Reducing Debt: Secrets Credit Card Companies Don't Want You to Know

By Michael M Thomas

Do you want to know how to go about reducing debt? Well, we all do. Reducing debt is the key to gaining financial freedom and building wealth. And without debt, no matter how much we make, we can all build our way to financial freedom.

Credit card debts are the main source of debts that trouble Americans. There are a number of ways to go about reducing debts. Here are three simple ways:

1. Pay double the minimum payment
2. Set up automatic payments with your bank
3. Pay more frequently than once per month

Let me talk briefly about each of these methods:

Pay double the minimum payment

When you're really struggling with credit card debts, this sounds painful. But it's key to reducing debts. By paying double the minimum payment, you will reduce (in the long run) the interest you pay and you will have less cash available to yourself (that's the hard part!) so you will be likely to spend less. This all adds up to you spending less money and reducing debts.

Set up automatic payments with your bank

This is a great method for reducing your debt because once it's set up, you don't even have to do anything. Set it up with your bank -- you can usually do this online -- so that a certain amount is sent to pay your credit card debts immediately after you are paid. This gets you in the habit of reducing debt.

Pay more frequently than once per month

This is rarely talked about, but it is an effective strategy. If you pay $100 on a credit card each month, pay $50 of it in the middle of the month and the other $50 at the end of the month. This will help you to reduce the interest that accrues on the account (because the average balance on the card will be lower for half of a month. In the long run, this adds up and help you in reducing debt and eliminating your credit card debts.

Credit card debts don't have to control your life. You should control your credit cards. These three tips will help you with reducing debt. If you want to eliminate all of your credit card debts, you need more than just those three tips. You need to stay on top of your finances, set a budget, and have a plan. Find a program that you can follow and learn as much as you can about finances.

Michael M Thomas paid off over $50,000 in credit card debt. You can learn how Mike did it by reading his blog. Mike's Credit Card Debt website also provides a free newsletter which regularly provides money saving tips. You can learn more about it and sign up for the newsletter here.

If you are serious about getting out of debt, you should consider a product like Debt Free in Three. Mike talks about Debt Free in Three on his blog.

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10 Steps to Building Good Credit History

By Andrew Gorton

Thinking of buying a new car? Maybe the time has come to become a home owner? Or maybe it’s as simple as wanting to rent an apartment or buy insurance. All of these situations will require your credit report to determine if you qualify for the loan, to decide if you are good enough to be a tenant, or to decide your insurance rates. That’s why these 10 steps to building good credit history are really important.

If you are sitting with a good credit history good for you but many are trying to repair or build a credit history which can feel like a real overwhelming task. Relax lots of people have been in your shoes and came out on top with excellent credit. Of course it’s not easy and you’ll have to work at it but by taking these 10 steps to building good credit history you will be on the right track in no time.

You need to start by doing a budget and then you need to live by it. No exceptions. You need to know what you are spending and where you are spending it.

Your budget needs to be realistic including all your basic expenses and then if there is money left over you can a lot some of it for extras. No just this one time so you can go out with friends. No but “I got to have it.” You should always try to bank at least 10% of your take home pay. When you plan your budget you will be able to see exactly where you can save.

If you do not already have a checking account you need to open one now. Financial institutes that are considering giving you credit want to know that you have a relationship with a financial institute and that you have an account available for paying bills. Don’t let your checking account sit overdrawn as it can affect your credit record negatively.

Always pay your current bills on time. These are bills like your telephone bill, utility bill, insurance, even your rent. If you are late or miss a payment it will go against your credit rating.

You should check your credit report at least annually. These days identity theft up checking it every 6 months wouldn’t hurt and with such ease of access online and a minimal cost there’s no reason why you can’t. Agencies like Equifax or Experian in the UK can provide you with your credit report. If you don’t do it online they will send you a copy via the mail.

Even credit bureaus are subject to making errors so you should review your credit report carefully and have any errors you find fixed by contacting the credit reporting agency and the creditor in writing. Check to make sure that anything that should have fallen off has. Items like bankruptcy, delinquencies, IVAs, CCJs, and liens do appear but they also fall off eventually.

If you’ve never had a credit card or you need to rebuild your credit history you should consider a secured credit card. How these cards work is you deposit funds with the credit card issuer and generally the card is issued for that amount. Making timely payments on this card is reflected on your credit report and helps to build your credit.

You can also apply for department store and gas cards which are easier to get then some of the major cards. Ask for small amounts because then it is easier to get.

You should never max out your credit cards because it is reflected on your credit report and actually hurts your credit score but reducing your point count. You should have no more than 25% of your credit limit used at any one time. One of the calculations is how much credit you have available to you and how much of your credit you have used. The more you are using the bigger the hit on your credit.

If you are running into trouble with making your payments don’t wait until the accounts are in the hands of debt collectors. Instead contact the creditor and make payment arrangements. If you fee you are over your head contact a debt counselor for assistance.

That’s it – these 10 steps to building good credit history should have you shining if you follow them.

Andrew Gorton is the founder of Fresh Finance, who provide Debt Consolidation to UK residents.

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Consolidate Debt Through a Bad Credit Mortgage

By Jack T. Blacksmith

How can anything called a "bad" credit mortgage be considered good? You would be surprised that it is a good option for many people. It even can help some people improve their bad credit! That is one of the main reasons the people are attracted to bad credit mortgage financing, especially people who are having financial problems. How does bad credit mortgage financing do this much good? By consolidating debt.

First, let's start with the idea that bad credit is really not such a good idea. You should try at all costs to protect your credit rating and getting a bad credit rating in the first place. Usually, people end up with bad credit because they have defaulted on a loan or failed to make payments on their credit cards. Running up debt that you cannot afford will surely ruin your credit rating and your chances to get credit in the future. If you do get credit, you will pay a very high rate on it. But you can use a mortgage to consolidate that debt and save money. How, you ask, if I have bad credit? Even though your bad credit mortgage will be at a higher rate than a conventional mortgage, it will still be cheaper than other loans. That is because the financial institution has collateral, your home, to back the mortgage loan. Plus, you probably already have some equity in your home since you have been making your mortgage payments on it.

Having collateral such as your home for a loan makes a big difference in applying for a loan. Some lenders will insist on some collateral for a loan as a kind of guarantee for the loan. Here's how it works: the lending institution makes an assessment on the value of the home. If there is enough value in the assessment of the home, the lender will be willing to lend money on it. This is why a bad credit mortgage loan works if you have bad credit. Yes, the lender is still looking at your credit rating, so you will pay a higher interest rate, but the lender can fall back on the value of the home in case of default. If you can possibly negotiate a loan without collateral, that would be great, and you should definitely try that if your assessment of the home does not yield enough equity for the loan you want. There may be other things you can use as collateral for your bad credit loan.

Make sure you also check out all of the fees and charges, such as points, closing costs, application fees, etc. on the bad credit loan mortgage ahead of time. If you are paying too much in upfront fees, the loan may not be worth wile, since even with a lower interest rate, your overall costs will be too high. (Perhaps the equity in your home is too low to get a height enough loan) You have to add in these costs to see if the whole package is still worthwhile. It doesn't make sense to take out a loan and then pay so much in fees that you have hardly anything left afterwards.

The essayist Jack Blacksmith is specifically passionate about information much like debt management and credit counseling. You can find his abstracts on consolidating debt and credit counseling over at his site and different sources for debt management tips.

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How to Avoid Credit Card Late Fees

By Daryl Flagg

Everyone hates late fees and being late will cost you dearly these days. For some credit cards today, if you are late, you will have to shell out as much as $40 each time. This can put a nice sized hole in your pocket really quick.

Below, I will provide you with some tips and strategies on how to steer clear of those monstrous late fees. This will not only save you a lot of money in the long run, but it will also keep those money-hungry credit card companies, I won’t mention any names, from getting your hard earned money.

Just pay your bill. One of the easiest ways of avoiding a late fee is to just pay your bill each and every month by sending in a check, money order, or other type of payment to your respective credit card issuer. Just make sure you follow the numerous guidelines, which are usually outlined on the back of each credit card bill, on how to send in your payment. These guidelines must be followed precisely if you want to guarantee that your payment will go through on time.

Payment guidelines may include everything from a specific payment address to the time of day by which the payment must be received to be credited that day. Many issuers also stipulate that payments must arrive in the preprinted envelope sent to the customer.

While the Fair Credit Billing Act requires issuers to credit payments the day they are received, each issuer is allowed to set specific payment guidelines. If any of the guidelines are not met, the issuer can take as many as five days to credit the payment.

An on-time payment could easily become late during that five-day period, so follow those payment guidelines carefully.

Just skip the payment. One of the more rare types of methods you hear of are Skip-A-Payment services. You can use these services to skip mortgage, credit card, or loan payments. Usually you would need to get in contact with your bank just to see if you even qualify or not. There are also independent companies out there that will allow you to do the same thing, no matter what bank you are a member of. Depending on whose service you use, the fee’s associated with it vary. When you use these types of services make sure you know how much you will be charged then decide if it’s worth it or not.

Pay minimum due immediately. One of the best ways to prevent a late fee from being charged to your account is to pay the minimum due immediately. As soon as you receive your bill, send in the minimum due. This will always insure that your credit card issuer received payment. You can always send in more money later if you decide otherwise. This is a great way to avoid missing a payment because if you forget to send extra money you can guarantee that you won’t be charged a late fee because the minimum due has been already been paid.

Move your due date. Are your credit card bills due at a time of the month when you're running low on cash? Many people have trouble saving money, so when it comes time to paying their credit card bills, they don’t have any cash to do so. One particular solution is to move your due date. Many credit card issuers will allow you to set your own due date to meet your specific needs. If you have trouble saving money, move your due date to a time when you do have money, like as soon as you get your paycheck. If you time your credit card bill to come the same day you get paid, you will always have cash to pay the bill.

Pay by phone. If you are one of those people that wait to the last minute to do everything or if you just forgot to send in your credit card payment early enough, you could always pay by phone. This guarantees that your payment will be on time. Just supply the representative on the other line with your checking account number and your bank routing number, which is printed at the bottom of each check. Usually the routing number is first and the account number is second. A lot of issuers allow you to pay by phone and some will charge you a pretty penny for doing so. Fee’s can range from $5 to $20.

Use other express methods. If your bank does not offer a “pay by phone” service and you need to get your payment to your credit card issuer as soon as possible, I recommend either sending your payment in by express mail or by Western Union. Either one of these services can get your payment to your credit card issuer immediately. These express methods are costly, but it will always most likely be cheaper than any fees associated with being late. Make sure you send your express payment to the proper address. Many issuers have separate payment addresses for express payments. The last thing you want to do is slow the processing of an express payment by sending it to the wrong address.

Daryl Flagg is the founder and CEO of Next Month Online. Next Month Online is a service that allows its visitors to skip credit card payments. They can be found at http://www.NextMonthOnline.com. Sign up for free!

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