Credit card debt » Credit Card Company

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

Negotiate Credit Card Debt

admin — Sun, 21 Nov 2010 15:28:07 +0000

Negotiating with a Credit Card company can be easier than you think because you must remember that you are the one who is control. The credit card company does not want you to get mad and default on your debt so they know that you have leverage over them and it is important to use that leverage. You must be nice to them and professional but always make sure that you leave the negotiation table with what you want. You can always speak with a manager if you fell like you are not getting what you want with the first person who answers the phone.

If your debt has gone into default and you are now talking to debt collectors it is always important to try to resolve your debt with the original debtor because there are situations were the debt collector will lie to you and not pay the credit card company what you agree to pay them. It is better to negotiate with a debt collector through the mail and you can send them a letter telling that this is how you want to be contacted. If you fall into there phone call trap you can be in for a long and bad phone experience. They like to threaten you and make you feel like you are going to jail.

Always remember that when you are negotiating credit card debt that you need to get help form a professional credit agency that has the know how to handle these credit collectors.

By: Bryan Burbank

Credit Card Debt Negotiation

admin — Wed, 21 Jul 2010 00:09:33 +0000

Struggling with your Credit Card Debts can leave you tired, frustrated and deeper in debt than you were to start with. If you have admitted to yourself that you are in debt then you are ready to start to move yourself into a more beneficial situation. This is where credit card debt negotiation comes into play.

The first thing you need to do is contact your credit card company, if you have been struggling with payments then they will probably be contacting you on a regular basis but do not wait for them to call you get on the phone and talk to them first. Many people are worried that when they call they will be told that there is no hope. This is not true it is within the Credit companies best interest to help you out of debt and put you in a better financial situation, that way they can try and get you to spend more on your card (Which you are not going to do once you are out of debt are you?).

When you call them tell them your situation and ask them what they can do for you, if they say nothing then you need to move onto the next stage which is to get credit counseling. A credit counselor will assist you in your credit card debt negotiation. They will help you create a budget as well as work with creditors to reduce your monthly payments, finance charges and late fees if you have accrued any.

A credit counselor will not only look at your credit card debt negotiation but also allow you to pay them one simple payment for them to distribute between your creditors. There is normally a one off fee but in many cases this is waived.

Do not continue to struggle on with your debts you will only end up deeper in than you are right now, your debts an also have an effect on your health and relationships. Credit Card Debt Negotiation is something that you need to do in order to live a more care free life.

By: Steven Turner

Credit Card Debt? Learn About the Benefits of Credit Counseling

admin — Fri, 30 Apr 2010 20:00:44 +0000

Credit card counseling can be a person’s best friend when it comes to helping you get out of of debt and a road to financial stability. It seems that where ever you go, you are bombarded with luring credit card offers.

Sign up for this card to get 20% off your purchases. Sign up for this card, to get bonus points and flyer miles. The advertisements are endless.

Unless you have a strict policy in place to pay off your credit card balance to zero every month, it is easy to fall into credit card debt.

What To Expect

Credit counseling is probably the best method available today to help people who are drowning in credit card debt. Credit card helps to lower consolidate all your payment into one easy payment, lower your recurring balances and payment terms.

Be aware that you will be required to may your monthly payment directly to ensure that your payment is made on time and in full.

Do your research.There are plenty of fraudulent credit counseling companies out there that prey on people’s desperation.

Choose Your Credit Wisely

After you’ve gotten your credit under control with a reputable credit card company, it’s best to learn how to properly make future credit card decisions wisely.

For instance, it’s probably not to your advantage to continue to buy more cards. Try to pay for things in cash. A exercise you can do when making purchases is to ask yourself if what you are purchasing is a need or want. If it’s a want, you may want to reconsider the purchase.

By: Christie Love

Benefits of Credit Card Debt Relief

admin — Tue, 20 Apr 2010 15:10:43 +0000

There are numerous credit card debt relief options and debt management solutions for those Americans who are under the burden of credit card debt. These solutions will help you to get rid of credit card debt and will also help you to manage your finance in order. These different debt management solutions will help you with debt reductions but they will also affect your finances and credit. This article will show you some of the debt management solutions and other ways to get rid of your credit card debt.

Do you think that Bankruptcy is the right Solution?

No doubt bankruptcy is the ultimate solution but it may affect the credit of a person badly in the market. Bankruptcy tends to remain on any person’s credit history for years even after it is discharged from the profile. A person has to wait for more than two years after the declaration of a bankruptcy to get personal or any type of other loan. So, it is not good to declare yourself bankrupt before trying all other solutions to curb the debt. Bankruptcy is not considered as the best solution to get rid of the debts even by the financial advisors. So right now let’s forget about the bankruptcy and concentrate on the different debt solution.

Let’s act smartly and Save for the Future

For any debt recovery a person has to stop all the extra expenses and other overspending. Without savings, a person cannot come out of any debt. You will think that saving is very simple but not when put to practice it proves to be very difficult. Remember that whenever you go for shopping stick to your list. Do not overspend in unnecessary things. Otherwise there are chances that you cross your budget.

The solution to Accumulated debt

If you think that your credit card debt is very high then there are many solutions for this problem. It all depends on how you control the situation. You can also negotiate for a lower rate with the credit card company if you want to keep your payments low. If you are not able to negotiate with the credit card company you can reach debt consolidation agencies. A lower rate of interest will lead to low monthly installments which will further lead you to lower accumulated interests. But, if you have very high credit card debt then there are chances that you have to keep your monthly payments high.

By: Lisa Adan Mills

5 Tips to Help Eliminate Credit Card Debt

admin — Sat, 17 Apr 2010 10:51:16 +0000

If there’s one thing almost all consumers have in common, it’s the desire to eliminate credit card debt. Whether it’s a few hundred dollars or a few thousand, credit card debt can really put a dent in a household budget. Here are five tips to help eliminate your credit card debt while building a healthy and solid financial future.

1. No Minimums Apply

Credit card companies have this thing that they like to call a minimum monthly payment. I call it keeping you in debt for as long as possible while they make as much money off you as they can. If you really want to eliminate credit card debt, forget that the minimum monthly payment option even exists (unless, of course, you’re having a hard time even making that payment).

Don’t make the mistake so many consumers make by paying only the minimum payment to each of their credit card companies when the bills come in. Instead, pay as much as you possibly can towards your credit card debt each and every month.

2. We’re Not Gonna Take It!

Shrinking grace periods, increasing interest rates, hidden fees and charges — don’t put up with them! If you want to eliminate credit card debt you need to avoid incurring unnecessary expenses, and that includes the nickel and diming that some of the credit card companies try to get away with.

If you feel that your credit card company charges too many fees or too high an interest rate, switch over to a more favorable card. If you really want to eliminate credit card debt, you need the right tools to do it. That includes a credit card that works for you, not against you.

3. Sacrifice Is Necessary

Sometimes you have to sacrifice to get what you want and if you really want to eliminate credit card debt, some sacrifices are going to be involved.

You know that expensive vacation you’ve been wanting to take? It’s going to have to wait. And those $4 lattes you’ve been guzzling almost every day? Gonna have to cut back to once a week. All that money needs to go towards paying off your credit card debt.

By eliminating expenses that aren’t necessities (and those lattes are NOT a necessity, regardless of what you’ve been telling yourself) you can put extra money towards your credit card debt each and every month.

4. Kill Two Birds With One Stone

Want to kill two birds with one stone? Clear the clutter in your home while you eliminate credit card debt.

A garage sale is a great way to take a chunk out of your credit card debt. Go through your home. Anything that you haven’t used in a year put in the garage and get ready for a garage sale. Some consumers have been able to knock hundreds of dollars off their credit card debt from the proceeds of a successful garage sale.

5. Put ‘Em on Ice

If you really want to eliminate credit card debt, you can’t be using your cards while you pay them off. If this means locking them away in the freezer, then do it.

If you pay off $200 in one month and then charge another $100, it’s literally like taking two steps forward and one step back. Don’t do it. Avoid using your cards at all costs until your credit card debt is eliminated.

Once your credit card debt is gone, you’ll be able to save more and spend more. You can go back to planning that great vacation or indulging in the daily latte — as long as you have the cash to do it. While it may not be easy to eliminate credit card debt, it is most definitely worth it in the long run.

By: Max Anderson

Credit Card Debt Reduction Tips

admin — Wed, 31 Mar 2010 21:17:06 +0000

If you’re burdened by credit card debt, you’re not alone. Whether you owe hundreds or even thousands, its hard to rest easy when you know you owe money. Credit cards are convenient, that much can’t be argued. You don’t necessarily have to swear them off forever even if you do owe a sizable amount on them. But no one wants to walk around carrying a ton of credit card debt. Here’s what you can do to get it all under control again:

Make a list of all the credit cards you possess, how much you owe on each, and their respective interest rates. Organize your list from highest interest rate down to the lowest. The higher interest rate cards are top priority.

Find out the minimum payment on each credit card. Maybe you can’t afford o pay off all your high-interest debt at once. That’s okay-figure out how much over the minimum you can afford each month. Start with the first card on your list, the one you are paying the highest fees on. Then move on to the second card. While you work to pay off the big offenders on the top of your list by paying as much as possible over the minimum, continue to make minimum payments each month on the lower-rate cards.

As you pay off your debt, you can still use your low-rate cards. But don’t use any credit cards to pay for things you already have money for. For example, use the cash in your wallet when you run out to pick up a few groceries, and use your credit card on a utility bill instead. Then, send the money for the electric payment to your credit card company ASAP.

By following these credit card tips, you can get back to less stressful, debt-free life sooner than you might think. You’ll also learn to avoid accumulating any more huge debts in the future. Too many people die in deep debt, leaving it behind for their family to struggle against. Don’t let your debt get that out-of-hand.

By: Brent Crouch

Credit Card Debt Advice – 4 Easy Steps to Pay Them Off Using Your Existing Budget!

admin — Sun, 21 Feb 2010 21:47:37 +0000

There are many people that have been hurt by credit cards and their credit card debt. There is a lot of good advice on what to do about this type of debt. But the real issue is the card companies themselves. Be careful because a lot of them just want to milk you for all you have and pretend that they are there to help you. Granted, charge cards can help you if you use them right. Credit card debt advice should be out there for people who really need it. In this article are a few bits of information to help you get out of the debt that you do not need.

It is really a shame that credit card debt advice is not taught in high schools. Financial advice is probably more important than chemistry or algebra or metal shop. From a basic level, here is what you need to know about credit cards.

Basically, it is an agreement with the credit card company. The bank or lender gives you a line of credit. At that time, this is the ‘max’ amount of credit that you will get. This credit is a ‘loan’ of sorts, and you are expected to pay that back in full, plus interest. When you do not pay back this credit, that is when you obtain debt.

So how can you get rid of your debt? The first thing you need to do is stop using them altogether. You need to prioritize, and for some people, really look at how you are spending money. You simply need to spend less than you make, sometimes considerably less. You can also try getting a second income, for instance getting a second job. Also try to cut down on luxury items such as cable and going out to eat at restaurants. It is really important to take this monthly difference or surplus of money, and apply that to your credit card.

When you have multiple cards, here are the steps I would take to get rid of your credit cards.

1. Take your credit cards and put them in order beginning with the largest amount of total money owed.

2. Pay the minimum balance on all of the cards, except for the one with the smallest balance (note: this might not be the same as the lowest monthly payment). For this card, pay off as much as you can afford each month until it is paid off.

3. When that card is paid off, take that monthly amount that you used to pay down that balance and apply it to the second smallest balance, in addition to whatever you can apply to pay down the second smallest balance.

4. So when you pay each card, use that money towards the next card, do not spend that money just because you paid that card off. Then just keep working your way up until you get to the card with the largest balance.

When you get to the last card, you should have a large amount of money every month to put towards paying that card off. This will definitely improve your credit score as you pay down your credit card debt. This is advice good enough for anyone.

By: Ken Watson

Credit Cards Can Help You Get Out Of Debt

admin — Thu, 18 Feb 2010 08:33:47 +0000

Your credit rating / credit score is based upon how you have dealt with credit previously.
If you have always paid the full amount owing and never missed a payment then your credit score will be high.
If you miss payments, been late paying, not paid in full each month then your credit score will be lower.
If you’re trying to re-build your credit or if you’re young and just starting out, pay close attention the next time you receive a new card offer in the mail. When you’re trying to build a positive credit history for yourself, using the right credit card makes sense. Making small purchases and then making your payments on time each month is a simple, reliable way to build an outstanding credit report.

What to Look For On a Credit Card Application

If the credit card application you receive appears to offer a low monthly interest rate, don’t make a decision until you turn it over and closely examine the Disclosure Box. In it you’ll find a more important measure of credit terms – the Annual Percentage Rate, or APR. By federal law, the Disclosure Box will also tell you whether or not the card has what is called a grace period – a number of days, usually 25, until your purchase starts to accrue finance charges. If a card has a reasonable grace period and you pay off your balance at the end of each billing cycle, you won’t have to pay finance charges. It isn’t difficult to find credit cards that offer these grace periods, so if the Disclosure Box doesn’t declare one then throw the application in the trash and look for a better offer.

If you don’t have any credit history at all, a credit card company won’t want to give you a very high credit limit, but that’s probably best when you’re just starting out. You don’t want to be tempted to go into serious debt with your very first credit card.

Calculate Your Monthly Finance Charges

Ideally you want to pay off your balance each month to avoid paying any finance charges, but when that isn’t possible it’s important to know the actual cost of the items you purchase. The annual percentage rate, divided by 12 months, gives you the periodic rate that will be applied to your outstanding balance each month. You can estimate what your monthly finance charge will be by multiplying the periodic rate times the outstanding balance. It may sound complicated at first, but taking the time to learn this simple equation can make a big difference in how you use your credit card.

When you’re able to see how much you actually spend on an item that you don’t pay off at the end of the month, it might help you to resist the temptation to over-use your card. An item that you want to buy might be on sale at the time you purchase it, but if you don’t pay off your balance at the end of the month then those finance charges can dramatically increase the actual amount you’ll end up paying.

Use Your Credit Card as a Tool

Credit cards are only one of the tools available to help you build a positive credit history. Making on-time payments for other forms of credit, such as rent and utilities, are also important. Depending on your situation, within 1-2 years your credit rating will be improved enough that you no longer need to use your card for new purchases to maintain your good credit. Use these tools wisely, and they’ll help build your financial future!

By: Paul Forcey

Managing Credit Card Debt

admin — Wed, 27 Jan 2010 09:59:05 +0000

Personally, I consider credit cards one of the necessary evils for living in the modern world. We all need a credit card. You’d have a hard time making a purchase online without one of those little magic pieces of plastic. Credit cards make life easier – maybe too easy. Paying with a credit card is easy – maybe too easy.

It is very, very easy for credit card debt to get out of hand. It’s easy to get into debt way over your head by simply using credit cards for everyday living expenses. The first step in effectively managing credit card debt is to accept the fact that it is DEBT, and you do owe the money. If you don’t want to pay interest, fees, and penalties, either don’t use the card or pay the balance at the end of every month.

Credit cards, when they are used responsibly, can be good things. They can even save you money if you use them right. They can even make a profit for you! I have one card right now that PAYS ME $25.00 every couple of months to use it and the credit card company has never made one cent in interest, fees, or penalties from me. My secret? I don’t have one. I simply pay the card in full BEFORE the due date and accept the reward that they give me for using the card for my convenience. It’s a terrific arrangement.

To get into that position though, it takes some serious self-discipline. You have to learn to pay for everyday expenses with cash or personal checks and not with credit cards. In order to reduce credit card debt, you need to pay MORE than the minimum payment. The way to do this is to choose one card (the one with the highest interest rate) and concentrate on paying that card off while making minimum payments on other cards. You can get out from under credit card debt. Go for it!

By: Milos Pesic