When Credit Card Deals Go Too Far
Credit cards are great assets to add to your financial arsenal and great credit card deals can provide some heavy firepower to help you get out of some sticky situations. Remember though that nothing in life is free and with these good credit card deals come great responsibility.
It’s easy to ignore this responsibility and indeed many people and families do ignore it. Perhaps that’s why the average American family owes over $8,000 in credit card debt alone. Perhaps that’s why many American families owe five-figure (and in some cases even six-figure) debts from just their credit cards.
Credit card deals can turn really sour really quickly if the credit cards are not managed properly and if that does occur, don’t expect the credit card company to act the role of savior and pull you out of the mess you’ve created. No way. You got yourself into this mess and now it’s time for you to get yourself out.
Step 1 – Stop the Source of the Problem
Change the way you spend and cut back on absolutely everything you can. If you have problems with impulse buying, then simply do not take your card with you when you go out. First you need to figure out exactly what it is you did to create the spending part of your poor credit history and then take steps to stop doing it.
People in this situation either arrived there involuntarily (through getting laid off or sick) or voluntarily (through excessive spending). Whatever your reason for being in this situation is, do all that you can to correct it. It’s like repairing a piece of plumbing in your house. Would you do that before turning the water off? Of course not, so why should fixing this leak in your finances be any different?
Step 2 – Cut down as you Cut Back
Many families have at least two credit cards and some have many more. Credit card deals are flashed all over nowadays by super aggressive credit card companies that want your business as well as your money. Even the best credit card deals are designed to make the credit card company money and they aren’t too picky who they have to steamroll to get the money either.
But people are easy to sell to. In the end, the rewards program offered by credit cards is a big selling point and people might sign up for the cards even if they don’t need them. Once the cards are in their possession, then the temptation to spend arises. And once a person gives in to that temptation, the game is over.
With that in mind, cut down as you cut back. As you start reducing your expenditures and impulse buys, reduce the number of credit cards that you use. Ideally you’d like to get it down to two or even better one, but do it gradually. Once you’ve stopped using a credit card, put it away somewhere not easily accessible and avoid the temptation to use it. Every day that goes by that you don’t use it, the temptation to do so will gradually lessen. After a couple of weeks, you should hardly be feeling it anymore.
Step 3 – Low Good, High Bad
Now that you’ve stopped using most of your credit cards and have made a reasonable amount of purchase reductions, it’s time to restructure your debt a little.
Have a look over all your credit card deals. What you’re looking for are the top credit card deals in terms of interest. All the great credit card deals will have lower interest rates and those are the ones that you’re interested in. Alternatively, home equity loans and credit negotiating firms are also options, but these should only be pursued as a plan B strategy.
The reason for this is that when you’re just dealing with credit cards, the fact that all your debt is on them might be enough to keep you from spending. If you clear your cards in one fell swoop, it’s only your willpower against the urge to spend and if you’ve spent years running up the debt you’re currently in, that is an uphill battle for your willpower. Pay down your debt as you increase your discipline and transfer the bulk of your debt to your lowest interest credit cards.
Final Thoughts
There are no quick fixes to getting out of credit problems and having a poor credit history, but a significant amount of effort concentrated out over a long period of time will eventually get you out of the problem, but only if you have the discipline to eliminate the source.
Also remember that while bankruptcy is an option, it should only be a last resort. Bankruptcy is throwing in the towel on this round of your financial dogfight and living to fight another day. The problem is that bankruptcy stays on your record a very long time, so that other day might be a decade away.
In the interim, good luck getting a loan or line of credit. Even if you’re in dire need of it, very few companies will even seriously consider your application.
Identity theft cases have become as common as dirt. The crisis US economy in at the moment triggers the rise of credit crime rate. Crooks do not even have to invent new more sophisticated ways to steal credit cards or identities themselves. Credit consumers struck by credit market crunch do not think much about protection against thieves now.
But now taking security measures against credit fraud is more important than ever. Say you discovered that you fell victim to identity theft. Do you have an instant action plan? Do you know what to do in order to minimize the grave consequences the fraud can bring about? Credit report freeze is the answer.
View full story Comments (0)
Too much is never enough. Especially when it comes to money. Your income is the cap on the amount of money you can spend. But if you have credit cards, your buying power increases and your spending limits do not bother and restrain you that much. However, nearly every credit card holder would not refuse to have a bigger credit limit.
Even if you carry a no limit plastic, you still have a cap on credit card spendings. Your highest balance is usually considered to be your limit. But can you increase your credit limit? And how will it affect your credit score?
View full story Comments (0)
Credit consumers, who want to highlight their financial standing, can find credit products that will fit their interests. There are the so-called status-credit cards on the market. Customers can choose silver, gold, platinum or black credit cards. All of them give certain privileges and that very status to their owners.
What is interesting, you do not even need to have excellent or good credit and really high income to get one of the status credit cards. They are available to bad credit owners as well. Let's take a closer look at Gold credit cards. Learn more about features, options and services that Gold credit cards offer.
View full story Comments (0)
