Posts Tagged ‘budgeting’

In the last several years, credit card fees have been getting ridiculous. That’s because the credit card companies have had free reign to charge just about anything they wanted. They’ve also been able to hide much of it from us by burying the details in long-winded fine print and legalese.

The tide is beginning to turn now though. More and more people are realizing what’s been happening to them and more and more people are starting to do something about it. One technique that can help us avoid the burden of monstrous fees is to switch off our credit cards and switch on prepaid debit cards. Let me explain.

If you’re in a position to do so, I propose you start converting all of your existing credit card spending over to prepaid debit cards. Month-by-month, phase out all of the credit card purchases until you make no more. Then (again, if you can), set up an automatic payment to your credit card, something that is higher than the minimum payment required and something that is scheduled to arrive at least a few days in advance of the billing due date. Then lock the credit card away in a drawer!

This will not only give you some peace of mind but it will also get you off the credit card fee merry-go-round. Fees you see are how these companies make their money and that, in and of itself, isn’t a bad thing. But the credit card companies stack the deck against you and manipulate you into positions where you’re actually tricked into some fees. Let’s take a case in point, the over-limit fee.

Every credit card customer has a credit limit but the companies don’t stop you from exceeding it because if they did, they wouldn’t be able to charge you an over-limit fee. But what’s really shady is that your next minimum payment will only pull you under your limit temporarily. As soon as you pay it and your finance charge is calculated, you very often go back over the limit. Then wham - another over-limit fee. it’s amazing that this practice is even legal. That would never happen with a prepaid debit card because you simply wouldn’t be allowed to spend more than what you’ve loaded to the card.

Prepaid cards don’t come with tricky monthly finance/billing cycle calculations either. These are the computations the credit card companies make to determine how much they’re going to charge you to carry your balance from one month to the next. There are actually 6 or 7 different ways these charges can be calculated and everyone is designed to yield the highest return for the company based on your spending habits.

There are also hidden interchange fees that all credit card customers pay. These are fees that are paid by the retailers for the actual transactions costs of doing business with a particular credit card company. They’re negotiated in secret and aren’t really published anywhere. But you can be sure that consumers are paying them in the form of higher prices so the retailers can cover their costs. And these represent a huge profit for the credit card companies because these fees will be paid even if you can’t pay your monthly bill.

These are just a few of the reasons why switching over to a prepaid debit card can benefit you as a consumer. Let’s face it; the credit card companies have almost all the leverage. About the only options we have left is to cut our losses and prevent them from preying on us in the future. So if you’re in a position to do so, I invite you to take a good long look at prepaid debit cards and see how they can become your sensible, more consumer-friendly alternative to credit cards.

Here is a few information you may need to know with your credit cards. Whether you have problem getting rid of debt or just new to applying for one, here’s a good guide to familiarizing yourself with credit cards.

Credit cards are part of a system of payments giving you access to funds for purchases from certain merchants supporting such system. Named after the small plastic card issued to you as the user of the system, your credit card is a representation of an account your accountable for. Since it entitles you as the holder to buy goods and services, the credit card provider hopes to rely on your promise as the card holder to pay for these goods and services you purchased. Granted with a line of credit to you, you can borrow money for payment to the merchant. Credit cards are convenient and widely accepted. It can also come with some perks such as reward points or frequent buyer’s privileges. Moreover, this can provide you with access to cash advances in cases of emergency.

Most of us are facing a financial crisis in our lives with the current recession. On the personal level, whether the current crisis is caused by personal illness or the loss of a job, this can be very overwhelming. Your new credit card can probably help you somehow with a cash advance. But this can be a short-term help.

The problem however with most of us is the trouble when paying the bills during the due date. When we receive notices from creditors, it is an indication of a bad credit score and a lifestyle of overspending. You may lose your home or your car if you fall on this trap. Find out your exit strategy first before getting your new credit card.

While you may hear that a credit card can provide you with a convenient, accessible credit, there are certain disadvantages too. Credit cards offer you a way to track your expenses. Why not use this to monitor personal expenditures? You can use this tool too to track work-related expenses for certain taxation or reimbursement purposes.

Before applying for that new credit card, weigh the options between the advantages and the disadvantages. Make wise use of that credit card and only use it when you can afford what you spend for.

For more information on Credit Card Debt, get FREE Articles Tips at DollarGuides.com. Get debt-free today with tips on how to get rid of deb.

These are tough economic times we find ourselves in. Everyone knows at least one person with a mortgage problem and who of us hasn’t had to deal with skyrocketing credit card interest and payments? We need to regain control somehow.

That’s a big reason why the use of prepaid debit cards is on the rise. People are viewing these cards as useful financial tools. Tools that can help them regain control.

You see, credit cards are really short-term loan instruments, but prepaid debit cards are an alternative spending tool. To acquire a credit card, you need a bank account and established credit while prepaid debit cards (aka stored-value cards) require neither. You simply purchase a prepaid card, load it up with your cash, and then use it. Pretty simple right?

You can use them just like you’d use a conventional credit card because they’re accepted in all the same places. At the same time, even though they work like credit cards, they don’t come with the same baggage.

For example, you can only spend what you’ve already loaded on a prepaid card. So overspending is difficult. But credit cards often let you “overspend” and that can mean credit trouble. Prepaid debit cards have no interest rate either, while credit cards do - and these interest rates can explode on you too without much warning. Also, you’ll never have a never-ending minimum payment with a prepaid card either.

Working with prepaid cards of course means you must exercise more discipline over your spending. Say goodbye to impulse buys and say hello to saving and planning. It’s a little old-fashioned, but it will save you money in the long run.

So more people have been turning to prepaid debit cards than ever before. They recognize the need for tighter control and they recognize that the features of prepaid cards can help them achieve that.

So, if you’re having some credit card spending issues of your own, why not try using a prepaid debit card for awhile? They’re easy to use and, since you don’t sign a credit contract, you can stop using them just as easily. They might just be the first step on your road back to financial recovery.

Getting rid of debt, especially with credit cards, is simpler than you think. It only requires a bit of discipline from your end.

The first step in getting started with eliminating debts is simply avoiding debt totally. This requires you to stop any new spending using your credit cards and, most importantly, finding yourself getting over that impulse to purchase unnecessary objects to end up collecting dusts in your closet.

This takes us to the next step to examine all of your past and current spending. Getting over that impulse might be easily said than done but it starts somewhere to finally realize that spending with a purpose is practically more important than your shopping spree every now and then.

Find out by the numbers how much money you can set aside towards paying off your credit cards if you become conscious with your purchases. Then, when all is done, it is time to finally start paying off that debt.

Credit card companies generally offer minimum payments ranging from 2 - 2.5% of the current outstanding balance. With the current balance of $1,000, you can simply pay a minimum payment of $20 - $25 for the month. Seems pretty convenient and easy, right?

Let’s break it down to the details. Your $25 minimum payment goes mostly to the interest on the balance. The tiny amount left after then interest will go to pay off the actual balance. That is if it is still significant enough to really deduct something to your balance.

After doing this for a few months, check back on your statements. The minimum payments will probably take you, in the example of $1000 balance, about 50 months or so to pay off that balance. That’s over four years of paying a $1000 balance. In details, you pay a sizeable amount in interests alone giving a huge profit for the bank. Now, is it still convenient and easy?

This only concludes that paying the minimum is not the right place where you want to start if you want to get debt free soon.

For more information on financial directory, get FREE Articles Tips at DollarGuides.com. Get debt-free today with tips on how to get rid of debt here. Start improving your personal finance today.

With the rich ruling over the poor, the same is true for the borrower as a slave of the lender. Some financial guru is preaching that debt is a tool but debt that cannot be handled can ruin a life into slavery. In fact, debt can take away our financial freedom in a snap.

Have some hope, debt can still be overcome. Your financial situation may be bad but it does not have to go to worse. This article will present some form of help available today, so let us start with a few.

It could even start with emptying your garage and attic. You may have things around the house collecting some dust form which you could make money today. It is quite simple and you can have a yard sale at your home. Sell your unused items to pay off your debt. There are also flea markets where you can sell the items to make money fast too.

Sell food items to neighbors. Advertise using a flyer at your local community center. You can also try a grocery store selling homemade meals and have a great deal. People usually do not have time to cook at home any more yet they still want to eat healthily. This can be an opportunity you can earn from. This can raise some money to pay debt off today.

It could be a temporary way to pay off your debt or you could be developing a business venture later to attain that financial freedom. Be wise with spending money starting today.

If you are still in financial hot water after these means to pay some of your debt, consider budgeting, credit counseling, debt consolidation, or, in worst case, bankruptcy. How do you know which is the best solution for you? It all depends on the amount of your debt, the level of your discipline, and your goals for the future. At the end of the day, it is worth knowing that you can have simple means to pay off that debt.

For more information on financial directory, get FREE Articles Tips at DollarGuides.com. Get debt-free today with tips on how to get rid of debt here. Start improving your personal finance today.

When attacking the problem of debt, you should always begin with the need to discipline yourself not to use your credit cards. Only buy the much needed things with cash. By putting yourself on a buy as needed policy, you will certainly eliminate a large portion, if not totally, of your debt.

It certainly won’t be easy to get rid of debt. As a guide to help you, we will present simple tips to help you free up cash with lifestyle changes. Stop spending more money on nonessential buys. For now, there will be no more new clothing, shoes, and costly gifts on your must-buy list. Add to that the CDs, toys, and other accessories until you pay off the credit card debts.

I should have mentioned this on the first part, stop using your credit cards. You can resist temptation by making your credit cards difficult to use. Put it on some place you cannot easily have access to. If you cannot do this simple tactic, try cutting your plastics up all together.

Suspend all your future plans for a travel or a pricey entertainment. You can certainly have a cheaper yet fun version without incurring further debts. When you finally get rid of the debt, the cruise and Disneyland will probably still be there.

Reduce your telephone expenses. Try to make fewer long-distance calls and cut off expensive postpaid plans. If you own a cell phone already, you can drop the land line you also have so that you can pay the bills with cash. Or it could be the other way. Just choose which is more frequently used or where you get the most out of your money.

Budget your groceries and always shop with a list. This strategy will make you focus more with just the items on the list so that you end up spending less on groceries. Try also to limit meats with your weekly meal plans. Red meats like pork and beef are proven to age you faster. Not only will you save money but you will also look younger in the long run. These are just a few tips to attack your money woes and get rid of debt completely. Be consistent and you will be rewarded soon.

For more information on financial directory, get FREE Articles Tips at DollarGuides.com. Get debt-free today with tips on how to get rid of debt here. Start improving your personal finance today.