DebtEliminationTips

Credit card companies are very good at doing one thing , keeping you in debt for as long as possible. But if you know what to watch out for and how to get around them you will save yourselves a lot of money and get out of debt faster.

Trick#1 Offering for you to transfer a balance to your card , when you already have a higher interest rate balances currently on the card.  Why this is a big deal is because of the way the credit card companies handle payments. Now when you make a payment it pays off the lower interest balance first before the ones with higher interest rates. Now the only one that that benefits is the credit card, as they will continue to collect higher rates on the original balance until the lower rate balance is gone .

How would you get around this issue, only transfer a balance to a card with no balance or one that you can transfer the entire balance to and this issue will be avoided all together. Not that transfering for a better rate is a bad thing but if you do it improperly you will actually end up spending more in the end.

Trick#2 The funny thing is my credit card just tried this on me, they sent me a deal to make certain debts split off on the card to pay on those first until they are paid off, sounds good right.? Well again in hind sight it does the same thing as trick #1 . It takes you focus away from your actual balance and allows them to sock you with lots of interest on everything else.

Trick#3 This is not actually a trick as it is a greedy measure to ensure they stay profitable. Never ever ever make your payment even a day late. they will sock you with the most interest that they can legally causing you to not be able to make an efficient payment. There are ways to limit the amount of interest you pay on your credit cards, this is the practice I show all my clients to allow them to save money regardless of interest rates.

Trick# 4 Credit card companies will periodically offer you the ability to go a month without making a payment , do not fall for this technique and please make sure to go ahead and make your payment. This gives them another 30 days of interest on your full amount owed..  so bottom line don’t do it.

These are very common things credit cards will do to keep you in debt for as long as possible, but you can fight back by planning things correctly. Planning a proper debt elimination , debt consolidation, debt reduction plan will go a long way in reducing your debt fast and increasing your credit.

This post was brought to you by http://www.debt-elimination-services.net -updated

THe aged old question .. Why cant I get a loan and why is my credit score so low! .

In today’s economy it will be very important for you to maintain a good credit score. Even if you do not plan on using it any time soon you will need it eventually. The cleaner you keep your credit the easier it will be to get financing when needed. Trying to correct an issue with your credit at the last minute will not benefit you as much as keeping your credit strong. Lets discuss how it we can go about getting this done and hopefully you can apply this to your situation.

We are going to use the example of someone that has a credit score of lets say 650, this is not terrible but it does need work to be able to obtain decent rates. Increasing this rate may even be able to help him with his current debts like credit cards , with better rates they can attempt to obtain lower rates.  There are a number of factors that go into your credit score and to raise it you will need to abide by these rules to correct your credit score.

So lets say for instance you have 4 credit accounts, a car payment, a first and second mortgage .

First Card is a Limit of 6000.00 and a balance of 5000.00 with a minimum payment 170.00 a month. Your second card is a limit of 4000.00 and a balance of 2300.00 with a minimum payment of 65.00 a month. The third card that you have is one with a limit of 4000.00 and a balance of 3000.00 with a minimum payment of 122.00 a month . Finally the last card has a limit of  3000.00 and a balance of 1500.00 with a minimum payment of 35.00 a month. Now considering thes amounts there are some very pertinent issues that we should be addressing but which order would we do them in and how and why.

Here is the first rule of thumb that you should be aware of and start focusing on currently , no balance on any credit account  should be more than 40% of your credit limit. So for 6000.00 your maximum balance should be 2400, 4000.00 should be 1600.00 and 3000.00 should be 1200.00. this will directly impact your credit scores both positive and negative so the question is how will address this and which order will you take to fix it.

Glad you had asked and I will gladly supply you my input to making your credit score improve. I always start at the lowest balance and I do this for reasons which I will explain . How you handle your debt will be directly reflected in your credit scores(Remember this statement always). I start with the lowest balance because we will be attempting to accelerate the payoff of this account , the more extra principal we will be applying will take a bigger bite out of a smaller balance and obtain our goals faster.  So as in our example our lowest balance we need to eliminate 300.00 dollars to get it to the 40% ratio on that account . ow even once we get there we are going to want to continue forward momentum on that and all accounts, but only pay minimum amounts on all accounts ut the one we are concentrating on reducing. Once we repeat this process on each credit account and get them at 40% we will shift gears and blow all the rest of the debt out in order. So your first goal that you need to work on is reducing your balances below 40% and then continue on with these additional steps.

Now even though 40% is your primary goal , it is sooooooooooooooooo important for you to pay your bills on time . Make sure you pay your bills so they will post at least a week early , and if you are going to be making extra payments on the account you are focusing on above the minimum make them when you have them. What I mean is do not wait until your regular scheduled payment , this is very important because every time you reduce your balance you are also reducing the amount you pay interest on for that month. So if you reduce it by 10.00 in the first week then you pay 3 weeks of less interest that the ten dollars makes up in dollars.  ow this techniques will give you an extra principal boost at the end of the month over paying it with your regular payment.

Following these steps will help you raise your credit scores and best off all help you get out of debt. Be persistent and consistent with your payments and will have remarkeable results.

This post was brought to you by: http://www.debt-elimination-services.net

What is it that stops most people from successfully executing a debt elimination plan. There are two big reasons that stop this process , one being lack of planning and lack of money. This post is going to discuss how it is that you probably already have the money you need to fix this issue but are probably using inefficiently and with a little help can be put right back on track.

The first item on our topic of this discussion and any and all discussions about this topic is a household bugget. Do you have a budget, meaning do you know where every dime you spend goes.? If you do not have a budget get cracking on this immediately as it will help you solve all your money issues quickly. If your budget shows you have an extra 50- 100 dollars available then you have your starting point , on the other hand you may determine that you run negative every month and should be considering some cut backs. We will discuss what to do with the surplus or negativity issues later in this post, but for now here are some other suggestions.

The first thing and probably the easiest thing you can do is look at reducing your expenses at the grocery store, sounds easy right. Handle you grocery shopping a lot you did with your budget, break down what you are spending monthly or weekly if you wish to do so. Make sure not to exclude all the extras like purchasing sodas, lunches, dinners out, once you have this information you take a good hard look to see if there is any fat to be trimmed immediately. Lets say you can trim 25 - 50 dollars right off the bat , this will again boost your efforts for eliminating and later in the post we will discuss how toy apply the money in an efficient manner. You should also start looking for deals with coupons, you have the local paper and some online resources like http://www.coupon.comto work with every time you go shopping. Now having said this it is very important that you change you mind set from using coupons to buy more to using the coupons to buy the same amount for less. Don’t get caught in this trap as it will take your advantage right out from under you.

The next item which is over looked quite often is the services you use on a daily basis , like insurance, cable, phone , utilities, etc.. Check with your car insurance company and go over your policy and see if there any trimming room without putting you at risk, again our goal here is to reduce tiny amounts across all your accounts and in the end we will build up an immediate increase in your debt elimination planning. Also look at the payment options they have , mine for instance has a 10% savings if I pay a certain way. While this isn’t going to make or break the bank it is going to play into your debt elimination goals.

How about your cable bill… Do you really need three HBO, Cinemax, Showtime for the tune of an extra 25- 50 dollars and we wont even go into the cost of HD. Lets get back to reality here as most of the movies played on the channels are also available for 8 dollars a month using netflix. Do you rally need 10 megs of download on high speed, almost 90% of the population will never even notice the difference and you are probably going to save around 20 dollars right off the bat with this options reduce. Enough said on that as most people are either stuck on the extras services or are willing to reduce where needed , I will leave that determination on your shoulders.

Lets discuss your utility bills, most cable company’s have a service where they install a device at your house that monitors and shuts down your services for brief moments during the day. I have this service and it saves me about 11 dollars a month and again a little per account will go along way in obtaining your goals.As far as your utilities are concerned you should also consider some other options, like making sure your hot water heater isn’t set to high. Setting he temperature properly can save you money, I for instance turn the hot water heater off when it is not in use and this make a dent in my utility bill. How about buy a round of the efficient light bulbs and as your bulbs die, replace them with more efficient ones. When you leave the house make sure to set you thermostat on the air conditioner to at least 80 , you are not home so why waste the money. Have all your equipment on surge protectors so that you can turn devices off when they are not in use, like over night.

Now that I believe I have gotten you on the path to increase the money you have available to tackle your debt, let discuss how we are going to use it for maximum benefit. If you are paying bills like most people then you are DOING IT WRONG, sorry for the bluntness, but I am convinced I can show you a better more efficient method that will change your financial future. This is actually simple and will only need one line to explain. Take any of the additional money that you have freed up and apply it to the bill with the lowest balance, make sure and apply it after your statement has posted for that month. Why you ask quite simple , applying in this way allows to reduce your principle balance by that amount for approx 24-28 days , this will result in a lower interest charge for the month and more of a principal payment. Doing this consistently will bring your interest and minimum payments down quicker then ever before. Even when this happens NEVER reduce yuor payment on this account only increase as available, once that card is gone you will now have an automatic reduction to the next card and so on and so on.

This post was brought to you by: http://www.debt-elimination-services.net

With all the financial problems in today’s society it is easy to attempt to reach for solutions. Sometimes the solution you find looks like the answers to all your problems to your debt issues, but in the end does not provide the desired effect.

Everyone has seen or possibly gotten advertisements to consolidate your debts into new loans. While the terms always look better on paper, does it actually provide you a better deal long term.? The usual situation is for you to take several different loans and wrap them up into a single loan with a reduced payment. Now who wouldn’t jump at an offer like this.? better payment so obviously it is a better deal for you right.?… WRONG ! . There are many things you should be considering before you jump into debt consolidation, please do not get me wrong as I believe this will greatly benefit you if it is done correctly. I will discuss a few of the obvious things and offer some possibilities .

Lets say you have 3 cards with the following balances and rates:

Visa Card with 7500 (Minimum = 180) balance with an interest rate of 14% , discover card with 2000 (Minimum= 75)balance with an interest rate of 10,4%, and a master Card with a balance of 1200 (Maximum = 25) with an interest rate of 16%. You have a total of 1700 and are offered a flat interest rate of 9% with a minimum payment of 220 , while this is a decrease in your minimum is this actually a smart move long term.? If you plan on making the minimum payment as it is offered to you then it will not benefit you long term, so how could it benefit you !

The reason that it will not benefit you is your are starting a new loan at full interest and will pay more . Now lets say you get the better rate and still plan on paying your original payment , applying this amount of extra principal will now make sense . The reason you should be very sure you are going to be able to accelerate your payments before consolidating debt. If you do not do this you be right back in debt if not more than you originally started with before consolidating.

Now here is spin on this to think about before you consolidate your debts, get organized and prepare a proper budget and have your ducks in a row. Start analyzing your debts lowest to highest and determine how much money you have available to pay every month. Start with your lowest amount as it will go the fastest and apply everything you have available on this debt, everything else gets the minimum. Now that you have set the tone go ahead and look into debt consolidation loans. Once you have the debt consolidation loan pay the minimum by the third week of the billing period, and all additional funds the week after your next month posts.

Why would you want to pay that way you ask…   Thanks for asking …

When you pay your minimum at the end of the month you are essentially paying 30 days of interest on the full amount of the loan , by paying any additional within the first week you are reducing your balance by that amount thus reducing that amount of interest you will pay for that month. If you do this each month you will start to see a rapid reduction in your principal and the interest you pay.

So in conclusion to this article if you are consolidating and plan on paying the reduced amount DONT WASTE YOUR TIME as it will not provide you the full benefit.  If you need to reduce your expenses to make ends meet start with what you have first and if you need assistance contact a good financial consultant who can assist , Feel free to contact me if you don’t have one available and I would be happy to help.

Now if you are doing to be able to make a bigger payment I would say go for it as you will be making a dent in your debt and it will have made the most benefit.

This post was brought to you by: http://www.debt-elimination-services.net