Tuesday, June 3. 2008Make Credit Card Interest Work for YouAdvertise Your Site Make Credit Card Interest Work for You by: Janna Weiss According to CardTrak, the typical American family had about £6,600 of credit card debt in 2007. That might sound pretty normal to you, but did you know that just by learning to use their credit cards more intelligently, those families could save up to £1,500 a year? To really see the benefits of intelligent card use, think of how that £1,500 could become £45,000 by retirement age – and much more if it was invested. Yes, little things like interest and fees really add up over time. Fortunately for card holders, there are several ways to reduce the amount of money they throw away on interest each month. First, try to negotiate a lower interest rate. Call your bank or card issuer and politely let them know that you’ve been offered a lower interest rate by one of their competitors (even if you haven’t). To be successful, stay jovial and polite. Be realistic about the interest rate you request. The average interest rate in America at the time of this writing is 12-15%. The higher your credit score, the lower the rate you can reasonably expect. Also, you’ll need to have a positive history with this card issuer that you can point to when asking for reduced rates. If you’ve been delinquent on payments, they won’t be as eager to set a lower rate for you. Remember, card companies make their money from the interest and fees you pay. If they think you are a credit risk, they will increase those fees to minimize their financial losses. Next, prioritize your credit card payments. If you have two or more cards that you pay for each month, pay a higher amount to the card with the highest interest. You want to get that one paid off first, because it’s costing you the most money. Then pay the next-highest amount to the card with the second-highest interest rate, and so on. If you have a lot of outgoing payments, you should check with your bank or credit union to see if you qualify for a low-interest loan. With a loan, you can consolidate your credit card payments into a single monthly payment with lower interest. If you have a small amount of debt that you can pay off in six or twelve months, look into a 0% interest credit card. By transferring the debt to such a card, you can put all of your payments toward the principal balance, not toward interest. Just be aware that most 0% cards have an introductory period that lasts from three to fifteen months, with six months being the most common. After that period ends, you will be responsible for interest on your balance. To plan for the future, take all the money you would have spent on credit card interest and put it in a savings account. When you’ve got enough, invest it in a mutual fund. Forget about it. Then, when you’re ready to stop working, you will have quite a chunk of change to fall back on. Who would have thought that credit card interest payments could be managed in a way that would lead to a comfortable lifestyle in your later years? Tuesday, June 3. 2008Pay Off Those Credit Cards - FastAdvertise Your Site Maybe you’re trying to improve your credit score so that you can qualify for a home loan. Maybe you’ve found that the rising cost of gas and groceries is leaving you with precious little money with which to pay down your credit cards. Or maybe you’re just tired of seeing hundreds of dollars fly out of your wallet each month to pay for that lovely family vacation you took – two years ago. The reasons vary, but the story remains the same: All over the world, people want to get rid of their debt. And they want to do it fast. Is it even possible to pay off thousands of dollars of debt in a short amount of time? Yes, if you’re willing to do what it takes. A little scrimping and penny-pinching today will save you from heavy debt and interest charges down the road. Wouldn’t you like to be debt-free by this time next year? Surely that would be worth sacrificing a few trips to Starbucks. To pay off your credit cards in a timely manner, you must first forget that you ever heard the phrase “minimum monthly payment”. Paying the minimum amount required by your credit card company will do nothing to get rid of your debt. In fact, it could take decades before your cards are paid off with minimum payments. Find a way to double or even triple your credit card payments each month. If your minimum monthly payment is $150, send in $300 instead. This might sound daunting, but it’s the surest path to a debt-free tomorrow. Make some small changes in your daily life to compensate. For example, start cooking at home instead of eating out. Negotiate lower interest rates on your credit cards. Reduce your energy bill and other utilities. Get rid of monthly charges you don’t really need, like super-deluxe satellite television packages. When you down-size your other bills, you can devote more money to getting rid of your credit card debt. Debt consolidation is another option. Go with a lender you trust, such as your personal bank. Try to arrange a personal debt consolidation loan, then use it to pay off the balances on your cards. The loan will likely have a much lower interest rate than the cards. You’ll end up with one loan rather than many indebted accounts, and you’ll have lower payments to tackle each month. If your credit card debt is small to moderate but subject to high interest rates, try transferring it to a 0% interest credit card. Just be sure to pay off the balance before the 0% introductory phase runs out – typically 6 to 12 months after card activation. These debt-reduction strategies can be used by anyone. Start now before your debt becomes unmanageable. You don’t want to file for bankruptcy just because you overspent! Instead, take the hard road for a few months in order to have smooth financial sailing down the road. Monday, June 2. 2008Balance Transfer Checks- Opportunities to SaveAdvertise Your Site Balance Transfer Checks- Opportunities to Save by: Debbie Dragon Tis' the season for credit card offers! In particular, it seems that from November through February marks an increase in marketing from credit cards you already have- particularly if you haven't been using them in awhile. Credit card companies spend quite a bit of money on marketing to attract new customers-and it's always cheaper to keep customers they have rather than trying to find new customers. What you may find waiting for you in your mailbox is a balance transfer offer from one of the credit cards you already have. The very best balance transfer offers are in the form of checks that offer 0% interest, but there are a number of other offers you might receive with 3.99% interest or 6% interest and no balance transfer fees. All of these offers may actually offer you a good deal depending on what you decide to do with them. For example, if you were to use a balance transfer check with 3.99% interest and a fee of 3% of your total amount to pay off a credit card or loan with 11% interest- as long as the dollar amount you borow from the balance transfer check is high enough, you're going to be saving enough money to make that a worthwhile fee to pay. You'll also be able to pay off the balance much sooner with the lower interest rate even by making the same amount of payments each month- since more of your payment goes to principal What many people don't realize is that they can actually get a balance transfer check from one of these low or no interest offers, and deposit the check into their own, personal checking accounts. Once you've deposited the money, you can use it to pay off a variety of debts that you owe that are costing you more than 3.99% interest (or whatever the interest rate is on the balance transfer check offer you've received); and save quite a bit of money! There have been people who purchase cars using a balance transfer check offer. If you're lucky enough to receive an offer for 0% interest on the life of the balance transferred (with checks); you can buy and pay for a car without any cash up front and without paying any interest. How great is that?! Other uses for the low or no interest balance transfer check offers: a buy now, pay later holiday shopping season! If you deposit the check from the balance transfer offer into your own account, you could use that money to finance your holiday shopping. This is a good idea if you get a 0% interest offer; or if you were planning to use a higher interest credit card to make your purchases. By using the balance transfer checks in your own checking account, you save on interest and have more time to pay for the purchases which means you aren't hurting your wallet too much. Home improvement is another good candidate for using balance transfer checks. Once again, just deposit the balance transfer check that you write to yourself into your own account, and then hit the home improvement store for the items you need to make the repairs or complete your latest project. As long as you make your monthly payments on time, you'll be able to keep your 0% or low interest offer on the balance transfer. Making even one payment late can be grounds for a rate increase, as well as late fees, and the financial gains of using the offer will be wiped out! Monday, June 2. 2008Are 0% Balance Transfer Offers Really Free?Advertise Your Site by: Debbie Dragon Paying off credit card debt with 0% interest is a dream come true – which is exactly why a large number of credit card companies offer the promotions. They know it will attract new customers who have debt with other credit card companies to transfer that debt to their cards. But where is the value to the company offer the credit card balance transfer offer; if they let you repay that debt with 0% interest? Whenever you see credit card promotions that sound like they're going to be a good deal for you, it's best to look into them closely and make sure you read all of the “fine print”. A 0% balance transfer is typically good for a specific length of time, six months or twelve months are the most common terms. If you have several thousand dollars of debt on a higher interest credit card and take advantage of a 0% balance transfer offer for twelve months, the credit card company is betting on you still having a balance once the promotional period ends. When the six or twelve months of no interest repayments end, the balance will start being repaid with interest. A common mistake many people make when transferring balances under the six or twelve month 0% promotional offers, is not checking what the interest rate will be after the promotion ends. If you're moving a balance that you are currently paying 9% interest to a card with an interest rate of 19% after the promotional period ends - unless you are able to pay it off completely during the 0% interest period, you are not likely to benefit financially over the long term. You would have to start looking for another 0% balance transfer offer, or pay the higher interest until the balance is paid off. The other often overlooked factor of balance transfer offers with 0% interest is that most of them charge a transfer fee. The fee can range from 1% to 5% of the amount transferred. This fee can add up, depending on how much money you are transferring. There are some instances when the amount you pay for the balance transfer fee will result in more money paid than if you had just kept your balance on the card it was on and paid interest. To ensure you're actually getting a good deal, you'll want to play with the numbers and determine how much you'll spend for the life of the balance if you keep it on the card it's currently on, or if you move it to the new card with the 0% balance transfer offer, and don't forget to factor in a transfer fee if you have to pay one, and what the interest rate will be at the end of the promotional offer. Interest free balance transfer offers are also only good as long as you make your payments on time. This is important to keep in mind if you sometimes have difficulty keeping up with your payments, because if you send one a few days late you can lose your 0% interest rate and start paying a much higher interest rate. In order to make balance transfer fees work for you financially, it's actually better to find a low interest balance transfer offer that is fixed for the length of the balance. If you can transfer a few thousand dollars from a credit card with 9% interest or higher, to a card with 1.99% or 3.99% fixed interest on the balance transfer for the life of that balance, you will save hundreds of dollars in interest and actually make out better than the 0% offers (provided you know you can't pay off the entire balance before the 0% offer ends). Monday, June 2. 2008Accepting Credit Cards Payments For Offline BusinessesAdvertise Your Site by: Keith Baxter Any smart business owner knows that accepting credit cards as a payment option will dramatically increase revenues. Not only do credit cards offer customers the convenience and ease of not having to carry around cash or checks, it lends a sense of professionalism to your establishment as well. The process of applying to become a credit card merchant can be a bit confusing and frustrating, so let's take a look at how it all works. The Credit Card Account The credit card account that you will use is called a merchant account. These accounts are different from a regular business checking account in that they are accounts that have been secured through a bank that offers credit card processing. This account enables you to process your credit card transactions through their banking establishment. This is a safe and secure process which provides both you and the buyer security and protection from the beginning of the transaction right through to the end. Since most of the merchant accounts are offered by a third party vendor, you are not obligated to use any specific bank or institution. You are free to choose the one that offers the options that will work best for you and your company. What you do need to pay attention to are the fees. These fees will come in three different forms. First, the initial setup fee (pretty self-explanatory), moving on to the percentage fee (the provider will take a percentage of each transaction based on amount of sale), and then ending with the monthly service fee. Read the fine print of any contract before signing it. Pay attention to all three fee categories, not just one. Also, look for contract obligations. Some providers will offer you great deals but will want you to sign on with them for a long period of time. You need to be aware of what, if any, penalties will be charged for getting out of the contract if things don't work out. How Do I Actually Get Paid Obviously, this is pretty important. If a customer has used a credit card, no money has actually changed hands. Since more and more customers are now using credit cards, how that money gets into your account and how fast has become vitally important. Any of the reputable merchant account providers will provide the business owner with payment into their account within the first 24 to 48 hours of the initial transaction. Whether that customer has a balance on that card is not a concern of yours. The bank will pay you anyway. If the customer disputes the said transaction, the bank is usually under no obligation to pay the business owner, especially if that dispute has been deemed acceptable. If a business owner has a high number of legitimacy claims against them, the provider may just drop them. The majority of the time, though, things go as planned and the money shows up in your account within a day or two. About the author: Keith Baxter made it his mission after college to educate as many people as possible to the advantages and disadvantages of credit through a widespread re-education initiative. You can find out more about Keith and what he's up to at http://www.credit-card-debt-consolidation.net Circulated by Article Emporium |
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