Credit Card Glossary
Debt Elimination Tips For Credit Card Users
Sometimes you end up over your head in debt when you use a credit card. It is one of the hazards of owning one.
Here are some credit-card debt elimination tips:
• Always be aware of all of the fees that may be associated with your credit card. (That means reading and understanding fine-print leaflets that come in your bill periodically!) Make sure you are familiar with the annual fees, current interest rates, finance charges, cash-advance fees and any other fees associated with your card. This knowledge can help you make better decisions on how to manage the use of your credit card.
• Cash advances taken from your credit card are expensive! You should obtain cash advances when it is absolutely necessary. Higher interest rates (than you’re paying for card purchases) are usually charged when you take out a cash advance. Most banks also charge a service fee related to how much cash you’re withdrawing. Furthermore when you get your bill you will notice that any payments that you make will be applied to your lower interest purchases and not your high cash advances first!
• Always be aware of cards that offer lower interest rates then the one you have now. Transferring balances from one card to another to take advantage of low introductory rates can assist you when you pay down debt as long as you have a very strong credit rating. The strong credit rating is required as these transfers and the inquiries that go with them can knock a few points off of your credit. You should look for credit cards that offer a low introductory rate (usually for six months), and transfer the balance from your previous credit card to that credit card. Before you take this step, however, make sure that, after the intro rate has expired, the new card offers the same (or lower) interest rate as your current card. Sometimes these zero or low interest credit cards skyrocket in terms of interest once the low percentage period is up.
• Pay more than your minimum payment each month. Experts say that making only minimum payments hurts your credit and in the long run you will also pay more. You will save lots of money on interest and get to debt-free goals sooner if you pay more than what is required each month.