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College student credit card debt

info — Sun, 24 Oct 2010 20:59:20 +0000

Credit card debt doesn’t shy away from anyone who doesn’t want to shy away from it. It treats everyone equally, irrespective of whether the person is a seasoned professional or just a college student. So college student credit card debt isn’t uncommon either. Since the credit limit on college student credit cards is much lower, the college student credit card debt cannot rise to the levels it does for other credit cards. However, college student credit card debt is an even bigger menace because a lot of students are already in debt due to the loan they have taken for their education. If they pass out of college with college student credit card debt, they will have to payback not just the loan they taken for studies but also their college student credit card debt.

Since most of the college students are inexperienced in the usage of credit cards, they can easily fall prey to what we call as ‘college student credit card debt’. In fact, college student credit card debt is one reason why the credit card suppliers keep a lower credit limit on college student credit cards. The solution for avoiding college student credit card debt is similar to what it is for avoidance of any type of credit card debt. So, the first thing for avoiding college student credit card debt is to understand the concept that credit card is not free money and that whatever you pay-for using your credit card has to be paid back to the credit card supplier when your credit card bill arrives.

So don’t treat credit card separate from hard cash. Avoid overspending e.g. do not buy things just because they are on sale, sales keep coming and going and there are always better offers each time; buy only those things that you really need. A good thing to do is to prepare your monthly budget and follow it religiously. Never budge from your budget. Another very important preventive measure for avoiding college student credit card debt is to avoid going for a second credit card. Some students have a tendency to go for multiple credit cards just because the credit limit on college student credit cards is very low. However, this is a perfect recipe for getting into a college student credit card debt. This is how college student credit card debt builds up. One credit card is more than enough for any student.

College student credit card is really meant to be treated like a training ground for learning more about credit cards. It should not be make an instrument of debt (college student credit card debt).

Do you have any helpful tips or ideas about how you conquered your student debt load? Please leave them in the comments below. >>

Credit Card Debt as a silent financial killer

info — Fri, 22 Oct 2010 08:20:04 +0000

Technology spoils people’s whims. It tends to cater to every human’s caprices. It feeds on the people’s undying thirst for easy, instant, and convenient. More often than not, it also causes them a lot of trouble—financial trouble through credit card debt—that is.

Credit Card convenience vs. Credit Card debt

We often see people pull out “plastic” to pay for everything they need. Why not? When all it takes is a quick swipe of the card through a little electronic box and a signature then, everything’s okay. You go home happy, content, and almost worry-free. On the other hand, not every one of these people realize that the convenience of using credit cards can lead to a false feeling of financial security. And this realization will strike them as soon as the bills arrive.

In fact, studies show that credit card debt and personal bankruptcies have increases bank profits to the highest level in the last five years. It only shows that more and more credit card holders were unable to manage their finances that lead to credit card debt. If you are a cardholder and having some credit card debt troubles at this early stage, it’ now time to think over the possible outcomes of this minor glitch so that a more serious problem with credit card debt would cease to arise.

Credit card gives people the feeling of invincibility. And it also gives them tons of uncertainty about their financial management capability when they encounter problems with their credit card debt. Although it is true that that credit cards solve financial matters especially when it comes to safety and convenience, credit cards also creates hassle especially when the person using it doesn’t know what you he or she’s getting into.

Indeed, paying off credit card debt may take a long time especially if the person has high interest rates. But, it doesn’t mean that you can do nothing about efficient management of credit card debt. When you find yourself overwhelmed with credit card debt, don’t fall into a pit of depression. You can get through it with discipline and a change in spending patterns. Start eliminating problems with credit card debt by getting tips and techniques on how to pay off your balances easier, how to consolidate of frequently encountered problems, look for free debt consultation agencies that can help you, and try—inch by inch—to rediscover ways on how you can regain your financial freedom by reducing you credit card debt.

The power to eliminate credit card debt

People who are having problems managing their credit card debt or those who are near in bankruptcy often don’t realize that the power to eliminate their credit card debt troubles totally is in their hands. Today, more and more Americans need credit card debt help badly. The main problem is that these families are having difficult times paying high interest for credit card debt. And instead of lifting the burden of credit card debt, more people are paying much in interest every month than that of the actual expenditure.

There are actually more lawful and moral ways to zero-out thousands of dollars in credit card debts. And if you only take the time to research and know your rights and how bankruptcy laws have changed, you will discover that there are valuable facts to eliminate credit card debt. Actually, the possibility of reducing or eliminating the high interest credit card debt is now more possible when a person takes action to get his or her finances back on track.

Apart from knowing your weapon in terminating credit card debt, it is very important that you develop a sense of control and perseverance first. Since credit card debt elimination process requires organization, clarity, and commitment to your own growth, it is a must that you are ready for the responsibility and to stand free and independent.

For those people who consider having a credit card indispensable but afraid of getting one because of the possibility of credit card debt nightmare, you must remember that credit card can be a powerful tool in managing your finances but there will always be glitches when not used properly. Of course, there are countless reasons why you should and shouldn’t get one depending on your needs. Whether you decide to get one or not, managing finances it still takes a sense of good budgeting, willingness to change spending habits, and the humility to avail low interest consolidation loans when you are already burdened by too much credit card debt.

How to Use a Credit Card to Build Your Credit Score

info — Wed, 13 Oct 2010 23:42:58 +0000

Credit cards aren’t the only way to establish your credit history, but they are usually the easiest way to create a credit history because it is usually easier to open a credit card than other forms of credit such as a car loan or mortgage (lenders are less likely to lend that much money to someone who doesn’t have any credit history).

Once you have established a line of credit, your actions are reported to the credit bureaus which begin recording your credit history on your credit report. Over time, your actions will be used to determine your credit score. Here is more information about the difference between credit report and credit score.

Click here to apply for a credit card for those who have poor credit and are interested in improving their credit.

No credit or poor credit?

If you are having trouble getting approved for a credit card, then you should check out secured credit cards, which require a deposit and sometimes come with an annual fee. The deposit works as collateral for your charges and if you don’t make on time payments, the bank will use your deposit to pay your charges. Secured credit cards cost a little more than traditional credit cards, but they often come with guaranteed approval and with proper use will help you improve your credit score. After proving your ability to make payments, you can often upgrade your secured credit card to a non-secured card that has a better interest rate and doesn’t come with annual fees.

Important notes about building credit with a credit card

Getting a credit card can help you build your credit so long as you treat it responsibly – otherwise you are only going to hurt your credit score. Credit cards can be a trap for some people, so it’s best to make sure you only make charges you can and will pay in full each month. Otherwise you may find yourself getting into a cycle of debt that is difficult to escape from.
Tips to establish your credit and increase your credit score:

Understand how your credit score works
Only charge what you can pay with cash
Pay your full credit card bill each month
Repeat the process
Add time

The key to establishing a good credit history and credit score is being able to prove that you are responsible and can continually pay loans that you receive. There is no silver bullet to improving your score quickly; it takes time and commitment.

The following URL will direct you to resources for applying for a credit card for those with poor credit and trying to improve credit. Click here >>

Choosing The Perfect Credit Card

info — Tue, 20 Feb 2007 03:45:49 +0000

It is a well known fact that there are many different credit cards available today. In order to pick a credit card that will work for you, pick one that reflects your lifestyle as well as your ideal spending limit. In order to find the best credit card company and the best possible deal, you will need to do your research to find the perfect card for you.

When picking a credit card, you will first need to decide what you need the credit card for. Some people want a credit card simply for the purpose of cash flow. Making purchases on a credit card, can then free up your income. You can put that money in your bank account and let it draw interest. This allows your money to earn interest, all the while you are still able to buy the things you need. Then, when the credit card bill comes in, you pay it in full, in order to avoid finance charges.

Instant cash purposes is another popular reason people get credit cards. They are then able to use the credit card at any ATM to obtain cash. Credit cards used for these purposes are great for an extended vacation or when traveling in general. If this is your sole purpose for obtaining a credit card, make sure that you find one with the lowest instant cash transaction rate.

With any credit card, it is always important to consider the monthly payments. You will either need to pay the credit card balance off each month or make the minimum required payment. When choosing a credit card, be sure to look at the balance transfer rates, any introductory rates, as well as any incentives that might apply to new credit card holders. Often times, if you have good credit, you can receive some amazing deals.

Credit card incentives are another important area to keep in mind. Many credit cards offer incentives such as reward points or cash back for certain purchases. Simply look around for credit card incentive programs that are appealing to your needs.

The APR or Annual Percentage Rate is another important area to look at. Whenever the incentive period ends, you will then pay the APR. Since APR’s vary from credit card to credit card, it is important to shop around and compare rates. The lower the APR is the better.

The minimum monthly payment is another area that must be looked at when choosing a credit card. Often times, credit card companies require you to pay about 3% of your total balance. Some credit cards are considerably lower, while others require a considerably higher amount. Choose a credit card with the longest interest free period available. This will help to keep your monthly payments lower.

After you have done the research and know exactly what you are getting into, you can then choose a credit card with ease. Credit cards can be a great thing to have. However, they can cause financial troubles if not used properly. If you do your homework, you will quickly be able to find the credit card that is right for you. As long at you pay your monthly bill on time and take care of your card, you will increase your credit rating, allowing you to eventually make larger purchases, like a house or a car.

Credit Card Authorizations

info — Sat, 13 Jan 2007 05:38:53 +0000

When you present your credit card as payment (either physically or by submitting the number by snail-mail), the merchant will typically contact their transaction processor, which will then contact the issuer of your card to confirm that there is sufficient available credit to cover the purchase (or cash advance.) This can be done in a matter of seconds as you standing at a store check-out counter.

When the card issuer’s computer system approves the transaction, it creates an authorization on your account. This means that, while the money has not actually been paid to the merchant yet, your available credit is reduced by the amount of the authorization, so that the credit is set aside and cannot be spent at another merchant. The charge is completed one to five days later, when the transaction slip that you signed is received by the card issuer, and they transfer funds to the merchant’s bank account. If the slip is not received within a certain number of days (one issuer told me five days), the authorization will expire, and the “on-hold” amount will become available again.

A common confusion regarding authorizations occurs in situations where the total transaction amount is uncertain. For example, a credit card is generally required for renting a car. Because of the potential for extending the car rental period or driving over a certain number of miles, the rental agency will immediately request the credit card authorization in an amount that they estimate will cover the total bill. Many hotels do this as well, because a guest might stay longer than planned, and would be liable for the extra daily charges. To some degree, card rental agencies and hotels may be covering themselves for the cost of minor damage to the vehicle or room, or theft of small items.

Often the customer may not be aware of the amount of an estimated authorization, and may be surprised to find the available credit on the card is lower than expected.

When the rental car is returned, or the hotel guest checks out, the final bill will be calculated based on actual days and/or miles involved. The customer will be presented with a transaction slip to sign for that amount, and this will eventually arrive at the card issuer, which will pay the merchant the amount on the slip and release any excess amount of credit from the original authorization. But since this can take days, the available credit on the card can remain “on hold” for the full amount of the authorization, even after the customer perceives the transaction to be finished.

Any time you are about to initiate a transaction where the total charges are unknown when you present your card, be prepared for a large authorization (at least $500 for a car rental), and ask the merchant to tell you the exact amount.

Credit Cards – Can You Do Without Them?

info — Thu, 04 Jan 2007 03:34:34 +0000

By Terry Rigg

As we all know credit card debt is out of control. The credit card debt is currently $8400 per household at an average annual percentage rate of 14.7 percent. In fact, about 18% of all consumer spending is on credit cards and is expected to reach 30% by 2006.

If you pay your credit cards off each month or don’t mind paying the interest they charge, by all means use them. However, entirely too many households are experiencing serious problems paying their bills because of their credit card debt.

Why do most people have credit cards? I believe that it provides a buffer just in case something comes up that they don’t have the cash to cover. At least that’s the original thinking.

In reality, once you have a credit card it is much easier to use than it is turning loose of your cash, even if you have the cash to pay for it. Also, we buy a lot of stuff with credit cards that we wouldn’t normally buy if we had to use real money.

I have nothing against credit cards. They are handy and can provide some very valuable rewards like frequent flyer miles. However, in many cases the rewards are over shadowed by the interest charged.

I like cash much better. You don’t have to sign anything and when you pay for something that’s all it will cost you. No interest, no bills, no late fees and no penalties.

There are no special secrets to saving money to use for the things you need, however, there are a few tricks that many use.

Two of the best known, but underestimated, is saving your change or the dollar bill savings plan. Most people don’t believe that these will provide enough money to do any good.

When my wife and I first started saving our change we were surprised that we could save about $75 a month just by emptying our pockets and purse at the end of the day. Believe me, at the time, I wasn’t making much money and $75 seemed like a lot especially because we didn’t miss it at all.

The dollar bills savings plan is just as simple. You never spend a dollar bill. If you buy something you simply use a larger bill. At the end of the day take all of your dollar bills and put them in a jar or box. It adds up quick.

There are a lot of ways to save money to avoid the need to use your credit cards but the key is to make it as simple as possible. Another important element is to think of that money as your “Crisis Fund” and not to be used to pay for your pizza on Saturday night.

The answer to the question posed in the title of this article is “Yes, you can do without your credit cards.”

You need to remember, when you use your credit cards you are using your future income not only to pay for the items you buy but also the interest and other charges. Since these charges can add up quickly you need to think long and hard before you buy anything with a credit card.

Terry Rigg is the author of Living Within Your Means – The Easy
Way http://www.homemoneyhelp.com/ebookadpage.html and editor
of The FREE Budget Stretcher Newsletter and Budget Stretcher
web site http://www.homemoneyhelp.com. He has 25 years of
experience counseling individuals and families concerning their
personal finances.

Types of Credit Card Accounts

info — Thu, 14 Dec 2006 21:11:26 +0000

Credit grantors generally issue three types of accounts. The basic terms of these account agreements are:

Revolving Agreement
(Typical Credit Card Account)

You may pay in full each month or choose to make a partial payment based on the outstanding balance. If you make a partial payment, you will be charged interest (a “finance charge”) on the portion of the balance you do not pay. Department stores, gas and oil companies, and banks typically issue credit cards based on a revolving credit plan.

Charge Agreement

You promise to pay the full balance each month, so you do not have to pay interest charges. Charge cards and charge accounts with local businesses often require repayment on this basis.

Installment Agreement

You sign a contract to repay a fixed amount of credit in equal payments over a specific period of time. Automobiles, furniture, and major appliances often are financed this way. Personal loans usually are paid back in installments, too.

Six Credit Card Secrets Banks Don’t Want You To Know

info — Sun, 10 Dec 2006 16:21:14 +0000

1. Interest Backdating

Most card issuers charge interest from the day a charge is posted to your account if you don¹t pay in full monthly. But, some charge interest from the date of purchase, days before they have even paid the store on your behalf!

REMEDY: Find another card issuer, or always pay your bill in full by the due date.

2. Two-Cycle Billing

Issuers which use this method of calculating interest, charge two months worth of interest for the first month you failed to pay off your total balance in full. This issue arises only when you switch from paying in full to carrying a balance from month to month.

REMEDY: Switch issuers or always pay your balance in full.

3. The Right To Setoff

If you have money on deposit at a bank, and also have your credit card there, you may have signed an agreement when you opened the deposit account which permits the bank to take those funds if you become delinquent on your credit card.

REMEDY: Bank at separate institutions, or avoid delinquencies.

4. Fees Are Negotiable

You may be paying up to $50 a year or more as an annual fee on your credit card. You may also be subject to finance charges of over 18%.

REMEDY: If you are a good customer, the bank may be willing to drop the annual fee, and reduce the interest rate 9 you only have to ask! Otherwise, you can switch issuers to a lower- priced card.

5. Interest Rate Hikes Are Retroactive

If you sign up for a credit card with a low “teaser” rate, such as 7.9%, when the low rate period expires, your existing balance will likely be subject to the regular and substantially higher interest rate.

REMEDY: Pay in full before the rate increase or close the account.

6. Shortened Due Dates

Most card issuers offer a 25 day grace period in which to pay for new purchases without incurring finance charges. Some banks have shortened the grace period to 20 days9 but only for customers who pay in full monthly.

REMEDY: Ask to go back to 25 days.

The Free Credit Card Trap

info — Sat, 02 Dec 2006 00:42:57 +0000

They arrive in your mail – a conspicuous looking mail piece from some “official looking” bank claiming that you have been Pre-Approved for a Mastercard or VISA credit card.

Of course, you don’t have to have any credit. You can even have bad credit or have just filed bankruptcy or even be rated as a “slow payer.” It doesn’t matter because these companies want to give you a second chance! These companies want to make it easy for you to obtain a credit card because they only want your money!

How the thing works is that you must send $35 to receive an application that provides you with a name and address listing of banks willing to give you a VISA and/or Mastercard without any credit approval. That’s a stiff price to pay for a sheet of paper, don’t you think? The instructions that come with the application will let you know how the scheme works. You must open up a bank account with the bank once that bank approves you. Big deal! They make it appear that you have won some contest or something and people will feel “good inside” that someone has approved them.

But that’s not all. The minimum amount you must deposit is $200 but you can deposit as much as you want. In return, you get a Mastercard or VISA credit card with a credit limit up to the amount you deposit. Wow! What a great honor! This is no break! Think about it. If a stranger gave you $200 to hold for him until Friday wouldn’t you feel safe in granting them a $200 loan? I mean it’s their own money you’ve got. If they default, you’ve got the full amount to pay off the loan. It takes a twisted mind to take $200 from you, grant you $200 credit with your own money plus charge you astronomical interest rates just to take the money from your hand and give it back to you. That’s insane!

Of course _ to combat this insanity, the great and wonderful banks claim to help fix your credit report. They say that if you maintain payments in a correct fashion, this information will be reported to the credit bureau. Yea, right! When Shell calls the credit bureau to check your credit for a gas credit card, your report shows 47 defaulted loans and a bankruptcy. However, there is one company that you make payments to on-time. Big deal. Don’t you think the rest of your bad credit will still be the deciding factor in Shell’s final decision. You bet you bottom dollar!

Look at this: the bank makes money from the interest of your deposit. The bank also makes money by charging you 18% to 22% interest for the right to use their Mastercard or VISA. Plus the bank is guaranteed their money because if you don’t pay on time, they take the money out of the bank account you opened with them along with any interest you have accumulated.

Why would anyone with $200 to deposit want a credit card with a $200 limit? If you have $200 and want to buy an item for $200 _ go out and purchase it. That way, you’ll own it lock, stock and barrel. No interest, no payments, no hassle! Plus, you won’t owe your soul to the company store _ sort-of-speak.

Credit is a wonderful thing if you use it intelligently. I know people who charge $100 at the beginning of the month and use that $100 to make $300. It’s free money for 30 days. Then, when the bill comes, they immediately pay the entire balance and come out smelling like a rose with $200 to the good. Credit is also needed in certain circumstances for establishing clout. You can’t call in a telephone order unless you can charge the purchase to your credit card. This delays you getting items you want now.

In fact some companies will try and make you feel “low class” if you don’t own a credit card. I am proud to say that I DON’T OWN one. When I’m in a store and they say “Would you like to put this on your charge?” I promptly say, “No, I pay for everything I buy!” They immediately shut up. And if they would snap back with a rude answer, I’d leave the stuff sitting on the counter, walk out of the store and get what I needed somewhere else. You don’t have to take abuse just because you don’t choose to line the pockets of the rich credit card companies! It’s insane!

If you’ve ever had a credit card and charged $200, you know you end up paying back $400 or more (unless you pay the balance within 30 days.) Stop allowing these so called banks to rip you off.