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Credit Card Debt Help The Golden Rules For Using Credit Cards and How To Get Rid of Credit Card Debt (Page 1 of 2)
Credit cards make spending money so easy. The process is one step removed and makes us far less careful about it than if we were handing over our hard earned currency. The combination of this with the fact that they are so easy to obtain for most people can be a recipe for disaster.
The use of credit cards has increased enormously over the last decade or so. Lenders are not always responsible about who they offer cards to – often people who clearly have no chance of paying them back if they use them to their full credit limit. Spending money on credit cards is one reason for many of the personal debt problems that people have today.
If you are one of those people with credit card debt, there are certain ground rules that you need to be aware of if you want to put the debt behind you. First and foremost being that you should not consider borrowing more money to pay off your debt, or taking out more credit cards for spending. Debt is rarely improved by borrowing more money and your situation is much more likely to be made worse than it was before. With credit card debt the best solution is to try to move your debt to another card with the lowest interest rate you can find, preferably 0%.
Balance Transfer Your Way Out Of Debt
You need to look for cards with the best interest rates for balance transfers. It doesnt matter what the rate is for purchases, because you arent going to be making any. This is a very important rule when you do a balance transfer, you must forget that card as far as spending goes. You will rarely find a card that has a special deal on both balance transfers and purchases, so chances are you will soon lose anything you gain on the balance transfer deal if you start spending on the same card.
You need to have some idea about how long it is going to take you to pay off the total debt on your credit cards. If you know you can do it in about a year, then you can look at doing one balance transfer with a good 0% deal and that should be all you need. Once you have transferred, you can just concentrate on paying back what you owe, without being charged any more interest. Just make sure you focus on when the 0% deal runs out and that you can pay if all off by then.
If you need longer than that to pay it off, then you can either find the lowest rate you can for the life of the balance (you are guaranteed that rate until the debt is all paid off) or if you are organised and disciplined you can keep transferring your balance to the next special offer 0% deal and avoid paying any interest at all. I stress that if you are not organised this will not work and you will end up paying interest and other charges. Be honest and decide whether this is for you or not.
Understanding Credit Cards
The way you deal with credit cards will be improved by facing up to some basic truths about them first. The first thing to remember is that the every single credit card is designed to make money for the card company – they would not exist otherwise. This does not mean that there are not ways to take advantage of the benefits of credit cards without paying the card companies, but you need to understand where the traps are and how to avoid them.
Taking Charge of Your Zero Interest Credit Card
The biggest names in the credit card industry like American Express, Discover, Citibank, and First USA among others are taking the market by storm with their zero interest credit cards. For people who enjoy an excellent credit rating, zero interest credit cards are a good choice. Not having to pay the additional interest rate on your outstanding balances is undoubtedly a great deal. However, this doesnt mean that you, the card holder, can sit back and relax on your debts. In fact, with a zero interest credit card in your hands, all the more you need to be in control.
Caution: Zero Interest Credit Cards Can Mislead You
Anyone who plans on getting a zero interest credit card should be aware that a single delay with your payment can cost you to lose the interest-free period and get stuck with a much higher rate. So before you get all too excited in applying for the first zero interest credit card you see, ask yourself, are you really ready to take on the challenge? Can you really commit to paying your credit card balances on time all throughout the zero interest period? Can you finish paying off all your balances within that zero-interest period? If not, switching to a zero interest credit card will not be a good idea.
If you answered yes and youre really determined to get off from your credit card debts by paying your monthly balances on time, then great, grab the opportunity that a zero interest credit card offers. But take your time in choosing. Dont judge a credit card deal based on the zero interest alone. Be a wise credit card shopper and examine all other costs associated with every credit card youre considering. Read the fine print no matter how lengthy or how small the letters are. The real costs of your credit card are all disclosed in your credit card agreement.
Also, dont forget to check on your credit report before actually sending out your application. Credit card companies do give out offers to just about anyone, regardless of whether theyre eligible for the offer or not. But getting denied after submitting your application will only damage your credit score all the more. So, dont expect an approval unless youve personally checked on your credit report. If youre sure that you have good credit, thats the only time you should submit your application.
Taking Charge Of Your Credit Card
After going through the choosing and finally getting approved, whats next? Be prepared to take on your responsibility. Pay off as much as you can each month so you can get off from your credit card balance at the soonest possible time. You have to beat the zero interest period before it expires.
It is a good idea to have your credit card repayment plan set up even before you get a zero interest credit card. If the zero interest period runs for 12 months, make it a goal to finish paying off your balances at even less time. For instance, complete your payments within the next 10 months or even less than that if you can.
Lastly, taking charge of your credit card means being in control with your own spending. If you keep charging new purchases on your other credit cards while trying to repay your old balances, youll certainly have a more difficult time keeping up with your payments. So take charge. Know your limits. If you must use your credit card to avoid closing your account, use it only for small charges that you can easily pay off on your next due. Bear in mind that a zero interest credit card will only work if you know how to use it to your advantage.