Posts Tagged ‘debt’
pay more than you should you pay and pay with a fixed amount as when you first pay. Do you know why the bank sets a very low minimum payments for credit cards? So you continue to pay the interest alone that acts as a source of bank income, while the principal debt was reduced very slowly. It took many months to pay off your credit card use if you pay the minimum amount. Once there are more funds, promptly pay to reduce your debt. And paid in a fixed amount, as if you pay a monthly fee that has not changed.
pay your credit card which has the highest interest and balance transfer your debt to a card with low interest rates. Currently because of the competition, some of the credit card issuers compete on rates and annual dues exemption. Take advantage of to reduce your interest charges, but do not add a credit card again. Move and cover high-interest credit cards. If you have relatives who believe in you and want to help you, you may request assistance no-interest loans to them to pay off your debts and you return it in installments.
The sixth step, have a target time of expiration of your debts are realistic and stick to your plan. Have the power of the target so that you understand when your debt must end. Must realize is that your debt problems may not be completed overnight, but will definitely end up with time. So, keep the spirit and optimistic and enjoy the process.
The seventh step, create a savings plan. With the savings plan, you know that if your debt settlement plan fails, then you can not go up to the next level, ie saving and investing. The longer you delay investing and saving, the more of your money problems. For this you could use the help of financial software to make a simple calculation you, or you can also consult a financial planner. Hope it helps.
For those of you who now feel upset, that your debts have piled up so much. And you know that you have to set aside some money to anticipate the unexpected conditions (emergency fund) for 3-6 months, invest for the future, buying and preparing the pension insurance. But today it is nearly impossible because almost half of your income used to pay the mortgage credit card debt that never ended. What to do?
Here I will provide tips on light that will help you in solving the debt problem. The first step is to stop adding your credit card debt. Debt problem becomes lighter at the start of this simple but important step. Do you know the main cause of people using credit cards is because there are credit card in his wallet, who easily removed and used. Try to leave a credit card at home and keep refrigerated, frozen with water deposits are difficult to use unless you really must make every effort to melt the ice that locked your credit card. This way you’ve closed the door of the ease of using credit cards.
The second step, reduce the amount of your credit card. You do not need more than 2 credit cards. Every time a new credit card offers, the bank will seduce you by praising you as a customer choice and so on. But, when you are in trouble, not the praise that you get but the problem with the bank. Ceremonial in accepting offers of credit cards, if you do not need to assert yourself to say no. By limiting the amount of your credit card, you also limit the amount of debt you owe and your freedom. If it is too large, then the credit card limit will restrict your movement. Do not penetrate your credit card limit because you will have to pay a higher interest rate again.
The third step, create a monthly budget. Record spending and your income every month. Make that your income is sufficient for one month without having to use credit cards anymore. Then make a budget for one year based on data preceding months. If there is a surplus, plan to divide it in 12 months as an additional payment of your mortgage debt. And if the budget deficit, then you should arrange for adequate return.
Concept of free credit cards
The concept of free credit cards is very diffuse. No credit card offers no interest and that any income from card issuers precisely the credit card interest charged on outstanding debts. The concept of free cards can be found in the following situations:
Grace periods of varying length. You can find credit cards that offer more extensive period of deprivation than others. Remember that the grace period is the period between the time you make the payment and the date of charge to the bank for which you do not pay interest.
You can apply for credit card with a grace period of 56 days
- Cards without credit card fees . There are credit cards that charge no fees for using the cards. A good card offer no commission is this. apply for credit cards without fees
- Promotional period without interest. Credit cards are offering a promotional period with no interest to my outstanding balance is common to receive credit card offers, pre approved, with incredible offers at 0% interest
- Precautions to be taken into account free credit cards
Pre-approved cards that offer a% of interest are often good opportunities, but before you sign should read the fine print carefully and take some precautions first, you must always keep in mind that the concept pre-approved is a marketing term, is impossible to give a card without studying your credit history, and this requires that you authorized.
0% interest has a limited duration, and often applies only to some type of transaction. Therefore it is important to read the fine print before
Be clear about the period of application of zero interest, and to clarify whether you can cancel your debt during the period in which the interest is 0.
It is important to understand everything about the commissions. If not specified, the contract clearly calls for information to your e clarifies all concepts you.
Definition of credit card: a small loan which makes use, through the issuance of a custom plastic card has a magnetic strip and a number of relief. There are many advantages of credit cards , but most important is the flexibility in the payment of the amounts spent. You can pay at the end of the month, in installments, or a minimum balance . The operation of credit cards is easy, you can spend to the limit granted. The credit is then automatically once you have paid the outstanding card debt
Principal uses of credit cards
According to the intended use do credit cards are used for:
- As a means of payment
- To buy or to defer payments for several months. Get Credit
- To pay off other debts .
How smart use of credit cards
- The card as payment
The card replaces cash. Purchases made during the period are accumulated in a monthly balance is debited to the cardholder.
To obtain credit cards
Credit cards are used to obtain credit in small amounts until the limit of the card, without prior approval. Money apalzado incur some interest on cards.
Credit cards to pay off debt
Using credit cards widely used, but completely wrong. There are better solutions to pay off other debts. Always check with your bank first.
The smart way to use the credit card.
The two most advisable to use the cards are:
- As a means of payment: One of the advantages of credit cards is your security as payment. Is a safe and accessible not only to make purchases in person but also on the Internet. If used carefully, the card gives you the chance to buy any anywhere in the world.
- It can also be used to obtain small amounts of credit, but always look carefully commissions credit card and the card interest . The cardholder can always paid in advance or pay a minimum amount. Monthly.
- Get free financing during the grace period . If you pay the total and not pass the limit you can get funding to 30 days at no charge
The most commonly used when we go into a sudden financial downturn is coming to our credit card. Normally, if the issue is timely, this solution may be right. However, if the problem remains and becomes permanent financing with credit cards can bring an escalating spiral of debt and fees, as her card fees are much higher.
The cards offer the ability to pay the monthly amount you want, even above a minimum , consisting only of interest.
As the capital return is not reduced, this will increase exponentially as interest. This spiral effect is more severe in the case of credit cards because the interest is greater than at any other funding.
With this mechanism for repayment of capital in small amounts and gives the impression that the user can continue shopping, avoiding focusing on the root of your financial problem.
Failure to stem this downward spiral of debt, all can lead to a big debt problem difficult to solve.
The personal loans and credit cards are the two sources of funding that normally we come in the case of sudden encounter financial problems. Personal loans and credit cards should always be the 2 nd option. In the case of liquidity problems, always, it is best to use the money you have in the current account. If it was not the case, it would be best to hire a personal loan to use the credit card. Explain this.
Benefits of Personal Loans
- In addition, unless you hire a variable rate loan, monthly payments will be fixed over the life of the loan. Therefore, do not run the risk of accumulating more debt if you follow carefully the monthly maturities.
- Contrary to what happens to the cards, the total amount due is fixed and set to the time the loan is personal.
- Returns also facilitate the monthly fixed so you can make a coherent budget your finances. The payment is fixed and can therefore be included as such in your estimate of expenditure.
- Unlike the cards, where the debt limit can vary, in the case of loans that can not happen, so avoiding the temptation to spend more.
- Most important, however, the interest rate is much lower than the cards. They can be 2 / 3 less than the rate dela cards. All this without taking into account the card fees , also much higher than in the case of personal loans.
Other problems with credit cards is the exponential effect of the interest. The effect of not paying the total balance at end of month has a spiral effect on the interest charged . If a month does not pay the outstanding balance, you will apply the interest. The next month if not paid the balance, interest will apply on the outstanding balance plus accrued interest, creating a debt spiral.
With any repayment that you make, the bank will liquidate the balances reported lower rates of interest, always maintained the highest.
Minimum payments
The permit card issuers to make minimum payments. (2.5% of outstanding debt). Know that this system will never get to lower the debt. With the spiraling effect of the interest, the reduction in principal is offset by the increased interest, leaving the final result as well.
Stop paying the minimum payment also has a very negative effect for tips crédito.Mas history of handling credit cards.
Banks are interested in this system because it is a very effective way to charge high interest.
Many cards.
It is tempting to think that the more cards the better, since it has a wider range of shopping possibilities. There are many problems with this:
More temptations to shop.
Higher risk of fraud in credit card
Credit History: Asking too many credit cards at the same time can have a negative impact on your history, and may hurt when applying for a loan of real need.
Points: Points and other benefits can lead us to think we’re winning something. However, these benefits clearly outweigh the interests of the debt.
With any repayment that you make, the bank will liquidate the balances reported lower rates of interest, always maintained the highest.
Minimum payments
The permit card issuers to make minimum payments. (2.5% of outstanding debt). Know that this system will never get to lower the debt. With the spiraling effect of the interest, the reduction in principal is offset by the increased interest, leaving the final result as well.
Stop paying the minimum payment also has a very negative effect for tips crédito.Mas history of handling credit cards.
Banks are interested in this system because it is a very effective way to charge high interest.
Many cards.
It is tempting to think that the more cards the better, since it has a wider range of shopping possibilities. There are many problems with this:
-
More temptations to shop.
-
Higher risk of fraud in credit card
-
Credit History: Asking too many credit cards at the same time can have a negative impact on your history, and may hurt when applying for a loan of real need.
-
Points: Points and other benefits can lead us to think we’re winning something.However, these benefits clearly outweigh the interests of the debt.
Recommendations to avoid credit card debt
- Avoid credit card debt without leaving some reasonable leeway (not borrow to the limit), any specific problem you mess all accounts.
- Compare before you purchase a credit card. Compare all offers available.
- Perform preliminary planning for all expenses and income. See how much we pay with the card without increasing debt.
- Taking into account the recurrent costs but also those who come once a year, taxes, insurance etc.
- Limit the number of cards and make a responsible use of them .
- Periodically checking our balance and movement of our own so that we have available and do not fall into overdraft fees or costs of default on the card
- Eliminir debts as credit cards . Causes of the debts of credit cards
base all investment savings
the saving is not a very pleasant habit of Latin Americans, instead of saving us not spend our income is spent every day no matter what may happen in the future, we never thought that there may be emergencies.
Looking in detail the savings should be fundamental to all people and we never know when we have an emergency, this saving serves not only to save but it also serves to investment.
It is obvious that all people always want to increase our revenues to have a more pleasant, but many people say they know how to save or do not have money for this.
Not that simply are not we really do not know how to save, because it keeps buying unnecessary things and also holds plenty of debt.
The first thing to do to start saving is that you have to make a budget for all expenses, so we know how much we go and how much we spend.
After knowing this we must organize and pay those debts, but also must take at least 10% of our income to save, this should be fixed and above anyway.
We must never allow ourselves to strangle the debt pay these slowly and one by one, for the simple reason that savings cannot be postponed, unless we do not want to have an emergency fund which inversion can give us more income.
Another way to save costs is dwindling at home market and bringing more economic supermarket promotions; we can also impair trips to the cinema, eating out, stadium, etc. Does not mean that we do not become any of this, it can only decrease.
And when we have enough savings so we can use to make investments which can give us very good dividends, including the investments are mutual funds, real estate, stock market, the forex market, etc.
Recall that before making investments should study a bit about them to avoid unnecessary risks, we must also learn to diversify the investment to run high risks so no loss.
This is a practical guide to know who they can lend money or not. Sometimes trust is not enough to know when you’ll get your money safely. These tips are designed to assess in your mind which people will pay you your money, which would be better to see it as a gift you did.
Investigate the reason and education.
If a person or family is asking money because of a problem is to identify if the loan was actually going to solve. Most of us are not usually open on the way in which we manage our money but to solve the problem of present money. Lend money to the person that you know has a future plan to repay and to avoid having to be in that situation again, as an emergency fund.
Do not pay money for a debt that will not end.
Many people borrow to get out of trouble with the end of the month but have no plan for this not to happen it will happen next month. Do not pay money that will be transferred to the prolongation of a problem and not the solution. Will be helping to avoid the inevitable and eventually you will not see your money.
Do not pay when you know you do not pay.
In the family there is always a person you know very well that you never pay and what it does is it expected to forget the debt to borrow again. If you know it’s very hard for people to pay you, take your instincts. Helps people better understand how to better manage money.
Do not contribute to a problem.
Do not pay money to someone that you know you will use those funds to maintain an addiction or a gambling problem. If you really want to help this person, help her get professional help.