We have helpful finance management advice on debt, loans and credit cards

More and more of us are taking getting credit cards these days, and many of us find it very difficult to even make the regular minimum payment, much less pay off the entire balance every month. Some people think about taking out a debt consolidation loan to pay off all their cards and only have one lower monthly payment. However there are some other options that you should consider.

One of the options to consider is to take the balance of all your cards and transfer it onto one card. The best thing to do would be to see which of your credit card accounts offers the lowest interest rate and transfer all the balances onto this account, thereby lowering your overall interest rate. However, if you are thinking about going this route you should also consider closing all but one of your credit card accounts. It is very easy to charge up your credit cards again right up to the maximum balance, which is the exact opposite thing that you should be doing!

Another option is to open another credit card account with an introductory 0% interest rate on all balance transfers, and transfer all your balances onto that one. This way for a period of time you will not be paying any interest at all, and if you are disciplined you can make extra payments and it will all go towards paying off the balance and none to interest. However, when this introductory period is over it is important to know what the interest rate will be and to take action again if it is fairly high. You will want to keep your credit card account with the lowest interest rate open so that you can transfer the remaining balance onto that card, thereby paying as little interest as possible.

Probably the last option that you should consider would be to borrow the money to pay off your credit cards from a family member or a friend. In order for this to work you would need to draw up a formal contract with the repayment plan and interest rate clearly stated. However, this is really the last option that you should exercise because there is a lot of room in this type of situation for bad feelings to occur and for relationships to become strained.

Whichever option you decide to go with, the important thing is that you do something about your credit card debt now. Dont wait until you are really in over your head before taking action.

Consolidate Credit Card Debt

When managing your existing credit cards seems overwhelming, one effective way to ease both the financial and emotional burden of the cards is to consider the option to consolidate credit card debt. There are several ways to consolidate credit card debt, and there are many benefits that arise from the choice to consolidate credit card debt.

First, what does it mean to consolidate credit card debt? One way to consolidate credit card debt is to take out a new personal loan and use the proceeds to pay down your existing credit cards. Another way to consolidate credit card debt is to perform a balance transfer; this involves applying for a new credit card which will allow you to transfer all the balances from your existing cards onto this one new card.

Both of these methods to consolidate credit card debt involve opening an additional unsecured credit account. Another alternative to consolidate credit card debt is to look into borrowing against your home equity. One way to do this is to take out a Home Equity Line of Credit (HELOC), which is credit line against the equity in your home. You would then use the proceeds of this to pay down all of your credit cards. Another way to take advantage of the equity appreciation in your home to consolidate credit card debt is to refinance your existing mortgage. As part of this refinance, you would use some of the proceeds to pay off your existing credit cards. This type of refinance is often called a debt consolidation refinance you are consolidating both your old mortgage and your existing credit cards into one new mortgage.

Now that you understand how to consolidate credit card debt, it is important to understand the benefits of this strategy.

Lower Interest Rate: Perhaps the most significant benefit that results when you consolidate credit card debt is that the new account that you are opening will carry a lower interest rate than the rates on the credit cards that you are paying off. This means that it will cost you less over time to pay off your debt. If your credit is strong enough, you may even qualify for a 0% balance transfer, which means that you will not have to pay interest charges on your debt for a set period of time. Moreover, a secured loan (e.g. mortgage refinance, HELOC, etc.) will generally have a lower interest rate than your existing credit cards.

Faster Repayment Period: Along with saving money over the long term by lowering your interest rate, you will also more than likely be offered a lower monthly payment. This may be very attractive given your current financial situation. However, if you are able to maintain your present monthly payment amount after you consolidate credit card debt, you will be able to pay off the new balance much more quickly than you would have with the old credit cards.

Ease of One Bill: Another very important benefit that comes with choosing to consolidate credit card debt is the simplicity of having one monthly bill that comes with the new account that you have opened. With multiple credit cards you are receiving multiple bills, more than likely with different payment due dates throughout the month. Not only is this difficult to keep track of, it also increases the likelihood that you will miss a payment and end up paying late fees and incurring higher interest rates. It is easy to see how one monthly bill can lower your stress level considerably!

These are just some of the many attractive reasons to consolidate credit card debt. Be sure to examine all of the financing options available to you before deciding on the right one. You may be eligible for a loan or credit card with very low interest rate relative to what you are paying.

A survey for the homeless charity Shelter has revealed that in 2007, more than one million people in the UK have used a credit card to pay their mortgage.

It seems that young people, including first time buyers are so eager to remain on the property ladder that they have resorted to this drastic action. More that 7.5% of people aged 18-24 have admitted paying their mortgage with their credit card.

But if you think that’s bad, it gets even worse.

It has been reported that some mortgage lenders are actually advising their customers who have repayment problems to take this course of action.

Truly Shocking!

The interest rate on most credit cards is at least 50% higher than even the worst mortgage rates available in the sub-prime sector. And the repayment schedule for your credit card debt will be spread over a much shorter period of time.

So in effect you’re swapping long-term, low-cost debt for short-term, high-cost debt.

Even if you use a credit card that provides 0% interest on purchases, the debt will still have to be repaid at some point in the future.

Okay, it might buy you a little time when you don’t have to pay interest, but when the interest free period comes to an end, you’ll have to find another 0% deal, which might be almost impossible in the current economic climate. Credit card providers are clamping down on easy credit, special 0% interest rate deals are scarce and many lenders have implemented balance transfer fees.

And if you miss your credit card payment date just once, any special deals may be canceled and you’ll have to start paying a hefty rate of interest, in addition to your continuing mortgage repayments.

So wherever you live, if you’re having problems making your monthly mortgage payments, don’t follow such reckless and irresponsible advice. Once you cross this danagerous financial barrier, the countdown to repossession starts ticking.

If you find yourself struggling to repay your mortgage, there are several options worth exploring.

The first step it to talk to your lender and see if they can suggest any sensible solutions to help you overcome the problem. Don’t let these reports about irresponsible lenders put you off contacting your mortgage provider. They may be able to offer you a solution that doesn’t involve making your situation worse.

If your financial problems are only likely to be temporary, you may be able to arrange a payment holiday so that you don’t have to make mortgage repayments for two or three months.

However, in many cases, this option will only be available if you’ve previously made overpayments. It also mean that the overall size of your mortgage debt will rise slightly.

Alternatively, you could shift the monthly payment date so that your mortgage payment is deducted from your bank account just after your salary has been paid in.

On the other hand, if your repayment problems are likely to exist for the foreseeable future, it’s important to consider other ways to reduce the size of your monthly repayments.

You could extend the term of your mortgage, repaying it over 27 or 28 years instead of 25, or you could switch from a repayment mortgage to an interest only mortgage until your financial problems pass.

However, both of these are major financial decisions that should only be taken after appropriate financial advice from a professionally qualified advisor.

As a last resort you could consider stepping off the property ladder temporarily. At the time of writing, the property markets in many countries are generally thought to be overvalued and this would allow you to find a more affordable home once the property markets return to sensible levels.

Whatever happens, don’t default on any of your mortgage repayments as it will dent your credit rating and could lead to an increase in the rate of interest that you have to pay on your debts.

Just make sure that you find a safer solution than whipping out your credit card!

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Though purchasing a product through a credit card is comparatively easier than paying cash, falling prey to debts through credit card transactions is even easier. Having high credit card debts is definitely not sensible. The interest rates of almost all credit cards are very high. Most people pay only minimum payment every month and manage to hold up high balances, thus losing a huge amount of money by paying interest.

By following certain precautionary measures credit card debts can be minimized as far as possible. Making the balance transfer to another card which has a low or zero rate of interest for a fixed period could be a good option. By keeping this balance at minimum interest rate, you can now pay off the other debts which have higher rate of interest. Ensure that you can make the payment before the end of the offer period, and keep another offer of balance transfer ready. In case a balance transfer cannot be made, it is better to pay off the maximum amount possible, so that the balance can be quickly brought to a minimum.

A tool for debt consolidation can be excellent in assisting minimization of credit card debts. The interest rate during loan consolidation is lesser than that of credit cards. A personal loan can save you a lot of money. The best way to minimize a debt on credit card is by self control, though it could be practically difficult. Reducing the usage of more number of credit cards is the foremost step in minimizing credit card debts.

Most people, if not all, while sorting out their monthly bills, will give more priority for payments on electricity, telephone or rent and keep their credit card payment at the bottom, but by then some small purchases would have been made by the person through his card and at the end the account may either be carried forward with huge interest or may be paid after the due date. A good method of ensuring card payments and controlling card debt is through auto-pay system on card accounts, wherein your bank will automatically pay the balance due from your account every month. For minimizing debts on cards, ensure that at least the balance due is paid off every month so that late fee and higher interest rates can be avoided as far as possible.

Learn The Credit Card Business Jargon And Stop Your Debt Cold

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Credit card companies, as part of the financial industry, use a massive array of jargon. If you understand the terms you can stay on top of your credit card debt. While you can’t be expected to recognize all the technical terms, some of them are quite important so here is a quick guide, in alphabetical order.

Affinity card
This is a credit card that gives a certain amount to a charity of your choice, depending on how much you spend. It is generally best to avoid any charity that wants you to sign up for such a card and dont let guilt lead you to a high interest rate.

APR
Annual Percentage Rate. This is your overall interest rate, calculated yearly, and given as a percentage of your credit card debt balance.

ATM
Automated Teller Machine. A cash machine. It will give you money when you put your credit card in, but will probably charge an extra fee.

Balance transfer
This is when you transfer your balance from one credit card to another. The usual reason for this is to try and keep as much credit card debt as possible on a lower-interest card.

Credit limit
Your credit limit is the maximum amount you can spend or withdraw from your card. Going over your credit limit will result in your card no longer being accepted and you being charged an over-limit fee.

Fixed rate
A fixed rate card is one where you are given a rate when you sign up for the card and that rate, at least in theory, stays the same for the whole time you have the card. In practice, though, interest rates can be changed for almost any reason.

Grace period
Your grace period is the amount of time between when you spend money and when you start paying interest on it. Good cards can have a grace period of up to two months and bad ones might not have one at all.

Minimum payment
A minimum payment is the absolute lowest amount you can pay back to the credit card company each month on your credit card debt. You should pay more, but you dont have to. Minimum payments are usually around 2% of your balance.

Sub-prime
This is a phrase used in the industry to describe customers who are a bad credit risk, but are seen as worth lending to anyway. If you are identified as sub-prime, youll start getting offers for loans secured on your property. They know that if you cant pay your credit card debt theyll get their money anyway.

Teaser rate
A special offer low rate, usually written in enormous letters. You will see many offers with LOW 4.9% APR in inch-high letters, followed by for first six months, 21.9% thereafter in microscopic ones. Teaser offers can sometimes be worth taking, but not if they tie you in for longer than the period of the offer.

Variable rate
This is an interest rate that is worked out by adding a certain amount to the current base rate. Taking this option will allow your credit card debt to be affected by changes in national interest rates. Its a good idea if you think rates might go down, and a bad one if they are on the way up.

The more informed you are the better control you will have over your credit and you credit card debt. To find out more about hidden fees, charges and costs buried deep in your credit card agreement and shift the financial powere from the credit card companies to you.

Consolidating credit card debt
Is consolidating credit card debt a good option?

Well, the answer will more often be yes than no. Consolidating credit card debt is often regarded as the first step towards credit card debt elimination. However, even before you move to take first step towards consolidating credit card debt, you must understand that consolidating credit card debt (or balance transfer) is an action that you are taking to eliminate credit card debt. Consolidating credit card debt is not a means of deferring the problem for later.

Consolidating credit card debt is indeed a good option in more than one sense. Not only do you get relief from the rapid increase in your credit card debt, but also get other benefits too. Offers for consolidating credit card debt are in abundance and are very attractive indeed. Almost all the offers for consolidating credit card debt have an initial low APR period during which the APR is generally 0% (or some low figure). In fact, this is one of the main things which make consolidating credit card debt a very attractive option. Besides this low APR, the offers for consolidating credit card debt also include things like no interest rate on the purchases made during first 5 months (or some other initial period) of balance transfer. This is another thing that lowers the speed at which your credit card debt gallops. So these are the two most important benefits that credit card suppliers deploy to attract people into consolidating credit card debt with them. Then there are other benefits which include things like additional reward points on the members reward program of the credit card you are consolidating credit card debt to. These reward points can be redeemed for other attractive goods/rebates/rewards etc. Sometimes, the new credit card (i.e. the one you are consolidating credit card debt to) might be a credit card that caters more to your current spending needs both in terms of the credit limits and the way you spend your money. For example, the new credit card might be a co-branded one offered by an airline that you have started travelling with very frequently in the recent times and consolidating credit card debt on such a card may open up much more benefits as compared to your current credit card which was based on your needs at the time of you applying for your current credit card. The credit card you are consolidating credit card debt to might open up discount offers to you.

So many people are completely buried by credit card debt, that you even wonder if they understand what is causing it in the first place. Granted, credit card debt comes at us fast and furious-every day we receive new offers of cards from credit card companies and stores. Do a lot of people out there look upon credit cards as if they won the lottery, or as if they found a treasure they can spend any way they like?

Well, whether they understand it or not, most people have too much credit card debt and need to find ways to eliminate it. First of all, stop creating more credit card debt. Anyone who is too tempted by buying things with plastic should put those cards away (or even cut all of them up except one for emergencies) and start paying cash for any necessary purchases. The interest rate you are paying on credit card debt is already increasing your balance; no need to add to it more. Disciplining yourself to save up for purchases or only to use cash for purchases, or do without will be a good training because once you have eliminated your debt, you will want to keep it that way. This new habit will make you examine your purchases more closely and only buy what is really necessary. You should make it a rule to never have more than 70% of your credit lines utilized at any one time. Better yet would be to get your balances lower than that and keep them there.

Debt consolidation is an option you may want to consider. Under debt consolidation, you transfer all of your outstanding credit card debts to one credit card, at a lower interest rate. It is important, however, to just use this new credit line to pay down the old lines. Using it as a new source of funds for purchases will just be counterproductive. When you are shopping for a debt consolidation loan, compare all of the interest rates, but also read the fine print. If there is a large balance transfer fee that may end up making you pay more, or the lower rate may be for a limited time and if your balance is not paid off, you pay end up paying more. You may want to check with your current card companies to see if they can match offers that you get from new companies. They may be interested in keeping you as a customer if they know they will lose you because you can get a better rate elsewhere.

Try to make higher and higher payments on your credit card debt. This will bring your balance down, and you will also be saving money because the interest will be charged on a lower balance. Start paying down the credit cards with the highest interest rates first and you will get the most benefit.

Above all, do not apply for a new credit card because you have maxed out your old one. You are really asking for trouble then, even assuming you find a credit card company that is stupid enough to grant you more credit. Don’t just limit your new found discipline to credit cards. Hold back from any other kinds of loans as well, such as personal or car loans. It doesn’t make sense to just switch from one form of torture to another.

You will learn over time how much you can do without and you will reap the benefits in the peace of mind you will have when you have a nice clean credit card debt and a good credit record.

A new credit card can be used to help you eliminate some of that debt that you have from other credit cards, and other sources of debt, too. As long as you are able to get another credit card, then you have a great tool available to reduce your monthly payments rather quickly. Here is how you can do it with a new credit card.

Look For 0% APR Interest

Here is one option that can really help you to cut down on the amount of interest that you pay each month on your credit cards. Get a credit card that has 0% APR interest, and make sure that this benefit will last for at least one year. Some cards will only give you as little as three months on this, and others will give you up to 15 months. By putting your credit card debt on the new card, you can literally reduce your interest payments to zero – as long as the introductory offer of 0% stays in effect.

Balance Transfers

This is the feature that allows you to take the debt from one credit card and put it on another. Watch out for a card that has balance transfer fees attached to it, especially if you are trying to reduce your debt – you don’t need another 3 or 4% interest charged for the transfer. It is common for a credit card to have balance transfer fees, but also, many do not have it. In addition, some credit cards will charge a specific amount of interest on balance transfers, but not on other purchases during the introductory offer period. You should know, though, that when you get your new card, you may need to list all transfers that you are wanting to put on it, and that you may not be able to transfer anything else to it. Find a credit card that will give you more flexibility.

Make Big Payments

A credit card, apart from adding a little convenience to your life by making it so you do not have to carry cash, is a great tool. But if you pay a regular late fee, plus high interest each month – it becomes more of a great inconvenience, rather than the help it should be. It will help if you can reduce your debt as much as possible by making as large a payment each month as possible. By having the 0% APR interest rate, you should be able to make larger payments and reduce the principal amount rather quickly – as long as you pay on time.

No New Purchases

Consolidating your credit card debt can really profit you once you get it down to where you can pay off each month’s transactions – each month. While this goal may be down the road for some, still, it is a goal that all should seek after. This means cutting down on your extra purchases that you really do not need until your credit cards are manageable in the way they should be used. Instead of looking at the card as a “buy all you can and max out the card as quickly as you can” approach, look at it simply as a way to handle finances better.

Rebates And Rewards

In order to save even more money, you will want to purchase your regular things, like gasoline, prescriptions, and food on the card, too. With some credit cards, you have the opportunity to save anywhere from 1% to 3%, and you receive it as a rebate or a reward – money subtracted from what you owe, each month.

Some of these options are only good if you learn to say “No” to unnecessary purchases. These credit card tips will help you consolidate your debt from other credit cards if you pay off the debt each month, and pay all that you can to get the debt down to a more comfortable level – and then you can start saving for those other things you want.

If you’ve got huge payments and high interest rates on your credit card, you may feel like you’ll never get your head above water.

You can get out of credit card debt, if you are determined enough. Though it’s difficult to get out of debt, it isn’t impossible. All you need in order to get out of credit card debt is planning and determination. Both are equally important.

Determination doesn’t come without proper motivation, so you need to ask yourself these questions: “How will getting out of credit card debt benefit me”, “What difference will it make”, and “Is it really worth it to try to get out of debt.” Use the answers to these questions to build up your determination.

The fact that all the nagging mail and phone calls from the collection agencies will end should strengthen your determination and provide you with a reason to get out of debt. Think about the stress-free life you’ll have after you get out of debt. List the reasons you want to get out from under your credit card debt and ponder the benefits. Collectively, these will help bolster your determination and prevent lapses.

The second thing that you need to get out of credit card debt is plenty of planning. The planning starts with making a list of the credit cards that you currently posses and noting the debt and the APR for each of them. The sum total of all this information is how much you owe. You also need to check whether you have been defaulting on payments on any of these credit cards (and hence incurring late fees). You will need to avoid doing that. Put it in the plan you have prepared for getting out of debt.

The next step is to check your current financial position. Make an assessment of what you expect your future financial position to be. Then you need to do research to check what balance transfer offers are available. See if one of these can prove beneficial to you. Use this information to calculate how much time you will require to get out of debt and how you will distribute the debt payment across your various credit cards. Try to pay off the debt that is largest first and make sure that you don’t make any late payments.

You can get out of debt. It is not impossible. If you have any more questions about getting out of debt, contact a consumer credit counselor.

Getting A Run For Your Money: How Do You Consolidate Credit Card Debt

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Spending is such a hard habit to break, especially when people use their credit cards. Once they get addicted, they continuously endure the agony of spending in spite of imminent problems that tag behind.

And when things eventually get out of hand, most people will soon realize that they are already stuck with a mountain load of credit card debts. And mornings after mornings, they will wake up each day with worries in their head about how they can repay all of those instant splurges.

Theres one way to get out of credit card debtsconsolidation. Heres a list of ways how to do it:

1. Make a balance transfer.

One way of consolidating a credit card debt is through a balance transfer. In this way, the person who has a huge outstanding balance on his or her credit cards will get another credit card with a lower interest rate. Once approved, they should immediately get a cash advance and use it to pay off their standing balance on the other credit card. In that way, they consolidate all of their payables into one credit card. Plus, they get to have only one rate to worry.

2. Home equity loans can do the job.

This is a very workable strategy provided that it will be used properly.

Getting a home equity loan is probably one of the easiest things to do. Best of all, home equity loans can offer tax deductions for the interest rate of the loan.

However, there is a drawback. The debtors house will serve as the collateral. But nevertheless, it still one good way of consolidating credit card debts. The debtor should only keep in mind that the money from the loan should only be used in paying credit card debts. If used on other things, it will only worsen the problem.

3. Make use of retirement funds.

There are instances wherein debtors can make use of their retirement funds in order to consolidate credit card debts. But this should only be made if there are no other options available. This is because this type of consolidating credit card debts can be very tricky.

Loans on retirement funds are not actually tax deductibles. However, the problem sets in when the fails to pay back the loan within five years or when he or she will resign from work.

Indeed, there are no nippy fixes when consolidating credit card debts. The bottom line is that, it is better if the person will stay out of debt so as not to worry on consolidation matters.