Posts Tagged ‘Those’

Do you ever wonder why credit card offers keep on coming in the mail? Is it because they think you are a good risk; trying to do you a favor? NO! They want to make money and money they make every time we use those credit cards. How else could they afford all that postage, printing and TV ads?

ABC’s Good Morning America Show revealed that the average American has in excess of $9,000 outstanding credit card debt every month. At 13% interest (or more) that is approximately over $1100 in interest that the credit card companies are making on us.

It is time for us to take control of this situation. Interest rates are rising; new laws have been passed so the credit card companies will raise the minimum payments we need to make. Below are 8 steps to take control of the situation.

1. Commit yourself to not using Credit Card with the exception of an Emergency. It is surprising how many of us feel helpless without a credit card in our wallet or purse. We are not asking you to cut up your credit card because you never know when an emergency will occur and you may need to use it.

2. Call Your current credit card company and negotiate a better interest rate to get an idea on what the market rate of interest is for credit cards today. Get the interest rate as low as you can tell them you are going to change credit cards and most of the time they will reduce your interest rate.

3. Pay it off. Take a good look at your credit card statement and determine how much you can pay each month on the principal to start eliminating your balance. Let’s just say you are the average American and have a $9.000 balance. Depending on your credit card company your minimum monthly payment can be between $180 to $360.

4. Commit to pay a minimum of $360.00 a month plus the interest. Do not make any additional charges on your card and it will take you approximately 25 months to achieve a zero balance.

5. You and your significant other (if applicable) need to talk, understand and commit to resolving your credit card problem.

6. You need to get your personal finances under control and the only way of doing that is with deep desire and dedication to prepare and do a family budget.

7. Re mortgaging, home equity loans should not be an option, until you and your significant other have successfully developed and maintain a budget. Then only then should you look at that option. Otherwise you will fall into the trap of re-financing your home to pay off the credit card debt. Then you will feel debt free (ha-ha) and charge again on the credit cards. Thus all you have down is added more debt, felt good for a few months.

8. Take small steps and take the right steps to beat the credit card companies

You need to know where you are spending money, you need to establish and work a budget before you really can beat those credit card companies and more importantly with a workable personal budget system it will save you stress, time and energy.

About two weeks ago as I was preparing the final details for last week’s workshop I suddenly realized I was missing something.  I was going to need at least 10 different credit card offers to use in one of the workshop activities. My usual habit of shredding credit card offers that came in the mail was going to have to stop for a bit.  I decided that I would have to ask my neighbors to save any offers they got in their mailboxes so that I would have enough. Well, I shouldn’t have worried. In the next three days I received over 20 offers from 7 different cards! That was convenient… but a bit excessive.

Right then I decided to ‘Opt Out’. Did you know that there is a national toll free number established by the major consumer credit bureaus to allow you to opt out of these mailings? Call 1-888-5-OPTOUT (1-888-567-8688). The recording will ask for your social security number, full name, address and telephone number.  If you select the two-year option, your request can be completed with just the phone call.   If you select the permanent option, your request will only take place after you return the form mailed to you.

If you are concerned about leaving your social security number when you call, remember, the credit card company most likely already received that from the credit bureaus when they bought your credit information.

There are other numbers to call to opt out of other types of mailers. You can call Polk Company 1-800-464-7655 and ask for the Opt Out line. Experian has compiled a database of lists, you can call them at 1-800-228-4571, ext. 4633 – just be prepared to wait through a long list of options to get to the one you want. Val-Pak’s number is 1-800-661-0959, and Money Mailer is 714-265-4100. Since these mailers are printed well in advance, be prepared to receive several more before the Opt Out takes effect.
As a last resort – or perhaps your first – there may be a number, email, address or website listed on the mailers that you receive that you can contact to Opt Out directly. Respond with something like…”Please remove my name from your marketing database. In addition, please do not pass along my name to others through mail list sales or trades. Thank you for your cooperation.” Most mailers will make an effort to comply with your request.

So save a few trees and reduce the amount of junk mail that you get (nearly 50 pounds a year!) by contacting the numbers above.

 
What does that have to do with clean credit? How about…the fewer temptations you have when trying to stay within your budget, the better!

If you haven’t already opted out I am sure that you have gotten one of those 0% credit card offers in the mail. Did you quickly fill out the form and then send it in, or faster still, call in and sign up that way? After all you didn’t want to miss that great offer! Well, I have one question for you – did you bother to read the fine print? Fortunately, these days the fine print is required to be a bit larger and more organized so that you can actually read and understand it.

Here are some of the things that you need to check before you apply for any credit card – in fact you should check the fine print on the cards you already have to see what you are paying!

I suggest you make an excel spread sheet that contains the items discussed below so that you can check them off and compare cards – that is the way to get the best deal for yourself. (If you don’t know what kind of credit card user you are make sure you read the previous article before you decide on the card you want to apply for.)
First, it is critical to find out how long those special offers are good for and what they change to at the end of that time. Next, find out what the finance charges are for purchases, balance transfers, cash advances, and any other special offers they may have. Are the rates variable or fixed? You should also find out the grace period. Make sure you know the type of balance calculation method – is it one or two cycle, and does that cycle include new purchases or not.

The last thing you need to find out is the various fees associated with this card. Remember the acronym – BLOATU . It is what the fees are designed to do – bloat your balance so that the credit card company makes more money. Did you know that there is no limit on the fees that credit card companies can charge?!
The most common fees are:

Balance transfer
Late fee
Over the limit fee
Annual fee
Transaction fee for cash advances
Usage fee

A lot of that information can be found in the offer you receive in the mail, but there are also some ‘hidden’ charges. Some of these are related to the balance on the card. There may be tiered rates. This happens when there are different finance charges for different levels of balances.