When you are trying to save money, managing your credit cards is one of the most important skills to learn. It is very easy to get in to debt with lenders seemingly falling over themselves to give you money. The problem is that the more you borrow, the less you can spend. When you begin to receive credit, it can feel as though your spending power has increased. This is a very misleading feeling because using credit actually limits your spending in the long term.
The Downward Spiral
When people first use a credit card, they often believe that they will always pay off the balance before the end of the month, which means they will never pay interest on their purchases. This is an idealistic view, but one that many people have when they first begin a credit agreement with the ‘just in case’ mentality. The real problems begin when you begin spending on the card on a regular basis, but not clearing the balance at the end of the month.
Change in Thought Process
At some point, you make the decision to spend your wages before you have them. This is not usually a conscious decision, but recognizing the moment will save you a lot of money. The moment the bulk of your wages are committed to clearing your credit balance, you have changed your spending power. The accumulation of interest charges will reduce the amount you can spend every month. This is the inevitability of using your available credit.
Ever Decreasing Circles
You have less spending ability when you are paying an amount of your earnings every month to service a credit card agreement. In this situation, there is always the temptation to obtain more credit, especially when you feel there are essential purchases to make. As soon as you recognize any of these traits in your monthly finances, you need to act.
A lifestyle Change
Changing your lifestyle is sometimes hard to accept, but it is the first step to improving your finances. Reducing your credit card balances should be top of your priorities. This is usually your most expensive debt to service. You should always remove your most expensive debt first, even if it means replacing it with less expensive debt in the form of a loan.
The Best Options for Replacing Expensive Debt
This will really depend on the level of debt you need to reduce. Transferring all of your debt on to one credit card that offers zero interest on balance transfers is the best option. This will instantly remove any dead money from your budget each month. By dead money, I mean money paid for interest; it provides nothing tangible. If you cannot transfer all of your debts on to an interest free credit card, a cheap loan is the next best thing.
Comparing a Loan with a Credit Card
The math works out quite easily when you take the time to study it. Whether it’s Dollars or Pounds, Yen or Rupees, interest will cripple you over time. A credit card debt (with an APR of 15%) of $4,400.00 over three years will result in $1,090.00 in interest alone. The same amount of credit with a loan at six percent would cost $418.00. This results in a massive $672.00 of total savings over the period of debt.
A Strict Regime of Austerity
Maintaining a frugal attitude can be difficult when your debt starts to lower. It is easy to forget that you have more spending power when you have no debt. It is important to have a plan in place and set targets to become debt free and you will find that finding financial freedom is as much a habit as getting in to debt.
Maximizing Income from Alternative Sources
When you are analyzing your finances, you should look to reduce any unnecessary expenditure. Most people have one or two monthly expenses that they rarely use or could be considered an unnecessary luxury. At first, you should look at expenses that are of little or no use to you. You should check whether your payment protection for your credit agreements is suitable. This is important for any PPI plans you have had in the past as well as those still running.
Claim Back Mis-Sold PPI
If any of your payment protection policies have been mis-sold because they were unsuitable for your situation, you could be owed thousands. You could still be paying a large portion of your monthly credit card payments every month towards PPI that you may not be able to use.
If your payment protection was not fully explained to you when you signed the agreement, you may have a valid claim. As always, you should seek professional advice if you want to Reclaim PPI to find out the best options available.
The Right Credit Solutions Reinstate Peace of Mind
Use of credit cards has become quite popular these days and with their ever growing popularity, the rise in credit card debts has been striking. Needless to say, the consumer debt epidemic has also paved the way for a diverse array of credit solutions and unique opportunities to reduce debts. M5N259HVPMCB
With the U.S. economy engulfed by massive credit card debts, as well as medical and business debts, it’s no wonder; so many Americans are defaulting on financial obligations and filing bankruptcy. Far too many consumers are burdened by unmanageable debts and don’t know where to turn for help. But, with the availability of smart credit solutions it’s not impossible to make life more financially stable. All you need is professional help, clever planning, and a thorough understanding of your finances.
Credit solutions are an effective debt reduction tool, such as debt settlement and debt consolidation- all these options have proven to be useful in reducing credit card balances and sub prime loans.
Debt consolidation, which seems quite popular among consumers, can help you get out of collections and back on track with your creditors. It also helps you repay a lower interest rate. But, whether you have credit card debt, medical, or business debt, oftentimes the right approach to assure you the fastest debt relief, is debt settlement. Being that debt settlement helps you to reduce the total balance, it provides far more aggressive debt relief than debt consolidation.
A debt settlement plan also normally yields the lowest feasible payment when it comes to repay the debt. Thus, you’d be out of debt much faster, in about half the time of debt consolidation. This is also the option that one might choose before bankruptcy.
Finding the right debt settlement professional is key to indulge in the best credit solutions. A knowledgeable debt negotiation expert can help you stop the seemingly endless and irksome debt collection calls. Getting such assistance can also help you achieve proper debt elimination to avoid bankruptcy.
Useful tips to get relief from stress caused by mounting credit card debts:
Debts caused as a result of unemployment or a sudden drop in family income can definitely cause a lot of worries. Whatever the reason may be why you’re in debt, it is always best not to procrastinate and to promptly confront the situation. Smart thinking and making prompt decisions to tackle the problem lessens the degree of your stress. But, doing nothing will not fix the problem. It will only exasperate a financial problem into a financial catastrophe, which can lead to lawsuits, the loss of assets, and eventual bankruptcy.
Applying the right debt negotiation strategy is an essential path toward getting considerable debt reduction. One of the most powerful paths is the “Debt-to-Freedom Plan” – it offers superb credit solutions on a variety of unsecured accounts, including credit cards, medical bills, business loans, personal loans, departmental score cards, bank loans, loans taken from financial institutions, collection accounts, Mexican and Canadian debts, etc.
The objective of the Debt-to-Freedom Plan is to help you attain freedom from debt by reducing and ultimately eliminating all of your unsecured debts and bringing your financial affairs to a more manageable level. Credit solutions like this are important tools to help credit card users manage their debts and household expenditures. Remember the end result – reducing debt is reducing stress.