credit card debt

Easy Ways To Eliminate Your Credit Card Debt

November 19, 2015 by editor

In the twenty-first century, being in debt is widely accepted as a part of life. As a student myself, I’m facing the beginning of my life with my net worth in the negatives, and it’s incredibly daunting. My parents are years away from retirement; throwing themselves into their work as they try to battle debts they never anticipated having. It’s an overwhelming, stressful struggle, and a cross I believe all of us have to bear and some point or another. While debt can feel crippling, as it did for me, it isn’t the big bad life ruiner it’s believed to be. There are ways to eliminate your credit card debt.

[Read: Tips To Deal With The High Interest Of Credit Card Debt]

As much as we all wish for the ability to wave a wand and watch our debt disappear, it unfortunately is not that easy. Nothing ever is. But it can be done, and my goal today is to give you a few options to help you eliminate your debt in the most painless way possible. Sorry to say, it may involve a little sacrifice of some of the finer luxuries in life, but lucky for us we live in a world full of loopholes and backups. There’s five of everything, each with it’s own unique price tag. A little trimming of your budget here, a switch-a-roo there, and your debt should shrink before your eyes.

Money Savers Hiding Right Under Your Nose

There are twenty-four hours in a day. Minus eight hours for a full nights sleep, and two or three hours of ‘down time’, and you are left with thirteen prime time, money making hours. Taking on a second job, even if it’s part time, can be surprisingly helpful when it comes to lifting that stress off your shoulders. Yes, I am well aware of how intimidating the idea can be; it’s not as difficult nor as challenging as it once was. With the vast reach of the Internet shrinking the world mile by mile, job opportunities and openings have become more globally accessible. It is now possible for a mom to make money from her kitchen table, virtually assisting a fortune five hundred company from the other side of the country. A tech savvy college kid with a looming five-digit debt ahead can shave off a few zeros offering tech support from the comfort of his dorm room. So set those fingers loose on that Google search bar; those seemingly simple skills you posses can be put to good use!

The other benefit of the extensive reach of the Internet is its amazing capability to bring people together. Countless websites have been created to re-unite family members, spread knowledge an information amongst peers, and (most importantly in this scenario) connect buyers to products up for sale. Majority of us are used to surfing the web from the buyers perspective, but put on your salesman suit, and have a look around you. How many objects stick out to you? How about all the stuff you’ve boxed up and stashed in storage? When was the last time you riffled through your attic? Your garage? Those hidden gems you’ve tucked away could put a serious dent in you debt.

Budgeting Tips And Tricks

As I previously mentioned, there are many areas of our lives that suck the money right out of our wallets. That’s money that could be put to use eliminating your debt! And in this modern era, everything is a marketing campaign, so it becomes a battle of wills. Here’s your secret weapon: budgeting. Budgeting on the surface is incredibly deceiving; it appears to be simple – common sense, right? But when one sits down and seriously tries to budget, it can be trickier then expected. Let’s see if we can’t simplify the subject.

[Read: Best Option For Credit Card Debt Relief]

Though we all love a fun night out, try bringing that five star meal home. Save yourself hundreds of dollars by buying a book full of delicious dishes, and becoming the chef.
Direct T.V, Xfinity, and all their brothers and sisters have slowly but surely become obsolete with the rise of sites such as netflix, amazon video, and hulu. For a fraction of the price, you get all the shows you love and movies you crave before they hit the t.v screen.
Cellphones take up a major chunk of our daily lives, but that doesn’t mean they have to take up a big chunk of our cash. There are plenty of plans out there that can offer you the same converge as a pricey company, but without the big price tag.
Bills are big money grabbers, but believe it or not we can “budget” those too. Get in the habit or turning your lights off when you leave the room. Time your showers and see how many seconds you can shave of to save your water and shrink your bill.

Reasons Why Your Credit Card Is Declined

December 6, 2013 by editor

It can be embarrassing standing at the checkout and your credit card is declined, there are steps that you can take to prevent this from happening.

Check Your Credit Limit

It is possible that your credit card is declined because the amount of money that you are trying to put on is too high and goes over your credit limit. It is possible to avoid this situation if you are looking at keeping your balance below a certain threshold, it is better to pay off your credit card bill every month, this means that you are not going to be paying the company interest payments.

There is the option that if your card has been declined to phone the company as soon as possible to discuss the situation, but try and avoid putting your credit limit up because it will mean that you will find more problems in the future and you will not have solved anything.

Bills Not Been Paid

It is possible that your credit card is declined because your account has not been paid. It is important that you schedule your payments for your credit card, because they can freeze your account and this can cause you embarrassment whilst you are trying to use the card. It is possible that the card might be taken off you and cut up. If this happens it is important that you take the cut up card and dispose of it carefully.

Suspicious Activity

Your credit card is declined and you are not aware of any unusual use and you have paid the bill. The card could be declined if the credit card company thinks that the use is unusual. This is a way to safe guard you against fraud but unfortunately sometimes it gets it wrong and the purchase is genuine.

If this is the case a quick call to the credit card company and the issue should be quickly sorted.

A Holding Charge

If you have ever booked a hotel room or rented a car and they want your credit card, it could be that the company has put a hold on an amount of money. This ensures that they will get paid as per the contract. If you then use the card and there is not enough free credit left then the charge is going to be refused.

Traveling Overseas

It is possible that your credit card is declined when you are traveling in a different country. The credit card company can see this as unusual activity and decline the transaction. Many times, you are told to inform the company of the travel arrangements, but the practices that are put in place that can protect the card from freezing are limited and most of the time they seldom work.

Incorrect Information

One reason that your credit card is declined can be the miss-reading of one of the digits or transposing a number. This can cause the card to decline because the number that you have given is incorrect. This is simple to check if you are reading the number over the phone get the people on the other end of the line to tell you the number they have typed in and you clarify this with the number on the card. If you have typed in the number again you need to carefully go through the number that you have inputted. Any errors can easily be rectified and the transaction can be re-tried.

Dated Cards

It is possible that the reason that your credit card is declined is because the card is no longer valid. The date might have passed and this is the common reason for a card to be declined. A new card arrives and you continue to use the old card and you forget to change over cards.

The dated or expired card is just no longer valid, it will need to be destroyed and the new card will need to replace the expired card.

There are a number of reasons that can prevent the purchase that you are trying to make go through. It is possible that the reason might simply be a cautious one on the credit card company protecting you, on the other hand it could be the credit card company protecting themselves from allowing you to increase a debt that you are struggling to pay off.

To recap some of the top reasons why a card are is declined are:

Dated or expired card
Suspicious activity
Holding charge
Traveling
Unpaid bills
Above credit limit

These are just some of the reasons why a card might be declined in a store, the most important thing that you can do is to manage your credit card debt, pay the bills when they are due and to keep to a set percentage below your credit limit. It is not going to stop the credit card companies declining a purchase when they consider it to be fraudulent, it can be embarrassing and annoying but they are trying to protect you.

Eight Credit Card Mistakes to Avoid

November 19, 2013 by editor

People who use credit cards carefully never end up pilling a huge debt. Credit card debt is very similar to the disease ‘swine flu’. Both of them result in fever, headaches, chills and exhaustion and no one wants to go there. If you don’t use them responsibly, you will find yourself overburdened in debt. It is not very difficult to prevent this from happening. Here are eight credit card mistakes to avoid:

Don’t let marketers tempt you towards a wrong purchase

Marketers try to tempt you with their offers such as reward points or a good sign-up offer. However, you must choose your credit card according to your lifestyle. Check if it could be used at your favorite restaurants and shopping malls and if you have to pay annual fees. The one with lower APR would suit you more.

“Pre-approved” credit cards might tempt people with a history of credit problems. You should know that pre approval does not mean you will get the card for sure. Do proper research and choose the card that suits you the most.

Carefully understand terms and conditions

Don’t get mistaken for elimination of some credit card fees as stated in 2009 CARD Act because it applies only on few of them. Read the terms and conditions carefully so that you know everything before you sign up. Credit card companies sometimes tend to be less transparent so you have to be careful at your end.

Avoid making only the ‘minimum payment’

Among the credit card mistakes to avoid, this is an important one because you have to pay an amount to keep from missing your payment every time. Let’s look at an example. If you have a $1200 balance on your credit card and you just pay your minimum payment of, suppose $42. Your balance will remain same as before, in fact you will have a higher APR. You will end up with the same balance along with $713.79 interest with an APR of 18%. Also, you will be charged a higher rate of interest if you carry previous dues.

Avoid taking cash advances

Among credit card mistakes to avoid, you should avoid taking cash advances from your credit card because once you take it, interest is charged from that very moment. Such transactions charge extra fees and higher interest rates.

Never ignore statements and notices

Credit card companies send you some statements which include “gray” charges. These charges could be membership fees you had cancelled etc. Look for such charges and if you find some, resolve things immediately. Review your statements very carefully to avoid fraud.

Never max out a credit card

Using all your available credit will cost you money and ruin your credit score. It is based on the amount used vs. amount available. This is also called debt-to-credit ratio. Creditors prefer a lower ratio or at max 30% otherwise they increase your interest rate or reduce the credit amount. You should keep an eye the ratio and manage it if it is getting higher.

Make your payments within due date

Credit card companies give you a grace period to make your payments. This is the time between the billing cycle and your due date. Delaying payments will result in lowering your credit score by 60 points and can also raise your interest rate. Always remember and make timely payments to avoid consequences.

Don’t run after points

There are different types of credit cards. Some of them come with points and they look very tempting. Don’t buy items just to increase points. This is a common credit card mistake to avoid! Purchase items only if you need them. If you keep on buying things to complete your points for an attractive offer, you will realize that you are ahead of required points. Majority of people tend to spend more money when using a credit card rather than cash. Well, the credit card companies use this as a marketing strategy to get more money from you, so be careful not to get into their trap. For example they would offer you a plane ticket on 100 points and you would start making unnecessary purchases just to make points.

Using credit cards does not always put you in danger. You don’t have to stop using credit cards because of the danger of accumulating debts, we are just guiding you to make the “right” choices and avoid common unnecessary mistakes. There are plenty of benefits you can enjoy using credit cards such as they protect you from theft, useful for emergencies, make transactions easily etc. All you have to do is keep 1 or 2 cards according to your needs, keep a track of your payments and spend only on important purchases. It’s not even necessary to keep on purchasing all the time to get a good credit score; one or two good purchases a month can do your job. So be careful and enjoy using your credit cards.

Tips To Deal With The High Interest Of Credit Card Debt

June 17, 2013 by editor

Credit card debt becomes difficult to pay off primarily because of the high interest rate. The interest amount that you will pay on top of your principal balance will always change depending on your debt. This means the bigger your balance, the bigger interest you will end up paying for. And that will continue to accumulate unless you do something about it.

Fortunately for you, there are many ways to deal with the high interest on your credit cards. Let us discuss them one by one.

Request for a lower interest.

Ask and you shall receive. Believe it or not, this is sometimes effective especially for those who have a good credit standing and have never been late on payments. Just pick up that phone and give them a call. It wouldn’t hurt to ask.

Refuse interest hikes.

Credit card companies have the right to change interest rates without reason. However, the government mandates that consumers must be informed of it. So if you receive this notification, you also have every right to refuse the hike. Two things can happen here: the creditor can accept your refusal and retain your old rate or they can deny your request and agree to close your credit account (after giving you ample time to pay off your balance).

Transfer your balance to a lower interest card.

Balance transfer is a great way to cut back on high interest for a couple of months so you can make significant payments towards your principal debt. It is actually a great debt consolidation option. For a minimal balance transfer fee (3% of the amount being transferred), you get to enjoy an introductory promo of zero interest from 6 months to a year. That can help reduce your debts significantly.

Apply for a debt consolidation loan.

Speaking of debt consolidation, you can apply for a loan that is big enough to pay off all your high interest card debts and leave you with one big loan that is stretched over a 5 year period. Personal loans usually have lower rates than credit cards – especially secured loans. So if you have a good credit standing or a collateral, this can be a great option for you.

Enroll in a debt management program.

While the low interest is not a guarantee, you can also give debt management a shot – at least if you do not qualify for balance transfer or debt consolidation loans. The credit counselor who will work with you will negotiate with your creditors for a lower interest. If you are current in your payments, they may approve. But again, this is not a guarantee so don’t put all your hopes on this one.

Stop using your cards.

If you really want to solve your interest woes, you need to stop using your credit cards. Pay down your debt and keep you card to ensure that you will not have easy access to it. If your credit score can take a hit, cut your cards and keep only one – preferably the one with the low interest. Don’t worry about your credit score because as long as you keep making good payments on your debts, it will go up.

Are Debit Cards Really Helpful To Maintain Debt Freedom?

May 22, 2013 by editor

Credit cards are getting so much negative feedback because of the fact that so many consumers are suffering from the debts that have accumulated because of it. The whole concept of this card is to allow consumers to purchase items that they cannot afford at present. They are allowed to pay for it using a future income that has the possibility of not arriving. If it is compromised, the consumer is left with a high interest debt that can end up ruining their financial stability.

This is why debit cards are starting to be a popular alternative for cashless purchases. Some people think that by eliminating credit cards, they are saving themselves from potential debt.

While this may be true, it is only right that you find out what you can about debit cards before really using them.

The benefit of debit cards is the fact that it allows you to purchase items without carrying cash. This is much more safe. When you lose your cash, it is gone for good. If you lose your debit card, you can simply inform the card company so they can freeze the account so it will not be used by the person who got hold of it.

The safety is also for the debt that you will not acquire. Unlike credit cards that rely on future income for payment, you have to deposit money into your debit card before you can use it. When it runs out, you don’t have to worry about overspending. You cannot spend more than what you have deposited into your account. It supports the practice of living within your means.

Most retail stores also give reward points for the use of these cards. These points can be exchanged for products and freebies. Sometimes, it can be used to purchase more products. Some of the popular stores have their own debit cards that you can use and stock up points.

However, all of the benefits do not really answer the question of debt freedom. Will it help maintain a debt free life?

First of all, you need to get out of debt first. If your credit card got you into debt, you have to pay it off to achieve debt freedom. You have several options but if you wish to maintain a good credit score as you pay off what you owe, you may want to use debt consolidation. Once you have paid it off, make the decision to cancel your credit cards. You can choose to have only one credit card or to get rid of them all and use only debit cards from now on. A combination may be good for you too.

Once you are debt free, maintaining them is easier if you have debit cards. Since these cards will not let you overspend, you don’t have to worry about going over budget. You just have to make sure that you put in the right amount into your card.

One piece of warning, make sure you understand the fees involved in debit cards. There are certain fees that you have to pay for when you make any transaction. You need to understand the fine prints before you sign up to anything. Not only that, make sure the account where you will put your debit card money is FDIC insured – just in case.

Tips When Using Balance Transfer As A Debt Consolidation Option

May 18, 2013 by editor

Two of the popular ways to consolidate debt are debt management and debt consolidation loans. However, there is another option that consumers may want to use. We are talking about balance transfer. This is an effective debt relief method that have gotten people out of debt effectively.

There are some similarities and differences with the other methods of debt consolidation. Of course, the common trait is the consolidation of debt. You will literally transfer your high interest credit account balance into a zero interest card. Be prepared with some cash though because you will have to pay for this transfer. It is usually a percentage of the debt amount that will be shifted to the new card. It all depends on the card company that you will use to transfer your debts to but 3% is the standard practice.

Although there will also be a lowered monthly payment, it will only be for a short period. The usual term is between 6 months to a year. The lower payment happens because of the zero interest promo period of the card. Any payment that the consumer will make during this period will all be towards the principal debt. After that, the consumer may be faced with a high interest once more.

If you wish to use this as your way to get out of debt, there are a few things that you have to work on.

The crucial period is the time when you have the zero interest. You have to maximize this opportunity to pay off a huge chunk of your principal debt. A suggestion to adapt a frugal budget may be in order here. This means living on a very tight budget. It means cutting back drastically on your fun activities, commuting to work to save on gas, not going out on weekends and not buying anything for the next few months. In other words, anything that you can give up that will not kill you in the process should be given up so the funds can be sent towards your debt payments. This is only for a short period so you may be able to survive through the frugality.

A pitfall that you should be cautious of are the other credit card accounts that you emptied of debt. Make sure that you will not use them again. If you have to cut them off, do so. Although your credit score will decrease, you can always work on increasing it as you pay off the debts on your balance transfer card.

Another reminder is to be careful in using this card for purchases. New purchases are usually not covered by the zero balance. This is usually for the transferred debt and cannot be used for anything else.

Read through the fine prints of your balance transfer so that you know important details like when the zero interest will expire. You have to prepare for this and build your debt payment plan around it. Not only that, you have to make sure that you will never get yourself in debt again. Consider the reasons why you got into that situation in the first place and correct the mistakes you made in the past.

This Is How Running Away From Credit Card Debt Can Make Things Worse

May 7, 2013 by editor

Have you ever been in a very bad situation that you just want to have the earth open up to swallow you in whole? Were you ever in a position that is so distressing that you want to drop and leave everything behind?

Well if you are referring to credit card debt, that is exactly what you should NOT do.

Running away from your credit card debt, or any type of debt in general, is a very bad idea. As tempting as it may sound, you need to face it because in more ways that one, you brought this upon yourself. No one is at fault for your debt problems but yourself – unless of course you were a victim of identity theft which is most unfortunate.

There are many things that can happen if you choose to ignore your debt problems. For one, your credit score will suffer immensely. If you let your credit score go to ruin, you can say goodbye to any plans that you have to buy a home, open a business or to get a good employment. Times have changed and credit scores have risen to be one of the most important measurements of your financial health – specifically in defining how you handle credit. It is scrutinized by lenders, investors, employers and even landlords. While it may not be the end of the world, having a good credit score will open more doors for you than having a bad one.

Another thing that can happen is your debts will accumulate very fast – especially when you have a lot of high interest credit card debts. Think about it and do the math for a second. Late penalty fees are added to your current balance even when you are only a day late on your payments. That means an average of $30-$35. Apart from that, finance charges are added into your balance. Whatever is the sum of all of that plus last month’s balance, that will be the basis of the interest amount that will also be added to you payment. If you are late even for just a few months, that would mean a significant addition to what you originally owe.

Things will also turn for the worse because of the stress that you will have to face. As soon as you miss a payment, creditors will start calling you. When 4-6 months have passed and you still refuse to acknowledge your debt, the collection will be passed on to a third party agency who will be more harassing, threatening and abusive in their collection calls. That stress alone will make it impossible for you to ignore what you owe.

Understand that no matter how it hard may seem to get out of credit card debt, you need to man up to your own actions. Although it can be difficult, it doesn’t mean you cannot ask for help. There are debt relief options that will help you get out of debt even if you have a very limited income.

For instance, debt management allows you to make lower monthly contributions towards your debts. This is possible because you will be stretching what you currently owe over a longer payment term. The debt counselor that will be assigned to you when you enroll in the program can even help negotiate with the creditor for a lower interest rate – which will lower your monthly dues even further.

Know your options and keep in mind that running away from it all is not one of them. Be wiser and responsible when it comes to your finances. Your debt, no matter how grave it may be, does not signal the end of the world.

Best Option For Credit Card Debt Relief

April 11, 2013 by editor

The best option for credit card debt relief involves getting rid of two things: high interest and irresponsible usage.

Let us begin with the high interest rate. These plastic cards are notorious for accumulating into a big amount in a fairly short amount of time – at least if you continue using it without any payments. If you are currently watching helplessly as your credit card debts are continually increasing, you need to get debt relief help and you need it fast. Even if you are paying the minimum amount stated on your bill, that will not get you anywhere. At the very least, you are only paying of 4% of your total balance. It will take you decades to complete your payments.

One debt relief option that you can benefit from is debt consolidation. It comes in two ways. You can opt to get debt consolidation loans that involves borrowing money that is big enough to pay off your credit card debts. Aim to get a low interest loan so that you get smaller monthly payments. By eliminating the high interest of the credit cards and the fees usually associated with it, you can lower your monthly payments even by half. You can also make steady monthly payments for a maximum of 5 years – since most personal loans are paid off by that time. Of course, the key is the low interest rate that can only be achieved with a good credit score or a collateral.

If you have neither, your other option is debt management. This involves getting the aid of a debt counselor who will review your debts and the finances you will use to pay it off. They will help you come up with a debt management plan that will be submitted to your creditors for negotiation. They will even negotiate to lower your interest rate and if they reach an agreement, that will help you make better progress on your debts.

But while the high interest rate is removed, another aspect that has to be eliminated is your irresponsible use of these cards. If you do not correct these mistakes, you may find yourself deep in credit card debt once more.

Getting rid of bad spending habits should be part of any debt relief program. You need to begin by knowing how much you can really afford to spend. Ideally, using a cash only policy will help you stay within your means. But if you have to use credit cards, make sure that you have the cash in your bank account to pay for the whole balance on the card once the bill comes in. The only way you can eliminate the high interest on your cards while continuing to use it is to pay for it once the billing statement comes in.

Read all the fine prints indicated in the card contract that you will receive after applying for a card. Or if you lost that contract, research or call the credit card company to learn about the fees and charges associated with every activity on your card. And if you know that you cannot control yourself, try not to bring your cards when you go out on regular buying trips. This is how you become a responsible card holder.