Tips on Credit Cards, Part 2

However, something that can help your monthly payment without increasing the interest rate or the length of time you will need to payoff your credit card is to look at the advertising you get in the mail for new charge cards. That is, these financial companies will frequently offer you a new charge card at a very small “teaser” interest rate of say 3% (instead of the usual 18%) for the first year. Obviously, it is worth their effort to offer this in order to get a new customer. Along with the small interest rate they will quite often suggest you transfer your outstanding balance(s) from higher interest rate cards. They figure that you will transfer these loans to their card for which they will give you a lower rate for one year and then up the interest back to 18% at the end of the year and you will not even notice. And most people do not notice! However, if you are serious about having more money in your life, you will pay attention and mark 11 months on your calendar. When you have used their low rate for 11 months, start watching the ads again for a special low rate on a new card. This way you are continuing to payoff the outstanding balance but with a smaller payment or the same size payment with more of your money paying the outstanding balance rather than the interest owed.

There is another type of credit card that people have a tendency to overlook. Let’s say you go into a store to buy a new mattress and box springs. You can fill out a credit form at the store and make monthly payments on your new purchase. The store has simply contracted with some lender to put this charge onto a charge card. You now have another card payment to make each month. If you need that new mattress set, take your time and shop around for a store offering “no payments and no interest for one year”. Now this may seem like you are just delaying the inevitable payment. Yes and no. Most important, as with any loan, you do not want to use this unless it is for something absolutely necessary. After you are out of debt you can buy things you simply want to have. The secret to this type of buying and saving money is to, again, mark your calendar. Before the time period is up you will need to find one of these charge card specials for 3% or so.

Yes, this does take some extra time and thought on your part, but it does allow you to save quite a bit of money over the course of this small loan. However, there is one warning. Be very careful and make sure they are offering “no payments and no interest for one year”. Some companies offer no payments but you still have to make the interest payment each month. Needless to say, we want to avoid as much interest as possible, not pay more. On this blog you’ll find lots of information on how you can save money in a variety of ways. We strive to provide you with great information on reducing debt, debt management, debt reduction and how you can settle debt for less and more. So stay tuned!

Budgeting - 5 Tips to Avoid Debt

No Debt - No Problem 

1. Make a budget, this is the most important thing you can do. Having a budget will help keep track of your spending which in turn will help you stay debt free. When making a budget, it should include how much money you have coming in, and how much you have to spend each month on bills and essentials. Whatever is left on your budget sheet when you take the outgoings from the incomings is your budget for the month. Every time you spend something, no matter how small put it on your budget sheet and work out how much you have left. Small items add up quickly, just a few extra bars of chocolate or some non essential items in town can end up making you spend money you don’t need to be spending, and that you often forget you have spent.
2. When buying an item in town, don’t buy it straight away, go around to different shops, have a look at other items, look for the cheapest you can find or try and find a similar item within the price range of your budget. Going around to different shops will help the impulse go, if at the end of shopping around you still feel you need the item then make sure you can afford it. If you can’t afford it and you don’t need the item, then be strong and do not buy it.
3. Make a shopping list. It may seem like something only old people do, but making a shopping list really works. It not only helps you stick to your budget, it makes sure you only buy the items you intended to buy when you set out. Stores are designed to make us buy things we don’t want or need, and often when shopping we end up coming back without what we set out for. Make a list, stick to it. It will help.
4. Set a budget for each shopping trip. If you are going into town to shop, take out $100 from the bank or whatever you can afford and set this as your budget for the day. Only spend the money in your wallet or purse. Having cash will make you stick to your budget. Don’t buy anything on card even if it’s a debit card. Only spend what you have. Even a few small extra payments on cards, it will mount up. If you absolutely must have something that is out of your budget range for the day, check tip 2.
5. To save some extra cash, take around 10% of what you earn every week or month, and put it somewhere safe like a separate bank account. The money will soon grow and can be put towards something your saving for. 10% isn’t so much money that you will notice it being gone from your main spending budget.

Hopefully using these tips will help you get a better grip on your finance and help you budget for the future and avoid debt.