Wednesday, May 17, 2006

Minimum Payment on Credit Cards - Bad Idea?

Author: Joseph Kenny

Are you quite happy paying off the minimum amount every month on your credit card bill? You may be unaware of the actual amount you are paying off towards your debt. Most off your payment will go towards the interest owed leaving your debt and further interest charges to accumulate further.

1 in 8 people in the UK pay only the minimum payment required on their credit cards. You may think that you are keeping on top of your finances but the truth is you will be losing a lot of money by paying in this way.

It has even been suggested that paying only the minimum amount on your credit card can indeed worsen your debt rather than improve it.

The Minimum Payment Black Hole

Credit card companies have been lowering the percentage for the minimum payment in recent years. By paying a lower minimum amount on your credit card it will mean you paying off your debt in a longer time period hence the credit card company earning more interest from your debts. By taking longer to pay off your debt the more the interest will accumulate on your balance.

The government has pushed through to try and get credit card companies to clearly explain the minimum amount and add minimum payment warnings on all credit card statements to further inform card holders of what it means to be paying off only the minimum payment. There are companies that are already including this feature on their statements.


Paying even a little more than the minimum payment each month can drastically reduce the amount of interest you will have to pay. Paying off your entire credit card bill every month means you will incur no interest charges at all as there is normally a grace period. If you can afford it this is the best way of utilizing your credit card.

There are ways in which you can alleviate the problem of large balances. Shifting your balance to a different credit card that offers an introductory 0% interest balance transfer will give you time to pay off your debt without having to pay added interest. Be aware that using this credit card to purchase goods will only add to your debt. Keep this card for the sole purpose of paying off your balance. Make sure your balance is clear before the introductory period runs out as you will again be faced with interest charges.

Credit cards are a very useful tool in today's society. Make them work to your advantage by knowing all the facts about your finances and credit.

About the Author: Joe Kenny writes for, offering the latest information on credit cards, visit them today for more best buy credit cards. Visit today:

Thursday, May 04, 2006

Tips for Getting Out of Debt: How I Did It

Author: Danna Schneider

You are More than You Owe - Just Remember That!

It's official. Americans are drowning in debt. Not only are we working record hours and decreasing our quality of life just to pay the bills, but we are also racking up more debt even as we've paid off another! How can we stop this vicious cycle or revolving debt, and get our financial lives back in order?

I found these few simple guidelines helpful in my own personal quest to be debt free, and in fact succeeded in paying off all of my outstanding revolving (credit) debt. You may also be able to apply them to your life as well, or at least modify them to help your personal situation.

1.) Limit your trips to restaurants. I hear more people who complain about uncontrollable debt talk about eating out several nights a week. And guess what they're using? Credit cards. Don't dine out unless you're paying with cash or your debit card. Eating out is much more costly than eating at home. After tipping, many times two people can spend $40.00 or more. Imagine putting that same money toward an outstanding debt. Now take it a step further and visualize how it will feel to be debt free, and also guilt free when you do eat out again.

2.) Every time you go grocery shopping, make a list and a pre-determined budget and do not waver from it. Not only can your wallet benefit, but many times your waistline too!

3.) ALWAYS try to pay at least double, if not triple your minimum credit card payments. This not only gets them paid down - and eventually off - faster, but it also reduces the interest on the unpaid balance, which gives you a little more breathing room to pay less in the future, since you're not constantly adding more interest. Then it becomes an exercise in futility.

4.) Go ahead and play the "Credit Card Game". This is where you pay off a higher interest credit card to a zero balance, with a new zero APR card. These types of credit cards usually only offer the zero APR deal as a limited time introductory rate, but you'll still be getting a zero interest rate for those 6-9 months, which gives you more time to "really" catch up on your payments and pay a little more, when there will be nothing else tacked on, and you can truly pay your balances down to manageable amounts.

Two things to note when playing the "Credit Card Game":

a.) Make sure you will get the going prime rate when the intro period is up.
b.) Do not cancel your old card. Just keep it at a zero balance. Experts say it is better for your credit score if you do not cancel old credit cards.

5.) Start a side business. I would say get a second job, but historically people who have two jobs do not win in the end as far as taxes go. If you have a side business doing something that you enjoy, not only are you getting a second income, you are also getting tax deductions. This is a good rule of thumb, but as with everything else in life, it does not apply to every situation. There are tons of businesses that cost virtually nothing to start up, and it can be a very gratifying experience.

Visit Spoozer Men's Magazine: Cars, Music, Technology and Humor Mag for great leisure reading and the latest scoop on cars, music, technology and even beer.

About the Author: Danna Schneider is the founder of Prime Rate Credit: Daily Weblog on Credit Management.

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Monday, May 01, 2006

How to Beat Credit Card Addiction - A Five Step Program

Author: Stephen Ashton
Copyright 2006 Stephen Ashton

While we rarely think of credit cards as being in line with alcohol, smoking, and drugs, they can be just as addictive. That's especially true in the US, where any college student is bombarded with credit cards, and people already in debt regularly receive "pre-approved" credit card offers in the mail. Many people have come to rely on credit cards, not as a privilege, but as one of life's necessities. They won't leave the house without a credit card (or two or three), and many people wouldn't even dream of shopping with only their available cash anymore. These are signs of credit card addiction. If this sounds like you, follow this five-step program to help you beat it.

1. Admit that you have a problem.
As with any kind of addiction, the addict is often the last person to know. The first step is to admit to yourself that you really have a problem, and to truly believe that. If you don't understand your problem, you can't solve it. Once you've admitted your credit card addiction, make a commitment to yourself to beat it. Write that commitment down in a short contract with yourself.

2. Ask for support from loved ones.
I'm not talking about financial support here. You need to find at least one person that you can trust explicitly, and confide in them. Tell that about your problem. Ask them to serve as your moral support, and to encourage you if you should "fall off the wagon."

3. Make amends with people that your addiction has hurt
Your credit card addiction has likely hurt many more people than just yourself. Perhaps your family helped you pay off some old debts, and it hurt them financially. Perhaps your lousy credit has hurt your spouse or children, because you couldn't get a new car, buy a home, or send your kid to a better school. Maybe you've had to resort to "borrowing" money from friends that you've never been able to pay back. Now is the time to apologize to anyone who's been hurt by your credit card addiction, and to tell them about your plan to fix things.

4. Set a budget.
Once you've dealt with the emotional and psychological aspects of your credit card addiction, it's time to start taking action. The first thing to do is set a budget for yourself. Evaluate where your money is going, and decide where you can cut costs. Discuss your budget with your family, because it will likely affect them, and they can give you suggestions for ways to cut costs without giving up what's most important to you. The idea is to live by spending less, but not to live so lowly that you're miserable. If your budget makes your life feel like a nightmare, you won't stick to it, so be realistic when creating it.

5. Pay off those credit cards!
As you live according to your new budget, you'll have extra money on hand. Cut up those credit cards, and put half of that extra money towards paying them off (that's in addition to what you were paying on them each month previously). Put the other half into a savings or money market account, so you can earn interest. By the time your credit cards are paid off, you should have a nice "reward" for yourself and your family saved up. Use it to take a vacation or to buy something the whole family can enjoy, and you won't need a credit card to do it!

About the Author: Stephen Ashton
Find out more tips and advice about how to clear your credit card debt at . You can find debt consolidation loans at

Thursday, April 20, 2006

Credit Card Eligibility

Author: Joseph Kenny

Have you wondered how credit card eligibility is determined? Curious whether you’re eligible for a credit card? It all has to do with your credit rating and credit score. Here we go with a quick tutorial on what constitutes credit-worthiness and how you can make sure that you are eligible for a credit card when you want one.

Credit Reports and Credit ScoresWhen you buy something on credit or have a credit card, the credit card company or store makes periodic reports to one or more credit reporting agencies. Those agencies keep records of your credit history – how good you are at paying your bills on time.

Among the things that go into your credit history are: 1. How many credit cards you have2. How much you owe on each one3. How many loans you’ve taken out4. How much you still owe on them5. Any payments that you’ve made late6. Any payments that you’ve missed7. If you’ve ever defaulted on a loan8. If you’ve ever filed for bankruptcy9. If you own a house10. If there has ever been a judgment against you for unpaid debtsCredit reporting agencies assign a ‘weight’ to each of those facts, and assign points to you based on each of those points. The total of those points is called your ‘credit score’. The higher your credit score is, the better your credit is.

Some of the things that you lose points on your credit score for are: 1. Having too many credit cards2. Carrying too much debt on your credit cards3. Carrying too many loans4. Making late payments or missing payments5. Defaulting on a loan6. Applying for a lot of credit cards in a short time.

The credit card and credit score give a ‘snapshot’ of your credit history.

Getting a Credit Card.

When you apply for a credit card, the company that issues the card checks with a credit reporting agency to get your credit report and find out your credit score. Since they’re basically lending you money whenever you use your credit card, they want to make sure that you’re the kind of person who pays your debts on time. They have an ideal ‘snapshot’ that they compare your credit report and score with. The closer your credit score is to their ideal, the better your chances of getting a credit card with a great interest rate and good terms.The lower your credit score is, the more a risk you are for the credit card company. Because they take a bigger risk when they lend you money, they charge you more by giving you a higher interest rate. If your credit score is too low, they won’t give you a credit card at all. If you have no credit history at all, they also may decide not to give you a credit card, depending on other factors in your credit history.

If you’re turned down for a credit card.

The credit card company has to tell you the reasons that you were turned down. They also have to tell you which credit reporting agency they got your credit history from. There are three major credit reporting agencies in the country – Equifax, Experian and Transunion. The report that the credit card company used to make their decision will be one of those.You have the right to request a copy of the credit report that they used to make your decision. The company that provided the report to the credit agency has to give you a copy free. The credit reporting agency also has to give you a copy of your credit report once every 12 months if you request it. Get your credit report to find out what it says about you – and to see how you can improve your credit score so that you won’t be turned down next time.

You may freely reprint this article provided the author bio and live links are left intact.

About the Author: Joseph Kenny writes for the credit card comparison site There is a credit card guide section to aid the selection and general use of credit cards among users.

Wednesday, April 19, 2006

Credit Reports -- Your Free Report Could Cost You

Author: Charles Essmeier

The growing prevalence of identity theft and increased concern about good financial health has led many consumers to seek copies of their credit reports online. Doing so is certainly laudable; the more you know about how potential creditors and lenders see you, the more prepared you can be when it comes time to apply for a loan or credit. An added bonus is that consumers can obtain one copy of their credit report from each of the three main credit bureaus once a year through the official Web site set up for such purposes at

Unfortunately, there are still many Web sites that exist for the sole purpose of tricking consumers who are seeking copies of their free reports. A quick Google search for the term "free credit report" today turned up no fewer than twenty four million sites in the search results.

There certainly are not twenty four million Web sites that are going to provide copies of credit reports for free, so what is this all about?

It's about money. Aside from the "official" site, the others are there to profit, and they can profit in one of two different ways:

Sell you something - Some of these sites actually belong to the credit bureaus; they have set them up to give you the credit report while selling something else to you in the meantime. These sites will offer the "free" report in large letters, while telling you in smaller ones that by accepting the free report you are agreeing to buy a credit monitoring service, which can cost you $10-15 per month. The credit bureau-owned sites will also tell you that you can get your report for free at the "official" site. That is usually stated in fairly small print near the bottom of the page.

Steal something from you - Unfortunately, there are still many unscrupulous crooks out there on the Internet who see the interest in credit reports as the ideal way to steal personal information from people. Their sites will offer a "free" report, and perhaps some other services for which you can pay. But when you fill out the application and provide your name, Social
Security number and credit card, you get nothing in return. Instead, the operators of these sites use the personal information to borrow money and take out credit in your name, leaving you to pay the bills.

If all you want is a free credit report, the best way to avoid this problem is to obtain it from the official Web site at Alternatively, you can call 1-877-322-8228 to receive your report by mail. That way, you can avoid being victimized by the thousands of Web sites that might cause you to pay dearly for your "free" credit report.

About the Author: Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including, a site devoted to debt consolidation, credit counseling, payday loans and personal bankruptcy.

©Copyright 2006 by Retro Marketing.

How Much Credit Can You Afford?

Author: Cindy S. Morus

Before making the decision to add more debt, you need to make sure that you:Allocate sufficient money for your essentials.Borrow only for items that you need and can afford.Borrow only if you're spending less each month than you take home.1. Start with your monthly take-home pay.This is the amount you have left after taxes and other deductions have been made.2. Subtract the amount you need for necessities and fixed expenses.This includes savings, your mortgage or rent payment, utilities, food, transportation, child care, medical care, clothing, and recreation. Include payments made on a quarterly, semi-annual, or annual basis, such insurance and taxes.3. Subtract monthly payments for existing loans and credit cards.4. The balance is the amount you can safely apply to debt repayment.Avoid thinking you can spend all this amount, since emergencies do occur, and you may not wish to use your regular savings account to cover small, unexpected expenses.Monthly Take Home $ _______________Fixed Expenses ---- $ _______________Loans/Credit Cards ---- $ _______________Amount Available For Additional Debt $ _______________


Many people find themselves with credit problems because they don't keep track of purchases they make with their credit cards. A simple method of keeping track of monthly credit card charges is to:Determine the total amount you can responsibly charge on all your credit card accounts during that month.Keep track of your credit spending in the same way you maintain a running balance of your checking account.Subtract each amount charged from the monthly charge limit you set.Stop using your credit cards if you draw this balance down to zero.

(c) Phelps Creek Financial Coaching - All Rights Reserved

About the Author: Cindy S. Morus ( is a Certified Financial Recovery Counselor specializing in showing women and their families how to achieve financial well-being and peace of mind. She is also a Certified Credit Report Reviewer and Get Clients NOW!™ licensee. Contact her at 541-387-2995 or She is also the publisher and editor of "Financial Fitness", an internet gazette dedicated to helping people improve their financial fitness no matter what decisions were made in the past.