Almost 70% of credit card holders do not use it correctly. Most of them miss their payments (and have to pay additional late charges), carry balances in it, exceed their limits and accrue a lot of interest on their balances. Eventually, the monthly minimum they can afford to pay ends up being just enough to cover the interest fees for the month. The principle does not decrease and with the addition of other usual charges, the balances only keep increasing.
Before using a credit card, look at the interest rate. For example, if a card has a 20 percent interest rate, add a zero to it. Two hundred percent is what you’ll pay back by making the minimum payments only. That means for a $20 pair of jeans, not only paying back the $20, but nearly an additional $40 in interest. Or before each use of the card, sitting down on paper and using the math formula I=PRT. Interest= Principal multiplied by the Rate multiplied by Time. The formula comes very close to the same amount. No one seemed willing to pay $60 for a $20 pair of jeans.
credit card debt can be really hard for people dealing with other financial problems caused by recession. Although having company to help consolidate can really be painful for your financials situation, there are ways to manage everything. You can become credit card debt free in 1-3 years if you choose the right debt relief method. Debt settlement is the method proposed also by the government for people who have to deal with more than ten thousand dollars debt. Financial settlement will make your life easier and stress free.
One common way to start to create additional income would be to join an affiliate program or network marketing business. Both fall under the umbrella of internet marketing.
Living on a cash basis during this debt reduction process will also make it much more effective. When you purchase everything with cash studies have shown that you will spend 15 to 18 percent less than if you use a debit or credit card. Spending cash makes you much more conservative in making your purchase choices. Saving 15 percent each month will really add up over the course of a year.
Just trying to keep up with the Joneses is putting you further and further into debt! If you only make twenty thousand dollars a year, you can’t keep up with your neighbor who makes eighty thousand dollars a year. It is just not possible, so stop wasting your money! Don’t buy that portable DVD player when your electric bill is due. Pay your electric bill and save the money for the DVD player if you really want it, but stop spending money you don’t have.
The Cost of closing costs – If you think you will be moving in the next 7 to 10 years you may not recoup those closing costs. It may actually cost you more money in the long run to refinance.