Evaluating Your Credit Card Options

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While most people are familiar with how credit cards work in general, not all credit cards are created equally. If you are in the market for a new credit card, one type of card may be best for you, depending on your needs. In this situation, you definitely have a lot of different options to consider.

Low-Interest Credit Cards

One type of card that may be an option for you is a low-interest credit card. With this type of card, you get a low interest rate on all of your purchases. If you plan on leaving a balance on your credit card, the interest rate that the credit card company charges should be an important factor for you to evaluate. Interest charges can add up quickly and paying a low interest rate is critical.

Balance Transfer Cards

Another option for you to consider is a balance transfer credit card. If you have existing balances on other credit cards, getting a new balance transfer credit card may be advantageous. This type of card typically offers a low introductory interest rate so that you can transfer the balance from your old card onto it and save money. The introductory interest rate may be as low as zero percent and it may last for 12 to 24 months. By doing this, you get a certain amount of time to pay down your debt without paying interest on it. If you have a very large amount of debt, this could be an effective strategy for getting out of debt. Most balance transfer credit cards have a minimum payment required that must be met in order for you to keep the introductory rate.

Reward Credit Cards

If you make regular purchases on your credit card, getting a rewards credit card could work out well. With this type of credit card, you get rewards points for each dollar that you spent on the card. Then you can use those points to purchase additional items that you need. For example, the points could be used to pay for electronic equipment or airline tickets.

When you are in the market for a rewards credit card, find out how the card accumulate reward points. Some cards give you one point for each dollar that you spend while other cards will give you two points for each dollar spent. You might even get additional points for purchases in certain categories like gas or groceries. You also need to look at how many points it takes to get anything of value. Some rewards programs are better than others when it comes to providing valuable items that can be purchased with points.

Cash Back Cards

Some credit cards give you a percentage of your purchases back in cash. This allows you to save money on your purchases overall. When comparing these cards, look at the percentage that you get back in cash. Some cards give you higher percentages back on certain types of purchases.

When you’re in the market for a new card, just make sure that you compare multiple offers. You might be surprised what one credit card company may offer in order to gain your business.

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Is Debt Reduction Right for You?

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If you are drowning in debt, negotiating a reduction of that debt might seem like a good solution. But, depending on your situation and how much you owe, debt relief could actually wind up costing you more than it’s worth.

Debt reduction involves negotiating with your creditors to reduce your debt. It is not the same as debt consolidation, in which you get one lower-interest loan to pay off several higher-interest debts. And it doesn’t simply involve lowering the interest rate on the debt you owe. In a debt-reduction situation, you actually seek some debt forgiveness from your creditors. For example, if you owe $15,000 that you can’t pay, you may convince your creditors that you can pay $10,000.

Though debt relief can have the benefit of getting you out from under an unmanageable debt load, it does come with consequences.

For one thing, debt reduction has a tremendously negative effect on your credit score. So while reducing your debts can save you thousands of dollars now, it could cost you thousands more in the long run in the form of higher interest rates. And the effect is more pronounced the higher your credit score is. This can make it difficult to get credit cards, a mortgage or other loans. One thing to take into consideration is how long it will be before you seek new credit. A debt-reduction plan will negatively affect your credit score for at least a couple of years.

Because of this, a debt reduction plan may not be the right option for you if you have other options available. If you can refinance your home or get a home equity loan and use the money to pay off debt, that may be a better option than seeking a debt-reduction plan.

Another situation in which debt reduction might not be the best solution is if the balances you owe aren’t that high. If you owe only a few thousand dollars and can afford the minimum payments, it’s likely worth it to continue paying and not risk the hit to your credit score that comes from seeking debt reduction.

If you do wind up deciding that a debt-reduction plan is the best option for you, make sure you can afford the payments. If you work with a debt firm that charges you fees for a program, you will lose those fees if you don’t complete the program.

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Disadvantages of Credit Counseling Services

Filed under: Credit Card Debt

With the economic downturn, many people have turned to credit counseling services as a solution to their credit card debt problems. Although credit counseling can be helpful, there are many criticisms of the credit counseling process and you should be aware of potential problems before committing to any credit card debt solution services.

Credit Counseling Compensation

One of the strongest criticisms of the credit counseling industry is that very often, the counseling services receive compensation from credit card companies themselves as payment for their services. This practice has lead to accusations that consumer credit counseling services serve as de facto collection agencies for creditors. In order to participate in a debt relief program, the consumer pays a single monthly payment to the counseling service, which then makes payments to individual creditors on their behalf. Credit card companies pay what is called a “fair share” fee to credit counseling companies and this fee accounts for approximately $5 billion in fees annually paid to credit counseling organizations.

Hidden Fees

Another criticism of the credit counseling industry is that there are often hidden fees that are not disclosed to consumers when they sign up for debt relief services. Both the Federal Trade Commission and Better Business Bureau report literally thousands of complaints about credit counseling agencies. Frequent complaints include the inability to “opt out” of what are supposed to be voluntary programs, undisclosed fees being charged and payments made not being applied to consumer accounts.

Effect on Credit Rating

Participation in a credit counseling program is not supposed to affect your credit rating. However, one of the strongest criticisms about the credit counseling industry is that participation in one of their programs is reported to credit reporting agencies. As a result, not only are credit card accounts usually frozen or cancelled, but potential creditors will consider you a higher risk and may be reluctant to grant credit.

Although consumers usually eventually see an improvement in their credit rating once their credit card balances are significantly reduced and regular payments are made, future creditors view participation in a credit counseling program as an indication of problems with making credit payments. This can result in difficulty obtaining credit for purchasing a home or a car, or in higher interest rates being charged.

If you find yourself mired in credit problems and are having difficulty making your credit card payments, there are numerous alternative solutions to working with a credit counseling company for debt relief. Consider talking directly to your credit card companies and trying to negotiate a reasonable payment plan or single payment settlement. As a final option, you might also consider bankruptcy as a solution if your credit obligations are large and it is clear you will not be able to recover from them.

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0% Introductory Deals

Filed under: Credit Card Tips

There are all types of credit card offers available today. Most of the time, the offer comes with some type of incentive for you to become a cardholder. One of the most popular incentives is the 0% introductory rate for either new purchases, balance transfers or both. People see this as a way to save money on their credit card purchases and want to take advantage of the opportunity.

When you see the 0% introductory interest rate words on a piece of mail or advertisement you need to get more information before making your decision. Offers may vary from company to company and even promotion to promotion. You want to make sure that you find the best deal before applying to any credit cards.

The first thing you need to know is whether or not the 0% introductory rate applies to purchases or balance transfers. If it applies to purchases and you know you are going to make a large purchase sometime soon, this is a great deal. You can buy new furniture or even take an extended vacation and charge the expense. As long as you pay the balance off before the promotional period ends, you aren`t charged any interest. By planning ahead you can save yourself some money.

Check to see whether or not the promotion includes balance transfers. If it does, you can transfer the balance of a card with a higher interest rate to the new card. You will get an extended amount of time to pay down the debt without the concern or hassle of any interest charges. Many people use this method as a way to get a credit card paid off quickly. It takes discipline, but it can be done.

Imagine what you are currently paying in interest each month on one of your credit cards. Now imagine that interest or finance charge being taken away each month. If you kept paying the minimum amount, how much more would you be paying each month? Is there any way you can pay a little extra? Imagine how this will help your debt.

When you do a balance transfer it is important to note that there is usually a charge associated with it. It is usually a percentage of the amount that you transferred or a minimum amount that needs to be paid. This amount will just be added to the credit card bill. For some, this fee is well worth the opportunity to pay down a debt without interest for a while.

The length of time varies from card to card and bank to bank. This is one of the reasons that it is important to read all about the parameters and guidelines laid out on these types of promotions. You don`t want to get confused and continue to charge if the interest rate has already gone up. You may want to skip the purchase or use another credit card.

Finally, you want to find out what standard APR (annual percentage rate) the card adheres to. What interest rate are you going to have when the promotional period is up? If there is a balance left on the card after this period is over it will be subject to the standard APR of the credit card company.

There are other important things to look for. Check to see if the promotion ends if you are late on a payment or make less than the minimum payment one month. While you always want to strive to be on time, or even early, the idea of losing the 0% introductory interest rate can ensure that you are on time all the time. In spite of the specifications and issues you need to educate yourself on, Moneysupermarket can provide you with a list of credit card opportunities including those with a 0% introductory interest rate.

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Compare Your Home Insurance and Save money

Filed under: Credit Card Tips

Today, with the rising cost of fuel, insurance premiums, food, and utility bills, we are all searching for ways to save money. House insurance is a great place to make savings, it is estimated that the average household over pay their premium rates by a massive 10% – a significant difference given the difficulties households are facing just to stay afloat. Here, we look at various ways in which you can reduce the cost of your house insurance.

Purchase all your insurance premiums with the same company:

Many people are aware that insurance companies tend to offer the best house insurance premiums when policy holders also purchase contents insurance – so, this is essential in reducing premium rates.

However, fewer people realise that the majority of insurance companies will also offer lower premium rates if policyholders purchase all types of insurance (e.g. car insurance, house insurance, contents insurance, life insurance) with them – although, you do not necessarily need to purchase them at the same time.

Research several insurance companies before settling on the most appropriate policy:

Different insurance companies offer different rates on their policies. Rates change all the time, sometimes they increase, other times they decrease. It is important that you research the market in order to find the best possible price for the type of cover you need. Always compare house insurance quotes between insurers, and with the same insurer in the event of a renewal quote.

Remember when making comparisons between policies that you are not just looking at price, but also at the comprehensiveness of the cover. It is no good purchasing the cheapest policy you can find, only to discover down the line, that you do not have sufficient cover.

Tweak the various options available within the policy, to see if this reduces your premiums
Voluntary excess has an effect on the price of your insurance policy. The higher the rate of voluntary excess, the lower your premium rates will be.

You may notice that a policy offers protection against theft of garden equipment, but you may feel that anything in your garden is easily replaced, or very unlikely to be stolen, in which case, you may wish to remove this cover, as it is largely irrelevant, but is costing you money, nonetheless.

Never renew a policy without contacting your insurance company and negotiating a better deal
Most renewals are not competitive. This is because insurance companies rely on the complacency of their customers. They charge a high rate, because they know many people will not look for alternative cover, and accept the quote at face value. You should always negotiate a better deal than that noted on any renewal notice. This is true of all types of insurance.

Is It Safe Borrowing From Your 401k Plan to Resolve Credit Card Debt

Filed under: Credit Card Tips

Have you ever heard of using your 401k plan to get out of outstanding credit card debt? I know that for many debtors this is a completely new concept. This is such a strategy where you try to trade bad amount of debt for good amount for debt. Though this is not the best way to shed off your debt, many debt-burdened individuals have tried this before. Let’s scrutinize this method to know how this can help you to eliminate your credit card debt.

If your 401k plan allows you to procure loans, then you may try and get up to 50% of your normally vested account. However, you should note that you have to repay the loan within a maximum of five years from the time you are getting the loan. However, if you are borrowing for your first home, a longer payback time is allowed.

The pros of this method used to prevent credit card debt.

  1. There is no credit check at all
  2. The interest rate is extremely low
  3. In a situation when you are required to pay yourself, this provides good return
  4. The whole interest is tax-free as you only pay taxes on the interest upon retirement.
  5. It is an easy way to avail loan to wipe out your credit card debt.

The cons of this approach

  1. You lose the interest which would otherwise end up in your retirement account
  2. You need to repay 401k debt with after the tax dollars
  3. All your future withdrawals will be taxable
  4. You will incur 10% credit card debt penalty plus taxes if your age is less than 59
  5. Since it is a consumer loan, it is not tax deductible
  6. Practicing this more than once may jeopardize your retirement

Again, this is most likely not the best method to resolve your credit card debt. However, if you are determining to borrow from your 401k, consult with a professional as a professional can help you handle these kind of issues more reasonably. Lastly, understand the consequences of such an approach before you opt out.

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Which Credit Card Should I Choose?

Filed under: Credit Card Tips

As even the briefest search on the internet will show you, there are thousands of credit cards available from many different providers, and even more sites offering advice on which card you should choose. Most card advertisements and promotions make a lot of noise about attention-grabbing features such as market-leading low rates, long balance transfer deal introductory periods, or enticing cashback or rewards programs, but some or all of these features may be irrelevant to you no matter how good they look.

What really matters when choosing a new card to apply for is getting the card with the right mix of features to suit the way you plan to use it. To ensure that you get the best deal available it pays to take a little time out to think about the ways in which you normally use your card.

In today’s increasingly cashless society, many people use plastic as simply a convenient payment method, clearing their balance in full every month. This frees them from having to carry large amounts of cash around, and makes it easier to keep track of their spending with online account management and the like. If this is the way you plan to use your card, then the interest rate doesn’t really matter to you. Considering that you’ll be clearing your balance every month, then you shouldn’t be charged interest at all.

What’s more important is to get a card that rewards you in some way for using it, either through cashback where a small percentage of everything you spend is credited back to your account, or with a rewards program that will allow you to build up points which you can later redeem to get cheaper goods or services.

If you plan to use your card to fund larger purchases such as home electricals, with the repayments being spread over several months, then the APR of a card is the single most important feature to look for. A low APR means that more of your repayments go towards clearing your debt rather than servicing the interest charges. This means that your debt will be cleared more quickly, and will have cost you less to take out in the first place. It may also be worth looking for a card which offers a long 0% introductory period on purchases, with many cards now offering a deal of 12 months or even longer.

The most common way of spending with a card is to have a mix of large and small purchases, repaying a reasonable portion of your spending each month but sometimes carrying a balance over if funds are a little short. It’s also common to want to transfer a debt from a more expensive account such as an older credit card or an expensive overdraft. For this kind of mixed use, a relatively new kind of card can be a good fit.

A ‘flat rate’ card charges the same low interest rate for each type of card use, whether purchases, balance transfers, or even cash withdrawals. The low interest rate means that your credit costs less and can be cleared more quickly, and the simplicity offered by having just one APR for everything means you know exactly where you stand.

So no matter how impressive a new credit card may seem, with a wide range of eyecatching features, it really pays to decide which one to apply for based on your own needs and spending habits rather than the features that card issuers tell you are the most important!

About the Author:  Wayne Reynold writes about proper cleaning of computer keyboards and laptop keys are essential with the use of appropriate keyboard cleaner. Click here to find out how to clean keyboard and restore your keyboard to new and better performance.

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Welcome to Your Best Credit Card

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Welcome to Your Best Credit Card!   We’ve built our site with you in mind, and we’ve searched the web for the best credit card offers…the best interest rates, the best cash rewards, the best balance transfer offers…simply the best credit cards for you. 

Our site is safe and secure, too, so when you apply online, you needn’t worry about your personal information, because we don’t share it with anyone except the credit card issuer.

So, please bookmark our site, and come back often!  We’ll be adding new offers, articles, and much more!

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