How To Pay Off Credit Card Debts Easily
Do you want to learn how to lower your credit card debts? If so, you’re not alone.
Unrestrained consumer debts are one of the most commonly found monetary problems, consumers in the Europe and United States are facing today. Millions of consumers are having similar problem for decades. Sometimes, people think that there is no way out. Low minimum wages in most jobs and high interest rates mean that it’s harder to even make the minimum payment each month. You may think that you’re doomed to be in the deepest pit of debt hell forever, but it doesn’t have to be this way. You should learn how to easily lower your credit card debts.
There are many debt reduction companies available out there that are willing to negotiate for lower late fees, interest rates, and overall amount of debt owed. The drawback to those companies is that they will charge a monthly fee for their financial service, which adds an extra burden to your already overstretched budget which is a bad thing when you are trying cut down your expenses. For most people, this just isn’t worth it, and they’d rather negotiate directly with the creditors themselves.
However, it is often not a good idea, either, since creditors are usually quite intimidating, and a debt reduction company is fully trained and has enough experience to deal with them, whereas most consumers may not be. Often, a debt reduction company is also in a permanent partnership with many major creditors, so they will be in a better position to trim down your overall debts.
You can definitely choose to use a dependable debt reduction company to help ease your headaches, but there is always an easier way. You need to prevent unmanageable credit card debts in the first place. But if you fail to maintain a sustainable credit card debt, you should learn to lower credit card debts all by yourself, without protracted and lengthy negotiations, and without any extra payment arrangements. It is important to develop a workable plan. Make a complete list of all your debt amounts and the related creditors, and sort them based on their minimum monthly payment.
Allocate all your unused money in a month (any money left after you pay for living expenses and other financial obligations) to pay down the debt with the smallest bill and do this continuously until it is finally paid off. Then move over to the next smallest bill. Keep allocating money to the next smallest bills until it is paid off. As you can see, even when using a good plan it may still take a significant amount of time to be debt-free! So, it’s important to maintain a healthy financial life right from the start.
Getting The Most From Your Credit Card Rewards
In the 60’s and 70’s, there was no such thing as credit card rewards. If you think that’s bad, consider the fact that most cards back then also charged an annual fee! Then in 1986, Discover became the first major credit card to have no annual fee, plus give cash back on spending. Ever since then, banks have been using miles, points, and cash back to make their cards stand out from the crowd. Today, nearly every credit card out there offers rewards of some sort.
What type of rewards will benefit you the most?
Whether you want frequent flyer miles, gift certificates to your favorite store, merchandise, or just cold hard cash… there’s a card for almost everything. It’s important to pick a rewards program that suits your lifestyle. However, what’s even more important is choosing one that gives you the highest percentage on your spending. For example, it’s not worth getting an airline card that only gives you miles worth 0.5% of your spending, when you could go with a cash back card that gives you 1.0% (that’s cash which could be used to buy a plane ticket directly).
Which are the best reward credit cards on the market?
There’s no “one-size-fits-all” answer, but for the most part, American Express and Discover are known to offer above-average rewards. For example, the American Express Blue Sky is a no annual fee card which gives 1.33% on spending – this is higher than most airline cards. When it comes to cash back, Discover More card gives up to 5%, however there’s a catch – the amount of spending which will earn the 5% rebate is capped. There are also a plethora of store credit cards which offer higher rebates when you buy from them, however these are usually a bad idea unless you spend thousands per year at their store.
Will it be worthwhile paying an annual fee for a rewards card?
Most reward cards do not charge annual fees. However, those associated with a given airline (i.e. the Delta Reserve credit card) or a certain hotel (i.e. Starwood Preferred Guest credit card) will usually charge an annual fee, ranging from around fifty dollars all the way up to a few hundred. As a general rule of thumb, it’s not a good idea to pay an annual fee, unless the rewards are outstanding and you spend a lot with the associated company.