Credit card debt » Credit Card Bills

Credit Card Debt Is Compounding Interest In Reverse!

admin — Thu, 09 Dec 2010 11:04:15 +0000

When you borrow money, compounding works against you. It takes more of your money, sometimes far more than the amount you initially borrowed. When you carry a balance, interest is charged on already-accrued interest.

Credit card companies want you to go into debt-it makes them wealthy. In fact, they will entice you to spend more and more with “free” gifts and rewards. The credit card companies are good-very good-at having people spend beyond their means. In 1996 the average U.S. household had $5,875 in credit card debt. Just ten years later, in 2006, it was almost $10,000.

That monthly balance is their bread and butter-how they make their profit-from your hard earned money.

Have you ever noticed, perhaps this last Christmas, how easy it was to spend more than you planned? Were you surprised, even shocked, when the credit card bills arrived in January? When you aren’t conscious of the money you spend (not actually handling the cash) you will spend more than you can pay off in a month so the card carries a balance.

Let me show you how this works and why the credit card companies LOVE for you to owe them money – aka “to be in debt.”

~ $10,000 debt on a credit card (with no more charges added to the balance),

~ $200 monthly payment,

~ 20% APR (annual percentage interest rate),

~ 108.4 months until debt is gone-over 9 years to pay it off!

~ The credit card company will make $11,679.80 in interest!

What would happen to your personal finances and the wealth creation for you and your family if you were to pay yourself first and invested that $200 per month over the next nine years? It doesn’t seem like a lot of money, and yet with compounding it adds up.

For example, begin with a zero balance and add $200 a month for nine years. That means each year you will contribute $2,400-$21,600 total. At the end of the nine years, at 10% compounded annually, you will have $34,330. If you leave the $34,330 alone and keep the money compounding for an additional 11 years (20 years total) the $21,600 would be worth $97,862!

So I enjoy looking at possibilities-what if you were to continue to add $200 per month for the 11 years? (You will contribute $48,000 for the 20 years.) That $48,000 would be worth $144,797.

Even though I’ve had an average annual return of 15% for the past 50 years, I used 10% compounded annually because it’s “more believable.” However, let me expand your mind a bit. $200/month at 15% for 9 years is $43,489; for 20 years it’s $264,415.

You will have a great start to become a millionaire if your money is compounding and working for you-rather than for the credit card company.

Practice Wealth Creation for you and your family.

~ Stop using credit cards-choose to live within your means.

~ Use debit cards-then it’s your money you’re spending.

~ Better yet, pay with cash-you know the green stuff!

~ Focus on quickly paying your credit card(s) off-yes it can be done.

~ Start NOW- you may end up with hundreds or maybe even thousands of dollars in YOUR bank account by the end of the year.

That’s right, hundreds or even thousands of dollars in your bank account. Isn’t it time you choose to pay yourself? I firmly believe that “Wealth is not a matter of chance, it’s a matter of choice-Your choice alone!” Choose to be debt-free, and become a millionaire.

PLEASE NOTE: These calculations are from interactive online calculators and are not intended to provide investment advice. Taxes and inflation were not considered for obvious reasons.

By: Paul Damazo

Eliminating Your Credit Card Debt

admin — Thu, 08 Jul 2010 02:33:06 +0000

Getting rid of your credit card debt can be done, but it requires some planning and patience from you. Once you figure out a plan of action, the most important thing to remember is to follow through with it.

You will find that the reward is going to be well worth it. Besides, doesn’t saving money sound like a good benefit?

The choice is yours, but it’s usually best to start with the card that carries the highest interest rate. For some, they decide to just pay off the card with the smallest balance first.

The most important thing to remember is that you need to figure out how you will exactly eliminate your debt before you start. Then remember, stick to the plan.

First thing’s first, you are going to have to create a budget. This will help you to evaluate your monthly income and your expenses.

By really focusing on your spending you can look at your habits. There will be expenses you don’t really think about (fancy coffees, dinners out, hand car washes, etc.) that really can add up. It’s time to get strict about where your money is going, because right now it needs to go towards paying off your debt.

Now is the time to stop using your credit cards. There is no possible way you can eliminate your credit card debt if you are still in the process of making transactions. The outstanding balance will not go anywhere if you are still adding to it.

You have probably heard it before, but it is time to practice this. It’s very important that you pay your credit card bills on time and really try to pay more than the minimum required. At least towards the accounts that you are trying to knock out first, go over the minimum due.

Companies count on you only paying the minimum due monthly and they love that, because that is how they are making their money off of you. Stop giving them what they want and start helping yourself to get out of debt.

If you are focusing on paying off the accounts one by one, then don’t forget to pay at least the minimum on your other bills. Go down your list and keep up the momentum. As you pay off one, focus on the next and don’t stop until you are out of debt. This might seem like a long list of things to accomplish but you can do it.

Have you thought about contacting your creditors? Sometimes they will be willing to work with you and give you a lower interest rate. There will be some companies who will tell you no, but you never know if you are dealing with one that might say yes!

If you don’t feel comfortable dealing with the creditors on your own, there are debt consolidation and debt settlement companies that can negotiate on your behalf. The quotes are free to you online and it might be beneficial to you, to have a company try and get the interest rates lowered.

Finally, one last tip to consider is that if you are planning on closing your accounts; do not close them until you have paid them in full. There are some credit card companies that will give you a higher interest rate if you close an account that is not paid off. That is the last thing you want to do, pay higher interest!

Just remember to devise that plan, the one that is going to get you out of debt. Keep dreaming about financial freedom and how wonderful it will feel once you are there. The quicker you get started the quicker you will make those dreams a reality.

By: Christina Costa

What Happens If I Don’t Pay My Credit Card Bills?

admin — Mon, 05 Jul 2010 09:50:52 +0000

When facing amassing credit card debt, it is not uncommon for many individuals to ask “Why pay my credit card bills?” Granted, while this option is there and it may give you some extra cash for a few months, here are a few of the major repercussions you might be facing should you decide to go delinquent on your monthly payments:

1. Creditor/Collection Calls:

This might be the worst part of a delinquent debt-the constant calls from creditors demanding their money. Collectors have been known to call 8-10 times a day, at home, at work, on your cell phone. And these are the ones who follow the rules. Creditors have been reported to speak to bosses, neighbors, and family members (which of course is illegal). Once they get you on the phone they can be even worse. They use a number of psychological techniques to demean you and force you to give them checking account numbers or other bank information. In other words, they will do anything they can to make you pay. (Please keep in mind that your rights are protected by the Federal Trade Commission. To find out more information, please consult the Fair Debt Collection Practices Act.)

2. Damaged Credit Score:

Creditors will begin to report missed payments to credit bureaus which will inevitability have an affect on your credit score. These marks can be removed once a settlement is reached or payments are made.

3. Interest/Late Fees/Over-the-limit fees:

Not paying does not mean that interest will stop accruing. Once you go delinquent, many creditors will immediately raise your interest rate to the highest possible interest rate, about 30%. In addition, they will charge late fee penalties ranging between $30-50, and if your balance exceeds the credit limit, they are more than happy to tack on over-the-limit fees.

4. Legal Action:

Eventually, if a debt becomes very delinquent, a creditor may opt to take legal action which can result in liens, garnished wages, or other legal judgements requiring you to pay your debt. However, this is typically a long and complicated process that companies would like to avoid. Nevertheless, it does happen.

If you are considering not paying your credit card bills, it may be the perfect time to considering professional help. There are a number of financial companies that can help you find a Credit Card Debt Relief solution to your financial dilemmas. Why wait? Contact one today, as the first step in finding a solution to your economical problems is usually asking for help.

By: Scott Wallitsch

Credit Card Debt Reduction Tips and Advice

admin — Mon, 10 May 2010 07:32:01 +0000

During times like these, keeping up with bills is a major headache, especially since interest rates are soaring and prices are soaring as well. If you have credit card bills to pay, you may find that keeping up with payments will start getting more difficult the more that you use your credit cards. Here are some tips to achieve credit card debt reduction:

Stop using the card

Stop using all your cards and look at the interest rates that you have to pay on each. The interest rates are a big reason why you are finding it hard to keep up with bills payments. On top of your principal debt, they will charge you extra because you borrowed money to make purchases. Don’t fall deeper into the debt trap by stopping the activity on your card immediately.

Pay bills wisely

Paying bills wisely means paying more than the minimum amount due on the card. Paying the minimum only will only keep you in debt and stretching the amount of time they can continue charging you an interest. This also means paying bills on time. By paying bills on time you can avoid all the late charges that you will otherwise incur because of bad account management.

Consolidate

If you have many credit card debts, try to consolidate them under a bank program that will help you pay them off at a lower interest rate. The advantage of this is that you only need to pay one bill and will be able to manage your accounts better without hurting your credit score.

By: David Patullo

Credit Card Debt Elimination

admin — Fri, 30 Apr 2010 17:23:29 +0000

Credit card debt elimination can be done with a good plan and a little patience.
The important thing is to find what works best for you and stick to your plan. The rewards are well worth it and you’ll save yourself a lot of money in the process.

You can choose to either start paying off the credit card with the highest interest rate first or you can get rid of the credit cards with the smallest balance first. The important thing is to know exactly how you are going to approach your credit card debt elimination before you begin.

First, set a realistic budget for yourself to lower your spending in all areas and stick to it. Living by your budget will help you pool your available cash for your credit card debt elimination plan.

The most important you must do immediately is eliminate your credit card spending. You can never succeed with credit card debt elimination if you continue to add to the outstanding balance. The interest on that debt added with a climbing balance will make credit card debt elimination impossible.

It’s important to pay your credit card bills on time and always pay more than the minimum payment on the bills you want paid off first. Paying the minimum payment doesn’t eliminate that high credit card interest rate. That’s exactly what the credit card companies want because they are making a killing off of that interest.

If you are concentrating your bill paying efforts on one bill at a time, then you should still pay at least the minimum on the others. Once each bill is paid redirect your resources to the next bill so your credit card debt elimination can become a reality.

A tip that some have been successful with is contacting creditors to ask for a lower interest rate. Even if most creditors say no what if some of them say yes? The interest savings to you will multiply your credit card debt elimination efforts and save you money. It’s worth a few phone calls and your time to try this.

One last tip is, if you choose to close your credit card accounts, do not close them until after the bill has been paid. Some credit card companies often will penalize you by raising interest rates if you close an account that carries an outstanding balance.

The most important thing to remember is to begin your plan right now. Think of how you will feel when you are finally free of high credit card interest. The sooner you start, the sooner your ultimate goal of credit card debt elimination can be accomplished.

By: Gary Gresham

Credit Card Debt Solutions – The Debt Snowball

admin — Fri, 23 Apr 2010 06:51:09 +0000

The debt snowball is one of the most effective credit card debt solutions, and a very effective way to finally pay off debt. Believe me, you really can do this, no matter how much you owe.

First of all, before you even begin, you need to realize that your debts are not going to disappear overnight. You didn’t accumulate them all in a day and you’re not going to pay them off in a day either. You also need to accept the fact that if you are going to overcome your credit card debt, you will have to stop using your cards.

Now, you need to figure out how much you can possible spend on your debts each month. Look for ways to minimize your monthly spending on luxuries and non-essential items so you can apply that money to your credit card bills. Be sure to have a small emergency fund that you can fall back on if something comes up, like a car repair or a leaky roof, etc. That way you don’t have to put that expense on credit.

Now you are ready to start the debt snowball. Make a list of all of your debts, large and small. Sort the list in order of lowest balance first, down to highest balance last. Hopefully the last item on your list will be your mortgage.

From here you start to put all of your available money toward your smallest debt, while still making the minimum payments on all of the others. Once you pay the smallest one off, take all of the money you were putting on the smallest debt and add it to the monthly payment that you were making on the second smallest one. Continue with this method all the way down your list until all of them are paid.

Some people suggest starting with the highest interest debts first so you can save on interest. This makes sense, but you will have a much greater sense of achievement by eliminating each debt quickly, rather than just saving a couple of dollars on interest. Imagine how good you will feel each time you cross a debt off your list!

Once you experience the exhilaration of paying off those first few debts, you will be hooked! That is what is meant by the debt snowball effect – once you get it started it just keeps rolling and growing under its own momentum. The debt snowball method really is the most effective credit card debt solutions you can use.

There are a few cases that this method may not work for. Perhaps you simply have too much debt to handle on your own. Maybe your income is actually less than your credit card monthly payments. Maybe it is just too overwhelming for you to even attempt. In cases like these, there is still hope for credit card relief. You may need to work with a debt reduction or debt consolidation company. These companies will work with you to find a credit card debt solution for you.

By: James Ashford

Not Paying Your Credit Card Bills

admin — Wed, 21 Apr 2010 10:06:43 +0000

A lot of people when faced with mounting debt will ask “Should I pay my credit card bills?” Yes it will give you some temporary relief and extra money in the short term but can have damaging consequences down the long road.

When you first go delinquent it is very common that you will receive constant calls from creditors wanting you to pay what you owe them. They will hound you calling 10 or even in some cases 12 times a day. They can usually find out your cell phone and work numbers, even in severe cases they will contact distant family members, which is against the law for them to do. Now if they are lucky enough to get you on the phone they can use many practices that can demean you and scare you into giving into their demands. They will try anything in the book, even threaten you to get you to pay them. You are protected however, by the Federal Trade Commission and should find out what your rights are before speaking with anyone.

Your credit score will be ruined by them reporting to the credit agencies that you are late on payment or have become delinquent. This can be damaging to you if you try to finance a big ticket item such as a house or a car. Please remember that you can always reach a settlement or once you make payment that your scores can be improved.

You can have many late, over the limit and interest fees that can be tact on to the original amount you owe. When you are in delinquency these creditors will charge you the maximum interest rate possible, usually over 30%. The late penalties can add up as well, usually $25-$50, and if you exceed your original credit limit, watch out, they will add those over-the-limit fees as well.

If your debt becomes very delinquent, the creditor can take legal action against you. It is possible that they could garnish your wages, get a lien or other legal judgments requiring you to pay up. Just remember this is a long process and companies do not like to get this involed. Just be aware it can happen and sometimes they are ruthless.

If you are in a situation where you can not pay maybe it would be good to seek out a professional. There are a lot of institutions that can help you in a financial crisis

By: Bryan Burbank

Get Credit Card Debt Help To Simplify Your Life

admin — Wed, 14 Apr 2010 07:03:44 +0000

Are you over burdened with credit card debts and don’t know what to do? Then credit card debt help will definitely find the best solution for you in this tough situation. Before anything, you need to be clear about the concept of these debt consolidation loans.

Extreme Pressure Of Credit Card Debt

If you have a few credit cards and don’t know how to restrain yourself from spending money for your lavish lifestyle, then very soon you would find it hard to pay off your heavy credit card bills. Due to heavy interest rate, gradually your debt will pile up, despite paying the minimum monthly due amount. Eventually, you would become sick and tired of the financial problems. In this situation, credit card debt help may become your savior.

How Can You Get This Help?

Your first step should be to find out a proper counseling agency from World Wide Web, who extends online debt help to solve financial crisis. Debt relief agencies mostly come up with free consultation to discuss about your problem. It is a free debt consolidation help, which you can avail to plan your way to freedom from debts and loans. A debt consolidation specialist will assist you in finding a convenient method to cut down the entire process of loan repayments to the minimum. It consolidates all your existing debts and payments into a low interest loan and helps you pay your creditors through manageable monthly installments. Now, you need not waste your precious time in managing your creditors, instead credit card debt relief service provider will negotiate on your behalf with your creditors and pay them off in time. Now, your only creditor will be your consolidate loan provider.

Debt consolidation specialists are expert in negotiation. They negotiate with your creditors to mitigate your debts, both in interest and principle, to the minimum amount. On an average, they are able to reduce up to 50%. Specialists also work hard to keep a lower APR, compared to your high credit card interest rate. This will also result in a radical reduction in your balance, helping you to repay credit card debt as soon as possible.

You Know The Best

After you have chosen the best consolidation company, it is a matter of time that you get back the control over your financial situation, without any headache. However, be very cautious while selecting your credit card debt help service provider. The best company would be the one, which clearly states their fees, difficulties of their policy, and besides, how smoothly you can handle the whole process. Do extensive online research, check rates, services, and associated risk factors to match your requirements and financial status. After all, you are the best decision maker for your future.

By: Asheesh Mani

All About Credit Card Debt Consolidation

admin — Mon, 05 Apr 2010 07:16:42 +0000

Are you looking for some solution, which will ensure of your credit card debt with a simple repayment plan? Then, credit card debt consolidation can prove to be really worthwhile for you. Under this plan, all your credit card bills are merged in to a single bill. This would imply that instead of making payment of four individual bills every month, you can make a single payment every month. The most astonishing factor of credit card debt consolidation loan is you will have to pay lower rate of interest. Let us get to know all the relevant details about credit card debt consolidation loan.

These days, obtaining a credit card is just a few clicks away. Each and every individual likes to have the benefits of money even before making payment. This is the inherent reason why most people are suffering from credit card debt trouble. Due to this, credit card debt consolidation becomes a necessity.

One more discrepancy of credit cards is that in case, you carry a balance over every month; you will be liable to additional rate of interest. A credit card debt consolidation can help you to get correct financial track. Moreover, it will help you to build your credit record in future, as well.

A credit card debt consolidation helps you eliminate your bad credit by means of a proper budget. You need to make a list of your income and expenditures. Keep the expenses, as low as, possible. And strictly adhere to this plan. All these benefits are available for a low price. You can search for credit card debt consolidation loan through various online sources. Your online search will render innumerable lenders offering credit card debt consolidation loan. Compare the various quotes to find the best deal.

By: Natasha Anderson

Is Transferring Credit Card Debt Wise?

admin — Sat, 03 Apr 2010 08:50:06 +0000

You will see a large number of credit cards that offer you the opportunity of transferring an outstanding debt from other cards usually for zero interest although they all charge a transfer fee of between 2% & 3%, this is a well known means of attempting to offset bills in a lots more organized fashion. However never think it is the total solution, the amount you transfer across MUST be cleared within the zero rate periods; otherwise it will incur high interest rates and compound your problem. When considering this course of action divide the amount you wish to transfer by the number of months of the zero rate can you afford this amount plus your regular spend on the credit card?

People who end up in credit card debt frequently defaults in their payment of credit card bills and end up chewing far more than they can swallow. Sometimes failing to clear the debt by even a small amount can build to a large debt over a period of time.

Before going on with this piece, I think it’s essential to ask you – have you read the first part of this article with an open mind and an attentive attitude? What one gains from reading an insightful article is largely dependent on his/her desire and commitment to get the meat out of what he/she is reading. Keep reading with an open mind as well as an attentive attitude and I’m certain it will all become very clear, about “Credit Cards”.

Credit card rates in addition to charges can be effectively compared against each other on the Internet before a definite choice is made.

If you are considering transferring a debt from one card to another to take advantage of zero or reduced interest rates, you should target the credit card firm that charges the highest interest rate on your debt and get rid of first before paying attention to the rest of your debts.

If you are a person who loves shopping at a particular retail outlet, seek if the outlet supplies credit cards is an excellent way of getting a credit card suited to your needs.

Quite a new innovation is the prepaid credit card. The new cash plus Gold card is a Master Card prepaid card. This means that like a pay as you go phone, you need to put money on to the account before you can use it. It is not a debit card that is linked to a bank account or credit card where you pay for your transactions at a later date. It’s a pay as you go Master Card Pre-Paid Card. You just top it up – it’s easy!With a cash plus card you top-up what you want to spend and manage your money in a hassle-free way. And it’s safer than carrying cash.

By: David Dutch