| Wednesday, October 25, 2006
| CUT YOUR CREDIT CARD COSTS
|FOR 12 YEARS I charged through life assuming I'd find the money to pay for all the things I was buying, stuff I could'nt afford. I could have saved myself a lot of grief. And a ton of money.
MARY'S WIPE-OUT-DEBT RULES
STOP. If you carry a balance on a card, stop using it. Period. This is crucial.
PAY THE SAME. Adopt your currect minumum payments as your fixed monthly obligation from now on. Even if creditors accept less, don't change it.
CREATE ORDER. Line up your credit crad debts with the smallest balance you owe at the top. Try to pay more than the minimum on that card.
GANG UP. Once you pay off that first debt, take its payment and add it to the fixed payment of the next debt in line. Repeat until you are debt free.
When it comes to convenience, it's hard to beat a good credit card. And that's the problem. The morve convenient they are, the more apt we are to get it over our heads. When that happens, carrying expensive credit card debt is like trying to navigate a minefield. Just one wrong move and you coulkd really mess up your life.
Look, credit cards themselves are not the problem. You nee a credit card to rent a car or make hotel reservations. Using a credit card is the safest way to buy inline. The problem is the mounting debt, interest and fees that result when you use credit cards to live beyond your means, sock away the difference, and know the ins and outs of credit cards to escape the debt cycle.
Buried in the fine print of the credit card agreement you signed is permission for the company to check your credit report routinely. If they see anything they don't like (late payments to another credit card of your mortgage bank, for instance) you've given them permission to increase your interest rate, even if you've always paid their account on time.
YOUR CREDIT SCORE
Everything on your credit report is refeclted in this three-digit number. Insurance companies look at yoru credit score to determine how much you'll pay in premiums, and many landlords and potentioal employers consider credit scores a kind of character reference. So a negative credit histpry may mean higher car insurance reates or missing out on that dream job.
You only need one major credit card, or possibly two to keep things separate if you cover work related, reimbursement expenses. Any more than two and you're just asking for trouble these days of rampant identity theft and increased fees. Keep the card you've had the longest to enhance your credit score. Once you've paid off the credit card balances, consider closing them. But pace yourself. Closing too many accounts at once can hurt your credit score.
REDUCE YOUR INTERST RATE
If you're in too deep to pay your balance in full every month and have at least six months of on-time payments, call customer service and ask for a rate reduction. If you don't succeed at first, keep trying. Getting a lower interest rate can save you lots of money.
Thirty percent of credit companies profits come from late and over-linit fees. Foil their plans by paying your bills early and not going over the credit limit.
GET OUT OF DEBT
(for more info, go to www.womansday.com/hunt.)
(Source: WDSOLUTIONS by: Mary Hunt)
|posted by infraternam meam @ 3:27 PM