Simple Steps to Get Out of Credit Card Debt
With the number of credit card offers that the average American home receives every year, and the fact that the average American is about $8000 in credit card debt, it is not difficult to see how quickly consumers can get deep into debt with credit cards. Although it’s not easy, there are some simple steps that can be taken to begin to decrease your credit card debt and to begin to gain control of your spending and finances once again.
To begin, look at the latest statement for each of your credit cards and check the balances on them. Then check the interest rate you are being charged by each of these cards. Some creditors can charge up to 21% or more in interest annually. If you find that you are carrying a balance on one or more of these high interest rate cards, and you are only paying the minimum required payment each month, it may take you years to pay the balance off. Not only that, but when the iniital balance is finally paid off, you will actually have paid many times the initial charges when you consider all of the interest paid during this time.
The next step you must take to avoid this scenerio is to consolidate your debt. If you are carrying a balance on a high interest rate card, begin looking for a card that offers a lower interest rate. If you are carrying balances on more than one card, look for a credit card that offers an introductory rate of 0% on balance transfers. Apply for one of these cards and transfer your existing balances to this new card. Now you have anywhere from 6-15 months (depending on the new card’s terms) to work on paying down your balance without worrying about added interest charges. However, be sure to ask about any transfer fees involved before opening one of these new credit card accounts.
The final key is to stop all unnecessary spending and increase the payments to your credit cards as much as possible. Above all else, avoid paying only the minimum required monthly payment. This is the worst thing you can do. Continue to pay off as much as possible every month while reducing your spending as much as possible and you will find your debt beginning to decline until you are finally out of credit card debt entirely.
Karyn Kudrna is owner of the website http://www.credit-123.com which offers information on low interest credit cards
Tags: balance transfers, credit cards, debt, Debt consolidation, financePublished by: faison on July 8th, 2008 | Filed under la-poste-finance.info | Comment now »
Navigating the Credit Card Minefield
Do a Google search for credit cards nowadays and you’ll find a truly baffling array of credit cards on offer with everything from 0% balance transfers, cash back rewards, and low interest payments on new purchases to Airline miles and free music CD’s. But in this minefield of offers, what’s the best card to choose?
It’s immediately obvious from the vast array of products on offer that everyone wants a piece of your business, but with financial products you need to look beyond the bright lights of the offer and decide which card best suits your needs. That is to say, what you will use the credit card for.
So how do you compare all the offers to decide which card to get? You don’t, well at least not yet anyway. The first thing you need to do is sit down and work out how you’re going to use the card. For instance, are you going to transfer an existing balance to the card, do you intend to pay the balance in full each month, do you want to make a lot of expensive purchases with the card, etc, etc.
Think about it honestly as this is what should really influence the deal you should eventually sign up for. So if you’re transferring a large balance from an existing card something like 0% interest on balance transfers for 6 months would probably be interesting (as you’ll save 6 months worth of interest payments) but it’s absolutely useless if you’ve got no balance to transfer.
Likewise high cash back incentives are only going to be any good to you if you intend to spend a lot of money with the card. Cash back rates are usually around 1% so you’re going to need to spend 100 to make 1. So in order to reap the financial rewards of a cash back incentive you’re going to need to both spend a lot of money with the card and pay off the balance in full each month to reap the true reward.
Other attractive incentives include 0% interest on new purchases for 6 months. Again with an offer like this, it’s only going to be of benefit to you if you intend to use it. So if you’re thinking of making a sizable purchase and would like what is in effect a 6 months interest free loan to pay it off, that’s the ideal offer for you.
Of course all the examples here are pretty cut and dried and your own financial situation will probably be a mix of several conflicting priorities in terms of your expenditure and ability to make payments. However don’t be lulled into thinking that there’s necessarily one solution to fit all. You could transfer a balance to one card to try and clear an existing debt while getting an interest free loan for a new purchase at the same time, just use two cards.
There’s quite a big health warning here though. You should only ever take on credit like this if you can control your spending on the cards with a will of iron. The worst case scenario would be to set off with good intentions only to end up with 2 balances to pay off both charging interest.
So what’s the sensible option? Think about what you need financially over the longer term, find the product that best suits this need and go for that.
Paula Marriss is a financial advisor and editorial contributor at The Money Zone where she writes regular articles on Credit Cards and other Personal Finance topics. To read more please visit http://www.money-zone.net/creditcards/
Tags: advice, balance transfers, choose, credit cards, finance, help, interestPublished by: faison on July 5th, 2008 | Filed under la-poste-finance.info | Comment now »
Do You Need A Credit Card
Credit cards have exploded in popularity. There are no more credit cards and credit card options available than ever before. There are credit cards available for all kinds of borrowers and they are designed to fit a whole range of circumstances. They have many advantages and there are many good reasons why you will need a credit card, however you should always remember that credit cards will cost you money, and they also carry the risk that they will allow you to overspend, and your finances can get out of hand, so you should really only take out a credit card if you have a genuine need for it.
One of the main reasons for taking out a credit card is for people who travel a lot. If you are frequently going abroad, and wish to have easy access to money, and a method of paying for things at all times, a credit card is a very good option. First of all it is very convenient, as credit cards can be used almost anywhere on the planet. You really shouldn’t have to hard a time getting access to money if you carry one, no matter where you find yourself. You also don’t need to worry about different currencies and always having some available, as the credit card will work no matter what currency you need to carry out the transaction in. Credit cards will charge a fee for these services however. The transaction will be charged using the credit card provider’s rates of exchange, and then, as well as this, most card providers also charge a loading fee for using the card abroad which may be as high as two to three per cent of the transaction.
Another reason credit cards are becoming increasingly popular is for shopping online. Paying for goods bought online is extremely fast and convenient. It is also preferable than giving out sensitive bank details over the Internet. However, there are also risks involved with paying for goods and services online and you should be aware of the dangers of identity theft. This is a growing problem, and while there are measures in place to reduce the risks to you, you may want to consider paying for goods and services online, through an intermediary payment service such as pay pal. Alternatively, if you are sure you are dealing with a reputable and well-known company, and then you can probably give over your details in safety.
Peter Kenny is a writer for creditcards-gb
For additional articles and an extensive resource for everything about credit cards, please visit us at http://www.creditcards-gb.co.uk and http://www.creditcards2go4.com
Tags: 0%, APR, balance transfers, banks, charges, credit, credit cards, fees, finance, interest rates