Credit Card Basic Knowledge

Most of us have accrued a significant amount of credit card debt. Of course, I’m sure we’ve all heard that more than once, right? It’s become quite personal, correct? I bet your high credit card debt is driving you crazy.

Relax- don’t file for bankruptcy quite so fast. One of the major things that you need to keep in the front of your mind is that most likely, your creditor is open to working with you. Making payments, even if smaller than the normal monthly payment, is better than making no payment at all.

So, below are a couple of ideas to help you manage your credit card debt:

First, get ahold of your credit card issuer and let them know of your circumstances. Ask them to lower your credit card’s interest rate, or for a reduced payment plan to repay. It’s quite possible that this may not have crossed your mind because I’m sure you are naturally polite. It is in your best interest to remain courteous when dealing with your creditors. Be firm, and polite, but present yourself in a manner that tells them you know exactly what you are looking for and that you expect to receive it. If you are not sure about what you are asking for, perhaps you might want to consider contacting a consumer credit couneling service with a reputable reputation. There are lots of trustworthy firms in business where the main purpose is to assist you in negotiating with your creditors.

Ok, now stop the credit cards from being used. Tear them up, or run them through the shredder. Do whatever you need to to keep them from ending up in your wallet or purse. Allowing them back in there will only create more temptation for you to use them again, perpetuating the problem even more.

This can be the most difficult part of lowering your credit card debt. You are addicted to spending money that you can’t afford to spend. You have to quit- cold turkey.

Start by paying off the credit cards that have the higher interest rates. Work from there. How would you do that? Concentrate your efforts on the high interest rate credit cards by paying more than the minimum payment that is due each month. That payment is just designed to keep you obligated to the credit card companies for the longest amount of time possible.

The credit card companies aren’t in business to lose money and it’s in their best interest to keep you paying them for as long as possible. Even a small amount extra each month pays off in a big way in the long run.

Finally, keep holding your chin high and keep looking up. Lots of people such as yourself have started and successfully cut their credit card debt using these very steps. You can too!.

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In the past, reward credit cards were limited to cards with Frequent Flyer Miles Programs. Today, as credit card holders continue to grow and as the competition among credit card companies grows even stronger, the emergence of rewards credit cards is undoubtedly an effective marketing strategy in attracting clients.

With this in mind, it is obvious that not all reward credit cards genuinely bring rewards to its users. Therefore, as a consumer, it is your responsibility to be aware of reward credit cards that offer great deals and those that do not. In this article, let’s discuss the features you should look for and the things you should avoid in a reward credit card.

Features to Look For

The Right Kind of Reward. What particular reward program can you benefit most from? Are you a frequent traveler? Do you drive a lot and spend a lot in gas? Or do you just use your credit card for shopping and groceries? Whether you choose a Frequent Flier Credit Card, a Gas Reward Credit Card, or a reward credit card with Cash Back- what matters is that it matches your spending habits and your lifestyle.

Reasonable interest rates. Obviously, you’ll want a reward credit card with a reasonable APR. Yes, you can avoid the interest rate by paying your balance in full each month but you can’t always guarantee that you won’t need to carry your balance over for the next billing cycle. The interest rates alone can kill the value of your rewards. Always be on the safe side by choosing a reward credit card with low APR.

Reasonable fees or no fees at all. Aside from a low APR, check out the other credit card fees such as the annual fee, late fees, etc. Some reward credit cards with good APR have no annual fees at all. Clearly, you can get more from your credit card if you won’t have to worry about additional fees from time to time.

Things to Avoid

Reward limits. A reward credit card may limit your rewards to only a maximum value. For instance, you can earn points but as soon as you reach $5,000 value, that’s when you stop qualifying for the rewards. You’ll want to stick with reward credit card that will last you a long time and not just for short period.

Blackout dates. Blackout dates often defeat your purpose of getting a reward credit card. Some reward credit card companies will not allow you to use your points at high travel times such as Christmas & Thanksgiving. You need to make sure you are aware of the blackout dates so you can properly plan your vacation.

Forfeit your rewards. Restrictions are always part of the deal. For instance, you may strive to rack up your points for the whole year to get your travel reward. But if you fail to earn enough mile points, would you be able to carry over your collected points for the next year? Or will all the points you earned be forfeited and you’ll have to start from zero all over again?

Also, the timeliness of your payments is a major factor in getting your rewards. If you delay a single payment, you may be disqualified from the rewards program. Make sure that you clearly understand your reward credit card’s terms and conditions on collecting and redeeming rewards.

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Take Charge of Your Cards

Imagine being 30 years old and still paying off a slice of pizza you bought when you were in college. Sounds crazy, but for plenty of people problems with credit card debt can lead to that very situation. Learning about responsible credit card use now can save you from having to dig yourself out of debt after you graduate.

Credit Cards and College Students

First of all, no one is telling you to cut up your plastic and return to the stone age. Credit cards are an indisputable fact of college life and there are many good reasons to have one. Credit cards give you protection for your purchases, allow you to shop online, and provide a cushion in case of emergencies.

If you don’t already have a card, you’ll have plenty of opportunities to apply for one once you hit campus. Many credit card companies set up booths and tables at the beginning of the semester, offering sign-up incentives such as T-shirts or water bottles. But before you sign on the dotted line, keep these facts in mind:

Credit Cards Are Not Free Money

In fact, they’re really high interest loans in disguise. Here’s a breakdown of some typical credit card fees:

• Finance charge: This is an interest charge (can be as high as 25 percent) on the unpaid portion of your bill each month.
• Annual fee: Some companies charge yearly membership fees of anywhere from $20 to $100.
• Cash advance fee: Avoid cash advances—fees are steep, and interest rates are usually higher.
• Late payment fee: Paying late can also result in hiked interest rates.

Carrying a Balance Can Be Costly

Not paying off the entire amount in your account each month can lead to big finance charges. Take the story of Joe Student:

Joe’s average unpaid credit card bill over a year is $500, and his finance charge is 20 percent. He pays a $20 annual fee plus a $25 late fee (he was up late studying and forgot to mail in his check). Joe ends up owing $145 to his credit card company, and he still hasn’t paid for any of his purchases!

Your Credit Report Matters

Your college years are an important time to build the good credit history you’ll need after you graduate. You’ll need to provide a credit report to apply for an apartment or finance a large purchase, such as a car. Employers often review a credit report when they hire and evaluate employees for promotion, reassignment, or retention. Problems with credit cards, such as late or missed payments, stay in your credit report for seven years.

Be Credit Smart

When you sign up for a credit card, you and only you will be responsible for paying the bills. Follow these rules of credit management and you’ll lead a financially healthy life:

• Read all application materials carefully—especially the fine print. What happens after the “teaser rate” expires? What happens to your interest rate if you’re late with a payment or fail to make a payment? What’s the interest rate for a cash advance?
• Consider using a debit card instead of a credit card. Money is deducted directly from your checking account, so you can’t spend more than you actually have.
• Use credit only if you’re certain you will be able to repay the debt.
• Avoid impulse shopping on your credit card.
• Save your credit card for a money emergency. (Using your card to pay for a spring break vacation doesn’t count.)
• Carry only the cards you think you’ll use.
• Pay bills promptly to keep finance and other charges to a minimum.

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