Tips For Credit Card Users

I have been a credit card holder for 3 years now. In those 3 years, I have certainly learned a lot. Some of these I learned the hard way. A big outstanding balance was my punishment. The following are some of them:

1. Know the important dates in your credit card.

These are the cut-off date, statement date, due date and card expiration date. These crucial dates can be seen in your credit card statement. Before purchasing, I advise you to pause for a moment and think if what you are about to purchase is within the cut-off date or not, when would it fall due and if you think you have enough funds to pay for it by the time due date comes . As to the expiration date, some stores refuse to accept your card if your car is about to expire and you want to apply deferred payment.

2. Pay the full outstanding balance on your statement.

Avoid paying interest or the so-called finance charge on your credit purchases by paying the full outstanding balance on your statement, and not just the minimum payment required by the due date. Remember that interest-free periods do not apply except if you pay off in full. If you fail to do this, you will be charged interest on your outstanding balance and therefore forfeiting the interest-free period on your past purchases. Moreover, you must pay the balance off in full before you will get any interest-free period on your current and future purchases.

3. Credit cards have annual fees.

Some banks offer to waive the annual fee on your first year or if you spend enough on your card each year, or if you are a valued client of the bank. Thus, unless you are sure that your card is exempt from annual fees, then this must be taken into consideration because annual fees can be a big amount, depending on what type of card you have. Further, this is also one good reason why carrying more than one credit card is not advisable.

4. Do not be fooled by the offer on cash advances on your card.

The interest rates on credit card accounts do not apply to cash advances. Aside from the interest rates, some cards also impose a service charge whenever you apply the cash advance feature on your card.

5. Remember that incidents of internet banking fraud are rising.

Be wary when using your card in the internet. Deal only with established and reputable merchants and be careful when sending out your credit card details.

These are only some of the things that must be kept in mind when you have a credit card. Credit cards can indeed be very convenient and can make our lives easier. However, we must also be responsible and not unmindful of the risks associated with having them.

Make 2010 the Year to Becoming Debt Free

Imagine waking up one day having your utilities bills, your car payment, your credit cards and your mortgage fully paid. Just imagine the heavy weight lifted off your shoulders. It is nice to be debt free. You don’t just have to imagine it. Make it your resolution for 2010: Make 2010 the year to becoming debt free.

It’s not impossible to become debt free. All you need is a little discipline and a little management. You have to learn to properly manage your finances and you’ll be on the way to becoming debt free.

Below is a list of five ideas you can use to start on your road to becoming debt free.

1. Change your spending habit. What drove you to become deep in debt is your spending habit. You must know that if you spend more than you earn, you’re going to get into trouble. And when you find that your salary has depleted, you reach for your credit card. Bad move.

Of course, credit card companies want you to spend and spend and pay them later. They charge you exorbitant interest and they earn when you spend. Remember this. The money you spend when you use your credit card isn’t your money. It’s the credit card companies’ money and that means you’re borrowing money from them. And when you borrow money you have to pay it back or you’ll get into trouble.

First thing you need to do to change your spending habit is throw away all your credit cards. Don’t use them anymore. Cut them in two and throw them away. Only use cash. If you have no cash, don’t spend. This is so easy to say but can be hard to do. That is why you need all the discipline you can muster to change your spending habit.

2. Change your lifestyle. Next thing you need to change is your lifestyle. If you’re always dining out and watching movies, stop doing them. Eat at home. Watch television. Buy generic clothes. No more designer labels. Buy only what is essential. Remember only what you need and not what you think you want and must have.

3. Pay all your bills on time. When you get your paycheck, set aside an amount to pay all your fixed bills like your utilities, your rent, your car payment and so on. These are payments that you need to make every month. If you don’t pay them on time monthly, you’ll find them accumulated to such a staggering amount that you’ll be so stressed thinking about how to settle them.

4. Have a budget plan. Now that you’ve paid your fixed bills, you can start thinking about settling your debts. List down all your debts and arrange them from the smallest to the largest. Try to settle the smallest ones first and then tackle the bigger ones. In your budget you must set aside an amount for your own daily spending and the leftover can be used to settle your debts.

You might want to come to an agreement with your creditors about how to settle your debts. Once you’ve come to an agreement, make sure you follow through in a timely manner.

5. Savings. Don’t forget to put aside a little money for any emergencies. This amount doesn’t need to be big. You could maybe put aside about 5% from your paycheck to an emergency fund. This fund will help you in times when you’re in need of money urgently.

Changing your spending habits and your lifestyle is most important if you plan on becoming debt free. You also need to have a budget plan and a little savings set aside and don’t forget to pay all your fixed bills on time. Doing all these will hopefully make 2010 the year to becoming debt free.

Is Zero Percent Financing Worth the Risk

Zero-percent financing offers are great credit building tools and can even turn you a profit if accepted and handled properly. The challenge is finding zero percent financing offers that are worth it as some may come with unwanted fees, restrictions, and so forth.

The most common zero-percent financing offers come in the form of 0% credit cards and more then often in the form of car payment financing.

How many times in a day do you see advertisements for 0% financing on new and used cars vs. 0% offers for credit cards, mortgages, student loans, and bank loans? That right there should be a red flag for which 0% offers to generally avoid which are car financing loans. When purchasing a car you should rarely use the services of the dealer's financing offices because they tend to come with a ton of restrictions, fees, and hidden expenses.

Car loans in general come with deceptive terms most often; you either pay a set monthly payment that includes interest (ensuring you end up overpaying for a product that depreciates quickly) or if you get a 0% offer you may run into a higher down payment, higher fees, or a sky high interest rate when the 0% financing offer ends. Honestly you may be better off putting your new car purchase on a low or no interest credit card or seeking a loan from a reputable bank.

That leaves credit cards as the best way to secure and use 0% financing offers. In times of recessions and financial cutbacks these offers are slightly harder to find, but in general every major credit card issuer offers them in some way. The terms for them will depend on your credit score and history, the credit limit given, and the company itself. Many credit card providers will extend 0% offers from 6-15 months with the average being 12 months. This basically means a person can get approved for an interest free credit card for 6-12 months and as long as that person does not exceed the credit limit or miss any of the minimum payments they can enjoy 0% financing.

To maximize the benefits of 0% financing on credit cards you should plan to pay off the balance in full when the offer expires to avoid interest. You can put money away in high interest checking and savings accounts like ING Direct and make the minimum payment each month as required on your credit card. You'll pay no interest during the 0% offer and earn a few bucks in interest on your money sitting in the bank.

The trick is to be sure you can pay off the balance in full once the offer expires so you can keep all the interest earned on your money in your high interest accounts. This means you can't use the card for purchases you can't afford to pay off by the end of the offer. Yes you can use it to buy that new plasma TV or that vacation to Europe but only if you know by offer's end, that you'll have the money to pay it off.

Some people take 0% financing further on credit cards and use it to write balance transfer checks to themselves for about 80% of the available credit; then they store that money in a high interest account while paying minimum payments on the card. At the end of the 0% offer they pay off the card and keep the interest earned as profit.

However fees and restrictions can limit this way of making money so only skilled balance bouncing customers and responsible borrowers should attempt balance transfer check floating.

Fees can ruin 0% offers of credit card. If there is a fee that is too high for balance transfers or transfer checks it can cancel out any profit earned. Plus even if you use a 0% card until the offer expires, if you miss one payment, are late, or can't pay in full at end of the 0% offer you may cancel out any profits and any rewards points earned.

Free money through 0% financing is a game and credit cards are generally the best tools to use. But getting free money, free points/cash back/rewards, and other perks takes a certain level of financial responsibility and planning. Free money is out there for anyone willing to research and be responsible with it but its a game that many don't win at.

Avoid Financial Strain with a Prepaid Credit Card

Prepaid credit cards are becoming more and more popular. As Americans find themselves stretched to financial limits, these cards have become a way to avoid overspending.

A prepaid credit card works just like a regular credit card, except you have to pay before you use it. Such cards are available everywhere and offered by most major card issuers. American Express, Master Card, and Visa all offer prepaid credit cards. They even look so similar to their brethren that it’s hard to distinguish the prepaid card from the standard credit card.

You can make any type of purchase you would normally make with a regular card, however, some restrictions due apply. Generally, you cannot use a such card for hotel accommodations, airfare, or auto rental, as these purchases require your card to attach to your name, address and personal information for obvious reasons. Your card is anonymous, is doesn’t attach to your name or personal information in any way. Also, gasoline retailers often restrict prepaid credit cards because of the drive-away syndrome.

A prepaid credit card is a good option if you are in tight financial circumstances. Because you pay ahead (load the card), you can’t really purchase beyond your means and there is no balance to carry forward.

Apart from the restrictions we have already discussed there may be associated fees for your prepaid cards. Such cards also come in many forms. At the rear of your Pharmacy or in Wal-Mart’s somewhere you will find a display featuring various prepaid cards. These are offered for preset amounts and you pay that amount plus charges at the cashier while checking out. You might purchase a $20.00 prepaid card from the display. At the checkout this card will cost around $25.00 because of associated fees. Once you’ve paid your $25.00. However, you’re done. There are no more charges and no fluctuating interest rates.

Other types of prepaid cards are one you can load to amounts you decide upon. These cards are usually issued by one of the Major credit card companies like VISA, or Master Card. You generally receive the card after applying for it and including your first deposit on the card. The card is issued to you and you can use it for anything up to the amount left in your account less fees for use. These cards allow you the option of refilling, or loading, your card whenever you want. While there are fees for using the card, they are pretty clear cut and you should check them out and no the costs involved before making an initial deposit.

Using either of these types of cards is a good solution to stop overspending until you get your financial situation ironed out.