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Lower Credit Card Payments
Many of us owe money to credit card companies. This is the biggest waste of
your hard earned dollar that you will find. The money you pay toward credit
card interest is doing nothing for you. At least with power and gas, the money
is providing something in your life. The best advice to cutting your credit
card bills is to have good credit and use common sense. Without good credit,
there will not be a whole lot that you can do to lower your monthly payments
with credit card companies.
- Get Good Credit
- To get a good credit score always pay your bills on time. Also, pay more
than the minimum balance. Paying more than the minimum balance will give you
an even better rating with the card company. Don't get rid of credit cards
that are paid off. A credit score is partly comprised of a debt rating. A
debt rating is the amount borrowed compared to the amount that is able to
be borrowed. If you close all open accounts, your amount that is able to be
borrowed will decrease.
- Don't Buy Things you Can't Afford
- This is the easiest principal to understand, but the one that is seldom
followed. Before you think about buying an item ask yourself if you can pay
cash for it. If you can then ask yourself if you really need the item. If
the answer is still yes, then purchase it. Put the money away to pay off the
card and do not spend it on something else.
- Always Pay off Your Bill
- Don't accrue credit card debt. If you followed the above step, then you
can pay off your card. If you pay any interest on your card, then you are
taking a major step backwards and everything you have done on this site to
save money is wasted.
- Ask for a Lower Rate
- Believe it or not you can ask for lower rates. Every card company knows
that you get offers in the mail for 0% interest cards. If you have good credit
they will quickly give you a reduction in rates. An extra 1 to 2% off of interest
rates can save you 100s of dollars a year. I had a Citibank card and noticed
my rates were approaching 13%. I told them via an email that I was upset with
the rising rates and they promptly knocked the rates down to 10.5%. With 5,000
dollars on this card, I saved about 125 dollars a year. Not bad for 2 minutes
of my time.
If your credit card company won't give you better rates, close the account.
If you have good credit, the representative will forward you to another specialist
that will do everything he/she can to keep you as a customer. I have had representatives
not let me cancel the card, offering rates of less than 9% and all sorts of
balance transfer deals.
- Use Special Promotions
- Use special promotions to lower your credit card bills. Every week some
card company sends me an offer of low rates if I transfer balances to their
card. You can look online and find 100 cards within an hour with a great offer.
Read the fine print. You want a deal that has no transfer
fee, no annual fee and preferably 0 percent interest for 6 or more months.
Make sure that the interest rates are reasonable after the promotion.
Also, find out if there is a clause in which you cannot transfer balances.
Credit card companies are smart. They know you transferred the balance for
lower rates; therefore, they don't want the same thing to happen to them.
Watch for clauses that state if the balance is transferred off the card, they
will back charge the interest.
Cash Back is offered by some cards. Make sure you use this.
The card company is banking on you forgetting about your rewards and not paying
your bill. If they offer 5% cash back for gas or groceries take advantage
of it. Then apply the money to your monthly bill or something else you need.
When I bought a house, I knew I needed stuff from Home Depot. I cashed in
my card rewards for a $50 gift card for the Home Depot which was free money
for fixing my house. Basically, I invested my rewards into my house. Remember,
the key is to pay off your monthly balance in order to avoid interest charges,
but use the system to give you extra cash.
- Live Within Your Means
- You are most likely reading this is because you have not managed money well
or had a financial stress like medical expenses or job loss. Whatever the
reason, the key is to stop adding to your debt. Your main goal is to pay down
the credit cards not to purchase a new TV or fancy steak dinner. Shop smart,
eat at home, and take advantage of specials until you are back on your feet.
As Americans we pay 1000s of dollars of our hard earned money each year to
credit card interest. How much of that is for stuff you really don't need?
If you pay 50 dollars a month towards interest ($5000 of debt * 12% interest
rate), that is $600 a year that you could be using to buy that TV with cash.
- Use Store Promotions to Buy Things You Need
- When things do break, like a stove or fridge, be smart and have a plan to
pay for the new expense. Some stores give great deals of no payments or no
interest for 6 months to a year. Take advantage of these offers. If you have
the money for the expense before the no interest time is up, put it into something
that makes you money such as stocks, Certificates of Deposit, or money market
accounts. If nothing else, you will make a few bucks during the no interest
timeframe. If you don't have the money, you can make payments monthly until
it is paid off. The important thing is that you pay off the debt.
- Ask for Refunds on Missed Payments
- If your credit card account is in good standing and you miss a payment,
don't accept the fees. Call up the credit card company and explain you forgot
to mail the payment or whatever excuse you come up with. Every card company
I have dealt with will give at least one allowance a year. I have done this
a couple of times when I forgot to pay a bill. The credit card company will
usually refund the late charges and tell me they are reversing the charges
because they want to keep me as a customer.
- A Dollar Today is Worth Two Tomorrow
- Interest is what is draining your money and keeping you in debt. Put all
your effort and extra money into paying high interest cards off first. This
way when next month's statement rolls around, your payment to interest ratio
will be lower.
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