Using Credit Cards?
Know How to Best Play The Credit Card Game
If You’re Going to use Credit Cards, Make Sure you Know the Rules.
We’ll Show you how to Save Money.
The average American has $11,000 in credit card debt. That is up from $3000, just 10 years ago. 30 years ago, it was a just a few hundred dollars.THE most important thing to know is that if you just pay the minimum balance, it will take you years to get out of debt. Every month, completely pay off your card balance. You can avoid interest charges, which may be considerable, by paying off your entire bill every time. Otherwise, you could be losing hundreds or maybe thousands of dollars to interest and fees every year. Use this debt calculator to see how long it will take to pay off your loan balance... FREE Debt Calculator If you cannot totally pay off a large balance, then pay as much as you can. Then, consider shifting the remaining balance to a card with a lower (APR) annual percentage rate. For example, if you have a $5,000 balance with a 17.6% interest rate, there will be $880 in interest in the next 12 months. If you can transfer that balance to a card with a rate of 6.4%, your interest would be only $320 for the next 12 months.By doing this, you'll save $560. With the new lower interest rate card, make the same payment as before, or double the minimum amount. For a modest fee, Bankcard Holders of America (703-389-5445) and RAMResearch Corp. (800-344-7714) will send you a list of low-rate cards.
Think before you charge. With every purchase, first ask yourself, “Do I need this, or just want it?” Unless you completely pay off your credit balance each month, don't use your cards for anything you can eat or wear.Avoid using credit to buy "wants" such as a new electronic gizmo. Wait until you have the money to buy it. Don’t take out a loan for a new toy. Since electronic items usually come down in price over time, you’ll end up spending less of getting a better model for the same amount by waiting. Only use your credit cards for emergencies -- when the refrigerator dies or the car breaks down. Get rid of all your cards except one. Take that one and make it hard to impulse shop with -- freeze it in a metal can full of water in your freezer. Than if you want to use it, you'll have to wait for it to defrost before you can use it. Since you used a metal can, you can’t use the microwave for a quick defrost. This will make you wait for a while giving you a chance to consider whether you really want the item or whether it is simply an impulse buy. Check your statement for the due date and make sure you abide by it. Be sure to always send in your payment a week to ten days before the statement due date. Even being five minutes late can cost you $29 in late payment fees. They may also increase your interest rate if you are late. Credit companies frequently check their customers' credit reports. Late payments on one card can increase fees and interest rates on other cards! Carefully read your monthly statements. Specifically, look out for hidden charges, such as credit insurance. You also don’t need credit card disability insurance. If it ever kicks in, it will make debt worse. Even though you don't have to make payments, the debt piles up all along. Be sure to use the envelope provided in your statement. Sometimes, the Credit card companies change their payment P.O. Box. By mistakenly sending it to the old address, you'll be responsible for the late fee and, likely, an increased interest rate. How is your credit rating? If your credit rating is low, you are subject to higher interest rates and card fees. The calculator and links below can help you with this situation.
Try to negotiate better terms with your credit card issuer. You’ll have the most success with this if you've had a year of on-time payments. Know that credit cards with cash back, travel awards, rebates, or other perks often have higher rates or fees. Consider a home equity loan to consolidate credit card balances. Home equity lines and loans offer lower interest rates and are usually tax-deductible. To avoid being in an even worse position later, you must be disciplined and stop spending more than you earn. Always keep your purchase receipts. Since many products are made cheaply, if you have the receipt, you have a much better chance or getting a replacement item of full refund.. You don’t need theft insurance on your card. There is no reason to have to pay for it. By law, your card is stolen, you're only liable for $50, at most. That is not the case for ATM cards. Don’t exceed your credit limit. Often those fees are $39 or more. Never take cash out on your credit cards. Almost always, the interest rate for cash advances is much higher. There is usually no grace period, so you have to start paying interest right away.
If you have any more ideas of ways to save money on credit cards, please
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and we will include your ideas. Thank you.
More Great Information About Managing and Eliminating Your Debt
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Credit Card Whirlpool
and the
Debt Trap.
We will also show you proven ways to manage and eliminate you debt.Please
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Additional Debt Resources
http://www.debtadvice.org
For consumer credit counseling and other good agencies. 1-800-388-2227
http://www.myvesta.org
1-800-myvesta. For The Myvesta Foundation
http://debtorsanonymous.org
- This site has local chapters Remember, it is important to understand that while debt counseling can be a good short-term fix, you'll still need to make some mindset and lifestyle changes to prevent the problems from happening again. You will need to fix the problems that got you in the bad situation initially. We can help you with that as well as all personal finance matters here at Financial Freedom Trail.
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