Debt Consolidation Basics
Sometimes, managing your money can be a challenge. The idea of having things now instead of later is very attractive, but unfortunately excitement can sometimes take over from logic, and you are left with lots of little debts with repayments eating up your spare cash. There is a solution though!
Debt consolidation is a method of rolling all of your debts into one, making it easier to stay on top of them all with a single repayment. The basics of debt consolidation are fairly simple, as far as financial matters go. This is an overview of how you can straighten out most debt issues in three easy steps.
Step One: Budgeting
Figure out your total household income and subtract your total expenses. Don’t forget to keep all the receipts you are getting for miscellaneous things like ATM visits and small debit transactions. If you can’t find them all, then just request a detailed account summary from your bank. Most banks are happy to oblige for free or next to free.
Once you know how much you are spending, decide what categories and how much in each are essential and how much are elective. If you can cut your wasteful spending habits by even half, you are setting yourself up to be financially stable in the future. An important tip: if you are in debt, stop going to restaurants. Learn to cook at home from scratch: it’s fun, easier than you think and you can add up how much you save at the end of the month.
Step Two: Determine Your Total Debt and Decide
Tally up all your debt that exist beyond a single month and decide if you need a debt consolidation loan. Not everyone does. Signs that you need a consolidation loan are: debts, other than mortgages, that are higher than a total year of your disposable income; and mortgages that have unfair terms and interest rates higher than the present average. (This part might take some local research.) Most people intuitively know when they are in over their heads, so if you have the feeling that you are, then you most likely do need a consolidation loan from a bank or third party. Remember that when you are negotiating your consolidation loan, the overall goal is to prevent debt snowballing from high interest rates, so always check if the loan you are offered is actually a better rate.
Step Three: Setting a Repayment Schedule
This step depends a lot on how much you pull in with regards to income. A good guideline for people of modest means is to try to use 15% of your monthly income towards debt repayment. If you can afford to allocate more, then go for it, as the sooner you pay the less interest you pay.
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Choosing A Good Credit Card For You
Credit card business is very big and there is a lot of competition to choose from, so you should consider your choices carefully. It almost always best to look for a credit card with a trusted financial institution with a good reputation; in this manner you are assured of stability and a low risk to yourself. Looking for a credit card is always a daunting task. However when looking for a credit card it is vital to realize a few things.
It is good to browse the selection available before signing up with the first credit card company you come across, since good credit almost a basic need for survival in our contemporary economy. The first thing to look for in a good credit card is a low interest rate. While there are many low interest credit cards currently available, like Citi Platinum Select MasterCard, most credit card companies will not offer these low interest cards at first, instead they will only offer the more attractive credit cards to clients who have the knowledge to ask for them. You should check the fees that are charged, because these wary wildly between credit cards.
Another thing to look for is companies who have great starting offers such as no interest on transfer balances for six months (for example the Discover MoreSM Card) as an incentive to lure clients away from their competitors. You should not be paying user fees on a credit card that already charges interest – this is especially applies to you if you don’t want to carry a balance.
Some privileged credit cards sometimes have annual fees for extra benefits such as increased air miles or a larger insurance coverage, but in general credit cards shouldn’t have a reason to charge any annual fees. A good option that hasn’t got annual fees is the HSBC Credit Card (Visa). Always look for a credit card that is best suited towards your personal lifestyle and your own interests.
Also, many cards today offer their holders additional benefits, points towards merchandise, car rentals, air miles, hotels, gas, etc… the list is endless. If you want to add some personal touch to your card some credit cards even offer to personalize your card by embossing your card with a picture of your choice. With so much selection among credit cards there you should have no trouble picking up a good card with great value and benefits that suit you. Good luck hunting for that perfect card for you!
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Looking For A Reliable And Good Credit Card?
When looking for a good credit card to add to your wallet, there are many factors that you should focus on. One is the actual cost involved in using the credit card. The other factor is any rewards associated with use of the credit card.
Keeping these two factors in mind, the search for the right credit card for you will be much easier, and you will end up in a better financial position than you started in. There are a few ways in which using a credit card can cost you money. Of course, if you plan on carrying a balance on your new credit card from month to month, one of your primary concerns will be the interest rate that the credit card you are applying for charges. Is it a fixed rate? Is it variable? Do the credit card’s terms allow the interest rate to be raised at any time, or do you have a guaranteed rate locked in for a certain time period? Many credit cards offer very low or even zero percent “teaser” rates for a short period, and then will raise your rates after this period expires. Some cards offer zero percent or a very low rate for longer periods of time, so if your credit is qualified enough, these cards should be your first choice. Look for a card that offers zero percent interest on purchases for your first six to twelve months. Capital One, Citibank, and Chase offer cards for some of their new credit card customers that have these types of terms, so you may want to contact them.
Another factor of applying for a new credit card that can cost you money is an annual fee. Some credit cards have no annual fee, while others can charge hundreds of dollars per year. Be sure you know the annual fee requirements for any card you are applying to. If you apply for a credit card and then find out you are subject to an annual fee, call the credit card company and ask if they can lower or waive the fee for you. In general, there are plenty of credit cards with no annual fee out there if you have decent credit, so you should focus on those unless you are unable to qualify for a credit card without an annual fee. If you must, try to keep the annual fee as low as possible.
Finally, check to see if the credit card program you are applying to offers any rewards points or frequent flyer miles for purchases. If you use your card a lot, these can add up quickly and are worth the effort to shop around for.
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