Your Debt Threat

Posts Tagged ‘Cards’

A great form of credit would be to get a credit card in your name, many people would not be able to live their life without their credit card but they can be really tricky if you start to fall behind on the repayments. You have to budget yourself correctly to maintain a good credit rating but this is easier said than done as you can easily get carried away spending money you don’t have. If you fall behind with and start to miss payments this means that your credit rating will effective and it may be hard to get credit in the future.

Basically a credit card works in the way where you can buy the desired product and you won’t get billed for it for 6 weeks giving you the time to save the cash up if times are hard. When you get the bill you have two options, to pay it in full (recommended if possible) or to pay a small percentage of the total bill and carry the remaining onto the next months billing period. This is where problems can arise because if you only pay the minimum payment and carry on spending money on the card the interest will be higher meaning you may only be able to pay the minimum again, this could carry on and on until you have reached your card limit and further actions would be taken.

If you are confident you can manage your finances good enough to pay off what you owe then credit cards are great at getting your credit rating up, be sure to shop around to find the best deal based on your circumstances and many banks and building societies offer online banking so you can manage your credit card online to see how much is owed and even make payments with the click of a button. You can use sites like money supermarket which can compare all of the leading companies by simply filling in one form which will save you a lot of time and ensure you get the best deal.

This makes your life a whole lot easier as you have total control of your account and can see your past transactions and can even get online statements which are safer as you won’t need to throw sensitive details into the bin which could cause a problem if these were to get in the wrong hands.

Undoubtedly there are distinct advantages to having a credit card, provided of course you know how to use one to your benefit. However, since an estimated six out of every 10 people in the United States alone are seriously in debt largely in part to misusing credit cards, it’s apparent that many people are completely unaware of how to manage their finances, and how bad credit can adversely affect most every aspect of life.

Needless to say, prevention is the best means of defense when it comes to avoiding the pitfalls of credit card debt. But today, the rules of the credit card industry have changed considerably over the last few decades, so much so that most people have no trouble being accepted for a line of credit. While to a point, this definitely can be a positive thing, although as most of us can attest to, it’s rather easy to fall into the trap of overspending by using credit cards unwisely.

Setting a Budget

Setting a realistic budget, and then following through with it is always the first step toward successfully managing debt. Although it may seem simplistic, actually writing down each and every expense gives you a visual example as to what your financial picture really looks like. So many of us don’t realize how much the little things add up, buying lunch instead of bringing it from home, stopping for coffee before work, eating take-out food because it’s quicker, but if you make a note of each time you spend money, regardless of the amount, you’ll soon see how much you’re wasting, and realize how your money could be better spent.

Simply put, if after doing your budget and keeping track of your finances you still find yourself using your credit card to pay for the every day necessities of life, this should be a clear indication that you’re living beyond your means.

Find the Right Card

Shopping for the right card is more than worth the time it takes to do so. With all of the different cards, offers, and incentives available, it’s often difficult to know which is best. Finding the right card for you will depend on your circumstances and what you plan on using the card for.

Ideally, the card with the lowest interest rate coupled with the lowest fees would be the wisest option, but those aren’t the only details you should be aware of. Make it a point to read all of the fine print so there will be no unpleasant surprises when the bill arrives.

Be Diligent

Being diligent about paying your credit cards on time and keeping your spending under control are imperative, not only for your long term credit history in the future, but also for your financial picture today. If possible, pay more than the minimum amount due, and be religious about paying on time each and every month. Always account for processing time by the credit card company, as well as the time it will take to travel through the mail.

Online bill paying is an excellent option for avoiding late or over-the-limit fees, and some companies also offer automatic bill payments, where the minimum payment due will be deducted from your bank account at the same time each month. This is a rather convenient option, but it’s important to ensure you’ll have the funds to cover the payment on the due date to avoid hefty fees from both the credit card company and your bank.

In the recent scenario, credit cards are getting huge popularity among the people all around the world. These cards are the preferred payment option that the people are choosing. Even, it is the best medium and the convenient way to pay the bills. With the increase in their demand, many of the banks and the financial associations are offering free credit cards to the individuals. Many of the credit card providers offer such amazing facility at 0 percent of annual percentage rates on all the purchases that have been made by the user in his or her credit card.

One of the major things is that no such annual charges are attached to all these credit cards. At the other hand, some of them also offer rewards programs that sometimes provide free cash on per purchases. Such useful and helpful facility of credit cards has become a convenient substitute in order to carry the actual amount of money. And by securing these terrific and amazing credit cards can add more enjoyment and excitement to the lives of the individuals.

Now, the questions arise as how to find a credit card that is free of cost. So, do not worry at all and merely surf the internet via online where so many banks and financial institutions information are given in detail. They provide an easiest applying process that you can do by the comfort of your home itself. You can easily acquire the credit card facility from this amazing method.

Just fill a simple and easy online application form with some of you personal details and submit it through online. Once your request has been made, you will easily get the Free credit cards within a short span of time. So, do not waste your time at all and grab this excellent service by enjoying the life fullest.

A lot of us know that credit card use may lead you to bankruptcy, but how to turn this wealth destroyer into a wealth tool is something worth investing time and effort to learn and practice. So you can leverage on this plastic card and turn it into a wealth tool.

Here are some powerful tips to turn this little plastic a powerful wealth tool for you:

1. Choose Your Best Credit Card

Not all credit cards are created equal. There is a particular credit card that will suit your needs. So when you apply for credit card(s), make sure you ask for their features such as the interest rate (APR), annual fee and reward system. So you can fully make good use of their benefits and avoid the penalty.

Getting a credit card will provide you the particular features with rewards, services, redeemed points and interest rates that will suit your needs. For instance, if you want convenient shopping but can’t afford to go the extra mile in shopping expenses, it is best to get a credit card that can offer you with reasonable credit limits.

In this way, you will not be tempted to max out your card and accumulate debts you simply can’t afford to pay.

Some credits cards offer you automatic installment plan, so whenever you make a purchase over a certain amount, then the credit card institution will bill you by installment, with 0% interest. Hence, you do not have to pay it in lump sum, so you can use this type of credit card when you need an interest free installment plan for some purchase.

2. Go For The Lowest Interest Rate

If you think you can’t pay your credit card bills on time but are willing to pay your balances in another period, it is best to get a credit card with lower interest rates.

Consumers may not be aware of this, but one of the reasons why debts are getting higher is based on the interest rates. The actual balances are made worse through interest rate charges.

3. Choose The Reward Credit Cards That Suits Your Lifestyle

Each purchase you make on your credit card(s) will earn you bonus point, which you can use to redeem free product and services like extra-miles, retails and dining vouchers, saving you even more money.

Don’t get a credit card just because it can provide you with several rewards. Not all rewards are worth your time and money. For instance, a flyer’s rewards credit card may not be functional if you aren’t a frequent traveler. But if you are, getting a flyer’s reward credit card can give you discounts as well as points that can be converted into tickets. This will be savings considering the prices of airline tickets nowadays.

Recently I found that the credit card institutions have raised their required redeemed points for gift. In other words, credit card users are expected to spend more before they can get the gifts. So decide wisely before you redeem your points!

4. Free Money Management Tool

At the end of each month, the credit card company will send you a total amount you swipe for the month, that make you easy to track you total expenditure, and it becomes a free money management tool for you.

5. Pay Off Your Full Outstanding Balances

Monthly

This is a very important rule, if you fail to obey, your failure may lead you to bankruptcy. Never let your balances stay on your credit card bill statements for long and it may create a snowball effect on your debt. This means that if you have accrued balances for the month, pay them immediately.

Before you swipe your card, the first question you need to ask is “can I pay this off when the next bill come? ” If your answer is yes, go ahead and swipe it, ask if you can enjoy any interest free automatic installment plan from any credit card(s) you have. If yes, you may go ahead and use the card, if not, perhaps you can call the bank and ask for it, so you can enjoy a 12 month or even 24 month interest free installment plan, without paying any extra money!

If your credit card(s) do not offer such plan, negotiate with the merchant for an easy payment scheme through credit card.

6. Be Wary On Cash Advances

If it isn’t an emergency, never take cash advances on your credit card. Financial experts say that cash advances reap higher interest rates immediately and have no grace period at all compared to the ones that you have on your credit card purchases, which is, by nature, soaring as well. In fact, a financial expert told me every time she receive the checks for cash advances, she just tear them off immediately, so she would not even think of using the cash advances facilities.

7. Ask for a lower rate

If you have been an obedient customer and pay your bill on time, it wouldn’t hurt you to call your bank or your credit card issuer and ask for a lower rate.

Surveys show that nearly 55% of those who participated in the survey were reported to have trimmed down their interest rates simply by requesting their bank or their credit card companies to act accordingly.

With lower interest rates, you can definitely save more especially if you are the type of credit card holder who doesn’t get to pay the balances on time.

All of these things are catered to help you cut back your expenses and save more on your credit cards. These things have been proven effective. It is now up to you if you will heed this advice or not.

Just remember, your actions will always tell you the kind of life you want to live, so better make good choices and start saving now.

Some people use credits cards wisely, some people seem to manage OK paying a little bit of interest per month and other have credit cards that are out of control and accrue large amounts of interest per month. If use effectively, credit cards can actually be a real asset.

The credit card market is a very competitive market, with lending institutions offering genuine benefits to attract and/or retain customers. If you’re smart about your credit card usage, you can actually really benefit from the “add ons” that are on offer.

Annual fees

Most cards come with some form of annual maintenance fees attached. Some lenders waive the annual fee for the first 12 months and some actually provide a card without any annual fees. Chasing down a card without annual fees can save anywhere between $50 – $100 per annum – better in your pocket than the banks.

Additionally, the annual fee charged may depend on the services attached to your card. Reward points membership or improved card status such as Gold or Platinum usually comes at a cost so make sure you fully understand the cost and benefits before signing up! Some of the cards with better status provide free travel insurance for example.

Interest rates

Whether you’re applying for a new credit card of reviewing your current credit card set-up, it’s important to consider the interest rate that is being offered. Most lending institutions offer an initial interest period at a reduced rate i.e. 9.95% per annum for the first six month versus a normal rate of 15.95% which depending on how you manage your credit card balance, can add up.

Additionally, some lenders provide reduced rates for the life of card, which can add up to a lot depending on how you manage your card. Be aware, lower interest rates usually means less in the way of “add ons”.

Have a look at the market and consider the options available and what best suits your needs.

Interest free period

All credit cards offer an interest free period. If you can manage to get an extra 5 or 10 days on your card, all the better.

Transfer of balances

Another way of attracting customers is to offer a reduced or 0% interest rate on balances transferred from another credit card. If you’re struggling with your credit card and find you’re paying large amounts of interest on the outstanding balance each month, it is worthwhile investigating the option of transferring the outstanding balance to a new credit card. This will allow you to pay down that balance whilst incurring little of no interest compared to incurred excess interest charges from your current provider.

Remember, the outstanding balance transferred to the new card should still be reduced as soon as possible. The longer it takes to reduce that balance, the longer you’ll have outstanding balance accruing interest on the new card in relation to transactions processed using the new card.

Lenders will apply your repayments to the zero interest balance transferred before reducing any of the new interest bearing debt accrued by purchases with the new card. The longer it takes to pay of the transferred balance, the more interest you will pay on new transactions.

Reward points

Most credit cards have a rewards program attached to the spending. For instance, for every dollar you spent you be aware a reward point which can be redeemed to buy products, redeem as cash to reduce your outstanding balance or redeemed as frequent flyer points with a partner program.

Depending on your level of spending you can actually accrued a large level of reward points and enjoy the benefits on offer – products from the reward program, free flights when the airline partner etc.

Reward points = Frequent Flyer Points

A lot of credit cards are now directly aligned their reward points to airline partners so that dollars they can be redeemed as frequent flyer points. For example, I have an option with my American Express card that allows me to redeem my reward points as Qantas frequent flyer points. These points will be used to fund my next family holiday or help pay for accommodation or hire card.

Summary of key tips for using your credit card effectively

• No or low annual fee

• Low interest rate

• Extended interest free period

• Ability to transfer balance at 0%

• Solid rewards program aligned with your frequent flyer program

Have a look at your current credit cards and see whether you’re getting what want. If the answer is no, get on line, check out the options and apply for the card that best suites your personal needs. It should be a pretty straightforward process and hopefully result in you saving some money.

For a couple of good credit card comparison sites, check out http://www.cannex.com.au or http://www.infochoice.com.au.

Remember, this is merely my personal option. If you’re not sure what you’re doing, speak to someone at the bank or lender of choice and make sure you’re fully informed before making any decisions. If need be, consult a professional advisor before making a final informed decision.