts" because the federal government will allow a student loan creditor to take your tax refund or levy your bank account without a judgment if you default. Since the bankruptcy law changes in 2005, even private student loans cannot be discharged in a bankruptcy. In sum, we only deal with debts where we will have sufficient leverage in order to procure the lowest debt settlement possible.


Q. Does enrolling into a Debt Settlement program have a negative impact on my credit?
A: Yes, your credit score will decline due to entering this program. How much it will decline depends on your original circumstances. Most of the accounts you place into negotiation are likely to "charge-off", which will reflect negatively on your credit. However, once this charged off debt is settled, the settlement is reported to the credit bureaus. Settled accounts are positive compared to unresolved delinquent debts or bankruptcy. After all the debts have been settled and paid, the credit score should begin to improve since the negative items have been resolved. A high credit score is desirable to have, but if you have a financial hardship and are unable to pay your debts, then your first priority should be to pay your delinquent debts and get back on your feet financially.


Q: Does enrolling into a Debt Settlement program stop collection calls from my creditors?
A: No. Your creditors have every right to try and contact you in order to collect a debt. However, we have been successful in eliminating most harassing telephone calls. If your account is in collections; collections agencies have to adhere to the Fair Debt Collections Practices Act (FDCPA). The FDCPA specifically states that a debt collector is obligated to contact third-parties with a Power of Attorney instead of the debtor. Once you enroll in our debt settlement program, we fax or mail a Power of Attorney to your creditors notifying them that we are handling your account.


Q: Can I still use my credit cards?
A: NO. All credit cards in the program will not be active and you will not have credit privileges. Any cards you DO NOT put into the program should not be used except for emergency purposes. This program is for you to get out of debt.


Q: Should I close my credit card accounts after enrolling in your debt settlement program?
A: Yes, you should close your account. In general, it is far better for an account to read "account closed by consumer" on your credit report versus "account closed by credit grantor." It shows to any future lenders that you took the initiative in your situation, which is helpful.


Q: What is the difference between Debt Settlement and Credit Counseling?
A: In a debt settlement program, negotiators work on your behalf to reduce your balance by up to 50%. In a credit counseling program, counselors work to reduce interest rates. The average credit card debt settlement program lasts between 1 and 3 years, whereas credit counseling services last for between 4 and 6 years. In general debt settlement tends to be a more aggressive approach to debt elimination.


Q: What is the difference between Debt Settlement and Debt Consolidation?
A: There are two types of debt consolidation: secured and unsecured debt consolidation. With secured debt consolidation, a consumer gets a loan that is collateralized by a home or vehicle to pay off their credit card debt, and then pays back the loan at lower interest since it is secured by property. With an unsecured debt consolidation loan, a consumer gets a loan from a bank, presumably at a marginally lower interest rate, to pay off their credit card debt. Debt Settlement does not involve lending, but rather negotiating with credit card companies and other creditors to reduce the amount you owe.


Q: What is the difference between Debt Settlement and bankruptcy?
A: Debt settlement is very different from bankruptcy. For starters, bankruptcy has far wider implications for your credit versus Debt Settlement. Bankruptcy is a suitable alternative for consumers who do not have any income or are seeking debt relief for secured debts like mortgages and car loans. In a Chapter 7 bankruptcy, the court orders a debtor to liquidate all of their non-exempt property and pays the creditors back with the proceeds from their sale. In a Chapter 13 bankruptcy, the court orders a debtor to turn over all their disposable income for 5 years.


Q. Can I be sued while I am enrolled in a Debt Settlement program?
A: Yes, your creditors certainly have the right to sue to recover their money. But usually the purpose of the lawsuit is to force a settlement on the matter. In our experience, most creditors would rather not go to the expense of suing and simply try to negotiate a settlement.


Q: What will I pay for your services?
We charge a 15% fee which is calculated based on the total amount of debt that an individual brings into the debt settlement program. This fee is recovered from your monthly payments in the first 12-15 months of the program. All costs and fees are always fully disclosed and you are required to sign for approval before you commit to our program.


Q: Can I apply for other credit while enrolled in the Debt Settlement program?
A: No, you cannot apply for other credit while enrolled because it could affect our ability to negotiate with the credit card companies. In some cases they will say, "If this client was having trouble with his or her debt, why have they applied for other credit cards after they enrolled in your program?" Moreover, the goal of our credit card debt settlement service is to help our clients become debt free, and applying for other credit cards while you were enrolled would defeat the original purpose of the program.


Q: Are there any tax implications associated with enrolling in the Debt Settlement program?
A: Yes, it is possible that you may be taxed on the savings related to our settling of your credit card debt. However, for clients who are technically insolvent, then the IRS only requires that you file a form 982, which exempts you from having to pay taxes on the savings from your credit card debt settlement program. The IRS defines insolvency as financial state in which someone owes more (liabilities) than the value of their assets. Many of our clients fall under this category, but you should consult a tax attorney for advice regarding your situation. Secondly, even if you are taxed on the savings from debt settlement, you still save a lot of money. Remember, you are only taxed on a percentage of the savings. That is, if our debt settlement program saved you $2000 off one of your credit cards and you had to pay 25 percent of that amount to the IRS ($500), then you still saved approximately $1500 and thousands of dollars more when you factor in the interest charges you did not have to pay.


Q: What are my responsibilities throughout the Debt Settlement program?
A: Your main responsibilities are to be truthful and to make your monthly payment as planned. Without ample savings we will be unable to obtain settlements from the credit card companies. If you will have trouble making your monthly payment, then it is important that you notify us 5 business days in advance, so you do not get charged for having insufficient funds. Moreover, it is important to stay in touch with us, so we always have quick and easy access to you during the negotiation process in the event that we need you to supply our debt settlement experts with any important information regarding your credit card accounts.


Q: Can I include accounts into the Debt Settlement program that have authorized users or co-applicants?
A: Before enrolling any credit cards with co-applicants, we ask that the co-applicant sign a waiver acknowledging that they are allowing the account to be included in our debt settlement program. For authorized users, we advise that you ask the credit card company to remove the person from the account prior to enrollment. If this does not work, we will need the authorized user to sign a waiver acknowledging that they allow the account to be included in the debt settlement program.


Q: What is the difference between credit card debt settlement and credit repair?
A: Credit repair involves removing inaccurate or unverifiable information off your credit report. Clients of our credit card debt settlement program will oftentimes use credit repair after their debts are eliminated to more rapidly increase their credit scores. Unlike debt settlement, however, credit repair cannot eliminate debts that you actually owe.


Q: Do you make payments to each of my credit cards every month?
A: No, we negotiate with your credit card companies to lower the amount that you owe. Once you have saved enough money and one of the credit card companies has agreed to lower the amount you owe, we pay them off with a lump sum settlement of your debt




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