Has Managing Your Credit Card Debt Become A Juggling Act?
By: Adam Singleton
There are many people in the UK who have already experienced, or are currently experiencing credit card debt. Credit cards have historically been relatively easy to obtain, but in recent times lenders have become more cautious about their lending policy - prompting David Kuo of the money advice website Fool, to speculate that as many as 7 out of 10 credit cards applications are likely to be rejected by 2012.It might sound like a case of closing the gate once the horse has bolted, but its scant consolation for those already burdened by credit card debt. However, credit card debt needn't be a millstone around your neck - there are ways to alleviate the burden and get your spending back on track. However, before you tackle the problem it is often a good idea to know how the problem arose, so you can hopefully avoid the same mistakes in the future.
For many people, the long, downward spiral into credit card debt begins at university. That credit card given to you by your parents 'in case of emergency' soon becomes too much of a temptation and before long, it's being used to buy clothes, shoes, CDs and cinema tickets rather than food and books. In order to solve the problem, many take out a second card with the intention of paying off the first. However, it rarely works that way, and it isn't long before the second card - like the one before it - is also maxed out. Thus begins the circle of borrowing, and it's not uncommon to leave university with a fistful of credit cards, each stretched to breaking point, with the incumbent wondering how they will repay them - especially when that high-profile job doesn't come along!
Many people in full-time employment still feel the strain of credit-card debt gained from their formative years at university. For some, making the minimum payments on each of their cards is the preferred method of dealing with the problem. While this approach doesn't do your credit report any harm (it does build a good payment history) it doesn't address the underlying debt problem, as making only the minimum payment on your credit card balance has little effect on the amount owing when interest is taken into account.
For others, switching credit cards to the best available rate is another option. Many credit card issuers now offer low rates of interest if you switch your balance to them, but the so-called 'rate tarts' have given rise to credit card lenders now charging a fee to transfer balances, which can effectively render the drop in interest rate worthless, as what you'll gain from a lower interest rate you will then lose in transfer fees.
However, the key to addressing credit card debt - as with other debt - is to prioritise and reduce your spending by acknowledging the state of your finances. To do this, ensure you budget for your essential items: your mortgage or rent, council tax, car insurance and similar. Then look for ways in which you can reduce your spending. For example, when shopping, don't buy the premium range of your favourite foods, instead buy a mid-market brand or even the retailer's own if available. The chances are you'll never notice the difference - except in your wallet - and the money saved can be put towards clearing off those credit cards.
Always tackle the credit card with the highest rate of interest first; after all, this is the card that will be accumulating debt faster than the others, so it makes sense to attack it first. Once you have cleared the balance on this card, continue to make the same payment in respect of the next highest card - the snowball effect you create will result in you clearing your debts quicker than you thought possible. Once each card is paid off, cut it up. That way, you won't be tempted to rack up the debt again.
It's also a good idea to know your financial situation by making sure you know how much money you have in your accounts. Consider using online banking, which can give you 24/7 access to your bank and credit card accounts, and also consider making payments via direct debit so you never miss one and end up paying unnecessary fees.
Credit card debt can be easy to get into and notoriously difficult to get out of. If you are constantly trying to juggle your credit card debts, it's only a matter of time before you drop one of them; when you do, the rest will come crashing down too, so it makes sense to tackle the problem now, before it becomes un-workable.
About: Adam Singleton Source: Ezinearticles.com
How To Get A 0 APR Credit Card
By: Gordon Goodfellow
High monthly credit card costs are increasingly putting family budgets under pressure and along with this, families themselves are coming unstuck. The more stressed people become, the more unable they often are to see a workable solution. Most of them don't know that they can transfer their high interest credit card balances to a single 0 apr credit card and save on interest charges for a specified period of time. Furthermore, there is nothing to stop them transferring that balance to yet another zero or low rate card at the end of the introductory period. If you are financially stressed because of credit card debt, this is an option you should seriously consider.Unfortunately, instead of getting rid of out of control credit card costs by applying for a 0 APR credit card, many people keep struggling to pay the monthly payments and often resort to further credit card debt simply in order to keep on going. With these competitive offers, this ongoing struggle is entirely unnecessary. It is the easiest way to quickly get your finances under control and to start heading in the right direction. Once you have transferred your credit card balances to a zero rate card, you will feel an immediate sense of relief and you can start to think clearly again and become proactive with your finances.
So how do you get from where you are now to where you want to be? The first step is to locate the best 0 APR credit card offers on the market. The easiest way to do this is by using the internet. You can conduct an online search for zero rate or introductory credit cards and quickly get hundreds of search results. The problem is, you will be confronted with so many possibilities that you will have to research and decide between them. For many people, this prospect is so daunting that they procrastinate and never manage to actually submit an application.
There is a way to quickly and easily compare introductory offers so that the task is not overwhelming and you can move from the initial decision to consider transferring your balances to a 0 APR credit card to actually doing it. This is to use the services of an all-in-one credit card comparison website. Browse some of these sites and choose one that offers informative articles on aspects of financial management and debt consolidation, detailed comparisons of a number of the better offers and an online application form.
Once you have taken these steps and have applied and received your new 0 APR credit card, you can begin to take back your life. Use the interest savings to pay any outstanding bills and then decide on how much of the interest savings you genuinely need to avoid using your new credit card. Anything over this amount should be used to pay off your credit card balance. Your goal should be to get out of debt as quickly as possible while still being able to meet basic needs. At the end of your introductory period you can transfer the balance to another zero rate card or refinance with a low rate personal loan. However you choose to get on your feet financially, you can be sure your zero rate card will be a great first step.
About: Our site shows you how to get a 0 APR credit card online in addition to zero visa debit cards. The associate site offers credit card balance transfers in the UK. Source: Ezinearticles.com
