The Simple $10 Debt Elimination Solution

Ask a friend what resolutions they made for 2004 and your bound to hear them reply 'Pay off my credit cards.' Ask them how they planned on reaching that goal and many of them will not have a clear cut answer.

The obvious first step to paying off credit card debt or paying down credit debt load is to cut back or eliminate the use of your credit cards. For some people this first step can often be the most difficult. If you're used to spending freely with plastic and worrying about the consequences later, it's difficult to break free from this 'buy now, pay later' attitude.

To gain control of their careless credit card spending habits, some people cut up their credit cards therefore making it impossible to use them. Others lock up their credit cards or hide them in a safe place and vow to use them only in an emergency.

The second step to paying down credit debt is to pay more than the minimum balance due. Most credit card companies require a minimum monthly payment of 2.5% of the outstanding balance. For example, if you have an outstanding balance of $1100.00 on a credit card charging an Annual Percentage Rate (APR) of 18.9% your minimum monthly payment would be $27.50. It will take you 66 months or 5.5 years to pay off your balance of $1100.00 making the minimum payments. The credit card company will make $676.94 in interest from your use of their credit card.

Monthly payments are purposely kept low by the credit card companies so that they can earn as much as possible from the interest rate charged to you the consumer. Paying just the minimum payment will keep you tangled in credit's web for years and years to come.

If you've been paying only the minimum due month after month, ask yourself this question, 'Do I have an extra $10.00 I could apply to this month's payment?' I'm sure that most of us could find some way to come up with an extra $10.00 for the month. Try cutting out a few cups of coffee or lunches at your nearby fast food outlets and in no time flat you'll have saved up the extra money that you need.

Now, it's time to unveil 'The Simple $10.00 Debt Elimination Solution.' Take that extra $10.00 and add it to the minimum monthly payment above, therefore making a payment of $37.50. By adding just that $10.00 a month to your minimum payment, you'll trim 23 months or nearly two years off of that credit debt! On top of that you'll save $277.00 in interest alone! That's money you can put toward savings or paying off other debts. Imagine how much you'd be able to save if you applied this same simple strategy to each of your other credit card debts!

Paying down credit debt doesn't always mean having to make huge monthly payments or sacrifices. It just takes some basic planning and a simple effective strategy to make it work.

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New Credit Scoring Model Could Help Millions

Mark and Beth, a young couple in their twenties, established a goal to buy a home within the first three years of their marriage before starting a family. They used the budget and their money wisely in order to save for the deposit. Whenever they purchased something they always paid cash-no credit cards for them. Why waste money by paying interest to a credit card company?

Within two years they had reached their savings goal and began to look for housing. They found their "American dream" house in a new community with lots of amenities that seemed perfect for their soon-to-be family. They were elated that their years of saving were about to finally gain.

But they met a big problem when they went shopping for a mortgage. Even though they had enough income to make mortgage payments and enough money to pay the down payment, they had no credit history. Lenders FICO score did not assess their creditworthiness in order to offer them a loan. Fair Isaacs Co. Established a system of credit score in the 1980s, and since then FICO scores have been used to determine whether someone will qualify for a mortgage and the interest rate they pay.

More than 50 million American adults fall into the same category, they have too little credit history or no credit history at all. But now, thanks to a new FICO formula called FICO Expansion Score, lenders will now have opportunities to extend credit to consumers based on traditional credit data that are excluded from credit bureau reports.

FICO Expansion will consider a wide range of financial transactions, including payment activities such as rent, deposit accounts, payday loans, book or CD club payment plans, and retail sales plans set aside .

Who stands to benefit from this new scoring model? Anyone who makes little use of banks, credit cards or checking accounts. The bad credit receivables Fair Isaac Co, which includes young adults, low-income consumers, widows or divorcees, and immigrants. And while those in the credit card and mortgage industry see this new scoring model as a potential advantage, credit counseling in the area to prevent potential problems.

Fair Isaac CEO Tom Grudnowski is enthused about his new company credit scoring resource. "This extension of the FICO score gives lenders and other businesses another powerful tool ..., while expanding service options for consumers who have missed opportunities simply because they no have no traditional credit history. '

The opposition, namely debt and credit counselors, see both the good and the bad. Some consumers will benefit by qualifying for less costly credit arrangements. However, other countries could fall victim to too much unless they also receive basic credit and debt education.

Tom Hicks, a credit counselor in Chicago, worries that "the average American household $ 8,000.00 because of credit debt, which could open the door to other people who are not able to s look properly credit. Ultimately the burden lies with the consumer, "he says.

Fair Isaac Co. Believes that at least half of those without traditional credit profiles will benefit from this new method of scoring.

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Identity theft and Internet

Be careful when using Your Nest Egg like an ATM

About five years ago, I moved to the ranks of being a tenant to an owner. Now, a week goes by that I do not receive some kind of supply through the mail encouraging me to refinance my mortgage, open a home equity line of credit (HELOC), or apply for a home equity loan.

Debt Payoff high interest credit card! To reduce your monthly payments! Buy a new car! Refinance and obtain money now! Crier slogans splashed across the envelopes.

The interior of the letters point out how it will be easy for me to 'get the extra cash you need! "They promise 'not out of pocket expenses" for a new refinancing 30-year loan.

Could I use some extra cash NOW? I could bet! Who needs a great interest credit card debt? Not me, no way, no way! Buying a new car? Hmmm, I like the new Pontiac G6 I saw on television, perhaps in a sleek titanium-colored with black trim?

For thousands of American families "Home Sweet Home" is quickly replaced by a new confession - "Home Sweet ATM." According to the latest study by the Federal Reserve, 45% of homeowners who refinanced their mortgage fired cash and 74% Liquidated extend their mortgage nearly six years. Only 17% short duration opting ready to reduce 15 years of mortgage.

In a six-year period, Americans have more than doubled the amount owed on the value of loans and lines of credit, nearly $ 766.2 billion, according to the Federal Reserve.

If you are in your 40 and the refinancing to a new 30 years. Ready, you will be in your 70 when your loan ends. Even if you shave a few years by paying off your principle, you are still not risking ownership of your home "free and transparent" with the approach of retirement age.

What happened in the days when your home was reviewed your nest egg must be used only for life-threatening or life-changing to pay for events like the marriage of a child or for a medical emergency ? And worst of all, many new owners are using their home equity as an alternative source of funding for new debts.

Think twice before using home equity to pay off credit card balances. If you are already overspending on your credit card, which makes you think everything will be different after you pay with a loan or a line of credit? Many people simply deepen the liquidation of the debt or facing bankruptcy because they could not resist their charge cards again.

Keep this in mind before you enter your home-your equity or HELOC is loan secured by your home. Default on the loan and you could lose your house, even if you declare bankruptcy!

The best use for home equity is to bring about improvements that add value to your home. Remodeling a kitchen or bathroom, adding an extra room or creating a master suite are just a few of the "hot" improvements that can really pay off when it comes time for you sell.

If your home is your nest egg, how intelligently use its own funds. Make sure it is part of your overall financial plan and golas. Otherwise, you could be left without a nest and just the egg!

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Avoiding the pitfalls College Credit Card

college first year Congratulations! You are about to embark on one of the most exciting times of your life. By maintaining your parents, brothers and sisters, and friends have offered all kinds of advice on how to make smooth transition to college-how to get along with your roommate, what classes to take and which to avoid, where to find the best off-campus food, and how to stay safe on campus.

One thing they may not have warned, it is how you will quickly overwhelmed bids credit card. You will find in your textbooks, in your mailbox, and on every campus bulletin boards. You will be provided free DVDs, T-shirts, music downloads, and more in return to complete a credit application.

Why all this fuss over you for a stupid piece of plastic? Because they like to recruit new borrowers, especially in your age. They know, numerous studies, that college students tend to be impulse buyers. And even if your impulse purchases tend to be small pizzas, coffee, beer, CDs, cigarettes, books, etc., these small purchases can be added quickly.

Fifty-four per cent of first-year students and 92% of sophomores have at least one credit card. A recent study shows the average college student graduates with $ 1,500 from $ 3,000 in Credit Card Debt.

Here are seven tips to help you manage your needs college credit card:

1) Go to a card with the lowest fixed percentage rate and a low or no annual fee. Carefully read the fine print many 0% or low introductory offers expire in 6-12 months.

2) NEVER use your credit card for a cash advance. The reimbursement of costs and structure associated with a cash advance is outrageous.

3) Get a budget! Your credit card is not free money. Budget your money so that you can pay off your balance at the end of each month. If you can not pay the balance, always make more than the minimum payment.

4) Pay your bills on time, otherwise you will pay a late fee between $ 25 to 40 every time your late with a payment. Late payments will also increase your chances for having raised your rates on ALL your credit accounts.

5) Ask for a low credit limit, somewhere between $ 700 to $ 1,500. The objective is to have credit available to answer some of your expenses and, in case of emergency.

6) Less is better. You do not need more than one or two cards to the maximum. The more you have the more you will be tempted to use or "max" between them.

7) Consider using a debit card instead. A debit card is linked to your checking account and purchases are automatically deducted from your account balance. Of course, make sure you have money in your account to cover any purchases you make.

Using a credit card is a great responsibility that you are a student or an adult. Managing your credit wisely establishes a positive credit history that will serve you now and in the future.

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Maximize Credit Card Rewards by Paying Your Bills

You may have a rewards credit card, but are you making the most of it? Having a cash-back or miles card is a good resource - make it work for you by putting money back in your pocket. Most people pay their bills every month by check when they could use their credit card instead.



Save at least 1% on all your bills simply by paying them with your credit card. Some debit cards also offer cash-back rewards, so you may be able to use those as well.



Here are a few key points to consider when using this money-saving strategy:



Spend often, Pay Often

The more you use your card, the more your rewards will add up - so spend often. In order to save money, get in the good habit of paying your credit card bills immediately - pay often. When using a system like this you don't want to be paying credit card interest on your bills, that defeats the goal saving money. Paying a few days interest should be ok, but don't let the balance add up to the point where it cancels your rewards savings.



Check your contract

Some cards will not offer you rewards if you make payments too quickly, so check your contract for the minimum period. You want to get rewards for the bills you pay, then repay in full before paying any sizable interest. If in doubt, give a call to your customer service department. You don't need to tell them the whole story, just ask whether you still get your rewards if you pay your balance in full every month.



Bonus: Building Credit

As a bonus, you can improve your credit rating by showing regular activity and payments on your card. Over time this may help qualify you for better interest rates - an added bonus.If you have credit card rewards, you might as well use them.



This "cash-back on bills" strategy won't work for everyone, but if you have the discipline there is money to be saved.

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Credit Repair Organizations

You may have bad credit due to some irresponsible moves or some unforeseen events in your life. You should never pay a credit card late, even if you need to get a quick advance or payday loan to get you through to your next paycheck. Protecting your credit score could prove to be very important to your future. There are lots of ways to keep your credit good, but if it’s already looking pretty bad, consider some other options. One way, which we’ll talk about here, is to go through a credit repair organization.



If you are tempted to use a credit repair company to fix your problems, please read this first. Credit repair companies can make a lot of promises, but be careful who you give your information to. There is a lot of deception going on in this industry and there are a few signs that you should look for.



First, if they ask you for any money up front, then it isn’t a legitimate or ethical company. The Credit Repair Organizations Act says that companies aren’t allowed to ask you for any money until everything that they have promised has been completed. So this should be your first big red flag.



Secondly, they should always inform you of your legal rights and the means that you can go through yourself to repair your credit. Crazy promises to remove all bad things from your credit should be ignored. No one can do this. You can investigate your credit files to dispute any inaccurate or incomplete information, but you can’t make negative information just vanish. If a credit repair organization tells you not to contact a credit reporting agency yourself, you should hang up the phone and do just that. Anything that a credit repair company can do for you, you can actually do for yourself, for free. Research a little online and find out what your rights are under the Fair Credit Reporting Act.



The Credit Repair Organizations Act is in place to protect you. If you decide to go with a credit repair company, then you should familiarize yourself with the basics of this act before you proceed. We’ve mentioned that they can’t charge you until they’ve completed everything that they’ve promised, but you should also know that they must provide you with payment terms for their services. They must inform you of all fees and a final total amount that will be due. They must give you a detailed description in writing of everything that they plan to do. They have to give you a timeline in which the process will be completed. Any guarantees must be in writing and included in the contract. The company’s name and address must also be included on the contract.



Before you sign anything, they must provide you with a copy of the Consumer Credit File Rights Under State and Federal Law. They can’t start repairing your credit until they have a signed contract in hand and have completed a three day waiting period. Anytime during the waiting period you have the right to change your mind and cancel the contract, owing nothing. Keep your rights in mind throughout the process and educate yourself before you start. Remember, anything they can do for you, you can do yourself for free.

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Different Credit Card Type Options

Whether you are a spender or a saver, there is now a mind-boggling variety of credit cards from which you can make a selection. You will be spoiled for choice-the bland vanilla credit cards that offer one or two months interest-free credit if you are lucky, at the fancy cards with a variety of gifts, discounts and cash back.

Cash Back Card

As its name indicates, you are paid a percentage of your monthly expenses. The percentage varies anywhere between 0.5 to 2% and may depend on factors such as your salary and how much you spend each month.

Reward credit cards

Again, an evocative name. Here, you get the rewards or points if you make your purchases from a certain store or a catalog. Some retailers offer a points system which staggered you earn points every time you use your card, but to receive a higher number of points every time you spend with a retailer recommended. You can also get rewards in the form of airline miles or points Nectar. You can even get a discount on your next car if you opt for the card rewards.

Charity cards

Every time you drag this card, a charity is a small advantage. When you choose to register for a charity card, the credit card company may make a small donation to charity, after which they will receive a donation on the proportion of each of your expenses. While this may seem a good solution, it is important to be aware of the fact that the amount given by spending does tend to be minimal, or 0.2%. However, the charity cards do present a practical way of giving something back each time you shop.

Balance transfer cards

You can use these maps for your shuffle debt from your card aged one to a new low or zero interest rates. Smart rate tarts are able to minimize the costs of transfer of the balance of 3% to a negligible figure.

Store Cards

Store cards are often given to buyers who make frequent or large purchases in a store or some are available for promotional reasons. These maps an interest rate, often up to 30% on the unpaid balance. Consumers warned will use a store card for big purchases in order to benefit from any introduction of discounts offered, reimburse the full amount, then keep the store for the sale of cards previews, priority benefits, and other benefits .

Credit cards prepaid

These cards were born and became popular because they were seen as a way to reduce the risks associated with the Internet spiral of credit card fraud and debt. You must first load your prepaid card with the amount you want to allocate to purchase online or offline, and the balance of your page where you want to make purchases. This prevents you from moving on the Internet, and it discourages fraud because only a limited amount of the balance is normally left on a prepaid card.

Situation value cards

Platinum and Gold cards lend a certain status to the owner and is a reflection of your salary or your good credit score. They can offer lower interest rates, but do purchase highest protection and other benefits as a higher or unlimited credit limit.

Pretty Cards

For others, credit cards come in different shapes, sizes, colors and a display of works of imagination. While such cards could cause some confusion outside the UK, they are good fun to use every day.

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