6 Tips To End Credit Card Debt!!

In order to get out of credit card debt it takes action on your part. So whether or not you are being swallowed by the sink hole of credit card debt or you are just starting out to dig yourself into credit card debt – you have to take action before it’s too late in order to be come debt free.

The six tips listed below will help you get out of credit card debt…if you use them.

1. Stop using your cards – By using your credit cards you are paying additional interest on the credit card balance you owe on which you’ve already been charged interest. Unless you pay the new charges when you are billed you are accumulating additional interest on both present and past charges. (Don’t you love credit companies…and yes this is legal for them to do.)

2. Figure out how much credit card debt is costing you. You can find out how much credit card debt is costing you by seeing how much interest rate you have to pay. This is done by reading the fine print on your latest credit card statement. If you do not understand then you call your credit card company and have them explain it to you. (By law they have to explain it to you.)

3. Lower your interest rate you are currently paying on your credit cards. Lowering your interest rate is the most effective and easiest way to get your credit card debt problem under control. You can lower the interest rate you are paying by transferring high interest rate amount balances to lower or no interest credit cards. Once you’ve stopped using your credit card you’ve stopped your situation from getting worst, it’s now time for you to improve it.

4. Call your credit card companies and tell them to lower your interest rates. Since you already know the interest rates it is time for you to ask your banks and credit card companies to lower the interest rates. You should call them and ask to speak with a supervisor. The supervisor has the authority to give you a lower interest rate. (Don’t take no for an answer)

This is what you tell them: The rates are too high and you want it lowered. And also let them know that if they are not willing to lower your interest rate you are considering to close your account and transfer all your credit card balances to the company that is willing to give you the lowest interest rate.

5. Consolidate your credit card debts – transferring all credit card balances to one credit card – is an effective way of getting out of credit card debts. So when negotiating to get a lower interest rate you should let it be known that your ultimate goal is to get out of credit card debt at the lowest possible cost and not credit card shuffling.

6. Cut your savings in half. It would be foolish to be paying high interest rates while continuing to save the usual amount, if you are indeed saving. If you are already so deep in debt that no one company is willing to loan you the money to consolidate your credit card debts then you would have to resort to this tactics.

It works like this. Get all your credit card balances. Divide each balance by the minimum amount you are required to pay each month. This tells you how long it would take to pay off each balance. Start by paying off the one that takes the least amount of time (half your savings + minimum payment). Continue making minimum payments on the rest. When that least payment is finished you would pay the next least payment and so on. You would continue using this tactics until you are no longer in debt.

If you follow the above tips and tactics you should be on your way to getting out credit card debts in very short order.

Best Ways To Increase Your Credit Score

It used to be that “people” made decisions about your credit worthiness. You knew your banker and your handshake was all the collateral you needed. Those days are long gone, and now a single number – your FICO score – determines your credit worthiness.

We can talk about several ways to review your credit but to keep it simple we are going to focus on the credit model created by Fair, Isaac Company. Better known as FICO.

Your FICO credit score can be used to determine your interest rate and how much credit a lender will give you. So taking care of your score, and keeping your credit clean will save you money.

Keeping your credit history in good order and improving your rating is not a hard thing to do…but it will take time. Here are a few ideas how to do just that.

FIRST: Get a copy of your Credit History

There are many reasons you may have no credit history. Maybe you’re just starting out, maybe you pay cash for everything and have never needed a loan. In any case, if you have no credit history, your FICO score is likely to be low.

The easiest way to raise your score is acquire a loan, and pay it off on time. In general, installment loans are weighted more heavily than credit cards. In other words, you will improve your credit score faster if you buy goods with an installment loan, rather than acquiring a credit card.

Another option is to take a $1000 and open a 6 month CD at a bank. Now turn around and get an installment loan using the CD as the collateral. You then take that $1000 loan and do it again at another bank. Do this for a total of 3 times.

Now what you have is 3 loans. Pay the minimum payment for 6 months. In the last month, cash out your CDs and pay the loans off. You now have a credit history, and did not go into long term debt to get it.

SECOND: Keeping your history in good standing.

So we now have a good history. How do we get the score higher?

You don?t need to close old accounts. (Unless you?re being charged a fee to keep the account open.) Part of the FICO formula is based on the amount of credit available vs. how much you have used.

Another thing to be aware of is how you manage your money. Here?s the scenario: you have a $2000 credit card. Every month, you charge about $1800 to that card. And, every month you pay it off. But here’s what happens – your credit card company reports your credit information monthly to FICO. However if they report it on the day before you pay it off…the credit agency sees you carry a balance every month. If you can try changing the days you pay off your credit card.

THIRD: Fix your bad credit

For whatever reason, if you have a poor credit history, there are things you can do to improve your score. Some of them take time, and you will probably be best served by talking to a credit counselor to be sure that you not only repair your credit history, but also eliminate what caused that poor credit history in the first place.

Your credit history is the most important part of your FICO score. You need to start paying your bills on time. The value of your bills is as follows. Mortgage first, followed by installment loans, then credit cards.

The next factor in your FICO score is how you have used your credit. So pay off those credit cards

When you?re all done with the rest of things…review your credit report. Get one from all the credit agencies. Look for errors and mistakes. Contact them to see if they can remove them or correct the errors.

Your FICO score is an important part of your financial life, and using these strategies may help improve your FICO score. Before making any drastic changes to your finances, consult with a financial advisor.