Credit Headaches? Here are some Ideas!
Owning a credit card or applying for a loan is part of life in our society today. It lets people get a little insight into your financial position, gives you leverage when shopping and opening accounts, dictates your position and success in life. With credit cards, there are the regular, gold, and platinum cards.
Most companies today use credit cards to process payments. It is also used to verify identification. In other words, having a credit card is essential to doing business today. It is a useful tool to have. A word of caution to all new credit card holders should be given: it is always better to use the card with caution and care.
It is so easy to buy anything nowadays because of the credit card. That is why so many have fallen victim to credit problems. In fact, it has become mainstream to hear about credit rebuilding.
For people with good credit standing, a good idea would be to keep track of all your credit purchases and scrutinize your statement every month for discrepancies. Do you know that because of the consumer protection act, you can demand a refund for a defective product or service? If you paid using your credit card, you have the right to refuse to pay it, provided there is proof.
You should also refrain from indiscriminately giving out your credit card number, especially during online transactions. Make sure to check out the seller first.
Ideas for those trying to rebuild their credit would essentially be getting your life in order. You can do this by living within your means. It does not mean you cannot splurge once in a while. Not at all. By all means, enjoy your life, reward yourself, but do it within your means.
If you cannot afford a debt consolidator or counselor, you can go to your local library to research and copy forms for a credit kit. These standard forms are what you can use to communicate with your creditors. Always keep the forms received either personally or through registered mail. Maintain a working file on all written communication between you and your creditors.
I would ask you to avoid any verbal agreement not supported by written agreement because then, there would be no way to legitimize the agreement in any legal court. Once you have reached an agreement, avoid delineating from it. Stick to the terms and conditions within the agreement.
Another way to deal with your problem is to consolidate your loans, apply for a low interest credit card, and use it to pay off all the high-interest loans. This way, you have one monthly credit bill to pay at a more manageable figure.
Finally, start buying with cash for the meantime. There is no sense in piling up another set of bills, especially before you have settled the previous one.
Maximising Balance Transfers
There was one point in time when I was not able to keep up with my credit card outstanding sums resulting in having a carry-forward amount the following month. The end result is straightforward - there is interest to pay. And a pretty high amount of interest at that. What I did was to utilise a balance transfer process to another credit card.
Many credit cards offer a balance transfer facility whereby you can shift your current outstanding sums / debts from other credit cards to the card which grants you the balance transfer facility. Most of these balance transfer facilities come with an initial low, if not 0%, interest period. So, if you are already paying 18% per annum on your current credit card debt, it would make sense to transfer the whole outstanding amount to another card under the balance transfer programme. This would save you a whole lot of interest payment - provided you do not incur new expenditure on your credit cards.
Before you execute the balance transfer, it would be advisable that you look out for the credit card which provides the best credit offer. Find out how long is the introductory period. The longer, the better. This would provide you adequate breathing room to manage your credit card debt. Find out also whether the special interest rate granted to you is only restricted to the transfer amount or whether it also applies for new purchases. Next, are there fees and charges involved for utilising this balance transfer facility? Some banks charge a one-time administrative fee. Some charge a percentage based on the amount transferred.
Finally, find out whether the amount transferred gives you any other rewards - eg. accumulation of points or rebates.