By: Benedict Smythe
Submitted: 2008-08-07 15:00:59 | Word Count: 552
Credit cards can be very convenient when we purchase things from the grocery, from the bookstore, at the auto shop, or online stores. With one swipe or a few clicks, the transaction is done.
Collectively, these swipes of convenience annually amount to $8 Trillion for Americans. Balances for credits can go spiral and debt accumulates faster more than we can imagine.
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You have multiple credit cards and the balance of each is neck high. What do we do before we drown financially?
Steps to Stay Afloat
• See where you are at. Don’t treat credit card bills like junk mails that you can allow to pile up for kilometers. You can’t control anything that you do not know. The key is to open those statements and write. List down the amounts that you owe and their corresponding interest rate. Take note of the interest rates from highest to lowest.
• Highest First Option. Paying the minimum will not bring you anywhere. Experts suggest to handle the credit card with the highest annual percentage first. When this has been paid off, handle the next highest interest rated card. The attack to the credit card with the highest interest rate should not be limited to paying the minimum. The minimum payment must be doubled, tripled, or even quadrupled if capable. You have to remember that the payments you make don’t really do much if you have very high interest rates to deal with. You must also stick with the plan until the credit cards are paid off.
• Negotiate for a Better Deal. Flip those cards and dial the toll free number to talk to the customer service representative. Inform her that you are getting offers through the mail for lower interest rates. Most of the time these representatives have the go signal to lower interest rates rather than lose you as their valued client. If you closed the deal, your minimum payment will go down. The secret to this is paying the old amount you’ve been paying.
• Alternative Card. Consider your options when dealing with several credit card bills. Don’t throw away those zero or low per cent rate for balance transfers. This may just work for you and save you a lot of money. Inquire and know how the offer for another card differs to what you have right now. See how long will the low interest rates will last and calculate how you can make the most out of the promo.
• Improve your Credit Score. It might be very difficult for credit card companies to grant you a zero percent or low interest rate credit card if you have a low FICO score. Your credit score reflects how you handle your financial responsibilities. Your credit scores are pulled down by late payments. If you have a 660, you might need to spend around 6 months to religiously pay for your bills so you can improve your score by at least 50 points.
• Avoid Unnecessary Fees. This takes financial consciousness and control. Your monthly fees might spike up due to several reasons. A late payment will definitely incur you a late fee and a higher minimum for your next month’s bill. You also have to remind yourself that credit cards have credit limits. Go beyond that limit and you will be charged accordingly.
