Top Tips For Reducing Your Credit Card Debt

The following is a guest post by John, who works in financial management specializing in credit cards for bad credit.  He’s a keen blogger and has written several pieces on how to improve credit rating.

Millions of people in the UK use one or more credit cards and they’re an extremely popular form of payment throughout the rest of the World.

It’s easy to see why too; credit cards are an extremely convenient and easy method of payment. They can be used to purchase good or services either in stores or over the Internet, withdraw cash from bank machines, and can even be used as an easy form of identification. With added competition for credit cards, a myriad of incentives, loyalty schemes, and reward schemes are available with most credit cards, with the majority of them also offering insurance covering your purchases.

But whilst credit cards are handled well by some (usually using them in emergencies or utilizing the tips outlined below), they represent a dangerous way into financial difficulties as a worrying amount of people slip into unmanageable credit card debt.

This article is a guide looking at some of the steps you can take to manage and reduce your credit card debt, whilst improving your credit ratings at the same time. You will need patience and a lot of organization but it is more than possible for anyone to control their credit card debts.

Keep Up With Your Payments

The first point I want to make it that you should always try keep up your scheduled credit card repayments. If you can keep up your repayments on a regular basis you’ll be taking a huge step to improving your credit rating.

Make sure you’re aware of how long your payment will take to clear; cheque payments and some bank transfers will take a few days to clear, you need to take this into account in order to have your payments considered ‘on time’ by the credit card companies.

Should you miss your repayment date, you’ll be charged a penalty fee (which varies depending on the company), which will simultaneously make your financial management more difficult and lower your credit rating.

Pay More Than the Minimum

Secondly, do your best to pay more than the minimum amount required each month. You don’t need to be drastic, but making sure your payment exceeds the minimum required will mean you pay less in the long term (due to interest), get into a good financial management habit and improve your credit score.

Don't Exceed Your Limit

The next point is probably the most important for effectively managing your credit card debts; don’t EVER exceed the fixed credit limit dictated by the credit card company. It will create a bad financial habit and will add to a mounting debt that has the potential to spiral into serious financial difficulties.

Should you exceed your credit limit, you’ll be charged a penalty fee that will increase both your minimum repayment for the next month and the amount you have to pay in interest. Consistently going over your credit limit will result in a lowered credit rating, which can often be hard to recover from.

It might be a wise step to figure out what would be a sensible credit limit for you, then contacting the credit card company and requesting that they lower your credit limit. This is particularly advisable if they suddenly increase your credit limit, as this creates a heavy temptation to overspend.

Budget

The last tip is an important, albeit fairly general one. You need to get used to properly managing your monthly budget. Keep a proper track of what you spend, noting down exactly what you spent it on. You might well be surprised at what you’re spending your money on every month and if you can get a strong idea of your spending habits, you’ll have a far better chance of cutting down your monthly outgoings.

I’ll give you a fairly simple example, last month I saw I was buying a bottle of water every day on the way to work at 69p per bottle. This worked out to an average of £13.80 for 20 bottles. A quick trip to a local supermarket and I found 8 bottles of Evian mineral water on a ‘buy one get one free’ offer, priced at £1.91. I bought two 8 packs which gave me 32 bottles of water (enough for one every day of the month, plus a couple left over), for £3.82, giving me an overall monthly saving of £9.98.

As I said, it’s a fairly simple example but it shows you how you can cut down your monthly spend with a little forethought and organization, and those savings really add up in the long run.

8 Money-Saving Credit Card Hacks

The following guest post was written by Alban, who is a regular writer at Credit Card Finder.

Oftentimes the best credit card hacks are hidden to us because we didn't even know they existed. While some of these perks are clearly stated in the small print of your credit card agreement, a lot of these are only available to those who dare to ask.

1. Can't pay your bill this month? Delay it:
If you have a good existing credit rating with your lender and suddenly find yourself in a situation that won't allow you to pay off your credit card this month, call your lender at once and explain the situation. Then ask for an extension of another 30 days to pay the bill. Chances are that if you have a good standing with your lender, they will agree and give you some slack.

2. Need more credit? Increase your limit:
If you have an upcoming holiday where money and plenty of funds are essential, then why not ask for a credit limit increase. A great sneaky tactic to get your increase approved fast is if you plan on making a larger purchase like buying a TV or renovating your home.

3. Bargain for a lower interest rate:
The easiest way to do this is by telling your lender you're considering a better offer from the competition. Be friendly and not accusing while bargaining. It will get you much further.

4. Paid late? Waive the fee:
Sometimes circumstances are out of your hands. You might lose Internet connection while paying your bill online and suddenly find yourself in a situation where you get charged a late fee because the bill wasn't paid on time. In those moments, you might be able to request a fee being removed from your account because it wasn't your fault.

5. Merchant surcharges removal:
This is more interesting for US consumers as some states prohibit the addition of credit card surcharges. In Australia, this is perfectly legal if the merchant is within reason, e.g. to cover excess costs.

6. Warranty matters:
When you pay for large purchases with your credit card, the lender might match your warranty. This saves you from having to pay for extended warranty periods. Check with your lender to be sure.

7. Consider renting a car?
You might be eligible for free rental car insurance: It is worth checking this with your card provider because you can easily save a few hundred dollars in the process of hiring a car for a longer holiday.

8. Are you missing out on freebies?
You might qualify for free hotel accommodation, free upgrades and the likes with your credit card's rewards program. It pays to check because some of these freebies are worth hundreds of dollars. Join Perkler to search for your loyalty program and find out all the perks and discounts you are eligible for.


Crystal's Note:  I like the fact that my Discover has the optional perk of paying $69.95 for any road side assistance.  I haven't used it, but I like to know I have a backup option.

Do you know of any other credit card hacks? 

Do You Escrow? Guest Post at Free Money Finance...Check it Out :-)

My guest post, Do You Escrow?, is up at Free Money Finance today.  It's a quick intro to escrow and an explanation of why my husband and I don't use that service.  Please take a look if you get a chance!

Retirement Savings Mistakes Guest Post at Learn Save Invest

My guest post, Retirement Savings Mistakes, is up at Learn Save Invest today.  It's an overview of a retirement savings mistakes article and how we are stacking up.  Please take a look if you get a chance!

How to Save Up by Saving Energy

The following is a guest post.  Billeater writes about ways to save money on your bills. The site strives to find the not-so-obvious solutions to every day expenses. You can read about more energy saving tips  at www.billeater.com.

It may seem as old as sliced bread, but everyone looks for ways to save energy. Some are struggling to get by and need the money to pay bills. The lucky ones are saving money towards buying an iPad or their next vacation cruise package.

All told, Americans use an estimated $1 million worth of energy every single minute. Studies show that saving energy reduces the basic fossil fuels burned (such as natural gas, oil and coal). Burning fossil fuels results in air stagnation, pollutants and other contributors to global warming. The average American will produce over 35,000 pounds of CO2 emissions each year. The question is: what can you do as a consumer to lower these emissions of carbon dioxide (otherwise known as CO2)?

Well, as luck would have it, the things you do to improve the atmosphere also help you save money towards buying your favorite things.

By beginning with the biggest energy wasters, you save a good chunk of money right out of the gate. Begin with replacing your old appliances. Take advantage of government rebates and other incentives being offered by environmental programs.

The Kitchen

First, look at your refrigerator and freezer. The ideal temperature setting for your freezer is 2° to 4°, and between 35° and 38° for your refrigerator. This one appliance accounts for 25% of the entire home energy usage.

Since we’re in the kitchen anyway, let’s look at the dishwasher. The best way to save energy here is to refrain from using the hot drying cycle. Instead, open the dishwasher when the cycle ends and let the dishes air dry. Also, choose the shortest “time saver” cycle whenever possible to save additional energy.

Laundry Room

Choose front-loading washing machines whenever possible because they save up to 75% of hot water usage. Remember to look for the Energy Star Label, a sign that the appliance meets strict government standards for saving energy.

If you already have an Energy Star front loader, be sure you are using cold water whenever you can. Most of these machines default to warm. Check the settings and make sure you set both wash and rinse on cold water. Hang clothing to dry outside on sunny days and plan your laundry days around the weather to avoid using your dryer as much as possible.

Hot Water

Next, let’s go to the thermostat on your water heater, since this affects all the hot water usage in your home. The standard setting for most household hot water heater thermostats is usually 140°F. Turn the temperature down to between 110°F and 120°F. While you are at it, take time to inspect the insulation around your water heater to be sure you are not losing heat unnecessarily.

Heating and Cooling

When summer gets here, you’ll be eyeing that air conditioning unit or thermostat longingly. Do whatever you can to stay cool by other means. Try spending more time on the bottom floor of your house, and only use the AC when you absolutely must.

Before the heat sets in, check the filters and replace them if needed. This will prevent overworking the system and will save energy. Also, don’t forget to turn the heat off when the nights get over 60 degrees. During the winter, you should set the thermostat for 68 degrees during the day and 58 degrees at night.

Lights

If you just can’t get the kids to turn off the lights when they leave the room, consider investing in some auto-sensing switches. These switches turn off the lights after prolonged inactivity.

Of course, energy-efficient light bulbs are important as well. Check with your power company to see if you can get a special deal on equipping your house with these bulbs. Don’t wait for the energy-wasting bulbs to blow out. Install the energy savers right away to start saving immediately. The bulbs will cost three times more, but last 12 times longer. Some estimates put the energy savings for changing the light bulbs to as much as 68 percent!

Windows

The best way to deal with leaky windows and all the energy loss in your home for that matter, is to ask your electric company to come out and do an energy audit. If they do not provide the service, you can do it yourself with the help of Energy Star through their Home Energy Yardstick. For more specific recommendations, you may wish to hire a professional home energy auditor.

Be vigilant in your search for ways to save energy. Simple steps like unplugging appliances that you rarely, use and taking shorter showers, can save you heating and electricity costs. The more you save on energy, the more you’ll have saved towards your dream vacation next winter!

Did You Know Car Financing is Negotiable?

Today we have a guest post from the Car Negotiation Coach offering advice on car financing. The Coach’s blog provides people with practical negotiation strategies and financial advice on car purchases.

Whenever one of my friends buys a new car, I always ask them what interest rate they got on their loan. And it always surprises me how little effort they put into finding a competitive rate. It’s often a percent or two above the best rates available at the time. They devote time and effort to researching car prices, driving around to several dealerships, and trying to drive a hard bargain with salesmen. But once they get what they believe is a good price, they put down their guard and consider the deal done. When they walk into the Finance office, they just take whatever rate the Finance Manager offers them.

What most people don’t realize is that shaving off a couple of percentage points of interest can make a huge difference.

For example, a $15,000 loan with a rate of 7.5% paid over 5 years results in a monthly payment of $300. That same loan with a rate of 9.5% would have monthly payments of $315 - a cost of $900 over the life of the loan.

So how can you get competitive car financing?

First off, there is nothing that says you have to get a loan from the dealership. It pays to shop for rates before buying a car. Check with your bank, credit union, or on the Internet for good rates. You can get pre-approved for a loan and get a blank lender check (up to a predetermined amount) to pay for a vehicle. Take this check or documentation of a rate quote with you to the dealership when you are ready to buy.

Once you get to the Finance office at the dealership, ask the Finance Manager for his best rate. If he gives you a rate that’s higher than your online quote, show him the quote and give him a chance to beat it. Most people don’t realize that car financing is negotiable! Loans are a big source of margin for dealerships and they will often try to win your business. Don’t be surprised if they are able to beat your best quote. But if the Finance Manager is unable or unwilling to beat or match your outside lending quote then just use the pre-approved blank check to pay for the car.

Summary
Don’t assume the price of a car is the only aspect of a car purchase that is negotiable. Get competitive offers before going to the dealership and see if the Finance Manager will beat them. Check out my website if you want more car financing tips.

BFS has a Guest Post about Recurring Expenses at Free From Broke

Free From Broke was kind enough to let me guest post today with Recurring Expenses Will Kill Your Budget-Choose Wisely. 

It's my personal take on prioritizing recurring monthly expenses.  What's on the top of your list?

BFS has a Guest Post about the Average Middle Class at Funny about Money

Funny about Money was kind enough to let me guest post today with How Middle Class Are You? 

It's a summary of an article about the average middle class and how my husband and I stack up...aren't comparisons fun?

BFS has a Guest Post about Minimizing at Funny about Money

Funny about Money was kind enough to let me guest post today with Can Minimizing Go Too Far?.  Take a look when you can, thanks!

BFS has a Guest Post about Angel Food Ministries at Personal Finance Journey

Lakita at Personal Finance Journey was kind enough to let me guest post today with Deal or Frill Angel Food Ministries.  Take a look when you can, thanks!

The Fun Stuff in My Budget

Today, Mr Credit Card from www.askmrcreditcard.com is going to talk about the fun things in his budget. He has also compiled his thoughts on the best credit cards offers available today if you looking for one. Hope you enjoy this post

Your budget serves many purposes. The most obvious one is to plan how much you intend to spend your money on different things. Budgeting is such a useful tool to know where your money goes and helps you decide where to put your limited resources to good use. However, very often, budgeting feels like to drag especially if you are looking to reduce debt or squeezing every cent to make ends meet. But as the title of this blog suggest, budgeting can be fun too! So in this post, I would like to touch on some of the fun things that I budget and plan for in our household's budget.

Saving For Vacation - This one is a biggie for us. We take a couple of family vacations every year. And we try to see different places each year. Our budgets for vacation vary every year depending on the circumstances. Normally, we have to save for airline tickets and hotel bills plus the usual meals and attractions if we intend to do the "Disney type stuff". Since vacations can be "relatively big ticket items", we do a few things to try to save money. For example we earn airline miles with our airline credit card. We book any airline tickets months in advance. We are also constantly searching for deals (which I guess is the fun part).

Budgeting for kids extra cirricular activities - We have three kids. All play baseball (softball for the girl). All play soccer. So there is always costs like new gears (cos they outgrow what they wore last year) and equipment. Our daughter also takes ballet lessons which she loves and two of our kids take piano lessons.

Sports Tickets - This year, we are going to get some season tickets for the Phillies and our new soccer team, the Philadelphia Union. I find that taking my kids to games is a really good bonding sessions. The kids really enjoy it too. I have found that getting season tickets is cheaper than just buying them before the game.

Gifts for Mrs Credit Card - Birthday, Anniversary, Christmas - Too be honest, buying gifts for Mrs Credit Card can be fun but stressful (hey, you know what I mean). I find that anniversary and birthday presents are most stressful. But yet at the same time, Mrs Credit Card does not like surprises. So she normally tells me what she wants. And we actually end up debating if it is a good buy and then put it in the budget!

Gadget purchases - I find that every year, I always buy some form of gadgets. Four years ago, I got Mrs Credit Card an iPod for her birthday (this one was a total surprise). Then the year after that, I got her an iPhone. Then last year, I got myself an iPhone. This year, we got the business a laptop. And we've got a couple of computer the last couple of years for the business as well.

The fun part of budgeting for these is that we actually do research on the stuff we intend to buy. That means spending time surfing the net for information (or you could call that time wasting). This year, we are thinking of getting a TV for the bedroom (perhaps 3D Plasma!!). I know most folks say it is a bad idea, but Mrs Credit Card and myself really like to veg out in front of the TV after putting the kids to bed.

House Renovations - This is not an annual thing. But for anyone that has bought an older home, or even a new home that was not really done up properly, you will know that there always seems to be a project to work on. Whether it is painting the walls, installing a new bathtub, changing curtains, or simply landscaping the garden, it costs money - and sometimes lots of it. But budgeting for these things can be fun too. After all, most of us take great pride in our homes. This year, we will not have any projects on the house. But the previous years, we had a deck installed and had our driveway repaved and extended.

What Are the Fun Stuff In Your Budget? - So there you have it - some stuff in my budget. What are some the stuff you have fun planning in your budget? Though I do spend quite a bit on these things, they are things I enjoy doing or in my opinion are worth spending on (ok - perhaps the house renovation is something I do not really enjoy!)

BFS Guest Post at Little House in the Valley - How Much House is Enough House?

Just wanted to say a quick thank you to Little House in the Valley for letting me guest post!

Feel free to take a look at the article, How Much House is Enough House?, to see my take on my own home.

Thanks again!

Guest Post at Sweating the Big Stuff - How Much Do You Need for Retirement?

Just wanted to say a quick thank you to Daniel over at Sweating the Big Stuff for inviting me to guest post!

Feel free to take a look at the article, How Much Do You Need for Retirement?, to see my take on retirement needs.

Thanks again Daniel!

Balancing Your Budget with Online Tools

The following is a guest post by Kevin Fleming. Kevin runs CreditShout, a personal finance blog dedicated to educating people on how to manage their finances and reviewing cash back credit cards.


Tracking finances, budgeting funds, and paying bills is one of the most important jobs you have. With one lost bill or skipped payment, your credit rating can suffer inordinately, so properly budgeting your finances is absolutely essential.

Many people shrink away from financial planning because it seems difficult—and face it, no one really likes the idea of spending hours working out a budget in a ledger book, surrounded by receipts from transactions you can’t even remember.

The solution to the issue may be a free online program, which allows you to monitor your debt, manage your credit cards, and track your spending habits over time. Here are some of the best budgeting tools you’ll find on the internet and how they can help you take care of your finances week by week.

Mvelopes – Mvelopes is an intuitive and award-winning online money managing envelope, and it comes with a free trial. While some online solutions are difficult to use and understand, Mvelopes uses the old-fashioned “envelope” method of saving and budgeting out your money. Most of the payments that you need to make—including payments to credit card debts—can be made automatically through the program as well, resulting in less work on your part to manage your finances. The feature can also help you avoid accidentally making late payments to your credit cards, which could trigger a late charge and a ding on your credit score. Mvelopes can help you use your credit cards wisely in a lot of ways. It even has a credit card spending tracker that sets money from your other spending envelopes aside, allowing you to pay off credit purchases in full every month. Remember, Mvelopes is only free for a limited trial, so if you plan not to continue using it, cancel your membership.

Wesabe – Wesabe has been online longer than many other online budget tools, and still touts itself as the best money management tool and financial issues community online. In fact, Wesabe is particularly attractive, as it touts a user-friendly interface and interactive forums that allow you to get finance tips from people just like you. You can add your credit union, credit cards, and bank accounts to Wesabe for easier money management, and you can tag and track your credit card purchases, along with your other spending, to see where your money is going Wesabe also allows you to check your credit card balances from multiple cards all in one place, facilitating debt repayment.

YNAB – Just like everyone else, you need a budget. YNAB (“You Need a Budget”) is a fantastic tool that uses four unique steps to help you take control of your earnings. It helps you to stop living from one paycheck to the next, to save money for a “rainy day,” and to adjust according to your under- and overspending. You can tailor repayment plans to target and eliminate your credit card debt right within the budgeting tool. The software also contains functions to track credit card payments, calculate debt payoff, and transfer money between accounts. While a one-time purchase of the software costs about $60, you can try it out for free for seven days and decide if you actually like it.

Mint – Like Wesabe, Mint has been a leading money management tool available free to online users since the mid-2000s. It has become so popular that it eclipsed, and ultimately took over, the Quicken budget tool many had become accustomed to using. Mint is extremely easy to use thanks to pages that are short on text and heavy on graphics, allowing for simple debt repayment to get you back to financial stability. If you’re interested in changing credit card companies, tracking credit card interest, comparing your spending habits with others in a similar financial situation, or getting to the bottom of your spending habits, Mint is probably the right tool for you. Best of all, Mint is completely free for users.


Using Online Budgeting Tools

The best way to use these online budgeting tools is to set up a budget and stick to it. Ideally, your budget should involve making aggressive debt payments to get out of credit card debt. While credit cards can be a great tool to earn rewards for spending (with the exception of some horrible store rewards cards like the best buy credit card ), the interest you pay can end up costing you hundreds- if not thousands- of dollars over the course of a year and quickly drain your pocket book.

Set up a plan to get out of debt and use the online budgeting tool of your choice to make that dream a reality. Once you've paid off that last debt payment, make a commitment to use your budget in order to pay off your cards in full each month. Track your credit card spending so you can find problem areas and always make sure you have the cash on hand to pay off your bill in full each month when the credit card statement arrives.

BFS has a Guest Post about ING at Bankshout.com

Kevin at bankshout.com was kind enough to let me guest post today with ING Direct is my Budgeting Buddy.  His site has a bunch of great bank reviews and suggestions.  Take a look when you can, thanks!

My Guest Post at Studenomics – How to Buy a Car

Just wanted to say a quick thank you to MD over at Studenomics for inviting me to guest post!

Feel free to take a look at “How to Buy a Car – What You Need to Know so You Don’t Get Ripped Off” to see my take on the car buying experience.

I have been working with finance managers for car dealerships for about 5 years, so this is experience talking.  Please feel free to contact me with specific questions since one blog post is not enough to fit everything in that I have learned.  :-)

Thanks again to MD!