Money Management Tips to Decrease Debt

No one wants to have any financial debt. Unfortunately, there are times wherein we find ourselves pushed to a corner and resort to borrowing money or spending too much credit. The good news is that you can do something about it.

Money Management Tips to Decrease Debt

  • Do Not Buy Things Which May Potentially Lose Value Using Credit: There is nothing wrong in borrowing money or using credit when you really need to purchase something. However, if you are borrowing money just to buy unnecessary material which may likely depreciate in value in a short period then it will just become a liability. On the other hand, if you are putting money towards investment or starting a business then there is nothing wrong in spending a bit of credit or borrowing a big amount.
  • Stick to Your Budget: Discipline yourself in following what you can only afford. Keep yourself from overspending. This does not mean that you should starve yourself but rather, if you are doing the groceries then maybe it would not hurt to keep yourself from buying that junk food for the meantime.
  • Learn How To Save: Having a piggy bank at home or depositing money in a bank is one way to keep you from spending too much. This will help you save more money since there are times wherein having convenient access to money can do more financial harm than not. Make sure that you set aside a certain percentage of your salary before you even spend for anything.

Having debt is good if it is directed towards a financial development plan. But if your debt keeps on increasing because you tend to buy more of your wants than your needs then maybe it is about time that you consider making a debt management plan.

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How to Save on Credit Card Debt

While credit card can be a great cash solution at times that you are out of cash, it can also be a source of financial problem at times. Yes, if you are not careful about your spending habits, you may end up with lots of bills and high interest. It takes a lot of discipline to effectively manage your finances.

Save on Credit Card Debt
Cut your expenses or cut your plastic?

The good news is that there are new offers to save on credit card debt these days. But aside from that, here are some tips that can help you save on your credit card debt:

1. Pay more than the monthly minimum amount.
You can bay more than the required montly payment so that it can cover the amount of interest and lower down the amount you have to pay next time.

2. Be careful with balance transfers.
Some credit card companies have great sign up offers like a very low interest rate and no interest balance transfer option. This can be a temporary fix to solve your monthly charges but if you are not careful about it, your credit card debt can go higher. So you have to use this option sparingly.

3. Adjust your credit card limit.
Your monthly limit usually increase after few months of using your credit card. But as your credit line increase, it can lead you to spending more. Take note that you have an option to keep your limit as it was or even adjust it to a lower limit.

4. Limit your expenses.
You can reduce your monthly charges by avoiding too much use of credit cards. If you think you can afford paying in cash or through debit card, then go ahead and do so. It is very important to know when you have to use your credit card.

Another option that you might consider to completely get over with credit card debt is to close the card. But if you will follow the above mentioned tips, this won’t be necessary especially if you’re really good in managing your finances.

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Credit Card Processing: Rewards Cards Make Comeback

Rewards cards — those credit cards that carrying an incentive or “reward” for use — are hotter than ever in the world of credit card processing. In fact, some of the offers out there are considered by industry observers to be too good to pass up by consumers.

Cardholders have long appreciated the opportunity to reap cash back, merchandise points or frequent flier miles by simply making purchases on their rewards card. But in recent recessionary times, the cards were more difficult to come by as issuing banks curtailed their credit card programs. All that is past history now.

According to the research firm Mintel Comperemedia, almost 60 percent of credit card offers made in the first half of 2011 featured an incentive in the form of gift cards, bonus miles or cash back. That’s up from just 30 percent in 2007.

It appears that banks are competing to shock and awe consumers with reward card deals like:

  • $300 cash back after making $500 in purchases, plus 1 percent back on all purchases and higher percentages in specific merchant categories (Chase Freedom Visa).
  • 50,000 bonus miles after the first purchase and an additional 50,000 miles after spending $2500 in the first three months (Chase British Airways Signature Visa)
  • spend $100 online the day the account is opened and get a $20 cash rebate, save 5 cents per gallon at Walmart gas stations and get 1 percent cash back on all purchases (Walmart Discover)
  • 15 cents per gallon rebates on gasoline at Exxon and Mobil stations, plus up to 2 percent rebates on the first $10,000 spent on other purchase and 1 percent rebates on purchases above $10,000 (ExxonMobil MasterCard)
  • Up to 6,000 ThankYou points for making $600 in purchases and signing up for paperless statements, 1,200 bonus points for paying the bill on time and not exceeding the credit limit and a reduction in APR for making a purchase, staying under the credit limit and paying on time three consecutive billing periods (Citi Forward Card)

Of course, these offers aren’t altruistic on the part of the banks. They’re determined to recoup some of the debit card interchange fees lost when the Durbin Amendment went into effect on Oct. 1 by promoting credit cards over debit cards (credit card interchange fees were not impacted.) Naturally, the banks also expect that many cardholders will carry a balance, incur late or over-the-limit charges or otherwise run up additional profits for them.

Unfortunately, merchants will likely watch their interchange fees climb because these premium cards generally carry a higher processing rate than standard cards. Increased sales may help to cover some of the jump, but businesses should consult with their provider of credit card processing services to see how they may be impacted.

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Have You Had To Resort To Loans For People With Bad Credit?

Have you ever taken out loans for people with bad credit because you have no credit cards, bad credit and absolutely zero chance of getting a loan from a bank or lending institutions?

If this is the case then you really need to start considering cleaning up your credit report so you can one day buy a home, get a car and get approved for credit cards.  Wouldn’t it be nice to be able to stop having to turn to loans for people with bad credit and be able to get the things you wanted on your own credit, your own financial reputation?

People with good credit don’t have to pay the interest rates that people with bad credit do.  It’s certainly not fair that the high interest rates even exist, but they do.  To get started on repairing your credit, order your credit reports from the three agencies.

After you get your reports (you can get a free report every year), start to go through them to understand what you need to dispute or have removed from each one.  Read below to understand the items you see in your credit reports.

One of the first things you will see on your report is your personal information.  The next thing you will see is a listing of all your credit accounts.

Lastly, you will see a listing of negative items.

FICO scores range between 300 – 850.  The higher the score, the lower the risk.  There are five categories that are taken into consideration when determining your score:

The first is payment history. Obviously a lender wants to make sure that you have paid your accounts on time as this means that they will most likely get paid on time.

The second is amounts owed. The fact that you have a credit account and owe money on it doesn’t necessarily translate to a low score. However, if you have an account where all of your available credit has been used, then this can make you look over-extended financially.

The third is credit history.  Approximately 15% of your FICO score relates to your credit history. A long credit history does fare well, but even individuals with newer credit history but a more current payment history will calculate to a better score.

The fourth factor is new credit. When you open several accounts within a small time period, this can represent a greater risk for the lender.

Lastly, they want to know the different types of credit you currently have. This category usually doesn’t contribute much to your score; however lenders want to see a healthy mix of credit cards, installment loans, store credit, mortgage loans, etc.

Now, don’t you feel a little of the weight lifted off your shoulders?  Maybe now next year when you go on vacation, you can actually take out a personal loan with a lower interest rate then having to use loans for people with bad credit again.

It is always great to know that there are loans for people with bad credit in case of emergencies and very important matters. Everyone should be able to have access to money one way or another.

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Some Effective Ideas To Manage Bad Credit Car Loans

Life is not bed of roses. A time comes when many have to face bad credit history which is nothing less than a nightmare for them. Neglecting to pay bills on time and inability to pay debts bring the credit score down, which is referred to as bad credit. Unfortunately, repairing the score is tough because it takes enough time. You need to request for a credit report from the three credit bureaus and once you get the report, need to review it briefly to check for any mistakes, debts and the things responsible for the lower score.

After that process, you need to write a letter to the bureaus to for the mistakes and meanwhile also need to pay your debts. The process is long and will take 3-6 or more months. But the thing is that bad credit scorers find life very tough. They find difficulties in getting favorable loans as the interest rate on loans for bad credit holders are much higher than fair credit holders. In this case, many people with bad credit find it hard to fulfill their dream of purchasing a new car. They know that bad credit car loans make their life miserable and badly damage their credibility .

Fortunately, there are some solutions available to people with bad credit to fulfill their dream of buying a new car without affecting their budget and savings.

The foremost solution is to increase the down payment. The more the loan amount, the higher the interest rate. If you increase your down payment, your car loan amount will automatically go down that you can easily pay even with the higher interest rate.

If you don’t like the first idea, the second thing you can do is to look for well-known car dealer in your area. These dealers have good acquaintance with banks and financial institutions. They may help you find a car loan with a little lower interest rate. Also, the dealer will provide flexibility to pay the car bill. In other words, the dealer will give you an opportunity to pay the half payment on quarterly basis and will set the timeline to pay the whole amount- 6 months or within a year. If you think you are capable of making payment on a quarterly basis, you can visit the dealer with the photocopy your address proof.

Do you think the second option is an effective way? If not, follow the third way that is to find a person who is with good credit history and is ready to apply for an auto loan for your dream. That person can be either your friend or any of your family members.

The fourth way that has been adhered to by a number of people is to apply for a new job that has a decent salary package. It will sound strange but is really a good way for bad credit car loans. When you have a good job with decent salary, you will not find a single problem to pay loan on time even if the loan interest rate is higher.

So, are you going to apply these ideas for buying a brand new car while you are struggling with bad credit?

Becky Darren is keen to write on finance. He spends quality time in search of financial related problems and their effective solutions. The bad credit car loans topic is the result of his extensive study.

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Basic Idea About Balance Transfer

The financial industry has changed a lot for the past couple of years. It was only a few years back when the first credit card was introduced to the people as a means to help them cope up with their daily expenses. Now, there are a number of companies out there competing with each other to be the best credit card company. But more than the benefits of having the credit card and other special quirks which comes along with signing up for one, competition mostly is about who has the better interest rate. As you are well aware of, these financial institutions make their money through interest. The idea here is that people who start revolving their balance will have to pay their balance plus any other interest on it. So as long they continue to not pay the whole amount of their balance, the credit card company will continue to earn extra through the interest.

Basic Idea About Balance Transfer
Because of this, companies are then employing marketing strategies such as balance transfers. Balance transfers allow you to transfer all your balance on your credit card to another credit card of a different company. The idea here is that the credit card company offering the balance transfer promotion will be the ones to pay the remaining balance of the customer from the old credit card. The customer will then continue paying the balance transferred to the new credit card with the new interest rate offered by the opposing credit card company. It may sound simple but then again, you have to be very careful considering credit card companies’ offers.

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Transfer Your Balances – Know This Method Of Consolidating Your Debt

Debt is a parasite, the sooner you get off, the better you are. It eats into your income and leaves you poorer every day. Unsecured debts like credit card debts can have extremely high interest rates which are difficult to deal with. The more the time passes, more amount of debt is added to your account. Ultimately it so happens that you remain trapped in this circle and struggle to get out of it. Consolidation of your debts will provide you with the thrust that you need to break this circle once and for all. The two most popular ways of consolidating your debts is by taking out a debt consolidation loan or enrolling in a debt consolidation program offered by a debt consolidation company.

However, it might happen that you don’t have a property which you need to keep as collateral to take out a secured loan which can be used as debt consolidation loan and neither are you interested in enrolling in a debt consolidation program. In such a case you have a third option which is called the balance transfer method. There are two ways of doing balance transfer. Both the methods are expounded below.

  • Balance transfer method – You can do this all by yourself. If you have multiple credit card debts take the card which has the minimum interest on it. Now transfer the balances of all other cards to this card. Thus by transferring your balances to one single card you are able to consolidate your debts and get a lower interest on them.

  • Balance transfer cards – Balance transfer cards are available from credit card companies. These are either minimum interest such as 1% or 2% or even zero percent card at times. You have to buy such a card and transfer all your balances in other accounts to this card. Thus you will be able to consolidate your debts. Also you can pay back your debts at interest rates as low as 1% or 2% or even 0%. However, there is a catch to the story. The period till which this rate is offered is introductory, which means after sometime the rate will change. As a result you need to pay off all your balances within that introductory interest rate period. If this period passes on, then the interest rate will increase greatly and as a result it will become more difficult to pay back your debts.

Thus it is very important that you gather enough money through expenditure minimization so that you can pay your debt back fast after using balance transfer card. This will ensure you are out of debt, once and for all.

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Quick Business Cash Solutions

Starting and developing your own business can be extremely difficult especially that the economy is not doing well. In order for you to be able to start one, you have to have a huge amount of money in hand as your capital. However, the hard part here is where you can get a huge amount of cash to start your business. For most people starting a business, there are three methods that are available for them to utilize. The first would be credit.

Credit is borrowing money from a financial entity and paying them back over time. A typical agreement between the borrower and the financial institution would be the borrower making prompt payments on a regular basis until the amount is pay off in full. This also includes any additional fees and interest that the borrower may have accrued over time. The other method would be equity financing. Equity financing is selling a portion of your business in the form of equity. The third method would be asset sales and as the name implies, you are selling some of your assets like stocks in inventory, property like real estate or equipment, contractual rights on an assets or account receivables.

These three methods has been the traditional way of people who are just starting to start their small business. It is important that you know which one you should utilize since you cannot start a business without cash in hand.

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