Posts Tagged ‘credit card debt’

Finding Out The Options For Debt Reduction Is Extremely Smart

Written by admin on February 7, 2010 – 7:53 am -

Fortunately for millions of consumers in the US who find themselves strapped with credit card debt there is hope.  The majority of debtors don’t understand all of the debt relief methods they have available to them, but there are quite a few.  Understanding the differences between these programs will be important to ensuring that you select the smartest plan for your financial struggle. 

One of the first things many debtors consider is to obtain a debt consolidation loan.  This looks to be an easy road but could in the long run stir more damage than good, if that is you even in position to obtain the loan in the first place.  The reason I state it will be difficult to obtain a debt consolidation loan is normally the consumer must offer some type of collateral first, in many cases this will be a piece of real estate.  Those individuals that have no collateral must then have incredible credit to get an unsecured loan, and consumers who are trapped in credit card debt often times don’t have decent credit.

If someone does finagle to get a secure loan against your home this can be a bad idea, for the simple fact that you are transforming low risk credit card debt into high risk secured debt against your home.  So if you wind up right back in the same position and cannot to make payments on the loan you chance the probability of your home foreclosed on.

Then there is credit counseling, this plan is similar to a debt consolidation loan but without getting the loan.  The advantages of this plan are decreased interest rates and one condensed monthly payment.  The drawback to this program is it does report adversely to your FICO score and if you fall past due on a few payments you will get booted off the program; thus forfeiting the benefits of a lower APR.  In most cases people fail off of this program due to the monthly payments in many cases aren’t much less than the monthly minimums, in certain situations they are even more expensive.  So folks who can hardly afford to make payments at this point may not survive the duration of the program.

Debt settlement is another method that has appeard to give the most lucrative results for pained debtors during this dreaded economic collapse.  With signing into a debt settlement program the debtor will wind up saving around half of what they owe on their bills.  So naturally this will dramatically cut back on the monthly output towards credit card bills, and they will also get out of debt much more rapidly.  The only real downside to this program is falling delinquent on the accounts which is necessary to ensure completion of the debt settlement, so the credit history will initially suffer.

The bottom line is no matter what choice is made those who are trapped dealing in debt need to find a way out as soon as they can.  Credit card debt is so bad for peoples overall economic well being.  Imagine all the money going out to credit cards being smartly invested?  What joy will that be to your life?  If you remain in credit card debt you may not find out.

 

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What You Need To Know About Store Credit Cards

Written by admin on December 19, 2009 – 12:25 am -

 

Have you ever signed up at a checkout counter to save 15% on your purchase? It may have felt like a good idea at the time, but chances are that after you read the fine print of your in-store credit card, the 15% you saved on that sweater really won’t feel like that good of a deal anymore.

This guide will tell you how you should use any store credit cards you’re already got sitting in your purse or wallet.

Use it at the store

This rule probably doesn’t need to be said, because most store credit cards can only be used in one place anyway. Just be sure to remember you have the card whenever you go shopping at that store. Nothing is worse than buying something with cash or your regular card out of habit only to remember later that you could have received a discount with your store card.

Make sure you can pay it off immediately

One of the tricks to in-store credit cards is that they can dupe you into thinking you’re getting a deal. The advertised 15% savings can look like a lot, but you might actually be paying more with your card’s high interest rate. Rates can get pretty high with store credit cards, so try and pay off any bills in full and on time to avoid any costly interest payments.

Watch what you spend

Store credit cards have notoriously low credit limits, so you’ll need to be careful how much you’re spending. Normally limits on these cards never go much higher than $500, so if you’re a big spender, you might want to consider using another form of payment, It doesn’t look good on a credit report to use more than 35% of your available credit at any time, so even if your purchase won’t exceed your store card’s limit, you still might want to pursue other methods of payment.

Don’t sign up for any more

Both closing credit accounts and opening new ones can negatively affect your credit score. So because you’ve already opened your store credit card, you’ll probably be better off leaving it on than closing it. Just remember to keep up with payments and don’t sign up for any more cards in the checkout line – they’re never as good a deal as they seem.

If you or someone you know is struggling with credit card debt, fear not. Debt relief help is out there. There are a great many bankruptcy alternatives in existence today.

 

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Why you need a savings account

Written by admin on November 2, 2009 – 1:25 am -

When fighting your way through tough economic times, it is better to try and face down these money troubles instead of closing your eyes and hoping they’ll go away. They won’t. There are many steps you can do to minimise the impact of the economic downturn, and they must be taken now.

Accumulate funds for emergency savings. In an emergency your going to need money in a hurry so a savings account allowing easy, penalty free access to funds for unexpected costs is a must. As a general rule its good to have enough in your savings to survive without an income for around three months. The best place to park this money would be in a high interest savings account.

Increase Your Savings. Try to arrange for an automatic savings plan. This arrangement enables you to set aside specific amounts of cash automatically transferred from a checking account to savings accounts earning high interest or to a mutual fund of your choice. It is important that the money go into a high interest savings account but remain available. A retirement fund will not do it because this is money you won’t need for quite a while.

Reduce your spending. This move may be obvious, but it can be a very hard step to take. Lump into one account all the phones at home (landline and mobile). You can get discounts from telecommunications carriers this way. It also doesn’t hurt to talk to at least two carriers to look for the best deal. Cut spending on your grocery bill by choosing supermarket own label brands, going to markets or joining a local food co-op. Save on motoring and join a car pool or use public transport. If you have two cars and one is seldom used, consider selling the other one. Put all the money you save in a high interest savings account intended for the rainy days.

Lower your credit card debts. Tough times mean you must make every penny go a long way. It does not make sense to shell out your hard-earned money to pay 17 per cent (or whatever) interest on credit card debt. Try to pay off in full the balance due each month; if that is difficult, at least pay much more than the minimum amount. Consider moving from credit to debit cards

Increase household income. This could be tough to do during the recession. You may be able to find creative ways of bringing in additional money using your skills. If you write, or do photography, or are able to do some other marketable skills, you can try freelancing on your spare time. In single income households the partner could try and take on casual or one off jobs for extra income. You could start a small business which might blossom into something bigger once the recession is over.

Utilise allowable tax deductions. Be on the lookout for tax deductible expenses such as education, charitable donations and your home office. Stay organised and strict with logging your expenses and receipts to support tax claims. Put the money saved on personal tax deductions into your high interest savings account.

Spruce up your résumé. Recessions can lead to more layoffs. It is best to polish the résumé to make it current, in case the need to apply for a new job arises. Try and get the resume down to one or two pages to keep it to the point. Make it presentable, but not flashy. Highlight your relevant work skills and experience.

Don’t wait for the crisis to hit you, by that stage it will be much harder. This will give you a strong sense of purpose even as it shores up your position.

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