How to avoid Credit Card debt

Credit Cards(CC) is really useful as you can buy things on credit. Book a flight ticket without moving an inch out of your house ,buy your favorite items even if you don’t have the much needed cash just buy what ever you with your CC. Isn’t that great!!. But if you don’t know how to manage your CCs properly you might fall into trouble called CC debts.
General advice to avoid CC debt

Always try to pay more than your minimum dues: You actually build up recurring and extra interest on your CC when you make only the min payments. It actually shoots up the net cost of your CCs considerably. Therefore, always make an extra payment towards your CC debts whenever you can. Follow this golden rule religiously just pay before the due date: Don’t make a habit of paying CC bills on the due date. You’ll be charged late fees if you somehow miss the due date of your CC payments. Therefore, it is always recommended to make the required payments on time .Good old cash! Try to purchase items with cash: You can avert accumulating CC debt if you make a habit of purchasing stuff with cash. Use CCs only during emergency time when you really cannot do without it. Make a smart budget plan and allot fixed amounts to each category so that you don’t require to use your CC unless it’s an urgency, such as, paying those emergency medical bills.Never use multiple CCs: never use too many if possible, cancel some of your CCs. It will help you to manage and remember the due dates of your payments if you have few manageable number of CCs. Also always create an emergency fund so that you don’t have to swipe your CCs every time. It will help you to prevent cumulatively accumulating CC debt. It is recommended that you keep an emergency fund worth 3-6 months of your living expenses. Also, make sure you don’t use the amount to buy stuff. Instead, use the money to repair a damaged item or pay an emergency medical bill whenever required.

Improve Your Credit Score

Credit score is important for everyone who has any account and uses credit card. You should always keep in mind that your credit score follows you just like your social security number. It plays an important role whenever you are going to get any mortgage, car loan or even when you are applying for any job. So if a person knows the method of checking credit, then it becomes very easy to improve the credit score. Following are some methods to improve the credit score following which can really help you out:

• First and most important thing is to review your credit report. Correct the errors if you find any in your credit report. You can always get a free copy of it from any free credit report site.
• You should always remember to pay you bill on time. This step will help you in long run to improve you credit score.
• Try to avoid too many credit cards which can lead you into heavy credit card debt.
• Transferring balances from one account to another can change the ratio of total credit card balances to total available credit lines. But you should also keep in mind that transferring of balances should not affect the credit score.
• You can also go for other new credit accounts but use it wisely.
• Try to use your credit card less and always pay them off at the end of month. It is good for your credit score if you keep space between the balance you carry and your total credit limits.
• It is advisable if you don’t close your old and paid off accounts because closing these old accounts can short your credit report as well as make them of less credit value.
• You should always avoid bankruptcy because it affects hard on the credit score.

If you follow these steps then you’ll sure improve your credit score and never get into any credit card debt trap.

Credit Card Options for Newly Wedded Couples - II

In my last post I shared with you what are the pros and cons related with couples who don’t share their credit cards with each other. Now in this post I would like to share the advantages and disadvantages related with couples who share their credit cards with each other.

If a couple have faith on each other so much that they can share a joint account and credit card between them only then they should go for a joint account because if both in the couple are spendthrift then the interest which will be counted in a single count which can lead the couple into heavy debt trap. The method of sharing a single credit card and account work only for those couple who share their opinion with each other and have same mind about their financial decisions. Couples which are sharing their credit card must keep in their mind that they must avoid any credit card debt as it affects the credit rating. This credit rating can affect you financially if couple don’t pay their balance amount or not make the repayment at the right time. If a couple shares a single account then credit card bureau always keep an eye on credit report of both people. Couple should use their joint account wisely because they have to answer the creditors whether for good reasons or for bad reasons. They should always plan for clear payment because having joint credit card affects credit rating. Couple can use their joint account for household expenses or for whatever they decide with a single mind.

Most of the couple never plans for their finances before and fall into credit card debt trap. So it is better to plan for financial matter to avoid any financial crisis.

Identity Theft - Protect your identity to protect your money

If someone steals your money from your bank account or any financial document using your personal identification details, we call this method of stealing as Identity theft. If a person can steal your personal identification details like your name, credit card numbers, email ids and password or social security number, he/she can easily take out all money from your bank account or can apply for credit on your name or even can get job on the basis of your social security number. It is not easy to solve such cases. It can get you into heavy debts and can ruin your credit score. In some cases, people are not able to recover from heavy financial loss.

There are several ways to steal your identity from you. The most common method is to steal your wallet with the help of which anyone can have your name, address and credit cards with the help of which he/she can quickly clear your bank account. Another way is to steal mail from your mailbox or change the mailing address in the post office in order to get your mail at the address given by thief. This type of thief can even use documents like old bills, bank statements etc throw away by you in garbage which has personal details about you. The most new form of identity theft is stealing identity through internet in which virus like Trojan send by thief through mails can get any type of personal information from your computer’s hard drive.

Identity theft is preventable and there are number of ways to avoid it. Following are some common ways to protect your identity:

• Monitor your account by checking it on weekly basis to check each and every transaction.
• Always check your credit report at least once in a year. You can ask for your credit report from credit bureaus too.
• Tear all your documents like old bills or bank statement before dumping them to dustbin.
• If your wallet is stolen by thief, then immediately inform bank, credit card companies and credit bureaus.
• Never open spam mails and never give reply to such mails.
• Use a good anti-virus in order to prevent your computer from viruses and unwanted application programs.

10 avoidable expenses in Credit Card Debt - II

I was not able to share all the points because of a meeting with the client. So here are the rest of points related with the expenses which you can avoid in case of credit card debt:

• Avoid gym membership: Yes, I can accept the fact that doing exercise in gym is important as well as good for your health but there are other ways too keep your body fit and healthy. You can go for run in a park instead of running on treadmill. It is not necessary to go for weight lifting machines or any other machines to have resistance in your body. You can do push ups, pull ups and other physical exercises for the purpose.
• Avoid designer clothes: Obviously, if you are going through credit card debt then you have to live on clothes without labels of any brands. Designer clothes come under luxuries items and are too expensive and being a person in debt you cannot afford a single luxurious item.
• Avoid unnecessary shopping: For most of the people, shopping is not an activity to buy things but it is an activity to refresh mood and a form of entertainment. So if you want to get out of debt change this habit. Don’t buy anything which you genuinely not require.
• Avoid late fees: Paying your bills on time will help you in two ways. First it will save you from penalties and secondly it will increase your credit score. You can borrow money at a much lower interest rate with increased credit score. So always remember to pay your bills on time.
• Avoid high interest rates: You are wasting your money if you have credit card with high interest rates. If you have any credit card with high interest rate then transfer the balance from that card to those which have lower annual percentage rate.

These are few points following on which can get you out of debt quickly and can balance your finance smoothly.

Useful tips for first time credit card getters

Most of us get credit card on our name when we start going to college or when we are in senior years of high school. Everyone when getting his/her first credit card faces same type of problems regarding finding right issuer and managing the credit card. Even I faced the same problem when I was trying to get my first credit card but I found it more problematic when it came to managing the balance in credit card.

The bank asks for previous credit history whenever we go to them for getting our first credit card. Since most of us don’t have any previous credit history, so in that case bank never responds positively towards the application. There are two solutions of this problem. First is, looking for a bank who are offering credit card for people who have no credit history and are starting their first credit line. But in that case, you should be a good payer and a faithful customer to the bank in order to receive more credit line in time. But in case if you are not able to find any bank with such offer then there is also second option. There are many gas stations, supermarkets and departmental stores which offers fidelity credit cards to persons who are their customers. So you can get a credit card from such types of departmental stores, supermarket or gas stations by becoming their customers. After becoming owner of card, be sure to use it properly and balance it intelligently. After few months with some credit history, you can again apply for credit card to any bank.

Now after getting first credit card the major issue is how to use the credit card properly? Most of first time credit card getters starts shopping and spend that much money which they are not able to pay back to bank. There is no relaxation or exception policy in banks for first time credit card getters. All late payments are count as bad credits and your credit card can be ceased too and then you’ll be considered as a bad client among all banks. So there are few tips which you need to remember regarding usage of your credit card and be good client of bank:

• Avoid unnecessary expenditure using your credit card.
• Maintain all information regarding money transaction you made through your credit card.
• Own only one credit card in the beginning. Give yourself time to become familiar with the banking world and information related with it. If you are able to maintain your first credit card, then you can apply for another credit card after one or two year.
• Always pay back to bank before time to be a good client of bank.