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

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If credit cards have become a way of life for you, it might be time to organize your credit cards. If you have a lot of credit card debt, you might even want to look at consolidating your cards to a lower rate card that will save you in interest charges. Be careful, done incorrectly, canceling and consolidating credit card debt can harm your credit.

Before you consolidate, first you need to recognize why you want to consolidate. Are you looking for lower interest rates? Do you need lower monthly payments? Do you simply need to stretch out the term of your loan? If you answer yes to one of the last two questions, you should beware.

If you really just want to get out of debt, you need to understand how you got into the mess. Then you can fix the mess. Simply solving the problem with debt consolidation often makes the problem worse. Too many people consolidate and then charge the cards back up again.

If you know that you need to reduce the number of credit cards you have open, start with determining how much credit you need. How do you use your cards?

If you have several department store and gas cards that you never use, you should go ahead and close them. You also shouldn’t need to pay a yearly fee for a credit card that earns you gifts, like cash back or frequent flier miles. Pay attention to whether you use the miles or not. You may find that what you are paying isn’t worth what you are receiving.

You really only need one or two credit cards. Ideally, you need one card that is only used in emergencies. There are several steps you can take to start consolidating your balances into fewer cards.

Start by paying off all of the low balance cards that you plan to cancel and then close the accounts. Then, transfer your remaining balances onto the card that has the best interest rate. You can’t use this card or the other cards until it is paid off.

Now you need to have one or two cards that have high enough balances to cover your charging needs. Make sure that they have the lowest interest rates you can find. These should be the only accounts you have open. IF you charge to them, make sure you pay off each balance in full every month.

When it comes to balance transfers, there are some questions you should definitely ask. Find out how long the transfer rate lasts. Sometimes you can be given a rate for balance transfers that only lasts a few months. Find out if the rate is just for balance transfers, or is it for transfers and new purchases?

You need to find out about the fees that apply. Is there an annual fee? Find out what the late fees and over-the-limit fees are. Some institutions will charge balance-transfer fees as high as 4%. The higher the balance, the higher the fee. Just add it up: 4% of $5,000 is $200!

Read through your credit card offers very carefully. A lot of information is hard to understand (and find). Some offers waive the fees for the “initial balance transfer” only. This could be your first transfer and not the additional ones.

Each additional balance transfer will be treated like a cash advance and charged cash advance fees, which are very expensive.

If you feel comfortable with the terms offered to you, fill out the balance transfer form carefully. Mistakes can mean that the transfer won’t go through. Keep making the minimum payment on your old card until you are absolutely sure that the balance transfer has been completed. This can take two to four weeks. You don’t want to try to lower your payments and still receive a late fee and penalty.

Even though the new card company will contact you when the transfer is complete, you still need to talk to your old card. Call and verify that there is no balance left on your account. Write down the representative, time, date and what is said every time you talk with a company over the phone.

Have your card company send you a billing statement with a zero balance stated on it. You may need this in order to clear up any mix-ups. Oh, don’t forget to close your old card, you don’t want to accidentally charge on it!

There are some situations that can occur when you are consolidating your credit cards. You don’t want to suffer because you are taking control of your credit. Manage your transfers well and you should avoid errors.

Don’t cancel a card that still has a balance. This causes your rate to shoot up, because they know that they have to get the most out of you now. Don’t even tell a card issuer that you are leaving until you have no balance. Many issuers will raise rates if you cancel with a balance remaining.

Pay all of your cards on time no matter what. It can take one late payment for your interest to go from 9% to 28%. Amazing, isn’t it?

Don’t start canceling all of your cards before you apply for a mortgage or car loan. This can make your chances of approval even lower. Credit scoring is based on many factors, including how much debt you have and how much you have available. If you have cards with no balance on them, it can raise your credit score.

You need to remember, even if you find better terms for your debt, it is still debt. You must be sure that you pay it off before you add to it. If you don’t, then it will never end.

Consolidation doesn’t offer you a new start, just a better path to paying off your debt. If you truly want to get rid of your debt, use consolidation as a way to put all of your debt in one payment. And get out the scissors.

Get Out Of Debt Plan – A Six Tip Debt Elimination Option

No one gets pleasure from being in debt, but unfortunately most individuals stumble upon debt at one time or another. There are several steps you can follow to make sure that your debt doesnt get out of control. By following these six suggestions, you’ll be following a get out of debt plan, and youll be closer to your goal of debt free living.

1. Calculate Your Debts. Verify that your bills are accurate. By examining your statements carefully each month, you will notice fees that are wrong. You will then be able to dispute the charges and avoid paying for inaccuracies.

2. Create a Plan – a Eliminate Debt Plan. Debt doesnt vanish on its own. Determine how much you owe. Make a decision about how rapidly you want to eliminate your debt, and take realistic and constructive steps on the road to accomplishing your goal.

3. Make A Personal Budget. You have to budget appropriately to make your plan happen. Your family budget must specify the precise amount of money committed to debt repayment, and that payment must be your main concern each month, until the debt is gone. You can not use every cent you have on your debt reduction solution. You will need money for ongoing living expenses. Part of the financial plan process will be making sure that you have adequate earnings to pay off your debt as well as take care of your living expenses.

4. Reduce Your Spending. If there doesnt appear to be room in your budget for your debt elimination plan and your expenses, peek at your spending routines. The majority of us use money on things that we desire, but dont actually need. An excellent way to evaluate your spending is to keep every receipt you get for a week. Your daily gourmet coffee and muffin routine might not seem like a good idea when you understand it costs $200 every month.

5. Maximize your Savings. It is an incredible feeling of confidence to have money in the bank. But if you have debt on high interest credit cards and you have money sitting in a low-interest savings account, it may be your greatest advantage to take the money to pay down the credit card bill. Then you can pay yourself back each month by putting money that would have gone toward the credit card bill into the bank. The money you save on interest will be an amazing aid toward your goal of eliminating debt.

6. Raise Your Income. One of the best ways to decreasing your debt is to earn additional income that is devoted to paying off the debt. Many people obtain second (or even third) jobs when working to remove eliminate debt. There are abundant opportunities for part-time work and possibly home based businesses that can assist you in earning added income.

By following these suggestions for debt-free living, you will be creating positive strides toward taking control of your money. You will be on your way to living debt free and living with a little less pressure.