Preferred Financial Services

Andover, Massachusetts July 30th2010 – Data released today by the government shows continued growth in the US economy but at a slower pace then expected or hoped for. After GDP increased by 5% in the 4th quarter of 2009 economists were hoping that the worst was behind us and the US economy would be shake off the recession and start growing again. However, the 1st quarter of 2010 saw a lower growth rate and today the Commerce Department reported that GDP grew by 2.4% in the 2nd quarter, much lower than expected and not enough to spur consistent job growth.

Reasons for this unexpectedly slow growth rate include continued high unemployment, very tepid consumer spending growth, as well as a growing trade deficit which is hurting our manufacturing industry and other export industries. Although this news gives some credibility to economists who fear a double dip recession, there is also some positive news to report. Businesses increased their spending on software and hardware upgrades by a huge 21.9%, indicating business are expecting the economy to turn the corner and are thus getting ready for increased growth. Home and commerical builders also posted some impressive numbers in the 2nd quarter with commerical building projects increasing by 5.9% and residential buildings increasing by a government aided 27.9%. Another interesting number to keep a track of is our personal savings rate as consumers. Before the recession, our savings rate was close to 0%  with some quarters even showing a negative savings rate.  As soon as the recession hit, this rate started to creep up, and last quarter it reached 6.2% of all disposable income, the highest it has been in a year. This is indicative of the continued high unemployment and limited job security. But, it could also indicate a fundamental shift in how Americans use and save their income.

The numbers we are reporting each week show continued ups and downs. No one, not even the Fed Chairman Ben Bernanke really knows where our economy is headed which is weighing down on all the important economic indicators. Stay tuned for more updates and to follow the pace of recovery in the US.

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit www.pfsdebtrelief.com or follow us on our blog at www.pfsdebtrelief.com/blog/ .

Contact:
Stephan Tavernini
Marketing Coordinator
Certified IAPDA Debt Arbitrator
Preferred Financial Services
stavernini@pfs1.net

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Andover, Massachusetts July 28th 2010 – The rise of “free” credit report websites and services has been rapid and almost unregulated. Popular commericals from sites like Freecreditreport.com created a huge buzz for these sites and as a result millions of consumers signed up for their services believing they were getting a free credit report with no strings attached. The truth was in the fine print, like it almost always is. The sites offered a free credit report but only after the consumer signed up for a credit protection service or some other personal finance tool. Most times, this obigation was relegated to the fine print at the bottom of the site which obviously did not help the consumer make smart decisions. After enough complaining, congress acted and passed a law that required sites offering “Free” credit reports to post a link on their site stating….

“You have the right to a free credit report from AnnualCreditReport.com or 877-322-8228, the ONLY authorized source under federal law.”

It was hoped that with that link on each site consumers would not be as confused anymore about the service they were buying and could access their free credit report without paying for any unwanted service. While the law has lowered the number of complaints, 18 companies continue to host sites that violate this law. Today these violaters were given a letter from the FTC demanding they comply. Hopefully the government will become more aggresive at requiring compliance with this law so no more consumer is scammed into a service he/she does not want.

The complete list of violaters can be found at http://consumerist.com/2010/07/a-list-of-18-free-credit-report-websites-warned-by-the-ftc.html

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit www.pfsdebtrelief.com or follow us on our blog at www.pfsdebtrelief.com/blog/ .

Contact:
Stephan Tavernini
Marketing Coordinator
Certified Debt Arbitrator
Preferred Financial Services
stavernini@pfs1.net

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The popular homebuyers tax credit which rewarded up to $8,000 to new home buyers through a tax credit has been extended. Most likely politicians noticed all the terrible economic data that has been released over the past two weeks and so have decided to extend this valuable tax credit. While this may be a short term political decision, it could also provide some much needed positive economic news. Although the benefits of these types of tax credits can be debated, the tax credit is expected to help the home construction and sale industries in the short term.Stay tuned for more updates on this topic and to see if it is having the expected positive impact on those industries.

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The opening few hours on Wall Street today were marked by a steep drop in the DOW, continued worries about the global recovery, and a rise in the dollar. Oil fell as the dollar appreciated and investors flocked to the relative safety of the dollar as the Euro continues to show weakness in the short term. Stay tuned as we will continue to follow the market throughout the day.

Stephan Tavernini
Preferred Financial Services

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Preferred Financial Services, Inc reviews and discusses the upcoming Financial Regulation Reform Package currently being debated in congress…

Andover, Massachusetts May 1st 2010—Preferred Financial Services has reviewed the Financial Regulation Reform Package proposal currently before congress and wants to make sure Americans know how this will affect them and not just Wall Street. This financial reform was first proposed last year as the financial crisis was winding down and banks were not facing ever rising default rates and credit shortages. The reform is meant to prevent a future Wall Street collapse and bail out while protecting consumers from the reckless risk taking that epitomized the Wall Street excesses of the early 21^st century.

The changes impact everything from consumer protections to financial products and future bailout procedures. The biggest change for everyday consumers will be the creation of a Consumer Financial Protection Bureau housed in the Federal Reserve building. It will be independent of the Fed and won’t have to answer to the Fed Chairman. Its purpose is to educate and protect Americans from exotic credit products that proliferated in the past decade including sub prime mortgages, financial derivatives, and lax credit worthiness checks. This new agency will educate consumers about all the products out there and give access to less risky products that are more consumer friendly.

The recent financial meltdown is very different from past recessions as many of the exotic and less regulated products that partly caused the meltdown did not exist then. Derivatives and securities that were bundled together and sold to investors were not regulated like regular financial products. These new regulations will place them under the same supervision as other products. They will be traded openly on exchanges just like regular products and the originator firms of the products will be forced to keep some collator on hand to control losses and risk taking. Not only that, but deposit taking banks will no longer be allowed to deal in them as they represent to large of a risk for average consumers and should be confined to investment and large scale commercial wealth management institutions.

A contentious part of the proposed reform is how to deal with a future meltdown and the financial firms at the center of it. The proposed idea would be to create a fund using financial sector money that would be used to dissolve future financial firms when they run into another meltdown like the one we just experienced. It is being opposed by some who see it as another form of a bailout that does not allow the free market to just eliminate unprofitable firms.

Another populist reform measure that is being considered would give the right to shareholders of publicly traded firms to hold a non binding vote on executive compensation. Executive pay has been a very polarizing issue since the economy collapsed and there is a lot of political and public support to bring their pay into line with the performance of their companies. Poorly managed firms should not reward their executives with outrageous bonuses.

All these reform ideas face a long and arduous political process that will surely eliminate and revise many of the ideas. Wall Street opposes any regulations that limit its freedom to work the markets and make a profit for shareholders. Republicans want to allow the free market to do its job while Democrats want to protect Americans from the predatory practices that ruined millions of families over the past 3 years. All three viewpoints need to reconcile so a package can be passed. The process is ongoing and politicians are attempting to complete and have the reform package signed into law before the summer recess begins in early August.

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

Contact:

Stephan Tavernini

stavernini@pfs1.net

www.pfsdebtrelief.com

Citations:

• http://www.senate.gov/artandhistory/history/common/generic/News_August_Recess.htm
• http://images.usnews.com/money/blogs/the-home-front/2009/06/17/obamas-financial-regulation-reform-7-things-you-need-to-know
• http://www.huffingtonpost.com/2010/03/15/dodd-unveils-financial-re_n_499569.html

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Preferred Financial Services, Inc reviews and discusses the most recent Household Debt Service and Financial Obligations Ratios data released by the Federal Reserve …

Andover, Massachusetts April 26th 2010—Preferred Financial Services has reviewed the most recent data released by the Federal Reserve in regards to household debt ratios and continues to see signs that the economic recession has changed consumer habits in the short term. The verdict on any long term change is still up for discussion as not enough time has passed for accurate predictions to be made.

As expected, the household debt (mortgage and consumer debt) to disposable personal income ratio continues to drop, hitting a 9 year low of 12.6. This means that 12.6% of all the disposable personal income of the average American is going towards debt service payments. This ratio went as high as 13.92 in the first quarter of 2008. This was the peak of the economic bubble where people were maximizing their debt payments to sustain a lavish and unsustainable lifestyle. As the economy started to falter and household income and spending took a hit due to property value plunges, foreclosures, job losses and income insecurity, this ratio has been on a steady decline.

This decline proves that Americans have changed their spending habits due to the economy, something that was not a foregone conclusion when the economy first started to slow down. The question everyone is asking now is if the old habits will reappear once the economy improves or if Americans have actually changed how they live and manage their finances. If we do revert back to our old spending habits, our economy might improve quicker due to higher consumer spending and thus economic growth. However, that means we didn’t learn from our past mistakes and are setting ourselves up for a repeat of the disaster of 2008. If it is a permanent shift in consumer spending, past assumptions about the American economy and the strength of consumer spending will not be true anymore. Consumer spending has been the engine of growth for the American economy since the end of World War 2, are we witnessing a fundamental shift of the American consumer? Only time will tell.

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit: www.pfsdebtrelief.com

Contact:

Stephan Tavernini

stavernini@pfs1.net

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Preferred Financial Services, Inc reviews and discusses recent financial data on consumer credit released by the Federal Reserve…

Andover, Massachusetts April 20^th 2010 – Preferred Financial Services has reviewed the most recent consumer credit report released by the Federal Reserve in early April and has found some interesting and thought provoking information in it related to how Americans are spending their money in this economy.

As expected, with the still faltering economy and high unemployment rate consumer credit has decreased quite substantially as American families are still worried about the economy and their personal finances. This drop in credit tends to signal that consumers do not believe the economy in general and the job market in particular has turned the corner completely. If they did, the credit use by consumers should be trending upwards not downwards as consumer spending increases.

The numbers also show that Americans are relying less and less on revolving credit and more and more on non revolving credit which once paid off can not be used again. Typical examples of this are car loans and student loans. Revolving credit, which is typical credit card debt, dropped an astounding 13% in February. Non revolving debt only dropped 1.3% on an annual basis in February. This disparity leads us to say with a high degree of certainty that Americans continue to limit their personal non essential expenses in these tough economic times.

The report goes on to state that total consumer debt has decreased by close to 40 billion dollars from January to February. Before this recession Americans had peaked their personal debt at close to 2.6 trillion dollars in the 4^th quarter of 2008. As the economy soured and Americans reigned in their debt, it has dropped to 2.45 trillion. The continued drop also signals that Americans are paying off their debt and not creating new debt. This is very important as it could signal a fundamental shift away from living on credit to a more responsible financial landscape.

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit: www.pfsdebtrelief.com

Contact:

Gabriel Tavarez

gtavarez@pfs1.net

866-992-7400

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What are the key measures of financial health? Is it how much money you make? Is it how much money you spend? Or is it a combination of the two things? While attempting to get at your financial health, you can’t measure just income or expenses you have to measure them both as they relate to one another.

Loan officers or mortgage brokers commonly refer to your debt to income ratio or DTI. Credit card companies and counselors also talk about debt to income ratio which begs the question what is it? And why is it so important?

In short your debt to income ratio compares how much you make to how much you owe. The purpose of the calculation is for lenders to be able to determine how much more debt you can take on without overextending yourself. To do the math, take all of your fixed monthly expenses and divide the total by your gross monthly income. Why is this information important to lenders?

Lenders want to figure out what type of risk they are taking when they are lending you money, your risk factor to the banks is manifested in your interest rate if they approve you for a loan; the higher the rate the more risk the bank assumes it is taking when it is lending you money. Mitigating risk is important for banks, but understanding how you should be managing your finances is critical to you… Here are some general guidelines:

Your DTI should be under 36% when shopping for a mortgage
Your total housing expenses should be less than 29%
FHA & VA loans allow up to 40% when evaluating loans

Paying off your debt is always a good idea. If you’ve found yourself in a position where your debt has started to get out of control look into your options…. Ultimately, you’re looking for the best debt elimination tool that you can find. Eliminating credit card debt should almost always be your top priority. There are lots of services that offer you the ability to resolve your debts effectively.

Debt consolidation services like consumer credit counseling may work for some people, while debt settlement may work best for others. Consumer finance is complicated; there are lots of questions you need to ask. Preferred Financial Services offers a debt settlement service that helps reduce your debt quickly and effectively. Keep all options open and above all keep your eye on the amount of debt you are taking on.

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If you’ve ever wondered why finance charges on a credit card accrue so quickly, look no further than your card holder agreement. Credit card companies have come up with a series of elaborate ways to bill finance charges adding to their bottom lines, while taking away from yours. The double billing cycle method is one of six complex ways credit card companies tabulate interest.

Double cycle billing is a method of calculating finance charges based on the average balance owed over the past two billing cycles. Credit card companies use this method of billing to increase revenues billed to card holders that pay off their balances quickly, but has been scrutinized as a result of fees billed on balances that may have been already paid off.

The Math:

Standard interest rate calculation:
Average daily balance * Annual Percentage Rate * Days in Billing Cycle/Days in year

$1,000 * .135 * 25/365 = $9.24

Double Cycle Billing:
Two-cycle average daily balance * Annual Percentage Rate * Days in Billing Cycle/Days in year

$1,500 * .135 * 25/365 = $13.87

The example is based on a cardholder with a $1,000 balance currently due, that held a $1,500 balance but made a $500 payment. In this case the credit card company made an additional 50% in interest for the period even though a third of the balance had already been paid. The disadvantage to consumers is obvious; even if you already paid your bill they are still billing you interest as if you still owe them.

The Impact:

If you follow the math you’ll notice that tabulating interest in this manner puts consumers at a significant disadvantage. The math detailed in the example above speaks for itself, paying interest on money borrowed that is already paid seems intrinsically wrong. That being said the impact on cardholders that carry similar balances on a month to month basis isn’t very significant, the greatest impact is felt by consumers that pay their debts off aggressively. The double cycle bill method looks as if it was designed to get greater interest payments from those consumers looking to eliminate their debt quickly.

Overall this billing scheme puts consumers behind the eight ball when it comes to reducing or eliminating their debts. Credit card companies under this billing structure have an advantage that consumers may not be able to overcome, putting them in a position where they are consistently getting behind with their credit card debts.

Information on ‘Double Cycle Billing’ is available on the Federal Reserve’s website: www.federalreserve.gov, there you’ll find a complete overview of consumer debt trends and an overview of new credit card rules and how they may apply to you. For more help on understanding your creditors or eliminating your credit card debt, feel free to contact Preferred Financial Services.

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ANDOVER, Massachusetts, U.S.A. – Preferred Financial Services of Andover, Massachusetts has been accredited by the U.S. Organization for Bankruptcy Alternatives. Lingering economic problems across the U.S. have forced many of our citizens into dire economic straits, and many who have defaulted on their credit card payments are beginning to look towards bankruptcy protection as their only alternative. However, bankruptcy and its lingering effects can affect an individual’s credit record adversely for many years to come. The good news is there are less drastic alternatives including debt consolidation and debt reduction assistance, but choosing an accredited firm to help in these matters is critical.

Debt consolidation is a process where an individual works with a credit counseling firm to reorganize their various unsecured debts (most often credit cards) into a single, lump sum debt with a more favorable interest rate than the high interest rates charged by the card issuers. Note, however, that while this tactic is helpful in reducing the total monthly payments due to a lower interest rate, the total amount of debt is not reduced. This often means that it can take upwards of 20 years to pay off the total debt.

Debt reduction firms such as Preferred Financial Services, on the other hand, reduce the total amount of debt owed to the credit card companies by negotiating settlements with those firms on the client’s behalf. Consumers that have defaulted on their credit card payments who enroll in a program with a reputable and accredited debt reduction firm benefit from negotiated settlements that often result in a reduction of 50% or more of what was originally owed. This effectively cuts the total balance by half or more, significantly reduces monthly debt payments, and helps reduce the time to reconcile the debt by many years.

However, consumers need to be aware that many ‘fly-by-night’ debt reduction firms have popped up on the scene. To avoid getting tied-up with one of these unscrupulous firms, consumers should work only with firms that are accredited by the United States Organizations for Bankruptcy Alternatives (U.S.O.B.A.). Preferred Financial Services (www.PFShelp.com) is one of a small handful of firms that have received this accreditation. To become accredited by this body, each organization is required to pass an annual, on-premises audit conducted by the U.S.O.B.A. Having a U.S.O.B.A. accreditation provides assurance that the firm adheres to the highest industry standards and has compliance with each state’s rules and regulations.

Anyone who has defaulted on their unsecured credit card debt and believes that bankruptcy is the only solution should seriously consider contacting a U.S.O.B. A. accredited firm.

About Preferred Financial Services:

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has some of the most experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt in 2009 for just over $6.4 million, for a savings of about 60% – and over 2,900 accounts were settled on behalf of their clients.

For more information, visit: www.PFShelp.com

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