There is no doubt that a credit card crisis is hitting our nation with credit card companies pulling in over $90 billion in interest and $55 billion in late fees in 2006 alone. But what is driving this crisis? It is easy to place blame on the credit card companies and their unethical practices. However, it is uncontrolled consumer spending that gives these companies power over consumers. Our society has grown into a culture that spends more than it earns and the only way to do this is with debt.

Today's society is no longer trying to keep up with the neighbors but is instead trying to emulate the rich and famous. Advertising focuses on status symbols - a huge house, big screen TVs, fancy cars, and countless other things that many can simply not afford. Problems are compounding now that the housing market has turned and home equity loans are more difficult to land at favorable terms. Credit cards have become one of the only remaining solutions for consumers - and this fact is being clearly reflected in bank statistics released earlier.

Instead of lobbying for changes at credit card companies, perhaps people should take a closer look at their own spending. Those experiencing problems right now should seek help through a credit counseling or debt negotiation service that can help reduce debt and get you setup on a smart spending plan. In the end, it takes two to cause problems and it is best to take action yourself before waiting on credit card companies to reform their practices.

The Financial Times recently reported that poor quarterly results posted during the past two weeks by US banks suggest that credit problems are expanding to include home equity loans, car loans and credit card balances. US banks have raised reserves of loan losses by at least $6 billion in the second quarter, indicating a substantial rise in the number and types of debt affected.

"What started out merely as a subprime problem has expanded more broadly in the mortgage space and problems are getting worse at a faster pace than many had expected," Deutsche Bank analyst Michael Mayo told the Financial Times. "On top of this, there is an uptick in auto loan problems, which may or may not be seasonal, and there is more body language from the banks that the state of the consumer was somewhat less strong (than thought)."

Clearly, these new areas of consumer debt are of great concern as banks have increased their reserves in anticipation of defaults. Moreover, a difficult market for auto loans may end up hurting auto sales during the next couple of quarters just as GM was set to beat out Toyota in sales. Just how bad is it? Well, the percent of borrowers of prime auto loans that are more than 30 days delinquent on the debt has risen to more than 2.5 percent, according to JPMorgan.

"We expect the severity of auto financing losses to grow due to extended financing terms, increased loss per vehicle and a quicker move to repossessions," JP Morgan analysts Eric Selle and Atiba Edwards said in a report. "We believe the core assets of Ford Motor Credit and GMAC are sound and they have sufficient liquidity. However, we expect higher U.S. prime auto borrower defaults over the next 18 months to cause GMAC's and Ford Motor Credit's profits to decline and their leverage to rise."

In the end, consumer debt problems continue to compound amid large mortgage resets, fewer people borrowing against their home equity, and higher fuel and food costs. These factors have cummulatively reduced the liquidity of consumers and promises to be a continuing problem.

There has been a push recently from consumer advocacy groups, college administrators, and student organizations to limit or ban the marketing of credit cards to college students. However, many others say that the best approach is not banning marketing but rather increasing education. Many colleges are now making personal financial management a mandatory undergraduate course to familiarize students with the dangers of taking on too much credit.

The Motley Fool recently reported that combined consumer debt has reached $1.7 trillion in 2001 with Americans paying $50 billion in finance charges alone. Meanwhile, 46% of householders are carrying credit card debt that averages $5,100. And more people than ever before are falling behind and being forced to declare bankruptcy. Clearly, there is a problem and one of the best ways to combat it may be through mandatory education as opposed to regulation.

In the end, the decision to get a credit card lies with the individual. Credit card companies are relying on uneducated customers to take on debt that they cannot afford and they will spare no expense marketing. Banning them from college campuses will only divert the dollars to other forms of media that reach the same college audience. But through education we can prevent credit card companies from ever happening in any medium.

Here are some tips to help you stay out of debt with credit cards:

1. Pay Monthly Balance - The first sign of credit card problems is failure to pay your monthly balance which can result in fees and interest charges piling up quickly. If you avoid spending more than you can afford and pay off your balance regularly, you will never find yourself in trouble in the first place.
   
2. Pay More than Minimum - Those that can't afford to pay off their entire balance should at least pay more than their monthly minimum in order to reduce the principle amount that you owe and avoid further compounding interest charges.
   
3. Find a Solution Quickly - Credit card debts that are out of control may require further intervention from credit card issuers or even debt assistance companies. If you cannot afford to pay off your credit card, simply call up your credit card issuer and request that they lower your interest rate or you will transfer your balance to another issuer that offers a better deal.
   
4. Transfer to Lower Credit Card - Some credit card issuers offer low introductory rates that can allow you to pay off your debts more easily. You can transfer your existing balances to these new credit cards.
   
5. Consolidate Your Debts - Unsecured debts can be difficult to overcome and may require debt consolidation in order to escape. There are two main forms of debt consolidation: credit counseling and debt settlement. Credit counseling will let you pay off your entire debt in a new plan negotiated between you and representatives of your credit card company. Debt settlement involves a third party working to reduce the total amount you owe and setting you up on a payment plan.
   
6. Use Home Equity - Home equity loans offer interest rates far below that of credit cards and other loans. Therefore, many people use their home equity loans to pay off their credit card balances in whole and then pay off the home equity loan at a lower interest rate.

There is a disturbing credit card trend emerging in the UK that may boil over into the US. Increasingly, people are resorting to their credit card to pay off mortgages or rent payments. A recent report showed over a million householders in the UK fell into this trend with more than six percent of them admitting that they needed to use credit in order to be able to meet their other financial obligations. Just as in the US, many people there are being hit by the credit crunch, interest rate hikes and housing costs all at once and it is making it difficult to stay afloat. In the end, credit card use can only enter someone into a death-spiral of debt that ends when no more credit is available and the customer can not afford to pay the balance.

The trend is also already impacting Americans; however, legislators are working to pass laws to tighten lending practices. These new laws may be aimed at curbing the use of credit cards; however, people will always have the ability to take out a cash advance and spend it on mortgage or rent payments. In the end, it is important for people to seek help as soon as they experience problems paying off their mortgages rather than compound the problem by using credit that they cannot afford to pay back. After all, by transferring your mortgage balance to your credit card, you are effectively paying interest twice! And this can add up-- one couple reported that their $900/mo ARM jumped to $1,700/mo only months after starting to transfer their balances. Be sure to act now before things get too bad.

There are many pros to having a credit card, but lets take a look at some of the cons. Banks will never let you know about them so we've made a list here:

1. No Annual Fee - Most credit cards except for American Express will negotiate or waive annual fees if you press them about it. The next time you receive a call from your bank about an annual fee just tell them that you prefer not to pay it. The bank will likely waive the fee if you upgrade or allow you to pay using reward points. Some credit card issuers will even abandon the fee alltogether!
2. Rollovers - Rolling over is the term for carrying your credit card balance forward rather than paying it on time. The cost is typically 24% per year, which is the highest that banks can charge for loans. This is never a good deal for you and should be avoided at all costs.
3. Balance Transfers - Typical bank promotions will tell you to transfer your debt and only pay a four percent processing fee and no interest for one year. This sounds good in theory but banks require you to pay off your old balance before spending any more. This means that if you make a new purchase you will be charged interest on that purchase (carrying over) until you pay off the transfer balance. You can beat the game by opening a second credit card or transferring your balance again, but this may only result in more confusion.
4. Unauthorized Charges - Criminals that steal your credit card and use it to make fraudulent purchases while signing your name aren't covered under the typical liability policies of credit card companies. In these situations, banks will only pay for charges made after you reported the card stolen. And even then, federal law permits them to charge you $50 of this amount before being required to cover the rest.
5. Free Cards - Many credit cards are free but only if you pay off your balance every time. If you do, you should get as many as possible as it gives you access to great deals. If not, re-evaluate your need for credit cards as they can quickly become a burden with excessive interest rates.
   

In the end, credit cards can be a good or a bad thing. If religiously paid off, credit cards give you access to free money and great rewards. However, if you fail to make payments, credit card debt can become crushing with high interest rates and other fees. Therefore, it is very important to evaluate your financial situation before using a credit card to make sure you have enough to cover.

Payday loans may seem like the easy way out of temporary financial problems, but many people fail to realize the crippling expenses behind the loans. These loans carry an average fee of around 25% with a repayment period of only a few weeks which combine into an APR that can reach into the thousands. Unfortunately, many consumers do not hesitate to renew their loans every month - which turns payday loans into an addictive cycle in many cases. It's easy to get into the habit of taking out new loans each month just to get by, which creates an enormous problem given the excessive interest rates here. If you are looking for cash, you may be better off looking at credit card debt, credit union loans, overdrafts, or non-profit loans - all of which are likely to be cheaper debt that payday loans.

When a loved one dies, often the only thing the family’s mind is sorrow, but people cannot mourn those who pass forever. Death is a natural part of life that happens to us all and eventually people have to move on. One of the major steps facilitating moving on is having a funeral to honor the life of the deceased. A funeral, however, is anything but easy to arrange or easy to pay for.

According to the National Funeral Directors Association the average funeral costs more than $6,000. Though getting the best bargain may be the farthest thing from your mind after a family member’s death, there is nothing wrong with honoring the deceased in a respectful yet reasonably priced manner.

Here are some suggestions on managing funeral costs:

• Shop around. It sounds crass, but prices can range greatly from funeral home to funeral home. Many people choose a funeral home because the family used it in the past or a friend held a funeral there, but with so much money at stake you are doing yourself a disservice by not at least exploring your options.
• Though it is not always possible, try planning some elements of the funeral in advance. This way you can not only compare prices during a less stressful time, but you can even get input from the person who matters most: the one who will actually be honored at the funeral. If your grandfather would prefer a simple casket, for instance, not only are you saving money but you are carrying out his wishes. 
• Consider cremation instead of burial. A “direct” cremation can cost less than $1,000. In a direct cremation the deceased is cremated without an actual funeral service or viewing, which saves significantly on the associated costs. Even if you want a viewing for your loved one, a cremation is still less costly than burial as a plot and memorial are unnecessary. 
• A casket is often the most significant cost of a funeral so shop around and consider getting a less expensive one. Also, many people do not realize that you do not have to buy your casket from the funeral home. Funeral homes often have extraordinary markups on their caskets so be sure to compare – you can even use the internet to purchase a casket and it can be delivered to a funeral home within days. 
• Like in a wedding, flowers can add a large amount of expense to a funeral for very little use. A reasonable amount of flowers done well can add greatly to the funeral without adding great cost.
• Do not buy a package from the funeral home as they often contain numerous unnecessary or overpriced items. 
• Do not buy new clothes for burial, especially outfits the funeral home offers. An excellent, and free, alternative is burying the deceased in a favorite or recognizable outfit. If you prefer a suit, consider a reasonable suit from department store instead of a tailored suit. 
• Do not purchase a rubber gasket, sometimes called a protective sealer. Though many funeral homes recommend it, it is said by some inside the industry to be overpriced by hundreds of dollars and completely ineffective.
• Monuments, like coffins, are a very large expense that can be curbed by both comparing prices and opting for a simpler, more subdued design.
  

Finally, there is sometimes assistance available for paying for the funeral:

• Social Security Administration: offers $255 that is payable to a spouse or minor children of the deceased for use towards funeral expenses. It is available if you meet “certain requirements” according to the government’s official website.
• Veterans Administration: Veterans of the U.S. Armed Forces as well as certain civilians who worked for the military are entitled to be buried at a national cemetery for free.

A death brings with it many responsibilities for the family of the deceased. The family needs to make funeral arrangements, call family members and deal with the funeral and burial among other things. One thing that a family shouldn’t have to deal with is the distribution of the possessions of the diseased. Everyone should have a will in their name, regardless of their assets or age.

Many adults postpone writing a will when they are younger; however, the simple fact is that death doesn’t wait for anyone. Others postpone creating a will because they are unsure how to start the process while still others avoid creating a will because it may a few hundred dollars – but this is a worthwhile investment.

Wills are important because they allow you to not only dictate who receives your material objects, but they also decide more important issues after your death. One of the most important issues typically addressed in wills is the future of any of your children who are still minor. You can specify in your will, for example, to have your best friend take care of your children in the event of a tragic accident that leaves your children without parents. Otherwise, if a will is not on file, the courts may be left to decide who takes guardianship.

Even in the event you die leaving your spouse behind, the distribution of your assets may not be according to your wishes if you lack a will. Think that your spouse will simply get all your property? Wrong: depending on the state you live in, your spouse may have to share the estate with any adult children, parents or even siblings in the absence of a will.

By using a will you can avoid the state defining where your assets are distributed. The government has very specific guidelines as to how assets are divided and any deviations must be made in a will. For example, in some states if you have a wife and two kids, the government will allocate half of what your assets to your wife and half for your children to split. If you want to leave more money to your wife or money to someone or something else, this must be specified within your will. With a will, you are free to distribute your assets to anyone and any organization you want.

Equally important is being able to assert who gets what particular assets. Assets may be split by the government but it is often difficult for them to decide who receives what assets. For example, will your wife receive your automobile or will the children? This could result in your family engaging in a legal battle with each other over particular assets – a beloved watch for instance - a problem that can be avoided through the creation of a will.

Ultimately, it is always smart to have a will on file to protect your wishes as well as your family from unnecessary turmoil. While it certainly will take a little bit of extra time, effort, and money right now, the peace of mind of having a will far outweighs the cost.

Don’t let the government and people you don’t know decide who gets your assets and even children and don’t leave your family in limbo regarding your assets after they have finished mourning your death. Stop making excuses and create a will because unfortunately you never know when you might need it.

Information on investing can often be somewhat dry and technical, but when your money is on the line, you should always be informed about your options. This article will explain to you, in plain language, two of the most popular forms of investing: index funds and mutual funds - as well as tell you which one you really should probably use.

Index funds and mutual funds can both be thought of as baskets filled with various stocks or bonds – but here we will focus on funds containing stocks. Now, a stock is simply a piece of a company. A stockholder is no different than a partial owner of a company, except that in most cases a stockholder owns a tiny piece of the company and for that reason doesn’t get to be involved in everyday decisions about the company’s operations, like a normal owner would; however, because stockholders are partial owners, like owners, their piece of the company increases with value when the company is doing well and decreases in value when the company is not.

So, index funds and mutual funds really just own pieces of other companies, they themselves don’t actually do or make anything, other than decide which stocks to buy, and it is here that the difference between index and mutual funds shows itself.

Index funds are so named because they attempt to mimic the performance of a specific financial index. A financial index is just a number that is derived from combining the values of whatever composes the index. To illustrate the point, when a news anchor says, “The market was down 15 points today,” he is often referring to the S&P 500.

The S&P 500 is an index containing the stock of 500 large corporations. When, on average, the value of these corporations decreases, so does the value of the S&P 500 index. If you bought an index fund that was based on the S&P 500, its movement would replicate almost exactly the movement of the S&P 500. The original idea behind an index fund was literally to be the S&P 500 – except that investors could purchase a piece of it. Of course, you can purchase index funds tied to numerous different indices besides just the S&P 500, such as the Wilshire 5000 and FTSE 100 among others.

Mutual funds are much different. It is easier to understand what they do, but harder to understand how they do it. Now, bear with me. A mutual fund is managed or controlled by a group of people. These peoples’ entire job consists of deciding what stocks to buy. Unlike an index fund, a mutual fund does not need to mimic a particular index, and therefore a mutual fund is free to buy stocks based on different investment strategies. So in other words, the group of people that manage a particular mutual fund buy stocks they like for the mutual fund, it is that easy. However, why they like certain stocks and not others is hard to explain and often doesn’t seem to have a real explanation.

Some groups of people who run mutual funds do “value investing;” they only buy stocks that seem to be a great deal. Others do “growth investing;” they only buy stocks that are in a business that is really booming. Others combine both methods… and the list goes on.

For the purpose of this article, the particular investing style a mutual fund uses doesn’t matter much because in the end they are mostly wrong. That’s right, most mutual funds underperform the market, and since you can basically receive market returns through an index fund, an index fund makes more sense.

There are two main reasons index funds make you, the investor, more money. First, in all honesty picking winning stocks, stocks that are going to go up in value faster than the average stock, is really quite hard on as large a scale as mutual funds need having millions of dollars to invest. Very few people are able to analyze and interpret data about a company’s orders, costs, debt, outlook, management, macroeconomic issues as well as countless other variables.

Now, if picking winning stocks is that hard both index funds and mutual funds should do about the same because it is all luck anyway and they both have some stocks - and who knows how any particular stocks are going to do, right? Well, because it is so difficult to determine what stocks are going to do, that argument would be right except remember that group of people I talked about who decide what stocks a mutual fund buys? Well, those people want to get paid, in fact they want to get paid a lot.

According to data, the average mutual fund manager makes almost a half million dollars a year and these high salaries are reflected in higher fees for mutual funds. Also, the buying and selling of stock carries associated costs which are more likely to occur with a mutual fund. These differences show up in the comparison between index funds and mutual funds time and time again.

In fact, according to most reliable data, index funds outperform some 80% of mutual funds on both a before and after tax basis. That means 8 out of 10 times you are better-off being in an index fund than a mutual fund. So the next time you see an add for a mutual fund, consider whether you would like to bankroll some fund manager’s million-dollar lifestyle or your own? If you choose your own, choose an index fund.