Credit Cardio

Its never too late to work on your personal wealth

How to Use a Credit Card Without Going Into Debt

Using a credit card without going into debt is surprisingly easy. A lot of people have this perception that a credit card is a sure fire way to get into debt, but this isn’t the case if you’re a savvy credit card user who follows just a few basic guidelines.

The first of these guidelines is to always plan what money you’re going to spend and stick to it. This is an absolute essential part of using a credit card without going into debt. If you make a plan of what you’re going to spend money on, then you remove one of the biggest causes of credit card holders going into debt. What is that cause? The cause is impulse buying. That’s why you need to have a plan and stick to it.

Secondly, always ensure that you pay your credit card off during the interest free period; this will ensure that you won’t get charged the massive interest rates of 15-25%, which a credit card attracts. Getting charged interest on your credit card is just one of the sure fire ways to get into debt with your credit card, but not going over that interest free period is very easy. Just contact you credit card provider and arrange for direct debit of your credit card balance every month from your bank account. Make sure you have enough money in your bank account at the end of each month.

Thirdly, always ensure you set your credit limit as low as possible. This will ensure that any urges you might get to impulse buy will be quickly defeated with the credit limit in mind. Often, the bank or financial institutions will offer you sky high credit limits hoping you will get into debt and have to incur their sky high interest payments, but you can always opt to have a lower credit limit. This helps you to ensure that you won’t get into debt unless, of course, there is a minimum credit limit in place. However, these are still usually a lot less than what a bank will offer as a maximum credit limit.

Finally, but still an extremely important point in ensuring you don’t go into debt when you have a credit card, is avoid as much as possible impulse buying. If you see something and you think “wow, I really want that,” it’s usually best to go home, sleep on it, and make a decision in the morning. If you still want it, make sure it fits into your budget, and then go buy it. This takes the impulse out of impulse buying. This doesn’t mean that you have to miss out on the once in a life time deal. You can always carry some other funding source, such as cash around for those because impulse buying with cash won’t cause you to go into debt, whereas with credit it could.

So as long as you take into consideration the points outlined above and always carefully plan your finances with a financial planner, you hopefully won’t go into debt as the result of a credit card anytime soon.

Budgeting with Credit Cards

Budgeting with a credit card is much the same as budgeting with any other source of finance. There should be no difference in the way that you budget the money you spend on your credit cards from the money you spend with any other funding source.

Households should budget on a monthly basis because this allows you to plan how you spend the money you get from you income, regardless of how you get paid. A monthly budget is always a good idea. Long term budgets are also helpful, but these generally won’t include the day-to-day living expenses that we include in a monthly budget. A monthly budget should be divided into saving and spending. A lot of the time, everyday Americans don’t have that much left over after we take out all of our living expenses. However, it’s always good to have some money left over just in case. Also, you may need some extra money put aside for when tax time comes around in case you need to pay a tax bill, which needs to be included in your monthly budget.

When you work out you monthly budget, you need to take into account all your expenses. This includes living costs, rents, mortgage repayments, shopping, loan repayment, and everything that is an expense. You then need to take around 10% of that and have that as a surplus in your bank account. The rest you can save through whatever means you wish. The reason you should do monthly budgets is that the cost of living can change in a month, such as if the Federal Reserve lifts official interest rates. Also, when budgeting monthly or long-term, the advice of a financial planner can really help, as they can give you tips and tricks on how to most effectively budget your finances.

Once you have your budget worked out, then all there is to do is to spend the money you need to spend and save the money you need to save. The spending part is where a credit card comes in and, as a consumer, you should view your credit card just like any other source of funding. It shouldn’t be seen as something you can use when your bank account can’t afford to pay for whatever you’re purchasing. That’s why a budget is so important.

The most important thing people need to do when budgeting with a credit card is stick to your budget. See a credit card like any other non-credit finance like cash or debt card. The advantage is that you don’t actually lose the money until the end of the month, meaning your getting more interest, but, other than this, it should be seen exactly the same as any other source of money.

How to Make Your Credit Card Interest Work for You

One of the main reasons people choose not to get a credit card is because of their fear of interest. They think paying off a credit card fully is next to impossible because the interest rates are so extreme. In some cases, interest rates can get up to almost 20 %. With a credit card payment of $5,000 or more, this can definitely add up. However, this is nothing to fear. In fact, interest can work for you.

So what is interest exactly? Basically, interest is the fee a person pays for borrowing money from the credit card balance. In some cases the fee can be as little as 0 %. However, most people pay an annual fee of 17-20 % interest. The fee will depend on how much you owe on your credit card statement. For someone who owes $ 5,000 at 20 % and only pays the bare minimum of 3 % per month, this monthly interest will cost around $80 per month.

However, there are ways to make your credit card interest work for you! Most credit card companies offer 0 % APR (annual percentage rate) as an introductory rate. This means that for a certain amount of time, usually 6-12 months, you will pay no interest on all purchases and overdue bills. However, try to pay off as much as possible within this first year so you won’t be stuck with a large debt and a large interest rate when the introductory rates are up.

Another way to make interest work for you is with a balance transfer. Essentially a balance transfer is a switch from one bank to another, transferring your credit card balance with you. Because banks want your business, they often give you low interest or no interest on this balance transfer. This can mean you return to the introductory interest rate of 0 % for another 6-12 months thus allowing you to pay off your credit card faster without the extra monthly interest fees.

For the extra savvy saver, there is a trick to really benefit from your credit card with a low or no interest rate. During the introductory period, some take out a large amount from your credit card money (borrowed money) and deposit it into a high-savers account. Then, once the introductory time is over and the interest fees go up, return the borrowed money into the credit card account and pocket the interest you have made from keeping the money in a high-savers account for a certain period of time. The process is sneaky, smart and, depending on your high-savers plan, extremely beneficial.

Don’t let your fear of high interest fees dissuade you from getting a credit card. Follow the above tips and take advantage of the low interest rates while you can. Let interest fees work in your favour.

About Secured Credit Cards

These days there are endless possibilities when it comes to choosing a product. Do you want a plasma or LCD big screen TV? Do you want a matte or glossy photo design? Do you want a salad or fries with your meal?

Credit card companies are no different. They offer many different deals from reward points to low-interest cards to mileage plans to no-annual fees. It is hard to decide which one is best for you. However, the first question you need to ask yourself when choosing the right credit card is this: do you want a secured credit card or an unsecured credit card?

So, what’s the difference anyway?

A secured credit card is a credit card given to you if you have a security deposit in the bank. The money in the bank acts as your payment guarantee, or assets which allows you to use your secured credit card. A secured credit card only allows you to make purchases on a certain percentage of the money you have in the bank. In a sense, a secured credit card is like a bank manager, making sure you only spend a certain amount.

An unsecured credit card, however, does not require any collateral. You do not need money in the bank, you will have more flexibility and you will receive more freedom from your purchase limits. With an unsecured credit card you may also incur higher interest rates and stricter penalties for missing payments.

So, which is best for you?

A secured credit card is best if you have money in the bank and want to ensure your credit card balance is always under control. If you do not plan on using your credit card often, especially not for spur-of-the-moment purchases and big splurges, then this is a good way to go. Secured credit cards are also good for those who have poor credit and need to rebuild their credit score.

However, if you are planning on using your credit card for larger purchases, even if you don’t have the money in the bank to back it up, then an unsecured credit card is best for you. An unsecured credit card will give you freedom to buy a big screen television or book a trip to the Bahamas for the weekend, even if you don’t have the money quite yet. If you choose an unsecured credit card you must keep in mind that the interest rates may be higher. In order to keep your credit card in check, make sure you always make the payments and try your best to bring your balance back to zero.

Weigh your options, your spending habits and your financial placement in order to decide which type of credit card is right for you.

How to Avoid Credit Card Fees and Penalties

Has this ever happened to you? When a bill or statement comes, you scan it over and then leave it in a big pile of other bills. Perhaps you even label the pile or put Post-It notes on top of the pile, reminding you to pay the bills, look over the statements in detail and manage your financial accounts responsibly.Then a month goes by and the pile is still there. If you’re like most Americans, then the answer is yes.

Whatever the reason for letting the pile mound up and the payments bypass their due date, the first step to getting your financial balance back on track is understanding what these fees and penalties really are.

Late Fees

Late fees are the easiest way to incur an unwanted penalty. This simply comes from missing a monthly payment. Unfortunately this penalty can be a hefty one with the average late fee costing $28 per month. To avoid incurring a late fee, pay extra attention to the due date. Circle it on the calendar, set an alarm on your clock or pay it as soon as you open your statement. Do whatever it takes to remember.

Over-Limit Fees

Over-the-limit fees are definitely ones to avoid. Over-the-limit fees simply mean you have spent more than you are allowed to borrow. For example, if your credit limit is $5,000 and you have an overdraft of $5010, then you are over the limit and will be charged a $20-$40 dollars penalty fee. To avoid these annoying penalty costs, keep your finances in check. Make a spreadsheet of what you’ve spent and what you’ve made. Put yourself on a monthly or weekly budget.

Cash Advance Fees

Cash advance fees come in the disguise of checks that your credit card company sends in the mail every month. Cash advances are also available at the ATM machines. Convenient? Yes. Free? No. Although they can come in handy, they also have a 1-3% fee each time you use them. Try not to use cash advances to avoid this small, but annoying fee.

The easiest way to avoid credit card fees and penalties is to pay your balance on time every month. However, if it is not possible to pay the complete balance, always pay at least the minimum. Unfortunately this will not save you from the high interest fees but it will stop you from incurring the other penalties.

Another suggestion is to make an appointment with your branch manager and discuss the options of lowering some of your fees by changing your contract. Perhaps switching to another credit card with lower interest or a higher credit line would help.

There are so many different terms and fees that it sometimes seems easier just to through the statement into a pile and forget about it. However, once you understand what these fees are about, you can avoid unwanted penalties and keep your credit card statement in check.

How to Protect Your Credit Card Information

Many people worry about credit card theft and credit card fraud. With the increasing number of both, it’s no wonder. However, protecting your credit card information is actually quite simple.

Just take the necessary precautions explained in the list below:

Sign it

When you first get your credit card, make sure you flip it over and sign it immediately. This will ensure you, and only you, can access the money.

Memorize your PIN

Your PIN is your personal identification number which allows you to access money from your credit card with an ATM. Don’t write it down; memorize it. However, don’t make it incredibly easy to crack either like 1234 or 1111. You can also choose a word to memorize if that is easier than numbers. Example 3696= DOWN.

Be wary at work

Although you don’t have to be suspicious of your co-workers, credit card thefts are most common in the workplace than in any other location. Don’t leave your cards unattended on your desk or in your purse.

Report Stolen or Missing Cards ASAP

As soon as you notice your card is gone, call your credit card company. However, keep in mind that the credit card number is most likely on the back of the missing card. Thus, it is a good idea to program the company number into your cell phone just in case.

Check, Check and Double Check

Check your card has been returned to you after a purchase. It is very common to accidentally leave your card sitting on a register or in the hands of a sales rep. Check to make sure you have all your credit cards whenever travelling. Before you get on a plane, a train or an automobile, make sure you are carrying your cards. Double check your statements every month for unusual purchases. It is so easy to just scan through your statement or just throw it right into the garbage or pile of unpaid bills. If you do find an odd credit card charge, report it to the credit card company right away.

Write it down

Make a habit of writing down all your credit card numbers and information. Keep this information in a safe place so, in case you loose your wallet, it will be easily accessible.

Having a credit card stolen or misplacing a credit card are both extremely frustrating, worrisome and frankly, annoying. However, the above seven tips can help take the fear out of credit card theft. You can easily replace the card and get on with your life.

Ways to Save Money with a Credit Card

For some reason everyone seems to have this stigma attached to credit cards that they aren’t a good way to save money. However, the opposite is actually true. Credit cards are a fantastic way in saving money if you know how to best utilize your credit card.

Almost all credit cards have some period of time interest-free, which means that there is a period from when you make the purchase before you actually start to get charged interest on the purchase. This is a massive advantage and a brilliant way to save money using a credit card because it means, instead of the money coming out of your account at the time of the purchase like with debt cards, it stays in there until the end of the month when you pay your credit card balance. This means that, if your interest is calculated on a daily basis, that your money will be in your account long building up interest.

Also if you run a business, rather than having an overdraft, why not just have a credit card? And if you need longer than the interest-free period, just pay off your credit card with your overdraft. This means you’re still better off than you would have been just paying it directly from your overdraft.

Also, if you get charged a per-transaction fee on your bank account, a bank account debit card may mean you’re unnecessarily getting charged bank fess, whereas credit cards usually don’t have transaction fees per transaction. You could save a pile of money on bank fees because you’re only having one transaction at the end of the month paying your credit card balance.

They can also save you money when you’re buying things over the internet. The cost of sending an international money order nowadays is phenomenal. If you buy something over the internet using your credit card, it costs exactly the same as it would have if you brought something in the US. By using your credit card to buy goods and services on the internet, you can buy goods on the international market for a-lot cheaper than you can buy them in the US. Use your credit card with a service like PayPal and you’ve got the good or service usually within a week. How easy is that?

Credit cards certainly aren’t the money chewers that they have been accused of being and, if used correctly, can be used to save you a lot of your hard earned money just by following a-few easy steps.

Why Students Should Have a Credit Card

Everyone seems to have this picture of a reckless teenager living the high life with a credit card, racking up a bill that they couldn’t possibly hope to pay. Back in the days of the first credit cards, this may have been the case when the credit card was first introduced. However, like everything, the credit card has evolved over time and those days are long gone.

Long gone are the days of a parent worrying about how they’re going to pay their son or daughter’s massive credit card account at the end of the month. Now with modern credit cards, students can obtain a credit card, and have a reasonable limit placed on their cards. And with online credit card services, like never before it is so easy for parents to monitor their young ones’ credit card usage in real-time. It really is like Big Brother, with parents able to obtain detail of specific transactions of their children’s spending habits. Should a child decide to go on a spending spree, the reasonable credit limits can be lower if needed. That means that the spending spree will be short-lived, which means their parents can sleep easy at night.

Also, credit cards are accepted almost everywhere nowadays, which is a great insurance policy for students if they find themselves stranded with no cash. They’re convenient and, obviously, they’re a-lot safer then carrying around cash. Unfortunately, schools and campuses aren’t as safe as we would all like them to be. It’s not uncommon to hear of bag snatching or robberies and the first thing that these types of perpetrators will look for is a wallet. So having the absolute minimum cash in the wallet means that any loss you incur, should you fall victim to one of these robberies, will be minimum. Remember that reporting your credit card stolen is only a phone call away, so you can have your card cancelled within minutes of the incident. This means that the perpetrator will never have a chance to rack up a bill on your credit card.

Another reason that students should have a credit card is because nowadays cash has very much become a second rate currency, with credit cards taking the leading in the way money flows around the world. So it only makes sense with Generation Y’s massive obsession with technology and having everything quick and instant, that a credit card would be the perfect source of funding their increasingly busy lives.

How to Understand Credit Card Offers

These days it seems like everywhere you turn there is another bank wanting to hand you a credit card. On the television, at the banks and even if your mailbox; every bank has a different credit card offer especially for you!

So which should you chose? And more importantly, what do all these offers mean?

0 Percent APR

You may notice this on many credit card application forms. But what does it mean? 0% APR means you will pay 0% interest on your annual payment rate. This is usually rewarded to new members for a limited time. The introductory 0% APR is often for your first year. Basically, this offer allows you to spend, spend, spend without worrying about the interest rates until next year.

Airline Miles Plans, Reward Points and Other Travel Promotions

Many people take advantage of the partnership between airplanes and credit cards. Basically, if you use your credit card often enough and acquire a certain amount of points, you can fly for free to some destinations. You can also use your points for hotel stays, car rentals and other travel needs.

There are three different offers available. An airline card lets you earn points toward free air travel on 250 airlines. A frequent flyer card lets you earn miles that will go into your frequent flyer account and a travel rewards card allows you to earn points of any type of travel and accommodation.

Some credit card companies offer 20,000 bonus reward points just for joining while others offer double points (2 points per 1 dollar spent). If you’re a traveler or frequent flyer, then this is the perfect offer for you.

Other reward points work on things besides travel including restaurants, certain shops and gas stations. Be rewarded for your speciality purchases with these great offers.

Cash Back Bonuses

Cash back bonuses work on different types of purchases. Basically they give you 2-5% back on certain purchases. Some credit cards offer 2% cash back on gas. Others offer 5% cash back on office supplies while others offer 5% cash back on certain retail shops. So, no matter what you plan on using your credit card for, you could be saving just by swiping.

Keep in mind that many credit card companies offer a combination of the above deals when signing with their company. So, no matter what you’re looking for, there is an offer catered directly to your needs.

When to Ask for a Better Credit Card Deal

Like many companies, credit card issuers usually reward their loyal customers. However, you do not have to be a long-time member to reap the benefits of a better credit card deal. Read on to find out the different ways to you can get a better credit card deal and which angle to take.

Check your Payment History

Before you can go to your credit card issuer and demand a better deal, you need to know what it is you want. Check your payment history and find out. Do you always pay your statements on time and in full? Then a credit card with low interest really doesn’t help you as you are never paying interest anyway. Choose a credit card deal that rewards you with bonus points or air miles instead of a low-interest card. Do you use your credit card at one place more than anywhere else, say, the gas station? Then talk to your bank manager about switching your credit card deal to reward points for that certain gas station.

Play up the Loyalty

Look through your past credit records. Have you been a loyal customer for a long time? Have you always put your money into your credit card company’s hands? Do you have a good credit history? Then use it. Talk to your bank manager about lowering interest rates and receiving more reward points for your constant business and loyal payments.

Do your Research

Find out which credit cards have lower rates, better reward services and more mileage plans. This may require some comparisons with other companies but it could be worth your while. Take your findings to your current credit card company and ask for them to match it.

Make the Appropriate Threats

Credit card companies want your business. Although threatening to take your business elsewhere usually isn’t the best route to go in negotiating, it could work for you in the credit card industry. After you have looked into which companies offer you the best deals including interest rates, annual fees, reward points and bonus features, take your findings to your branch and threaten to leave if your demands are not met. If they are not matched, then take your business elsewhere. There are several different banks out there, all ready and willing to do what it takes to make you a happy client.

So now is the perfect time to pull out those old statements, do your research and ask for a better credit card deal. No matter what your history with the credit card company is, there is a better deal out there for you. All you have to do is ask.