Experts Advise on Credit Card Debt

If your credit cards debt is out of control, then look no further, this credit card secrets is for you. If you are struggling with your finances, you are not alone. One of the biggest challenges for young people in America is how to overcome a looming mountain of credit card debt built up over several years. The good news is that you can reduce your credit card debt and you can beat it in a few years or less, giving you a new start in your financial life. These few points are designed to give the knowledge you need to start the journey to financial freedom.

              Credit card in a nutshell               

Credit card debt is an example of unsecured consumer debt, accessed through credit cards. Debt results when a client of a credit card company purchases an item or service through the card system. Debt accumulates and increases via interest and penalties when the consumer does not pay the company for the money he or she has spent.

The results of not paying this debt on time are that the company will charge a late payment penalty (generally in the US from $10 to $40) and report the late payment to credit rating agencies. Being late on a payment is sometimes referred to as being in default. The late payment penalty itself increases the amount of debt the consumer has.

When a consumer has been late on a payment, it is possible that other creditors, even creditors the consumer was not late in paying, may increase the interest rates the consumer is paying. This practice is called universal default.

Relieving credit card debt.     

Account holders can request a reduction in their annual percentage rate (APR). A survey conducted by U.S. Public Interest Research Group in March 2002 found that among its fifty participants, including people of all credit backgrounds, who contacted their credit card issuers, 56 percent received a lower APR. On average percentage went from 16 percent to 10.47 percent.  

Few strategic points that will enable you to get out of credit card debt in a twinkle of an eye.

1. How did I first get into debt?

This is the first question you must ask yourself if you want to prevent this mess from repeating itself. This will enable you to do all within your capacity to avoid buying things on credit which always result in accumulation of credit card debt.

2. Don’t pick a card you can’t handle.

Not all cards are created equal, so you should shop around with the one that best fits your situation. Look for credit card that has no annual fee, a low rate and a few additional benefits, like a cash back program.

3. Don’t carry your card to the bar.

You at least need to set limitations on what you will  use the card for. For example, don’t charge frequent, small items like groceries, dinner bills, and bar tabs to the card. You will hit your monthly limit in a week that way.

4. Don’t settle for the minimum payment.

Minimum payments are really only meant to keep people paying interest for more years than needed. If you are merely paying the minimum, you are hurting your bottom line. In the economic inquiry study, researchers found that when the minimum monthly payment was raised just a little, people ended up paying back even more which resulted in getting out of debt quicker.

5. Don’t fall for scams

 Whenever credit companies send a check along with your monthly  statements, lending you a hefty amount of money to use up front.”Just shred the check if you don’t want to incur more debt. It is called cash advantage and basically allows you to borrow a large chunk of money from the lender that has an extremely high interest rate tacked on to it.

6. Work over time

Doing over time work is one of the ways of you getting rid of your hefty credit card debt. Your must intensify your effort to meet up with a specific target in order to quickly write off your debt.

  If this article has been of help to you in any way or if you feel like making your own contribution to the listed points above, kindly post your comment below and I shall be glad to chat with you.

  GOOD LUCK!

Small Steps To Reduce Credit Card Debt

One of the worst aspects of unmanageable credit card debt is the feeling of helplessness .It can seem as if there is no hope of ever getting on top of things ,and that can lead to people ducking reality so hard that they end up with their heads in the sand. The following steps will definitely help you reduce your credit card debt.

·         Take stock of your situation. Don’t be afraid  to look your bills “in the face” and make a list of what you actually owe by adding up balances on your credit cards and other loans. Note the rate you are paying each card while you are at it.

·         Listing all your essential monthly spending: rent/mortgage; heat and power; loan payments(including minimum payments on credit cards);commuting cost; home, car, food purchases-everything that you can’t live without.

·         Calculate the difference between your total income and your total essential outgo .That’s your discretionary spending. If your discretionary spending is zero or minus figure, you should find a qualified and reputable credit counselor.

·         If you can, quit using credit cards: Instead, use a debit card so the payment comes straight out of your bank account.

·         Freeze your debt. If you are trying to tighten your belt, consider putting your credit cards out of service temporarily. Simply place your card in the middle of a container full of ice cubes, putting a few cubes on top to keep the card from floating to the surface. Fill the container with water, and put it in the freezer. In order to use your credit card again, you’ll have to wait for it to defrost, which will give you a ” cooling off” period to consider your expenditures.

·         I f you must continue using your credit cards for now, charge only what you can pay in full within 30 days when the bill comes.

·         Minimize your spending on luxuries. Resolve not to fritter away the discretionary spending you have on those luxuries, but instead to devote it to pay down debt. Use a credit card calculator to explore how long it will take you to pay down each card, and set optimistic but achievable goals.

·         Save, don’t charge. If you want to make a large purchase, try saving monthly for it until you can pay for it in cash. It’s much cheaper to save for an item first than to buy it on credit. Keep your future debt load reasonable.  

                                                           Be Wise About Credit Cards

Ø  Pay attention to interest rates. Don’t throw those credit card solicitations out without looking for cards that have a lower interest rates than your current debt. If you have a good offer, transferring your debt can save you a bundle.

Ø  Order a copy of your credit report, and that of your spouse, and sit down together to review them. If there are any inaccuracies, decide which of you will take steps to correct the problems. Don’t put it off—it will only get worse.

Ø  Shop for the lowest interest rate if you expect to carry a balance from month to month. However if you plan to keep your balance small, look for a no-annual-fee card with the lowest interest rate you can find.

Ø  Make sure that the credit or debit card you carry has a zero liability policy. Although payment card fraud is extremely rare, many of the card associations enhance federal security protections with zero liability policy. The zero liability policy provides added protection to consumers by eliminating liabilities.

Ø  Plan ahead

Ø  If you are drowning in debt, get help! Contact the consumer credit counseling services in your area.

               
 
                     How to Cut Credit Card Debt

 Most Americans have too much credit card debt. Duh, we've all heard that
before, right? Only now its gotten a bit personal... right again? You
personally have too much credit card debt and its about to drive you crazy.

Well there IS hope so don't file those bankruptcy papers just yet. One
major thing you have to keep in mind is your creditor is probably very
willing to work with you. Its in their best interest to have you making
some payment versus no payment. So here are a couple points to help you deal
with your credit card debt.

The first thing you have to do is simply contact your creditor and let them
know your situation. Ask for a lower interest rate or a repayment plan.
You might not have thought of it because you're just naturally so polite but
its a very good strategy to be courteous at all times when negotiating with
your creditor. Polite, but firm. Come across as one who knows what you're
asking for and expect to get it. If you're not sure what you're asking for
in the first place you might consider a reputable credit counseling service.
There's a lot of great, honest organizations out there whose mission is to
help you work things out with your creditors.

Next you've GOT to stop using your cards. Cut them up, freeze them in a tub
of water, whatever you need to do to get them out of your wallet or purse,
do it! You simply can't keep adding to the problem by running the debt up
any higher. This is actually one of the hardest parts of cutting your
credit card debt. Its like you're addicted to spending money you don't
have. So go cold turkey and drop the habit.

Start paying the ones with the highest interest rate first and work from
there. How do you do that? Concentrate on those high interest rate cards
by paying more than the minimum balance each month. The minimum is just
designed to keep you on the hook longer anyway. The credit card companies
are in this business to make a profit and want to have you paying them for
years to come. Even a little extra each month makes a big difference in the
long run.

Lastly, keep your chin up and have a good attitude. Millions of folks just
like you have begun to cut their credit card debt by following the common
sense steps outlined above. You can do it too. Good luck.