Posts Tagged ‘Minimum Payments’

What Is The Best Way To Resolve Credit Card Debt?

August 7th, 2011



Credit card debt reduction has become a necessity because of the numerous negative impacts of improper and mindless use of plastic money. Be it carelessness of usage or the conceit of users, whatever be the reason, credit cards can effect on your credit standing in a negative manner. Due to easily accessible facilities of credit cards, people can hardly resist of stocking and adorning their wallets with plastic money.

As long as you’ve been making payments on time, you probably shouldn’t get credit counseling because it will be a bad mark on your credit.

Stay with the minimum payments on the student loan and the medical bills because they will have the lowest interest, and they don’t hurt your credit so much if they’re part of your debts

Do research on frugal living and money management to find out exactly where your money is going and tips on how to reduce your day to day spending on food, groceries, and other extra items. Like, you could use cloth diapers because disposables are so expensive. You can make your own baby wipes out of paper towels, baby soap and baby oil and it’s WAY cheaper than buying them in the box at the store.

The following are some of the best methods of debt consolidation:

If you have good credit rating, you can get a card offering lower interest rate than other types of consolidation loans. Besides, you do not have to deposit any collateral, making it virtually risk-free credit. Find out from the current issuer the interest rate they are willing to give you, for balance transfers from other cards to their cards. Choose a fixed rate if possible and request them not to charge transfer fees. If that is not possible, look around for another card. Many sites offer you a wide choice of cards with different interest rates. But do not apply for plenty of applications simultaneously as it can damage your credit rating. Once you get a card, draw a repayment plan to clear your debts within 3-5 year.

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Compare Credit Card Offers To Get Better Deals

January 29th, 2011



Credit cards are probably offered to you every day. You probably get mail offers, email offers, internet advertisements, phone calls from banks and financial institutions, etc. However, you don’t need all those credit cards and it is smart to select just the best offers so you get cheap financing and you don’t ruin your credit with too many open credit lines.

Different Credit Card Offers

There are many different credit card products out there. There are secured and unsecured credit cards. Secured credit cards require a deposit of certain amount and after you’ve meet that requirement you can use the credit card up to that credit limit without difficulties. Unsecured credit cards on the other hand do not require a deposit as collateral but in order to get approved for one, you credit situation will be so as to see that you don’t have too many delinquencies on your credit report that would turn issuing a credit card for you a great risk.

Different credit cards have different APRs and you should pay special attention to this variable as it defines whether a credit card is economically viable or too onerous to use. APRs higher than 15% are excessive and unless you have a terrible credit score, you should avoid using such cards. If you have no other choice, you need to try not to pay only the minimum payments and instead, try to cancel the whole balance every time.

Also, there are some credit card offers featuring promotional periods. There are 0% APR credit cards for a certain period of time during which you can finance all your purchases without having to pay interests for it. There are also 0% balance transfer fees, that let you transfer the balance from one credit card to another without having to pay for it and then you can take advantage of the 0% APR promotional period to cancel that debt while it stops generating interests.

Finally there are many credit cards with different reward programs that let you accumulate miles which you can trade for airline tickets to travel anywhere you want or other cards that let you accumulate points that you can later trade for prizes like house appliances, tickets for entertainments and shows, discounts on stores, etc.

Searching The Net and Comparing

Thus, it is important that you don’t close on the first deal you are offered, instead, search the net for different credit card offers, compare them and only after you’ve decided which ones best suit your needs, you can fill the online applications so you’ll be contacted by the credit card issuers with a response to your request. That’s the only way you’ll get the most advantageous terms on your credit cards.

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Credit Card Debt – First Steps To Resolution

November 4th, 2010



If you have let your credit card debt get out of hand, then do not panic. You are among a fast growing group of people who are falling victim to the UK’s ever increasing credit card debt mountain. As a nation, we are adding to our credit card debt at a truly alarming rate. With the number of people now in credit card debt approaching half of the population, this trend is only growing and growing.

Luckily, there are a number of steps you can take to start getting your credit back on track. The first, and most obvious step to take is to reign in your spending. If you are starting to worry about your debt level, then don’t bury your head in the sand and try to ignore it. As soon as you become aware that there may be a problem, stop spending on the cards. For most people, when they begin to get worried, it is not too late. They will be able to manage their debt so long as they take action and stop racking up debt.

What you then should do is make a repayment plan, dedicating your highest repayments to the cards with the highest interest rates. Your plan should be to clear one card at a time, starting with the most expensive. Then direct your attention at the next highest rate card, and so on.

If, taking an objective look at the situation, you feel that this will not be possible, either because you can only barely afford the minimum payments, or you cannot afford them at all, then maybe debt consolidation would be the way to go. The sooner you do this the better, as you will be saving interest for every month that passes.

Debt consolidation loans charge far lower interest rates than any credit cards, and will give you a definite time at which you will be finished with your repayments. This can be good for your moral, and good for your budgeting as you know exactly how much you have to set aside each month. The downside of debt consolidation is that you will most likely have to secure the loan over your home. This carries inherent risks and if you fear for any reason, that you will be unable to keep up with the repayments, then you are far better off if you have not secured the debts over your home.

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Credit Card Bailout – Get the Facts Before You Take Action

October 29th, 2010



Getting out of debt may not be as the credit card bailout hype makes it sound. Most of the changes govern gouging consumers with high interest rates when a payment was late or for no reason at all. If you are overwhelmed with debt because of high interest credit cards, there are a few things you might find beneficial. We hope to shed some light on the options for credit card bailout and hope you can benefit if you can barely keep up with minimum payments on your credit cards.

Credit card settlement is a possibility in some cases, mainly those that owe over $10,000. Some credit companies are willing to offer this, but it is important to note that they may require a lump-sum payment of 20% to 30% of the balance, even if it is a reduced amount. Most consumers don’t have the funds. If you can borrow money against home equity or use savings, it might be an attractive option. You will want to call the bank before taking any action.

Another option to consider is an interest rate reduction, if you have an extremely high interest rate on your credit card debt. Not all companies are willing to do this. The only way to find out is to call them. Even good customers are seeing their credit limits disappear or their interest rates raised to the maximum allowed as long as notification is given first under the new guidelines.

Some people think they must hire an attorney to work out debt settlement or interest rate reductions. An attorney or credit counseling company will not have much better luck than you will yourself. Sometimes, the easiest thing is to call the credit company and be honest about your situation. There are times that an attorney or credit counseling company can be more effective depending on the situation. Certainly if you have a lot of credit card debt, then an attorney can advise you whether bankruptcy might be an option you should consider.

Bankruptcy laws have changed so while it used to be that unsecured credit cards were automatically eliminated in bankruptcy that is no longer the case. New bankruptcy repayment plans involve financing the paybacks over a period up to five years which cost more in interest and it ruins your credit for the next seven years. Bankruptcy may be the only credit card bailout option after attempts have been made at debt settlement or lowering interest rates. Attorneys and credit counseling services are quite good at advising you on this option.

Another option many people are trying is to pay as much extra per month on the highest interest rate card and minimums on the rest. By cutting back on other unnecessary expenses such as coffee on the way to work or fast food lunches some people have been able to save over a hundred a month to pay down the credit card debt quicker. If you are able to do this you can pay back the balances in half the time it would take by paying the minimum payments.

It’s important to remember that the credit card bailout is not a free ticket to get out of what you owe on your credit cards. You might be able to work out a debt settlement or interest rate reduction, but you are still going to need to pay them back under these plans even though at a reduced rate. Not all credit card companies will negotiate, so there is no guarantee. Your credit will not be affected by these two methods as it will on bankruptcy so they should be considered.

As you can see the credit card bailout is meant to keep banks from interest rate gouging consumers without notice and help those with large balances. It is not a tax rebate or incentive. The best bailout would be to stop using your credit cards and eliminate the balances as quickly as you can. By paying off your high interest cards first, you can start putting more towards your other credit cards. If you aren’t sure whether you should file bankruptcy or what option to take then you should talk to an attorney or credit counseling service regarding your credit card debt.

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Credit Card Balance Transfers Explained

September 8th, 2010

What is a balance transfer ? A balance transfer can be explained simply as a balance transfer! When a balance is transferred usually from a credit card, but possible from a bank account or loan to a credit card with a offer interest rate (usually 0%) for a set period. It does not have to be the entire amount. The card receiving the balance will an interest rate for a set term, normally 6 months, but can be 9 months or even a year. Take a look at the current balance transfer deals currently available. This will give you a flavour of the typical kind of deal available.

Should I apply for a balance transfer ?

It is important to remember that a balance transfer does not mean that the debt has gone away. It just means you are not paying interest on it. You will still have to maintain payments.

This may seem obvious but many people do not get this straight in their mind.

The basic criteria for getting a balance transfer is when you regularly have an outstanding balance after making your monthly payments. This is the amount you should look to transfer to another card. This will mean that for the period of the offer you will pay no interest on the balance (provided you make the minimum payments).

You should be very wary of taking up a balance transfer, if your overall debt is increasing. A balance transfer is not a green light to spend more money. The money you save should be used to decrease your debt.

What should I look for in a balance transfer ?

You need to be aware of the following when looking for a balance transfer card

Good things

Length of offer period. Offer Interest Rate. The zero or low interest rate charged on the balance. Possible transfers from loans and overdrafts. On some cards you can transfer from existing loans and overdrafts and still get the offer.
Bad things Cut-off period for the balance transfer offer. Hidden Charges on transfers. Some banks will charge a handling fee on the balance transfer.
How long the offer is valid for ?

There is usually a cut off point from the account opening when the offer is no longer valid. Be very aware of this otherwise you could end up transferring a balance to a higher rate !!

What about new purchases ?

Unless there is also a 0% interest rate on new purchases then you should avoid making new purchases on a balance transfer card. This is because the banks will look to reduce the balance transfer debt quicker than the new debt. Provided your credit history is reasonable, there is nothing stopping you having several cards for different purposes. A good way is to have a card, which specialises in 0% on new purchases and another card for balance transfers.

What happens when the balance transfer period finishes ?

When the balance transfer offer period finishes the debt will revert to the typical variable APR. The lenders hope at this point that the cardholder will retain the card and some of the debt, so they can then start charging interest and making some money! So take into consideration the low interest rate credit cards. However, there is nothing stopping the disciplined credit card holder from switching to another balance transfer deal and closing the account. The cycle then starts again. Always allow 6 weeks to 8 weeks before the end of the offer period to apply for a new card. This means you can get the balance transferred to the new card before the lender can start charging the higher rate. You have to be organised to do this, but if you are it does work. People who regularly switch balances are know as card tarts.

The Golden Rules

There are three things to look out for with a balance transfer card As mentioned previously, the unsuspecting can get caught out when spending on a balance transfer card. Maintaining regular payments. If you miss a payment you incur some penalty, so be aware. To be safe set up a direct debit. The interest rate applied when the offer period finishes. Good luck with your choice.

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