Family Issues

The Christmas season is once again all over. After all the happy exchange gifts and all the eating one would now need to worry about paying his or her credit card bills. The person who probably over burned his credit card just wishes that he or she got money to pay the bills. Well, now it’s just too late, but you can still gear up for next Christmas. Here are some tips on how you can reduce your credit card debt.

1.    It is important to be aware of the interest rates that your card has. High rate cards will definitely hurt your pocket and probably your head as well. I.e., if the card holder has the average balance of $2,500 and a purchase rate of 19.99%, the credit card holder will pay $1,000 in interest for two years. It would seem almost half of the average balance. If the rate was lowered to 8% the interest payment will be $400. The difference of $600 is definitely big.
2.    Try to avoid cash advances because the rates are higher and will hurt your wallet more.
3.    There are some companies that will entice customers by giving “introductory rates or teaser rates.” These rates are very short lived, but if you are very savvy you can manage to do some tricks that will prolong the grace period.
4.    When looking for cards, try to look for those that have longer promotional period about 6 to 12 months for balance transfers.
5.    If you have more than 1 card with available credits, you may transfer the balances to be able to continually avail of the promotion. This is called transfer rates or card dumping.
6.     If you have good credit history, you may try to ask the card company to extend the promotional rate.
7.    Be aggressive when dealing with credit card companies. Try threatening them with paying off your given card, because this will put you in a bargaining positioning.
8.    Avoid only paying the required monthly requirement of card companies. If you have an outstanding debt of $3,000, avoid only paying the required $60 monthly. It would only hurt you more because it would take 8 years to pay with an interest of $2,780.
9.    There are some companies that will immediately start the grace period when you have purchased the item and when the billing statement arrived. Avoid them.
10.    Try to get help from Credit Counseling Services when your credit card debt reaches $2000.  Organizations like these provide debt analysis and would require only a few minutes. They will negotiate with the credit card company to lower the interest rate by 50%. These programs also help prevent you from ending up bankrupt.

Tags: Credit Card Traps, Budget, Visa Card, American Express, Debit