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Avoid Credit Card Offers

Jan 30, 2008
If you're like most people, you have plenty of credit cards, and you have stacks of offers for more. There's no need to carry any money with you ever again: you can just take one credit card with you to the shop and pay the exact amount just by handing it over.

A study by The UK Post Office found that a quarter of credit card holders said they had started the New Year more dependent on real credit than ever before with 41 per cent saying that they would be relying on their credit cards to pay for groceries and other daily expenses.

The weight of the calculations, administration and marketing needed to support the industry is immense the average Briton or American gets at least one credit card offer in the mail every day. Some cards can be much more expensive than others. Do not ever forget that after just five years at 15%, you'd owe double what you borrowed.

Once you've got a credit card, you'll find that you can do more with it than just pay for things with the card. If you had bad credit, you couldn't get a credit card at all. Whatever you do, though, don't spend a whole day applying for every credit card you can find, just to see if anyone will take you.

In the West, though, the art of saving seems to be a lost one almost no-one is saving enough for their retirement and banks are having to offer ever-higher interest rates to get people to put money anywhere near a savings account. Many people have over-stressed themselves over the Christmas period and have little choice but to use their credit card in the new year. "In the UK only an estimated 6.9 million household bills were being either unpaid or paid late over the last six month period" is mentioned by a separate study from MoneyExpert(DOT)com.

If you're a good customer, you'd be surprised how easy it is to get a better rate.

Companies giving out small loans are far more likely to rely completely on this rating than to bother checking your income, and a worse rating will mean that you are offered a higher interest rate. The problem is simply a matter of people leaving their balances on credit cards for too long, not realising just how high the interest really is. Your balance from the end of each day in the billing cycle is added up, and then divided by how many days there were, and interest is charged on this amount.

Going over your credit limit will result in your card no longer being accepted, and you being charged an over-limit fee. Your limit is just that: a limit, not a minimum! Whatever you do, don't get a card and immediately spend your whole limit.

When you have enough money to pay off your debt, there's absolutely no reason to keep it. Debt is for people who don't have the money, and need to borrow it. Debt costs money, and savings make money you want as much of your finances as possible to be savings, not debts. If your savings account and credit card are with the same bank, then you're effectively paying for the privilege of borrowing your own money from them. Why would you do that? Try always to negotiate your credit card debts. After all, the worst they can do is say no. To close the account, you'll have to negotiate something called a 'payment plan'. In all the technical discussion you hear about credit card debt, the best ways to manage it and pay it off and all the rest, one thing goes largely ignored.

You will be surprised at how lenient credit card companies usually are if you phone and apologise after all, the sensible ones want to keep you paying interest to them for a long time to come, so it's not really in their interest to punish you. If you're willing to call them up and wait in their queue for a while, the chances are you can get them to accept a credit card payment just by you reading the number. Know Your Local Laws.

People with lots of debts don't want to talk about it, even with their family, for fear of upsetting people or looking like a failure. You'll be less stressed about your debts, and your credit report will show that you were able to pay everything back getting you a much better interest rate if you ever need to go into debt again. It is very important, though, that you do talk about your problems, as keeping it all inside yourself will make you much, much more stressed.

The next time your issuer check your credit rating (they usually do it quarterly), they'll spot it and want to raise your rate. In some countries, you may find that you can sign up to get credit reports regularly for a small fee, or even for free! Make sure to check your local laws.

Good cards can have a grace period of up to two months bad ones might not have one at all. Almost no cards have a grace period on cash advances or credit card cheques, however.

The most dangerous thing about debt consolidation loans is that the ones with lower payments generally last a very long time you could be paying it off for twenty years, or even longer. Chances are that any interest rate you're offered on a debt consolidation loan will be significantly lower than the interest rates you're currently paying on credit cards. If you have lots of cards at a high rate and you've had no luck transferring the balances, then debt consolidation could be a very good idea.

In some countries, you might not have a legal leg to stand on your card issuer can do what they like to you. When it comes to Credit Card Issuers, getting it in writing also means that you can hold them to what they say later on. Credit card lenders realised, though, that they could set the minimum payments lower, and collect a smaller amount of money each month for a much longer period of time. There are some credit card lenders out there who are trying to scam you.

Settling your debts takes a lot of time, and many people find it intimidating. Firstly, look for a card with a high minimum payment this is a good way to discipline yourself into paying off the debt faster.

Anyway, credit card lenders are devious, and there are plenty of things there designed to catch you out here's what you should be on your guard against. There are many government bodies, legitimate financial companies and charities that give good advice, but the ones who do a lot of advertising tend to be owned or partnered with people you don't want to know.

They are also a very useful way of proving to credit rating agencies that you can handle debt, and this will be taken into consideration when you apply for car loans or a mortgage.

Don't be fooled by any offers that give you a good rate for a limited time you're going to have this loan for quite a while. Your minimum payment is the absolute minimum that you must pay off each month to avoid defaulting on the debt. If you look at what your payments would be and think 'oh, how cheap!', the chances are you'd be signing up to them for a long time to come.

Any offer that says it's for a limited time only is one you should ignore, as there's no reason to do it other than as a sales tactic. Any bill you don't pay whether it's for another card or for your electricity gets put on your credit record. Make sure you keep track: make a mark on the calendar. It's money you should have been spending instead of making purchases with a credit card.
About the Author
Christos Margetis is available for interviews and public speaking. The tips in this article were extracted from Chris's award- winning website. ClickGoFind offers best information and reviews for Debt Recovery and financial resources information.
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