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 »
Protect Your Credit
Because identity theft and credit card fraud are among the fastest growing crimes in the U.S., there are several steps you should take immediately if your credit card becomes lost or stolen, or if you find bills in your mail that you do not recognize or charges you did not authorize.
The first step you should take is to initiate a fraud alert on all your credit card accounts. There is a common misconception that doing this will prevent you from obtaining any further credit cards or financing. This is simply untrue. What a fraud alert will do is require creditors to contact you by telephone before any new accounts are opened in your name. It will also require creditors to contact you by telephone before making any requested changes to any existing accounts, such as increasing your line of credit.
To place a fraud alert on your accounts, contact any one of the three major credit bureaus:
Equifax: 1-800-525-6285
Experian: 1-888-EXPERIAN
TransUnion: 1-800-680-7289
The credit bureau you contact will then contact the remaining two bureaus and all three will send you a current copy of your credit report, free of charge. When you receive these reports, look them over carefully. Note any accounts you didn’t authorize or debts you don’t recognize. Also check that all your personal information, such as name, address, and Social Security number are correct. If any incorrect or fraudulant information is found, contact the credit bureau to have it removed. Then continue to check your credit report on a regular basis to insure no further fradulant activity is found.
After initiating a fraud alert, you should then immediately close any accounts you think may have been violated and submit an ID theft affidavit to the credit card companies in question. You should then file a police report with your local police department and also file a case with the Federal Trade Commission.
Identity theft is a federal offense with stiff penalties for those who dare to attempt it and are caught. Take steps to protect your credit and prevent yourself from becoming a victim of this very serious crime.
Karyn Kudrna is owner of the website http://www.credit-123.com which offers information on low interest credit cards
Tags: credit cards, credit fraud, finance, identity theft