hello. this is "your bottom line" the show that saves you money. be debt free. we'll tell you how to manage your credit card debt. fighting fraud. how to spot the warning signs and protect yourself from a scam. and fool proofing your resume. tips and tricks to stand out from the crowd. "your bottom line" starts right now. we begin with the very latest on the troubles many of us are having when it comes to paying our bills. delinquencies on consumer debt, auto loans, credit cards, and home equity loans rose to a record level in the first quarter of 2009, up slightly from the previous quarter. now, that according to the american bankers association. even worse, the percentage of borrowers at least 30 days late

paying a balance is the highest since the group began keeping records way back in 1974. despite government efforts to get banks to lend more card issuers are lending less. in the first four months of the year banks issued 9.8 million new credit cards, nearly a 40% drop from the same time last year according to equifax credit bureau data. low risk borrowers can still get credit but less than before. the average limit on a new card slipped this year to $4,594. now, managing your credit card debt may seem impossible but you can do it by creating a plan and sticking to it. michelle jones is the senior vice president of counseling at the consumer credit counseling service of greater atlanta. michelle, great to see you. >> thanks. good to see you again, as well. >> let's get right to it. how do i handle this credit card debt for the typical credit card holder it's over $10,000 and now the credit card issuers are making it so much harder on me. how do i pay that down? >> well, there are several

things you can do, jerri. one is if you have several credit cards, which most americans do, and you want to start paying those off, the first thing you want to do is look at how you can snowball those payments. by snowball what i mean is you take any extra money you have available and you put it towards one of your credit cards and just make the min payments on the other ones. >> how do i pick that card? a lot of people say you pick the card with the highest interest rate but you actually have different advice here. >> you know, that is one reasonable way to pay down your debt is to look at the one with the highest interest rate. but another thing that some people prefer to do is start making payments on the lowest balance cards first and the reason for that is that you get a real psychological lift when you pay off those debts. you can say okay. i had six credit cards. now i'm down to five. and you can really make fast progress. that's a good way to stay motivated. >> right. that's interesting. there is a great feeling when you get one of those paid off completely. really makes you want to go and pay off the other one. let's talk about debt

consolidation. a lot of people think about doing this. is it good news? is it bad news for people who have a lot of debt? >> you know, it really depends. you want to look at those offers carefully. if you have one credit card with a very high interest rate, it may very well make sense for you to transfer that to a lower rate card. you have to be aware that some credit issuers are charging higher fees now for the balance transfers. >> that's right. >> you want to be sure and do the math. that can take the bite out of it. >> right. i love that. okay. we had credit card reform. remember that, you know, the president signed off on that way back at the end of may and i thought life was going to get better but, clearly, the numbers are getting worse. it's obvious people are making mistakes with these credit cards. what are the biggest ones? >> well, the biggest ones are failing to stay current on your payments. i mean, that's when your interest rates can really go up and you can start to see extra fees. we've seen some credit card companies that are lowering your available credit balance so that when you start -- you may go over the limit without realizing

it. >> right. and that's always a disaster. let's talk just a little bit here about the idea that credit card debt, guess what, is what they call unsecured debt. that means nobody's coming after your house, nobody's coming after your car if you fail to make a payment. knowing that, what advice would you give to consumers, michelle? >> well, i would say absolutely if you're considering consolidating your debt the way not to do that is to attach it to your house. do not take out a home equity line of credit or something like that where it would attach your credit card debt to your house. as you said, it's unsecured debt. there is no physical property they can take from you if you get behind on those payments. however, you turn that into a line of credit on your house and you've just put your home at risk for credit card debt. >> that is great advice, michelle. thank you for that. >> you're welcome. thank you. one of the few businesses that's flourishing during the recession is the foreclosure rescue industry. companies charging a fee for preparing loan modification documents say they're out to help consumers save their homes,

but housing counselors say that's not a promise you can take to the bank. >> we are writing this letter directly to you to explain our family's unfortunate set of circumstances. >> this man is asking for a mortgage modification. he's not alone. realty track predicts 4 million foreclosure filings this year. he doesn't want to be one of them. enter chris maz illo the brains behind a timely internet startup in phoenix called e-modify my loan.com. yes, that mazillo. he's the nephew of angelo mazillo of countrywide the company that helped trigger the mortgage meltdown that forced millions into foreclosure. this mazillo says he wants to help victims of that debacle. >> it was a terrible business mistake the entire industry made and certainly he was in the center of that being ceo of the largest of the mortgage companies.

>> his site charges $97 to guide homeowners through the modification process. >> we're trying to put those tools in the hands of the homeowner so they don't have to pay thousands of dollars for a loan modification. >> you do not need to pay for someone to help you facilitate a loan modification or a short sale. there are over 1700 counseling agencies. >> yet loan modification companies are thriving. even mozilo agrees his line of business needs a watch dog. >> it is ripe for fraud. there have been people arrested and taken to jail because they are taking advantage of people. >> arroyo, who found a free counseling service, says you don't get what you pay for. >> if someone is looking to modify their loan, i strongly recommend them not to pay a single penny. >> the arizona attorney general's office says it has already received a hundred complaints about the so-called foreclosure rescue industry this year and that it is the fastest growing scam in the state.

just last month new york attorney general andrew cuomo subpoenaed information from 14 loan modification companies as part of a nationwide investigation. the ftc bureau of consumer protection is out with a new fraud warning video. listen to what one former telemarketer convicted of fraud had to say. >> you never saw me in your life. you saw a commercial on tv. you got on the phone and spoke to me for ten seconds. i gave you some names to call and things to look up and you called me back three days later and you wrote me a check for $50,000. that sound a little screwed up? >> up next we'll tell you the warning signs and how you can protect yourself from getting ripped off.

just last week we had a story of an 86-year-old woman who lost her life savings to telemarketing fraud. she was defrauded out of about $200,000. >> they called me and told me i had won a certain amount of money and different ways for me to acquire it. i would have to send money. i just kept thinking, when i talked to people, i believe what people tell me. >> so sad. well, lois, like many victims of fraud, says she feels pathetic and embarrassed. but she said she wants others to hear her story so they don't get taken advantage of. just how does this sort of thing happen and why? well, according to the ftc scams are on the rise due to the troubled economy. take a listen to their new public service announcement and

just how much money one former fraudster used to pull in. >> i think the catalyst is money. in my best month i made $50,000. >> in 2005 jim was convicted for his role in a business opportunity scam. >> there was ridiculous money being made. you could take down $20 million in eight months. >> he sold the american dream, the dream of being your own boss. >> it's basically learning how to listen and manipulate people. once you understand the dynamics of what you're trying to do, which is separate them from their money, that's it. >> let's get you armed to protect yourself and avoid these scams. karen is an attorney for the federal trade commission and joins us now from washington. i just get angry listening to that. i mean, these are people out to rip you off. with these business opportunity scams what are the red flags? there are legitimate opportunities out there. how do you find the fake ones? >> look.

the tell tale warning sign of a business opportunity fraud is a guaranteed earnings claim or a guaranteed success claim. there are also other signs, which is the money back guarantee. look, if you fail at a business, no one is going to give you your money back. that's another sign. the other thing these scammers like to do is to make you hurry up with your decision. they don't want you to do your due diligence. >> right. all right. stay at home. you're guaranteed to make money. all of that means you're in big trouble if you get involved. of course there are documents that these people should give you if you're signing up. what are those documents and what am i looking for, karen? >> that's right. for a business opportunity, you're supposed to receive a disclosure form. and that has a lot of very good information in it. in particular, the history of the principles of the company. they need to tell you if they've ever been sued before. if they've been sued for fraud, in particular by the federal trade commission or other agencies. and they should also give you a

list of references that you can call and ask them about their experiences. they also need to give you a very extensive list of prior purchasers. >> you talk about people who are references. in this particular fraud people did get references but they were fake. how far do you go in checking out the references? >> you need to go as far as you can. you need to meet people in person. you need to open their books and take a look and if they're asking you for money up front you really need to do your home work first. >> all right. so i need to see those references, see their results on paper. one of the problems is these people try to rush you through the process. if you don't sign up today, karen, we'll move on to somebody else. is that a red flag? >> that's a huge red flag. if you're going to be investing $20,000 in a business and upwards you need to take your time and these folks should give you that time. this is a huge investment. >> and i should be getting some

earnings numbers as well, right? those documents that are disclosure documents should show me real results. >> if someone is making an earnings claim, they need to give you documentation that substantiates that earnings claim. if they say you can make a hundred thousand dollars a year with this business opportunity or i've made a hundred thousand dollars a year in this business opportunity, they need to give you the proof. >> and, of course, this isn't the only kind of fraud out there that people are encountering. there's these phony government grant frauds. i hear about this all the time. you've really got to be careful when you're picking up the telephone. >> absolutely. if someone is calling you on the phone and they are asking you for money up front for anything, you should be very, very skeptical. do your due diligence. >> do your due diligence and be careful. the fellow told us, fast nos and slow yess, the way to vet those

projects. your resume is a great way to make a first great impression. how to avoid mistakes.

as the unemployment rate climbs and companies continue to cut costs workers are feeling lucky just to have a job even if it's one they don't like. this survey found more than half of workers with a job are planning to look for a new one as soon as the economy turns around. with even unhappy workers staying put the job market is tougher than ever. in may there were nearly six unemployed workers for every available job. so if you've been sending out your resume left and right and the offers are few and few between it might not be you. it could be your resume u our next guest says there are boilerplate resume phrases that can be killing your chances of getting that interview. liz ryan is a work place expert in denver. liz, i want to talk about some of these phrases that you say are boilerplate. i think they're phrases we've all been using for a long time, like team player. you name it. i think we use them all. what are those phrases and why shouldn't you use them? >> well, you know, jerri, some of them were so trained for us

to use we don't think about them. team player, bottom line orientations, work ethic. the trouble with these phrases is they don't carry any weight for us in a job search. >> what do you mean? they describe what i want to be. >> right. >> i want to be a team player. i want to have work ethic. i want to prove that to the employer so why wouldn't i put it on my resume? >> great question. because they don't prove a thing. what those boilerplate phrases are, jerri, are empty boasts. what we should be using, that precious real estate on a resume for is to prove that we're a team player, to tell a little story about our work ethic to show we have a bottom line orientation instead of just claiming that which anybody could put on their resume and they do. >> i think people got in the habit of using these phrases over and over again and it became a short hand if you will. >> exactly. >> of course now a lot of people use those phrases because they feel like that's what they expect the employer expects to hear.

they're pulling out phrases from ads for these jobs and they know that there are computers looking at these resumes and they want to be sure they're using the right language so they'll be paid attention to. >> right. the reason the companies use that corporate speak language is because they've drawn it from hundreds of job descriptions, job ads they've written before. they don't have a way to ask us about what we've done specifically to get to the heart of what they're looking for but we have the benefit of our background and our experience and we need to use that and bring more of ourselves, concrete, specific accomplishments into the resume. kill the boilerplate. it's dead. it doesn't help us. >> all right. but that long description is going to take me past a single one-page resume which so many people recommend. >> you don't need a long description. two pages is perfectly fine for a person who's been in the work force for seven to ten years. in fact, two pages is standard. you don't need a long description. a resume exercise is a wordsmithing exercise. i do it all day long and i sit

on thesaurus.com and find stronger words, better words, more human words. >> liz, i think this is really important. a lot of people out there are getting older. they've been in the workplace a long time. they have tons of experience. >> yes. >> and because they feel like, you know, employers are trying to steer away from people in their age group they're taking out words like manager and that show their experiential. is that the right thing to do? >> it depends. the most important thing, jerri, is to be relevant to the job description. what people do is they send out the same resume, the same cover letter for every job. that does not help us. we have to really read that job ad to make sure we're speaking of the accomplishments in our background that are the most relevant. >> right. >> if it's a manager job we'll talk about management. if not, maybe we don't need to emphasize the management in our background because that could mark us as over qualified. >> thanks for your help. we appreciate it. >> thank you. we love our pets but from

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