Credit Card Debt Reduction Strategy

Are you someone who hides from your credit card bills each month? Do you even know how much you your total debt is? You don't have to be afraid of it; with planning, you can tackle any size debt and pay off those cards!

The first step is the hardest. You need to sit down with all of your statements and tally up your debts. Next, take a sheet of paper and list each credit card balance, credit card interest rate, minimum payment and balance owed. If your credit is good, contact the credit card companies and ask them if you can have a lower interest rate. Tell them you are going to switch cards if you don't get a lower rate. Getting the lowest rate possible gives you the greatest chance at paying them down quickly.

If at all possible, get a 0% interest rate card to transfer balances with. However, do your homework. Don't get a card that has a high fee for balance transfers, as that can negate your interest savings. Also check to see how long the 0% is good for. Sometimes that is an introductory rate that only lasts 3 or 4 months. You want 0% for at least a year. And make sure that the rate the card will revert to after the introductory period is lower than the cards you are transferring from. In case you should happen to miss a payment, your account will automatically revert to the standard rate, so get it as low as possible.

After you have tried to get lower rates, then you will put the cards in order of credit card interest rate, with the highest interest rate being at the top of the list. This will be the order of payment you will be working on.

Pay the minimum payment on all the other cards for now. Then pay at least $10 over the minimum payment on the card with the highest interest rate. And much more if you can afford to. Why do this? Compound interest! This is how credit card companies make a lot of their money. As your balance drops, your minimum payment drops. And interest compounds monthly based on your balance - which includes the interest your account already accrued! So you are paying interest upon interest repeatedly. That's why it seems to take forever to get out of credit card debt. For example, if you have a credit card at 15% interest with a $3000 balance, making only the minimum payment each month will take you 216 months to pay off. And you will have accrued $2757 in interest charges. That is almost double the original purchase price!

Once you have the first card paid off, take the full amount that you were paying each month for that card and add that to your payment for the card with the second highest interest rate, while still paying the minimum payment on the other cards.

Do this with each subsequent card. You will find that as you proceed this way, the cards will be paid off faster and faster. The reason is the lower interest rates on the other cards and the fact that your payment itself will be larger and larger. Once you have your debt paid off, close all but one or two cards for emergency purposes only and revel in the feeling of being debt free!

Managing Multiple Credit Cards

If you are struggling with credit cards and are trying to figure out how to manage them without declaring bankruptcy, then you need to read this. Americans are finding themselves with increasing numbers of credit cards. There are some strategies to living without credit cards forever.

Credit card debt accumulates interest faster than any other type of loan. At 20% and sometimes higher, Americans lose thousands paying off credit cards. The first thing to do is to decrease how much you put on them every month. Get to a point where you do not even use your credit cards any more. This may take a while and it will require working out a budget and getting on the straight and narrow. Perhaps selling a new vehicle for a used one or if you need a drastic solution, you may be forced to live with relatives and liquidate your assets in order to prevent a bankruptcy. Please see your financial advisor or a wise relative.

Once you have weaned yourself off the credit cards, determine how much you can pay off each month and find more ways to increase that amount every month. If your first impression is to pay off the cards with the lowest balance, please think again. It would be nice to pay off that one card with only a few hundred on it but your problem is interest. It is costing you a lot of money. Figure out how much you could be paying your balance down if ALL or none of your money went towards interest. You could crawl out of this financial hole much faster if that was the case. Find the credit card that has the highest interest rate and pay that off first. Pay the minimums on everything else until that balance is zero. Do not stop until it is zero or another card's interest rate climbs to become the highest.

Once a credit card is paid off, cut it up and throw it away. Plan to throw away all of your cards but one. Find one card that you have had the longest and keep that one. Even if it is not the lowest interest rate, your plan is to never pay interest again so that does not matter. By keeping the credit card with the most history, your credit score will take account of your long history with the same card and your it will increase faster than with a brand new card with little history.

A popular solution is to transfer credit card balances to a 0% credit card. That interest rate will expire but it does prevent interest from building up. This method would force you to open many accounts and keep opening and closing credit cards in order to escape paying interest. This may work however, your credit score will drop to reflect this behavior. If that credit score drops and you apply for a home mortgage, the interest rate will be higher. One way or another you will pay interest, I suggest not opening new accounts and transferring balance since it only benefits you in the long run and you need a permanent fix.

It may sound simple but it will take patience. Look at the problem at a weekly or monthly and make small steps. If you are late on credit card payments, talk to the lenders and tell them your plan. If you communicate with them, you can manage this debt much easier. If they know you have a plan, they can rest easier. Of course, you still need repay it but if lenders have no idea what is going on, than they will be forced to act and really put you in a bind.

Credit Cards Are A False Sense Of Buying Power

The plastic power is all too common now days. We almost live in a cashless society paying for everything either with a debit card or in most cases a credit card. Credit cards have many conveniences, almost too many and some drawbacks. Before you sign up for another card, let's take a look at the pluses and minuses to see if the rewards outweigh the risks.

Credit cards are, first off, a great way for everyone to build credit. Establishing credit will secure a high FICO score or credit rating. This credit rating is crucial to maintain. Everything is being tied back to your credit score so it is important to start as soon as possible. Building credit will allow you to make purchases for the lowest interest rate possible, along with many other advantages.

What most people may not realize is that every time you use a credit card you are taking out a small loan. Getting loans from a bank or other financial institutions take time, but a credit card is instantaneous and can be used anywhere around the globe. For this convenience, they charge a 20% or so interest rate. Your new card may start with a low interest rate but it will jump up much higher. The ease of buying with credit cards gives a false impression that that money is ours. The reality of credit cards is that you are spending someone else's money. They will charge you a high return for using that money too. Imagine you making 20% a year on your investments. Everyone would jump on board that program but instead we are on the other side of the fence, paying someone 20% interest instead. If you pay off the card every month, you do not have to worry about paying interest but most people just pay somewhere between the minimum and the entire balance every month.

Some people have more than one credit card. Having more than one card will not build your FICO score faster; it will at some point bring it down. You only need one card to start establishing credit, having three or five only brings that number down and works against you. Having several cards will raise your possible debt and your credit score will reflect it AS debt.

Many retailers offer credit cards to use in their store and perhaps elsewhere. Anytime you make a large purchase or open up a line of credit, they mail you a credit card to your house within weeks. These cards usually have some open credit available to make more purchases. This is only a trap to buy more and open up more accounts. The reason most people have a credit card is because they do not have the money to pay for something. So opening more and more cards only adds to that problem. A word of advice is never open up a credit card account no matter how good of a deal you think it is. It is only a good deal for the retailer; if it were not a good deal for them then they would not offer credit cards. It would certainly be a bad business decision.

Credit cards give us a false sense of how much money we really have. If you pay off all of you credit cards every month that is one thing but many people have cards maxed out. If you are using a credit card, to begin with then assume you cannot afford it. Remember you are taking out a loan and spending money you have not made yet. Beware of the plastic power because it is easy to forget how much you have spent, until the bank starts calling you every month.

Credit Card Basics

Credit cards are very helpful when it comes to devolving and building credit. Nonetheless these small pieces of plastic can be very dangerous in the wrong hands. Credit is important because some of the most expensive things you will ever buy are determined by your credit score. Some only consider home and vehicle financing, but there are plenty of other entities to consider. Today is the time to start focusing on your credit whether you are trying to build or repair.

There are many things to consider when deciding upon applying for a card. First of all there are two different types, secured and unsecured. A secured card is secured by deposits to your issuing bank. To use one of these a deposit must be made from $50 or higher. After you have made a deposit then a credit line up to 100% of your deposit will be issued. In other words you can only spend what you deposit and in some cases not even 100%. Unsecured cards are the ones you may be familiar with and they are the complete opposite. These are initially issued with a set credit line that may be used once the account is activated.

Understanding the different terms associated with these cards will determine how well you manage your credit in the future. Terms such as; APR and finance charge are very important to the charges on an account. APR which is short for annual percentage rate is a yearly rate of interest that has fees that apply to your loan. APRs are different based upon issuer's and credit. You want good credit to be able to get a loan on a home, but you also need it for a good rate on a credit card. Finance charges are comprised of fees and other charges.

If a user does not carry a balance then the card issuer offers a grace period. A grace period is interest free and is the time between the billing and transaction date. If a balance is carried then there will be no grace period. Minimum payment is the minimum amount that has to be paid to have a current account. Not paying the minimum can cause your account to go into default and extra fees may be applied to your account. It is always best to pay extra then your minimum payment every month.

There are late fees and over the limit fees which apply to every account. Late fees are accrued when you pay after your due date and can range from $20 up. Over the limit fees apply when your account balance goes over your credit limit. These fees are at average $35. Make sure to pay your bill on time and to stay below your limit. In other words always steer clear of these fees.

Credit can be a blessing and can be a curse. Knowing what everything means beforehand will save you a lot of money in the long run. Stay away from high APRs and finance charges. Pay all bills on time and pay more than the minimum. Appreciate credit while staying away from all of the red signs.

Avoid Credit Card Debt

Today people think that they must have everything they desire immediately. This perceived need for immediate gratification is fostered by advertisers, retailers, banks and others with a vested interest in pushing the consumerism barrow and to most people it represents the golden way of capitalism and is therefore to be at least encouraged, if not worshipped.

As a result, credit cards have become a major instrument in household financing. Although not wishing to dampen the spirit of capitalism and the consumer society, as I see it, for many struggling families the availability of unsecured credit is more of a hindrance than a help. Yes the convenience of instant money fits so well with the must-have-it-now society, that it is just too easy to buy first and think about affordability later. And that is precisely where many people come unstuck. Firstly, using your plastic is usually the easiest way of getting goods on unsecured credit. That means that no collateral is needed to get your money to buy. The goods cannot be handed back to the bank if you find yourself unable to pay pack This is unlike chasing a bank loan or hire-purchase where physical goods, a car or a house is mortgaged and can be sold by the lender if the loan is not paid. With unsecured credit the card company will charge interest and fees on the outstanding amount, commonly at much higher rates than the federal reserve's declared rate, until the outstanding amounts are paid or the customer goes into bankruptcy.

For many average and even 'wealthy' householders, the availability of credit cards has meant ever increasing debt, hardship and bankruptcy in many cases. The demand for credit has never been stronger, but the supply is overwhelming. How many banks and stores have you seen offering yet another card or luring you into churning from one card to another or more commonly extending your credit with increased limits making it easier for you to spend more and more money you do not have.

The burning drive for credit has been fueled as we have said, by the growing consumer society. It seems we can no longer be satisfied with last season's clothing, and your car and PC from a few years ago no longer has all the latest features or it lacks sufficient 'grunt' to enable you to do the work you bought it for. And your kids must have the latest X-Box or PlayStation because the technology has moved along and the graphics are better in the new one. Well if you have been around for more than five minutes, you will realise that if you want to be always at the cutting edge of technical innovation, you will be trading up or acquiring new gadgets every other month! And that my friend is financially irresponsible.

I read somewhere recently that the average credit card holder is spending ten to twenty years paying off credit card debt, on basic monthly payments, that they procured in their twenties! We can only hope that their spending was for long lasting items - but most likely the goods have long since been disposed of, the sumptuous wedding or vacation only a vague memory. And another statistic worth mentioning is that the average U.S. college graduate begins his or her post-college days with more than $2,000 in credit card debt.

Where I come from, interest rates on plastic cards can vary between about 11% (with annual fee of $50) to around 17.5% with no fees, no frills. Off the top of your head, how long will it take our average student with a $2000 debt to clear it at 12% interest, no fees and minimum repayment of only $40 a month? How does 6 years sound? Frightening isn't it!

But credit cards are not all bad, especially if you educate yourself as to what and when you will be charged and evaluate what you are buying (as distinct from what you are spending) and how long it will take to pay it off. By embarking on a long term credit card debt for something that will grow in wealth over time, i.e. an investment such as a collectable, artwork etc., you are effectively investing by using other people's money and as such could be considered an effective strategy. But you would want to hope that the growth in value of your investment outstrips the cost of the money - i.e the interest on the repayments. Will that painting have a growth of 15% a year? What about shares? You see there is always a risk that you may end up paying too much. The wise use of instant credit is in a situation where you know that you have the cash invested somewhere to cover the purchase, and you use your card to snap up the bargain and then clear the CC debt once you redeem your cash.

Recently, an internet marketer wanted me to purchase his wealth-making strategy using a credit card, arguing that the cash I would make with his system would easily cover the charges on the card and I would back in the black in a few months. Yes you are borrowing from the bank, using other people's money, which is considered a good strategy for acquiring assets, but if you are using money you do not have for something that is unproven, that is a potential liability then this must be considered a risky strategy. By the way, we are still waiting for his gambling system to make any money.

Purchases on a whim, or because your stuff is 'outdated' is a classic way many people build up credit card debt for things that are non-essential. The wiser consumer keeps a balance between the things they 'need' and the things they 'desire' Needs are those essentials like rent, food, new tyres for the car. That weekend vacation, computer upgrade or TV are luxuries if you have not saved the money. Credit card spending on either type of purchase should be avoided, but if credit is needed, opting for new tyres is the safer option. Saving is largely unknown to our consumer generation. When my parents wanted a holiday, new refrigerator or entertainment, they put money aside from their fortnightly wage packet in an interest bearing account and paid cash for everything except houses or cars. But this took time, effort and consistency. Far easier to spend all your pay and borrow for all you 'need' right now! But although we cannot dwell in the past, there are some practical rules we can take from the past. Placing purchases on credit cards should never be entered into lightly because you really need to consider if you absolutely need the item. More importantly, paying off a vacation or a new article of clothing ten years down the track seems a little stupid. By the time you have these things paid off, they will be forgotten and discarded.

To re-emphasise, weigh the need and desire for purchases seriously, calculate the interest that you will pay, and the amount of enjoyment or productivity that you will derive from them. Car tyres—those are a must have purchase, and putting them on your credit card is not a major financial commitment. Well, that is unless you are putting the tyres on your credit card so that you can use your cash for an upgraded car stereo. This choice falls into the financially foolish category because using credit for a necessity tires so that you can make a luxury purchase is the equivalent of putting the luxury item on the credit card. Ask some questions: Is it a need or a desire? What is the real, total cost of the item, including interest? How long will it take to save for the item, putting the repayment amount into an interest bearing account? For example, I deposit regularly into an account online with a major international financial group paying around 6% pa interest. Not a lot, but with compounding I can hit my savings targets quicker than keeping cash in my wallet or borrowing on credit and as long as I am earning at a greater rate than inflation, my wealth is growing which is a better feeling than being in debt.

Getting A Credit Card

Today the use of credit and debit cards for everyday purchases is becoming more and more common. Paying with credit or debit card is almost required for making purchases online, which is gaining popularity. People with poor credit may find it difficult to be approved for a card, but there are ways these individuals can enjoy the convenience of having a credit card.

Getting a card for those with average to good credit is usually very simple. Credit card companies are constantly sending offers and advertising their cards. They offer a number of incentives such as giving a certain percentage of all purchases (usually 1-2%) back to the card holder, or low interest rates. The customer simply has to select which card they like best based on its features and submit an application to receive the card. Depending on the company and card involved, customers can be approved instantly and receive their card week or two. The card holder then is free to make purchases with credit, and incurs no fees if their balance is paid within the month. However, expect to pay a huge amount of interest if the balance is not paid, this is where card companies make money.

Heavily advertised cards that most people see on TV with attractive offers are often challenging for people who do not earn very much or have some credit problems to get. However, it is still possible for these people to get credit from these companies through the use of Risk Based Pricing, where the company offers credit at a higher interest rate to offset the risk of loaning the money. Those with low credit scores may not be able to receive the advertised card, but they can get a similar one with different rates.

While those with only minor problems with their credit report may be able to get traditional cards with raised interest rates, people with severe credit problems must find alternatives. Some companies offer beginner cards for those with bad or no credit history. These cards have very low spending limits and high interest rates when compared to most cards, but they do offer a way for people to get their first credit card. These cards can then be used to build a credit score which allows the user to get a better card in the future.

People who have severe debt or have previously declared bankruptcy may not even be able to get a starter credit card. The only option for these individuals is a prepaid card. Prepaid cards, also known as secured cards, work much like debit cards. The cardholder funds the account with money they already have, and they cannot spend more money than they have, preventing them from going further in debt. Since there is no risk to the issuer of the card, nearly everyone can be accepted, but expect to pay large fees for one, such as a percentage of all purchases or a signup fee, so it is important to check all the details before obtaining a secured credit card.

Credit Cards – How Many Is Too Many?

Have you ever stopped lately and took a look at how many different credit cards you’re currently carrying? If you’re like the average person, I’ll bet it’s too many. So how many credit cards are too many? Can it really have a negative effect on my credit report? Let’s take a quick look.

It is so easy to get a credit card these days. We are constantly being bombarded with offers in our mailbox. It almost becomes a habit to fill out the pre-approved application and send it in. The next thing we know we have yet another credit card. This is why the average American has 5-10 credit cards.

Did you know that having too many credit cards can actually hurt your credit score? This is even more so if you have a large amount of unused credit on them! So, how many credit cards should you really carry?

To be honest, there is no exact figure to go by. Rather, it is about your balances. We will get into more on that later. Credit companies will look at the number of credit cards you have in determining your credit risk. If you have a high number of cards, you can be considered a high risk, even if you’re not using the cards. Why? Because it’s possible for you to suddenly rack up a lot of debt on these credit cards and not be able to pay it back off.

Having department store credit cards can also be a negative factor in your credit score. Some experts say that every store card will automatically deduct 20 points off your score.

Most everyone only needs 2-3 credit cards at any one time. Perhaps one of them being a store credit card that you shop at all the time, and the others being Visa, MasterCard, American Express, or Discover.

Another important aspect to keep in mind is your debt ratio. You always want to strive to maintain your credit card debt ratio under 50%. If a creditor sees that your credit cards are maxed out, you will appear to be someone who can’t pay off their debts. Try to hold only a few credit cards and keep the balances low. Some experts will even tell you that if you can’t maintain a zero balance on your credit cards, then you have too many.

Having long established credit accounts are better than having newer ones. So, if you are trimming back on the number of credit cards you hold, try to hang on to the ones that you’ve had the longest.

Credit cards are nice to use in making larger purchases than using cash. You will have protection in case of a return. They also help against fraud by giving you the protection that you need. But, you need to be careful with credit cards. It is often said that having too much of anything in life can be bad for you, and having too many credit cards is the same thing. Opening up lots of new credit accounts will not help your credit rating, it will only harm it in the long run. The key point in all of this is to carry only a few credit cards and keep your balances as low as possible.

The Vicious Cycle Of Credit Cards

Most of the people in the United States and Japan nowadays count almost exclusively on their credit cards in order to maintain the lifestyle they are used to. There are literally millions around the world who plan their monthly spending or budgets in general along the line of credit their banks give them. That may be as it is, but it turned into an absurd situation for most of them. Before there was such a thing as credit cards people lived from paycheck to paycheck. So by the end of the month they had spent all the money they had earned, waiting for the next payslip. But they had spent THEIR money.

Nowadays people still live from paycheck to paycheck, but now they need all the salary or wage they get to pay off their credit card. So at the beginning of the month they are already broke and have to do the rest of the month's spending on credit cards, which in turn they have to pay off at the beginning of the next month. It's a vicious cycle and a multi - billion dollar business for the banks. People will always spend more than what they have or will be able to pay off the following month and therefore have to pay obscenely high interest on their cards.

Another negative side effect is that people have such a high credit debt that they are unable to save some money for a new car, for example, or a new house. They are condemned for practically the rest of their lives to go through this repeated cycle.

Now, there are countries, like Germany, for example, where credit cards are highly unpopular. The Germans use them, yes, but very expeditiously. Germany and others of her European neighbors have a very developed financial culture where spending money which you don't have is frowned upon. It's the diaspora for American Express, Master Card and others. That´s why they love to do business in the United States, because there it's socially accepted that you spend money first and than work for it.

The Germans, to stick with this example, are famous for their internal savings. The country as a whole might be indebted, like any other nation on this earth. But Germany's debt is always set off by the private savings of its people. Every household has on average about $1,000 in a savings account which is never spend. It's for the famous emergencies, few of which actually happen. But add up a thousand dollars for each household and you'll find that the countries balance sheet is in the blacks.

Back to the States. Most young people are told to establish, early on, their credit line and it does look to them like free money. Until, that is, they start to realize that they have to pay off at some point or other these ridiculously high credits, or else. So a lot of people resort to the old trick of paying off one credit card with another, spending their lives juggling about their different credit cards. They end up with multiple banks they owe to instead of one.

Credit Cards – Understanding Reward Cards

Everywhere you look it seems like another credit card company is offering a new reward program for using their credit card. They make it sound so good and such a great deal. But are the rewards really worth using the credit card? Let's take a look at some of the different rewards that these credit card companies are offering.

You may be thinking that having one of the many different credit cards that are offering various rewards are a lot of fun. The truth is, you need to be careful and you need to be smart. Not all reward cards are worth having. You may think it is fun to use your credit card to gain free nights stay at a nice hotel, or fly free to a great destination, but you may have paid twice the price for these things in the long run if you're not careful.

Avoid reward credit cards with high interest rates. In many cases a reward type card will carry a higher interest rate than your standard credit card. The higher interest charges can easily offset any possible reward. You'll need to do some checking to see if it is worth it or not. Of course, if you're someone who pays off his or her balance every month, this will never be a problem for you.

Likewise, keep an eye out for any reward credit cards that have a high annual fee. This may offset the value of any reward you would receive. By looking at the fine print you could save yourself a lot of money spent on fees and costs.

Cash Back

This is a popular type of reward credit card going around. Many of the top credit card companies offer cash back reward programs on your purchases. Generally the cash back is 1%, which comes out to $10 for every $1,000 spent. Be sure to read all of the fine print on these types of cards to see if there is a maximum limit you can receive.

Points

Another popular reward credit card is one that gives you so many points for every purchase with the card. You can then redeem your points for items such as a store gift certificate, or other items. Does the card have a limit on the number of points you can accumulate? Or do they have a time limit for saving up your points? If so, then this may not be a very good deal in the long run. Take your time and shop around for the best deal.

Airline Rewards

Frequent flyer programs have been around for a number of years. Some are based on points, while others are based on actual flying miles. You will receive one point, or mile, for every dollar you spend using your card. The problem with most of these type rewards is that it takes 25,000 points in order to redeem them. This makes it very difficult for most people to achieve the rewards from these types of credit cards. If you are a big user of your credit card, then this may be a perfect program for you.

Finding a good reward credit card can take a little work on your part. You may just find the perfect one that fits your needs and lifestyle. Or, you may find that the standard credit cards are more suited for needs. Be sure to read the fine print and shop around.

Credit Cards – Applying Online For A Credit Card

Everyone is familiar with the credit card applications we get in the mail every week. While many of these cards say you are pre-approved, you can still wait for several weeks before hearing of a decision on the acceptance of your application. The Internet has changed all that. Applying for a credit card online can mean getting approved in a matter of minutes. What are some things to look for in applying for any new credit card online?

How Is Your Credit?

If you know that your credit is good then you’ll have no issues in getting approved for an online credit card. The credit cards with the best terms and rates will always go to the consumers with the best credit. So, it is always a good idea to know what your credit report says about you. Be sure to check your credit report at least twice a year. Another benefit of doing that is to be sure there are no errors on it.

If you haven’t reviewed your credit report in some time, then it would be a good idea to do so before applying for a new credit card. Check it out for accuracy, and fix anything that needs attention. Keep in mind that by applying for credit cards, and getting turned down, will affect your FICO score. This can play a key role in getting future credit offers.

Applying Online

After you know whether or not your credit is good enough to be approved for a new credit card, you’re ready to apply online for an immediate approval card. All credit card companies will ask you for the same basic information: name, address, phone, social security number, date of birth, employer, length of employment, gross income, etc.

Before you apply online for your new credit card, read the terms and conditions carefully. Check to make sure there are no surprise fees. All credit card companies will require you to submit your social security number. They do this so they can pull your credit report and determine whether or not you are creditworthy enough to approve you for a new card. One important note to check for; make sure that you are using a secure server when transmitting the information online. It should say SSL 128-bit encryption. This is standard procedure over the Internet today. It will make it virtually impossible for someone to steal your information.

When you enter in all your information and press “send”, you will have an approval/disapproval decision in minutes. It will either show up right on computer screen, or be sent to your email address.

After you receive the news of your approval, you can expect your new credit card to arrive in the mail usually within 2 weeks. If you have been turned down for the credit card you applied for, you’ll be sent a letter in the mail stating the reasons for your denial. Check over the reason for your denial. It may simply be a mistake, in which you can speak to someone at the credit card company, and they can help you get it corrected.

Choosing Your Credit Card

As you probably already know, there are many credit cards out there. The one you choose however, should reflect your lifestyle and your ideal spending amounts. If you are looking for the best possible deal and the best company for your credit card, youll obviously need to look around at what you have to choose from and what works best for you.

The first thing youll need to decide when choosing your credit card, is why you need one in the first place. Some people choose to get a credit card for cash flow purposes. With a credit card, you can make purchases and buy things, leaving your paycheck or other source of income in your bank account to draw interest. This way, your money will continue to grow while you continue to buy the things you need. Then at the end of the month, simply pay your bill.

Others will choose to get a credit card and use it for instant cash purposes. This way, they can use their credit card at an ATM and get instant cash, which is great for travel or going on a long and extended vacation. If this is why you want a credit card, you should look for one that has the lowest rate possible for instant cash transactions.

With a credit card, youll also need to think about the payments. Youll need to decide if you want to pay the balance in full each month, or only the required amount. When you select your credit card, you should look at the introductory rates, balance transfer rates, and other offers that may apply to new credit cards and new holders. Some will offer you truly amazing deals, especially if you have good credit.

Another important area to look at when choosing your credit card is the incentives. There are several cards out there that will give you incentives, such as reward points and even cash back with purchases that you can use towards paying back what you owe. There are several incentives out there with credit cards, all you have to do is look around and compare.

The key area youll need to look at and compare is the APR (Annual Percentage Rate). The APR is what you will pay on what you purchase when the incentive period runs out. APR rates will vary among credit cards, so it is always in your best interest to compare and shop around. The lower APR rate you get, the better off youll be.

Another concern with choosing your credit card is the minimum payment amount. Most minimum payment balances will start around 3%, although some can be lower while others tend to be quite a bit higher. The interest free period is a concern as well, as you will obviously want to choose the longest period that you can keep the payments down.

When you make that final decision and choose your credit card, you should always make sure that you know exactly what you are getting. Credit cards are great to have, although they can lead to a downfall if you dont choose them carefully. If you put some time and research into choosing your credit card, youll find the best one for you. As long as you take care of your credit card and pay the bill on time, youll help raise your credit and eventually be able to purchase even bigger things - such as a car or even a house.

Bank Secured Credit Cards

Even though there are many types of credit cards out there for consumers, there are few for those with bad credit. Those who are looking to repair their credit have a few options available, one of which is the bank secured credit card. This credit card can help you to repair your credit, as it works in conjunction with your savings or checking account.

Bank secured credit cards look and work just like traditional credit cards, although they use your bank account as collateral. Anytime you arent able to pay your credit card bill at the due date, the bank will take the money out of your account. This way, there is always money there for the bank, in the event that you are unable to make your payment.

Bank secured credit cards are also ideal for those who have a bankruptcy or simply dont qualify for a line of credit due to bad credit or no credit history. These credit cards show your bank that you are able to pay your monthly dues, and that you are taking the necessary steps in rebuilding or building your credit. Over time, if you remain responsible and pay your bill on time, your bank may give you an unsecured line of credit - known as a standard credit card with no collateral.

Due to the fact that bank secured credit cards only allow you to spend what have in your account, you dont need to worry about debt. When you cant make a payment, the bank simply takes the money out of your account. Although this is a great back up plan, you should always pay your bill and never let this happen.

Just like other credit cards, bank secured credit cards do have disadvantages that can hit you like a ton of bricks should you use the card irresponsibly. Anytime you dont pay your bill on time, the bank can hit you with high interest charges and late charges. These charges and fees can get higher and higher if you dont start paying your bill, which can eventually cause you to drain your account that you set aside. If you pay your bill on time though, you wont have to worry about being hit with these types of charges.

For those who have bad credit or need to start building credit, a bank secured credit card is a great place to start. These cards can lead you to an unsecured credit card, providing you pay your bill on time. Almost all banks offer these credit cards, all you have to do is ask. Once you have kept your credit card in good standing for a period of time - youll have the satisfaction in knowing that you are taking the right steps in rebuilding your credit.

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American Express Credit Cards

Also known as AMEX, American Express is easily one of the most recognized names in the world of credit cards. Even though many people have Visa or MasterCard credit cards, they are still interested in AMEX. With Visa, MasterCard, and AMEX being the most popular and preferred types of credit cards, they are all great although there are also differences between them as well.

Both Visa and MasterCard are methods of payment. Both will allow different businesses to accept credit card payments using their systems. Neither of the two issue credit cards on their own behalf, instead they rely on banks throughout the world to issue the credit cards for them, provide the credit, and then charge the interest. Your credit card bill goes to the bank, as Visa or MasterCard doesnt see any of it.

AMEX on the other hand, is very different. American Express has their own payment system, and they also issue their credit cards directly to consumers. Unlike Visa and MasterCard, AMEX runs the entire show. Therefore, when a credit card says American Express on it, you instantly know who has issued the card, what payment system it has, and everything else you would need to know.

Even though MasterCard and Visa are used more throughout the world, American Express is always expanding their networks. Visa and MasterCard are used in over twenty five million locations over the world, including third world countries, which makes them global credit card payments. AMEX on the other hand, doesnt quite reach this degree. It is a great credit card, although it isnt used around the world in areas where the other 2 dominant credit cards are.

You can get AMEX credit cards with rewards, although youll need to be careful where you look and what you select. Normally, with Visa and MasterCard, youll have to look at hundreds of banks before you can find the best choice. With AMEX, you can look at their website and find out what they offer and what type of APR youll have to pay. Most of the time, you can find a credit card with low interest and a great spending limit - providing you have good credit.

AMEX also has several advantages that it offers customers in North America and Europe. The credit card is accepted widely in both areas, offering you credit cards with great features and very attractive looks. AMEX offers you great rates, good rewards, and excellent customer service as well.

American Express also offers you Blue, which is a newly introduced credit card that offers you increased security, no annual fee, and 0% APR for the first year or so. Depending on your credit, you may be able to get an extended period with no interest. After that time has expired, you pay low fees, which makes it a great credit card for anyone looking for a deal. Blue is the newest card from AMEX, and will rapidly become one of the best - due to its amazing features.

In the world of credit cards, American Express is one of the best. They offer you a variety of different credit cards, designed to meet just about everyones needs. You find them online or through a local provider, although online is the preferred way to go. Simply fill out your application, and if you have good credit, youll be approved. Before you know it, youll have a credit card from AMEX - and be ready to experience life in the fast lane.

Tips For Responsible Credit Card Use

These days it seems the use of credit is running rampant. So many people are purchasing things they don't have the money for. This is quickly ensuring a generation of people who will spend a majority of what they earn just to may down their debt, instead of using their hard-earned money for other things.

Credit is an important part of buying the necessities in life, such as a home, or a vehicle. The more credit you're able the build, the better, so a credit card is an easy avenue to get there. Credit used irresponsibly, however, can do serious harm to your credit status. Therefore, a serious look at responsible credit card use is important.

The first thing to remember when using your new credit card is to go by a budget. Decide just how much you can comfortably afford to absorb and try not to go over this total. Just because you have a limit of $5000, doesn't mean you should max this number out each month. It is ultimately your money that you are spending, so keep this in mind when developing a budget.

Pay the full balance on your card as often as possible. If you are sticking to your monthly budget, this shouldn't be a problem. Keeping your balance paid in full will ultimately boost your credit rating much quicker, as creditors will see you as a much lower credit risk. Paying in full will also help you to avoid costly interest charges. Paying just a minimum monthly payment will ultimately cost you many times over in interest charges, so it is important to pay your balance in full to avoid those extra charges.

Pay close attention to your statements. Credit companies can normally change interest rates with advance notice. Read your statements thoroughly to ensure you're well aware of any changes in your account and act accordingly.

Keep track of the due date for payment and be sure never to be late in making your payment. This is where credit companies earn a majority of their profits. They will charge a late fee, even for being one day late with your payment. Always try to get your payment in well in advance to avoid a late fee.

Save all of your transaction receipts. Hold onto your receipts and check them against your monthly statement to ensure there are no mistakes. This will ensure you have physical proof in case the listing in your statement does not match up with your receipt. The last thing you want is to pay extra for something because you misplaced your receipt.

Never give your PIN number to anyone. There is no valid reason for a bank, credit card company, or any merchant to request your PIN number. Disclosure of your PIN number can lead to credit card fraud and the possibility of you being stuck with charges you never made.

When paying with your card, keep a keen eye on the merchant accepting it. Be on the look out for any suspicious activity. Card skimming is becoming a highly lucrative form of fraud and could potentially cost you a lot of money if you are hit. If you suspect you have been the victim of skimming, or any other form of credit card fraud, contact your credit card company immediately to have it deactivated.

Following the tips outlined above should help you make responsible choices when using your credit card and will hopefully help you avoid pitfalls many do not. A credit card is a very convenient tool when used responsibly.

Student Credit Cards: How To Find The Best One

Many college students are surprised to learn that they receive many, many offers for credit cards almost the minute they apply for college. They might be wondering how they can get all of these “pre approved” credit card offers when they have little to no credit history. The world of the student credit card is becoming an extremely lucrative income field for credit card companies.

One of the reasons that credit card companies target college students, offering them cards when they have no credit history, is that most people stay loyal to their first credit card company. Whatever card they get as a young adult they are likely to keep and continue using. Also, students are often unaware of the pitfalls of interest rates and late fees, meaning that the credit card company stands to gain more financially off of a college student who signs up for their card versus a more seasoned adult.

College students are notoriously frivolous with their money, and credit card companies know this fact. Students often view credit cards as free money, spending much more money than they make on things that they do not really need. They assume that because they can pay the minimum payments that they can afford to carry a balance on the card.

Student credit cards do have a place in the college student’s life. Most college students do not have a lot of extra money in their possession. Because of this, if they have an emergency, such as a car breakdown or major medical problem, they might find it difficult to afford the treatment or repair that they need. Carrying a credit card for emergency use is very helpful for college students who is getting used to being on their own for the first time.

Also, using a credit card for a few purchases each month, and paying off the balance each month, is a good way to build a person’s credit rating. This is valuable once the college student graduates. Usually after graduation students look to make major purchases, such as buying a house or a car. These purchases usually require a loan, and in order to qualify for a loan, the person needs to have a credit history. Using a card sparingly and paying it on time helps to build a strong credit rating.

When shopping for a student credit card, use caution to avoid teaser rates. Many student credit cards bait their potential users with low interest rates for an introductory period. What happens, though, when the introductory period is over, is the credit card throws a high interest rate at the owner, often surprising them with high finance charges. When applying for student credit cards, read all fine print carefully. Also, a student seeking a first credit card needs to be aware of what finance charges and late fees they will be charged if they do not pay off their balance on time each month.

By understanding how a credit card works and carefully paying it off each month, student credit cards can be a good way to build a solid credit history and be prepared for emergencies. The danger in getting credit for college students is that they often misuse their cards. Use caution, and shop carefully for the best card.

Selecting A Credit Card

Peruse the newspapers and you will see countless ads that offer free gifts, fee waivers, contests, cash advances and so on. This aggressiveness can be attributed to the intense competition among banks to grow their loan portfolio.

Financial institutions are vying to get a bigger slice of the personal loan pie because such loans involve lower risks compared to corporate lending. One of the most attractive areas of personal lending is the credit card business.

Faced with this barrage of credit card promotions and offers and all sorts of marketing strategies, what should consumers do? How do you determine if the promotions are worthwhile? What are the hidden costs you should know about?

To begin with, do not be influenced by the promotions because you might not need the free gift at all. Do not fall into the trap of spending more just to obtain free gifts or win contests too.

On the surface, there may be no 'hidden costs' for the consumer as the promotion may form part of the financial institution's marketing campaign, but in reality, the expenditure will be recouped over the medium term in the form of charges, fees and interests levied on the cardholders and merchant outlets.

When taking part in contest-based promotions, bear in mind that they are based on the premise that the more you spend, the better your chances are of winning the prizes.

If you are applying for a credit card to take advantage of its cash advance benefits, do take note of the high charges levied. The finance charge is usually 5% of the amount withdrawn. Then there is also the interest rate. Cash advances are beneficial to a consumer who requires it for a useful purpose but it is a debt magnet, no matter how you see it, since it is a borrowing and needs to be settled.

As for 'annual fee waiver' promotions, some credit cards may come with certain conditions. Some 'free for life' cards require you to, within a certain period, charge a designated amount or carry out a stipulated number of transactions. You may also be required to carry out the condition every year, so make sure that you can sustain this without overspending.

Apart from this, the usual criteria for selecting the right card also apply. You need to examine why you want a credit card and what you want it to do for you. Look at your lifestyle requirements and shop for a credit card that matches your needs and requirements.

Worldwide acceptance and customer service are important because customers expect the card issuer to respond quickly during emergencies. Customers should also be rewarded for being loyal.

Consumers should refer to the three 'R's; recognition, rewards and relationship. A credit card also serves as an entry level to sell other products offered by the issuer, thereupon creating a customer-bank relationship. It is more convenient to get a credit card from the bank with which you have other banking or loan relationships. This application process is simplified and payment is convenient.

At the end of the day, as with most things in life, self-discipline is required, especially when it comes to managing your personal debt.

Credit Card Skimming

Credit card skimming is an international problem accounting for losses of over one-billion dollars a year. This type of credit card scam is common in Europe, Asia and Latin America and is starting to show up more in the United States.

This scam is easy to run - it can happen when you give your credit card to a store employee to make a purchase. That employee may not only swipe your card for payment, but also swipe the card with a small machine they hold in their hand known as a skimmer. This small device will store the information from your card into its system. The skimmer is equipped to hold information on hundreds of credit cards and from this information, the crooks are able to produce counterfeit cards.

There are skimming rings working all over the world and once your information is put into the skimmer, it is then downloaded into a computer, ready to be emailed to anyone worldwide.

A decade ago, this fraud was not as easy to accomplish as it is today, due to the fact skimmers were very large and had to be hidden under counters. However, with the advance of technology in the past ten years, they have been able to streamline the skimmer, making it small enough to be hand-held and out of sight of the unwary customer making a purchase. These skimmers are easy to buy; in fact, they can be purchased over the internet at around $300. The machine needed to make counterfeit credit cards is a much larger investment - costing $5,000 to $10,000.

Another form of this scam is done by actually pulling information directly from the credit card terminals. A skimmer bug is placed into the terminal and later retrieved with credit card information on it. Only the older terminals can be violated in this way and with the onset of new credit card terminals, this has alleviated much of this bugging.

As soon as the crooks have their needed information on you, they will start their shopping sprees using your credit card number. They purchase all types of merchandise and charge it to your credit card. Over half of credit card fraud is done over the internet with online purchases. With shopping on the internet becoming more and more popular, card fraud on the internet has also increased.

The crooks will also use the internet to verify the card information is valid. They will purchase many low-ticket items through various websites, checking to see if the card is active. Internet processing of card purchases is done by real-time processing and not handled by a person; thus, no chance of them being caught trying to use a stolen card number.

The cardholder is a victim of this crime and is responsible for up to $50 of the total amount charged on his card, while the real victim in all of this is the merchant whose employee did the skimming. The merchant is held 100% responsible and risks losing the merchandise, and is responsible for paying the fees of the investigation. Investigation fees paid by consumers and businesses in 2003 amounted to an estimated half-billion dollars in annual revenue for credit card companies. This money is used by the card companies to offset costs to investigate charge back claims by their customers.

The crook who perpetrates this card fraud, for the most part, goes unpunished. There is a limit of $2,000 before a criminal investigation can be started; the crooks know this and will not exceed $2,000 on their purchases from any one business. Thus, they are pretty much free to continue to victimize consumers and businesses.

The Tactics Of Credit Card Companies

The tactics of credit card companies are bankrupting America. The vast majority of Americans own and use credit cards and, sadly, many survive on credit cards. Some use them to pay bills, normal household bills like utility and phone bills. Each time the card is charged, interest is added, which means not only do you have to pay back the amount charged, but, also, the interest charged on that amount.

Through the years, the credit card companies' greed has led them to come up with ideas over and over to make more money, anything to boost profits. For instance, they have instituted fee, after fee, after fee. One such fee is an over-the-limit fee. This fee ranges anywhere from $35.00 to $50.00. If you charge your card even $1.00 over the credit limit they provide you, they will charge this over-the-limit fee. There is a late payment fee charged, if you are late with your payment to them. This fee also ranges somewhere up to $50.00. They consider a payment late, even if it's one day past the due date.

Currently, a 25% APR is becoming more and more common on credit cards. They devised a way to raise a person's interest rate for any frivolous reason. Even though your payment history with them is perfect, they will raise your interest rate according to your credit score. If that score declines or if you are late paying some other creditor, they justify this as a reason to raise your interest rate. This is called 'universal default'.

The minimum monthly payment is calculated at around 2% of the unpaid balance or 1/50th of what you owe. At that rate, it will take up to fifteen years to pay off the card, even with no new charges being added. This is designed to keep you in constant debt.

Congress has been asked to require credit card companies to include in their monthly statements a calculation of how many months it will take to pay off the balance by paying the minimum monthly payment. The Federal Reserve claims this would be difficult to do - it would involve too much expense in calculating. Many consumers are not aware of the true cost of their credit card debt, so by including this information on their monthly statements, this would give them an idea of how many years they will be paying off this debt. This misinformation can be blamed for the explosion of credit card debt over the past 25 years.

The offers for a promised 'fixed' or 'low' rate can be deceptive. The companies advertise through television, mail solicitations and telemarketing phone calls that they will give you a credit card with a low, fixed interest rate that will never increase. However, reading in the fine print of the contract, it states these low, fixed rates can change within 15 days notice.

As of 1998, around ¾ of American families had at least one credit card or more. This is a 50% increase from 1970. The increase in credit card debt has to be associated with the fact that wage increases have been sluggish during this period of time. In many instances, people use credit cards for this reason - their income has not kept up with the rising costs of living.

The attractive thing about credit cards is you can have what you want today and pay for it later. This idea can be enticing, but always remember you are going to have to pay for it sometime, plus pay the accumulated interest on that amount.

Credit Cards: The Financial Sand Trap?

Credit cards are a very easy way to get what you want. Imagine the digicam that you have always wanted, the one that has five megapixels, four times optical and digital zoom, the one that can record high resolution videos is right at your finger tips. You are salivating and you can feel the smooth surface and grooves of the digicam as you hold it in your hands. So you take your credit card and charge away the expense. You walk away from the store happy, yet there is that nagging feeling inside of you that you have just done something very wrong.

Just the other day you charged a full tank of gas and bought that big screen plasma TV that the kids have been nagging you to buy for three months, but it's no big deal. You can always pay the credit card company the minimum payment required. You think to yourself that these credit cards are great! I can buy what I want and pay only partial amounts of the total amount due. The next month the same cycle repeats itself. You spend more than you earn thinking that you've got it all covered. That is until the bills come knocking on your door and you are shocked at what you see.

Many people today have become trapped in the debt burden that is the so-called credit card. They pay the minimum and yet each month they don't notice that the total amount due is not going down. The reason for this is that each month, interests are added to your total purchases and the minimum payment required is actually just enough to cover last month's interest charges.

Why do you think the credit card business is very lucrative? Here's why (the following scenario is an oversimplified illustration of the point):

Supposing your grandparents decided to give you $200,000, as your inheritance from the family estate. You decide to get into the credit card business, offering 20 cards that have a maximum chargeable amount of $10,000 each. Your subscribers all max out their cards and only pay the minimum required payment each month. Interest rates vary from country to country so for purposes of illustration we will just use 2.50% per month. This should amount to $250 per month per subscriber that will give you a total of $5,000.00 each month. You know what the good news is for the credit card company? IT IS RECURRING INCOME! Your subscribers didn't pay a single cent on the principal amount due. So the following month it is still the same.

Now let's say that half of the subscribers had their heads knocked to their senses and finally saw the light. They figured that they will only use half of their credit card limit. So 10 of them pay their credit card bill and generate expenses (via their card) of only $5000 and the other half still manage to pay the minimum amount. Put all the interest payments per month together and you still end up with $3,750 as monthly revenue. Amazing isn't it? Well, if you own a credit card company I'm sure you are very happy but if you belong to the other side of the spectrum then I'm sure you are very worried about your situation.

Apparently, a lot of people are starting to realize that their spending habits have much room for improvement. Hence, credit card companies have undertaken full-blown marketing campaigns to gain more subscribers, so as to give them more revenue.

Credit Card Reward Cards

No matter where you look, there is always a credit card company that is offering reward programs with their credit cards. New ones pop up all the time, making it sound too good to turn down. Even though they may sound great, you may wonder if the rewards are truly worth it. In some cases they are, although in others they may not be quite as good as you would like.

Although having more than one reward card is something many people instantly think about, you should always keep in mind that not all of them are worth having. Even though using your credit card is always good, you can sometimes end up paying quite a bit if you dont pay attention to what you are buying. When it comes down to credit card reward cards, you should use caution - with a dash of common sense.

Any reward cards that come with high interest rates should always be avoided. With most reward cards, youll find that they include higher rates of interest than standard cards. This higher interest rate can quickly and easily offset any type of reward. To be on the safe side, you should always look at the interest rates and determine if the reward is indeed worth it. If you pay off your entire balance at the end of every month - then this wont be a concern at all for you.

You should also keep your eyes peeled for reward cards that offer a high annual fee. These cards can be very tough to keep a grasp of, and they can also interfere with any type of reward you may think your getting. If you look at the fine print before you get choose your reward credit card, you can help to eliminate problems.

Cash back is a type of reward card that is becoming very popular. A lot of the top credit card companies and banks offer cash back programs that are normally around 1% for every purchase that you make. Before you rush out and get a reward card, you should always make sure that you read the fine print and see if there is a maximum limit on the card.

Another type of popular reward credit card is the type that give you points for every purchase you make using that card. Once you have accumulated enough points, you can redeem them for items and other cool things. Some cards will have limits as to how many points you can receive, which again makes it your best interest to shop around.

There are also credit cards with frequent flyer miles, which have been around the longest. Some cards will base their rewards on points, while some choose to use actual miles. For every dollar you spend using your frequent flyer credit card, youll receive either a point or a mile. Once you get enough accumulated, you can redeem them. Most frequent flyer rewards take about 25,000 points or miles in order to redeem them, which can make it nearly impossible for some to reap the benefits of using the card.

No matter where you look, finding the right credit card reward card can take some time and effort. You may have no problems finding the card to fit your needs, and if you do, you should consider yourself lucky. Before you choose your card however - you should always take the necessary time to read the fine print and compare what each unique company has to offer you.

More Money Generated With The Credit Card

Nearly everyone knows that little piece of plastic is really a money mint for the credit card companies but do you or those companies themselves really know how much money they do actually generate?

Why we ask the question of the companies themselves is because these companies have literally grown up creating more income sources for themselves without really knowing where it is all going to end.

In this short article we are not really going to examine the profits that accrue in the basic money generating system of the card companies which of course is the interest they are charging their customers on the money they are lending them to shop using their credit card. Here we will only mention the fact that they are charging much more interest on the loaned money than almost any other form of loan one can get into.

One must actually understand when we say ‘much more’ that we are understating the facts by a long way. If a credit card company is only charging 4% more than your average bank’s interest rate it does not seem too bad. But if you understand what it really means, it isn’t that good. If a bank has a prime rate of 10% that means you can borrow money yourself at that rate and if you were to pay it back at 14% it would be a 40% return on that money. Not a bad return on any commodity or product.

However, many credit card companies are charging much more than given in that example, and many people who see the credit card companies charging 20% interest think of them only making 10% on the money should sit down and work it out to see what they are really getting on the money lent at that rate.

One of the very grey areas your average person does not know much about is the amount of money these credit card businesses charge the merchants to process the sales. The merchant being the retailer your credit card holder is purchasing from. Here, the credit card company is getting a percentage of each sale and this can vary from less than 1% to 5%. This works out to an awful lot of money, and many companies that make massive investments in people, products and market share would be happy to get a total return in this region from their entire business.

Remember, this is only one stream of income for the credit card company.

Another area that they seem to take the average person to the cleaners with is items like insurance premiums; whether on their own services, or for products the credit card holder is purchasing. Because insurance premiums are normal calculated on an annual basis, and the insurance companies know the average person can only afford to pay at a monthly rate, they offer very attractive monthly terms themselves – very often working out to be an interest free monthly rate.

The credit card company will charge the amount for the annual premium and add interest on to this debt they have just created for the cardholder. On top of this, they could be acting as an agent for the insurance company and thus get a commission on the premium the cardholder is paying too. To add insult to injury, they could even negotiate better terms with the insurance company and the credit card holder could end up paying interest on a loan he has in fact floated!

The trouble why this kind of thing goes on is because some of these companies have become so large that people are assigned to looking after only an aspect or division of the credit card company and only see what is happening in their area. Very few people understand, or have clear picture of, the entire operation of a credit card company - and so this will continue.

Credit Card: Tips On Avoiding Late Fees

Many people ruin their credit card score by not paying their credit card bills on time, or by missing payments. Late fees can be very expensive. Before you know it, the fee has piled up and the interest rate can grow and, after a while, you will not even be able to pay the minimum payment. This could be a disaster for you. But with a bit of careful management, you can avoid late payments and expensive late fees altogether. There are seven golden ways to avoid late fees on your credit card. Let’s look at them.

1. Follow the payment rules

This is one of the most important things you can do, and start doing right now. Sometimes we are sloppy about getting our payments sorted out. But remember that carelessness can cost you. If you mail payments, make sure you fill out the paperwork correctly, make sure your checks are legible, and make sure there is enough postage on the envelope. You will be kicking yourself later if you don’t. And be sure there is enough in the account your transferring from to cover the payment.

2. Make minimum payments immediately

We often procrastinate about paying, even when we have enough to cover the minimum. But a safe strategy is to pay the minimum as soon as your credit card statement arrives. You can always pay more later, and you won’t be tempted to spend what you should be paying off.

3. Change your due date

Bank statements always seemed to arrive at the worst possible time - at the end of the month when we are “skinned”. Most of the time, we are surprised that payment time has come around again and can never keep enough aside to make a payment. The solution is changing the date of your credit card bill to be issued right after payday. A lot of credit card companies will do this, if you ask them.

4. Direct Debit Payment

Setting up your accounts so that your bills are paid automatically is a great way to avoid late fees – no human error! It’s a big plus for you, so that you won’t forget about the payment and kick yourselves the day after it is due.

5. Pay by Telephone

This is a great one for last minute payments, if you know you’re not going to get it done any other way – but be careful. Some banks charge for this service, anywhere from $7 to $20. Still, if it’s lower than the late fee it’s definitely a good option to get your payment made fast.

6. Get your fee waived

If you mailed your payment on time, but you still get hit with a fee? Make sure you challenge it. Do you usually pay on time, but were late just this once? Ask your credit card company to waive the fees. They are sometimes lenient with customers that have a consistent payment record.

7. Change your credit card company

You’ll be shocked when you realise how much you could save by changing to a smaller credit card issuer; the local community bank for example, or a credit union. You’ll also be happy to note that they are more forgiving when you are late with payments.

How To Benefit From Using Credit Cards

It is simple really, as far as taking care of plastic cards is concerned, yet so many of us abuse the flexibility of the credit card. Usually, this is due to paying off debts or extraneous spendthrift activity. If this applies to anyone then it should be a firm decision to simply stop using the card, or find ways to make the card work better. That is to say, other than being a financial sinker for the wallet after a few years of constant spending.

Most of us are aware of how hard it can be to avoid using the plastic credit pals like Visa or MasterCard when its time to pay the fiddler. It is right there in wallets upon entering shops. ‘Hey, I’ll take one of those, no cash in my wallet, but I have my trusty plastic buddy.’ This is probably a very familiar thought, and not one secluded to the husband’s spouse on a weekend shopping spree. Let us face it, all people will spend more than they can afford at some point in their lives. These helpful hints on the use of credit cards will help avoid unpleasant debtors:

Hint 1: Do not let the balance build. Ensure that the outstanding amount is paid off quickly, or the card will suffer interest penalties. Not to mention the insurance, if the option for insuring the payments against unexpected unemployment, as this can really add up. This accrued interest will be noticed once the card is used often, and a hefty debt rears its ugly head.

Hint 2: Many credit cards offer rewards to the consumer that can be spent on travel, discounts, and other ‘rewards through points’ programs. Many of the leading brands will support this point system. Examples are MBNA and American Express.

Hint 3: If the credit card currently owned has a high interest rate – get rid of it. Transfer to a card offering 0% for 6 months, or even some others that give a year. Heavy credit card users will notice the benefits of this simple manoeuvre over an annual period.

Hint 4: Find a card that is useful when needed. Don’t just take a card because it has a $10,000 limit; question that - ‘Do I need that much’ and ‘what will I specifically need the card for??’ These are important questions. If discipline is a problem, the card will become a problem. Take care and use it for needful things and not as a daily spender. That is the path to debt doom…

Hint 5: Recognise and stay within personal limits. Use the amount of household income as a frame of reference to establish this. How much can be spent on the card before monthly bills exceed monthly expenditure? That magic word, or bane of family life, called Christmas soon comes. This is when most people tend to go ballistic and attack the trusty credit card. Care should be taken to ensure that limits are withheld. Spendthrifts do not understand limits, and should avoid credit cards at all costs until cured of the spending bug.

Hint 6: Avoid applying for too many cards, as payments can become difficult. Measure the monthly income against the card limits. If they almost match, or the household income monthly falls below the card limit, a good general rule is to only possess one - or at the most - two cards. This may sound generic and too simple. Work it out. If the card is maxed, and the income falls below that amount, the card will be demanding a hefty minimum payment which may mean that there is no further flexibility on the card as it is maxed, plus there is a staggering minimum amount to pay now.

Hint 7: Avoid late payments. Pay the minimum amount plus more. If you cannot manage more, just pay the minimum, but this means that card usage should cease until available income has increased. Always try to pay the debt off completely or as much of it as possible rather than just paying the minimum amount monthly.

Use credit cards wisely, and they will be a versatile friend. Do this not, and they will become apostates of hell. Be wise, and be sensible, and credit cards will always be a useful aid for every financial need.

Credit Card For High Schoolers?

College students are some of the worst offenders when it comes to racking up mountains of unpayable debt; a problem that stay with them long after college has finished – the irresponsible use of credit in college can continue causing damage until much later in life. By teaching your kids how to manage money responsibly when they’re young, you’re setting them on the road to financial health and happiness.

Many banks offer credit cards tailored especially to the needs of high school students. They are issued with a guarantor or co-signer – usually parents or guardians. So although the ultimate responsibility of the card payment lies with the co-signer, wise students will also find they are able to use the credit card to start building a good financial history while they are still young.

Be sure to check out all of the options with your child before you commit to a card. Beware: some banks will try to charge exorbitant fees, reasoning that the applicant has no credit history. But there are reasonable deals to be found if you are willing to do some homework.

Of course there are risks involved – you will have no control over your child’s spending and reckless behaviour could lead not only to a heavy burden of debt, but damage to the child’s credit rating in the long term. Make sure that the card has a very low credit limit when applying and offer your child as much guidance as possible; encourage them to keep within a budget and to make payments in a timely manner.

If you’re not sure whether your child is ready for the responsibility of their own credit card, another option is to get an extra card issued from your own credit card account and give it to them. Most credit card companies will be happy to issue cards to family members at no extra cost. Students will feel less tempted to run-up insurmountable debts, and you can keep a very close eye on their spending habits.

If your child is still too young to qualify for a credit card of their own, or if your aim is to teach them financial responsibility after they have demonstrated the opposite, the best option may be a pre-paid card. It’s not exactly a credit card, and not exactly a debit card. This will allow parents to set up accounts for teens and children. They are quick to set up and you have complete control over them – just put in the amount of money you want your child or teenager to have – when it runs out, the card stops working.

Giving your kids the responsibility of a credit card could be a nerve-wracking ordeal, but it doesn’t have to be. If you make the right choices with the card, give proper instructions and support – making sure they understand the consequences of their actions – teaching your kids about the risks, the benefits of credit can be immensely rewarding. This will give them a sense of responsibility that will last for a lifetime.

Top Tips For Increasing Your Credit Card Limit

Having a credit card gives you flexibility and purchasing power that you have grown used to. But what about when it comes to making those big purchases, or consolidating your debts? There are times when everyone wants to charge more on their card, but banks are not always quick to offer a credit card limit increase. What can you do to sway the banks decision in your favour and take that dream holiday in the sun a bit quicker? Here are some tips that should make you a shoo-in.

The banks want to know that you are a good risk; you have to prove to them you deserve it. The easiest and most obvious first step is to abide by terms and conditions set by your bank.

A less obvious, but equally important strategy, is to prove your overall credit rating. Banks immediately look to your credit score to determine whether you might be a bad credit risk. Keep up on your loan (mortgage, student, car) repayments to avoid damaging your credit rating.

Maxing out the card to the limit is bad news, so use your card sparingly. Keep your outstanding balance to less than thirty percent of the limit, even if you pay off the outstanding amount in full every month. When your credit score is calculated, it will also help to have a low balance on your card relative to your available credit. Remember the thirty percent limit.

The older your active credit history is, the better, in the eyes of the bank. Got any old cards lying around that you haven’t used for a while? Pull them out and put them to work. If you use your old card once in a while for a small purchase, and pay off the full amount before the due date, the information will be updated at the credit bureau and your rating will be positively affected. Don’t use your credit card for emergency purposes only. Use it every chance you get. This is another way to increase your credit limit.

Of course you should always make payments on time – nothing damages your credit rating the way consistently overdue payments can. But if you’ve been a good customer and can’t avoid one late payment – you can request a ‘goodwill adjustment’ to prevent the incident from damaging your record. And it’s never too late to start paying on time – if you make 12 consecutive prompt payments, your lender may re-adjust your account to erase a poor track record.

When you do make your payments, try making more than the minimum. The whole lot if possible. The bank will see that you are comfortable making repayments above your current minimum, proving you will be able to cope with the increased minimums that come with a higher limit.

Ironically, having a higher limit can itself improve your credit rating, which makes it something worth striving for. Once you get your increase – spend wisely and protect it by budgeting carefully. Soon enough, you’ll have the credit you need - and more - for a comfortable, stress free lifestyle.

Knowing Your Predatory Credit Card Companies

For a number of credit card consumers, lending options are widely available. However for individuals with bad credit, the options are few and far between. With this in mind, lenders may take advantage of individuals who have problems repaying debt. These organizations typically target people with tarnished credit, elderly, or low-income individuals. Predatory lending for credit cards companies are becoming rampant thanks to the ease of targeting certain demographics and markets.

Predatory lending is a practice that provides unreasonable rates and fees for bad credit consumers. They offer high interest rates and, often, high fees for each credit that they sell to the borrower. By doing so, the repayment amount becomes too steep - or fees become unusually high for the average cardholder.

For people with tarnished credit scores, careful consideration should be taken for “bargain loans.” Bargain loans are programs that promise that an individual’s tarnished credit isn’t a problem. The offers are often labeled as a “limited time” offer and consumers are enticed to quickly apply. In many instances, the lenders offer instant approval or even guaranteed approval for their card application.

Interestingly, it’s illegal for lenders to require payment of fees before a loan is actualized. If this happens, the borrower should immediately report this to the proper agencies. There are plenty of scam operations that charge a huge fee and then not offer the loan to the applicant.

Before applying for such a loan, the applicant should check to see the terms of the credit card before signing the dotting line. One should verify that the terms of agreement is the same as what was discussed with a sale representative.

Individuals with bad credit should try to determine if the lender is a trustworthy company. One can simply ask for references from the lender, or contact the Better Business Bureau for any complaints. Sometimes information about the lender can be found by a simple search in a search engine like Google. News or complaints by customers on popular websites such as ripoff.com can raise red flags. There are even forums for credit cards that have opinions and complaints from cardholders.

Card applicants should shop around as well. The consumer should look at the rates and fees for each credit card and assess which one is right. Sometimes customer service is an important factor. Ask for the customer service hours and service quality.

Credit cards can also come in the form of a secured card. In other words, you would need to provide collateral such as cash to get the credit card. For example, a $300 credit card limit will require you to upfront $300. However, if the credit card company requires that the collateral amount should be over the card limit, then it may be best to walk away from the program.

Predatory lenders also take advantage of the grace period. In fact, the lending company could issue the bill with a payment due date of the mail issue date. This means that by the time the recipient receives the bill, the bill will be already past due. The lender now has means to raise the rates and fees.

Consumers need to be aware of Credit Card companies that are involved in predatory practices, especially consumers with bad credit. As more of these practices become apparent, consumers now have the means to arm themselves from such lenders.

Credit Cards - Lowering Your Interest Rates

is your credit card interest too high? Do you carry large balances on your credit cards? Do you want to apply for a new credit card? Many people struggle with these issues everyday. However, there may be a light at the end of the tunnel. Interest rates can be lowered, or eliminated, and a higher percentage of each monthly payment can go to the principal amount on your credit card. This can be accomplished by adhering to the following process.

First, gather all of your credit card bills together. List them in order of the highest percentage rate to the lowest percentage rate you are paying. Once you have this list compiled, you can see how much money is wasted on interest every month. You might now be asking, “What can I do about this?” You are now going to call the customer service number from the card that was first on your list (the highest percentage rate you are paying). Ask to be connected to a customer account representative. When connected, ask the representative if your interest rate could be lowered. Tell the representative how long you have been a customer, you always pay your bills on time, and you never are late with your payments. (If you have been late or missed a payment in the past, your bargaining power is reduced somewhat, but still ask for the interest rate reduction anyway – The answer is always “No” unless you ask.) The representative will most likely put you on hold and come back in a few minutes with an answer. If that answer is “Yes,” then congratulations! You have just saved money. If the answer is “No,” thank the representative for their time and end the telephone call.

After you have called all of your credit cards and had your interest rates lowered, we now want to call them back and ask for a balance transfer. (This is assuming you have more than one credit card. You should wait at least two weeks from the time you made your first call.) A balance transfer will transfer the balance from one credit card to another. The advantage of this is that a balance transfer normally receives a lower interest rate. You may be able to get as low as 2.9%. When you speak to the account representative, ask if you qualify for a balance transfer, what the interest rate would be and the length of time the balance transfer rate will last. It is also important to ask what the balance transfer fee will be. It can be as much as $75 if you don’t ask for it to be waived. Negotiate with the representative to lower or eliminate the transfer fee. (It still might be worth transferring your balance if you have to pay the fee.) If you qualify, you can transfer the balance from your higher interest card over the phone. If you don’t want to transfer the balance over the phone, ask the representative for balance transfer checks to be sent to you in the mail. You may then use the balance transfer checks to transfer the balance to the lower interest rate card.

The last phase of lowering your credit card interest rates might be to apply for new credit cards. We all get numerous credit card applications in the mail everyday. Don’t just blindly throw these away. Many new cards offer 0% interest on balance transfers. What this means is that you will be paying zero interest. Each payment you make will go directly to pay off the principal amount on your card. You should be aware of the following before you apply for a new card. Do not apply for a card with an annual fee. The credit card company makes too much money as it is and they don’t need an extra annual fee payment from you. As mentioned earlier, try to avoid paying balance transfer fees. Sometimes this is unavoidable, but if you negotiate, you may eliminate the fee altogether.

Credit card debt can be a huge burden. You can, however lighten your debt and pay less interest (or none at all) if you follow the steps in this article. Good luck on your interest-lowering journey.