8 Critical Rules For Credit Card Users
The temptations offered by credit cards are many and while using different cards to tide over tight situations may provide temporary relief in the long run you will find that most of your available funds go towards paying credit card interests and that too at different rates.
Once in the deep waters of debt there are just two options, to swim to safety steadily or to drown. Consider consolidating credit card debt and to stop utilizing your cards until you are out of trouble. You must also consider ways in which to curtail expenses and find ways of increasing your income.
Getting out of a debt trap has certain important rules or steps:
1. Once you have worked out a plan carry out credit card balance transfers taking into consideration overlap periods and interest calculation cycles for each card. Avoid paying more interest than you need to by notifying the banks / institutions well in advance so that they have enough time to post or carry out your instructions.
2. Utilize offers like 0 balance credit card plans and apply well before the scheme expires.
3. Once you have chosen a credit card where you intend to transfer all balances, check through their offer carefully. Many cards have hidden charges in fine print which you may overlook. Make sure that the 0 APR is exactly what it is.
4. Choose a card to make a transfer balance with care. Do a comparison shopping for APR. And try and select just one low interest card to consolidate debt. If you are careful you will save a lot of money.
5. Verify the efficiency and dependability of the card. Always check carefully never jump into a commitment without being sure you have made the right choice.
6. Keep track of when the 0% interest period finishes and try and pay back the amount owed within the period. Otherwise scout around for another scheme and transfer balance owed well before the last date. While some cards offer a 0% rate for six months others make the scheme valid for a year after which the interest rate is raised once again to market levels.
7. A balance transfer helps you avoid paying high and varied interest rates. So you must sit down and figure out what the interest rates you are paying are and how much is owed to different cards. The consolidation must benefit you and you must avoid paying out large amounts as transaction fees.
8. Always try and move as much as you can. Ask the low interest or zero interest credit card company what is the maximum amount they will accept. To save money you need to transfer as much debt as possible from a high interest to a low one.
The primary focus must be to get out of debt. And if you are clever you will find a credit card that offers you the greatest advantage. Remember if you pay 0% interest then even the amount you would have otherwise paid as interest can be adjusted against the principal owed.
However while you are undertaking debt consolidation you must lock away all cards and not run up additional debt. To turn your life around you need to curtail expenses and live a budgeted life. A few tips: take away credit cards from all family members; cancel as many cards as you can; when you go to a mall or shopping district leave your cards at home and take along a friend who will discourage temptation and impulse buying. When tempted think do I really need x, y, or z? When am I likely to use this. If the answer is not in the near future do not buy it. Discipline is the only path to living a debt free existence.