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So, you've made the decision to apply for a credit card. It's an important step for any consumer. Whether this is your first application in an effort to establish your credit, an addition to your existing credit card portfolio, or a plan to re-establish unsatisfactory credit, it is critical to research and fully understand the plans associated with various types of credit cards.

Before beginning the research process, consider and decide how you will use your new credit card. Will you be using the card for everyday purchases, or will you be taking an exotic vacation? Do you plan to pay the balance in full each month, or do you prefer to make monthly payments? Since APRs (annual percentage rates) vary for each card and respective payment plan, it's important to make these types of decisions before the credit card selection and application process.

Obtaining credit is not free, but can be economical and less costly if you understand the finance charges (the cost you pay for using a credit card). Grace periods may help reduce certain finance charges, depending on the individual credit card company offer. A grace period is the number of days you are given to pay your credit card balance in full before you are charged a finance charge. In most cases, finance charges are applied to new purchases only. (Cash advance finance charges are usually imposed immediately following the advance.)

Familiarize yourself with the annual percentage rate. An annual percentage rate represents the interest rate associated with using your credit card for purchases and cash advances. The APR is often a determining factor for many consumers when selecting and applying for a credit card. Credit card companies may vary their APRs, offering a different rate for purchases, cash advances, introductory periods and penalties. Traditionally, purchases carry the lowest APR. An exception may be an introductory APR for new purchases or balance transfers that may be offered at 0% for qualified applicants.

Many credit card companies competing for your business may offer a lower introductory APR of 0% for a specified period, for example, six months. At the end of this specified period, the APR will change to a pre-determined APR. (This information will be included in the credit card offer.) Therefore, it's very important to understand the APR following the introductory rate period, particularly if you will be using the card for large purchases and / or balance transfers. Also look for companies offering 0% interest on balance transfers with no time limit. Cash advances usually carry a slightly higher APR than purchases, but will vary for each credit card company.

An annual fee is another cost associated with using a credit card. Many think of annual fees in this way, the greater the APR, the lesser the annual fee. While this may be true in some cases, these fees are typically charged annually and usually will be subject to finance charges. Some special credit card offers, such as unsecured or unlimited credit card types and lines, may impose a higher annual fee.

In addition to a possible annual fee, many credit card companies impose charges through other fees such as late payment penalties, over limit fees and cash advance fees.

With the growing competition amongst credit card providers, new plans such as rewards and points programs are offered as incentives. These programs may offer earned 'points' or privileges for consumer items, travel (vacations and frequent flier miles) and other premium services, but oftentimes impose an enrollment participation fee in addition to any annual credit card fee. If you are a frequent traveler, these special programs and incentives may appeal to your taste.

When reviewing each credit card offer, look for the specific information outlined here to best determine the most appropriate card type and plan for your needs. You may elect to use a comparison chart of your own when considering credit card programs to more carefully select the best offer. Using the categories listed above (APR, finance charge, grace period, annual fee, etc.) create a left-hand column containing specific information about each category. Then, create a column for each credit card offer you are considering. This method will afford you a side-by-side, line item comparison to assist you in making a final decision.

Everyone have different needs when it come ups to choosing a credit card. If you pay off your monthly measure in full on a regular basis, for instance, you’ll desire a different sort of credit card than person who maintains a balance every month. Or, if you accumulate some kind of points, you may desire a card that assists you garner more, faster, with every purchase. This article will discourse the different things to believe about when trying to make up one's mind which credit card to apply for.

Choosing a Credit Card: Fees
One of the most of import and first idea of issues with getting a credit card is fees. Fees can include not only the annual fee, but the interest rate charged on any balance you carry, any late fees, and ‘other’ fees that a credit card company may charge.

If you are able to pay your full balance every calendar month (as is highly recommended by the experts), you’ll be better off with a no annual fee card. However, if you are like most people, and program on carrying a monthly balance, instead you’ll want to look for a card that offers an drawn-out low interest rate. Also, happen out how long the low interest rate is valid for; many of these credit card rates are merely teasers, and run out after a couple of months.

It’s very of import while comparing credit card companies that you look closely at how interest is charged, not just the rate it’s charged at. For instance, it’s A large financial difference if interest is charged on the average day-to-day balance of the last month, than if it’s charged day-to-day based on the going interest rate. Read the mulct black and white here, since it’ll wage off in spades, later. And don’t forget the mulct black and white with the ‘other’ fees – these can add up quickly. Bashes the credit card company charge when you take a cash advance, for instance?

Choosing a Credit Card: Acceptance
Where your possible credit card is accepted can do a human race of difference when shopping around. If you travel extensively, then this is of the extreme importance – maybe even more than of import than fees, because if you can’t usage your card, what’s the point in having it? Mastercard and Visa are the most widely known credit cards at the minute in North America, with American Express a distant third. Any others you’ll desire to do some heavy research on to make certain where you desire to utilize it, you can.

Choosing a Credit Card: Perks
Frequent circular points and bonuses at local supplies are both regular fringe benefits available with many credit cards today. If these options are of import to you, do certain to research their dollar value in mention to the other spots and pieces as well, and compare them alongside each other.

Choosing a Credit Card: Credit Limit
Finally, your credit bounds is something to look at when crucial on a card. Usually this measure is easy, because it is decided by the credit card company, and not yourself. Just do certain that you aren’t getting too high of a limit, because as you well know, it’s hard to delve your manner out of too much debt.

The procedure of glade credit can be laborious and frustrating, but your attempts will be paid for in better financing. Your rights are protected by laws, but you need to take sensible actions toward your end of glade credit discrepancies. You can get the credit reporting agencies to assist you instead of hindering your first-class credit pursuit with these tips.

1. Order credit reports.

2. Check for discrepancies.

3. Note problems and disagreements in your Credit Dispute Log.

4. Contact disputed companies by telephone. (Contact original debtors, not collectors.)

Log the telephone phone call with a little summary of agreements.

Remember to enter the name of the contact representative.

5. Follow up with certified missive to original company.

6. Write letters to collectors, difference bill, direct certification of payment to original company.

7. Fill out difference word form provided by credit bureau.

8. Write separate missive for each moot point to credit bureaus.

Send letters by certified mail.

Enclose transcripts of supporting documentation.

9. Use the number provided by the credit agency and phone call for progress; have got your mention number handy.

10. Keep comprehensive records in your Credit File.

These 10 stairway will assist you finance your dreams.

Copyright © 2005 by Jeanette J. Fisher. All rights reserved. (You may print this article in its entireness with the following author's information with unrecorded golf course only.)

The coming of engineering spoils people’s whims. The dawning of modernism goes on to provide to every human’s caprices. It constantly feeds on the people’s undying thirst for the easy, the instant, and the convenient. Often, it also causes them a batch of trouble—financial problem through unmanageable debt—that is.

Convenience vs. debt

Credit card gives people the feeling of invincibility. And it also gives them dozens of uncertainness about their financial management capableness when they meet problems with their debt. Although it is true that that credit cards work out financial matters especially when it come ups to safety and convenience, credit cards also makes fuss especially when the individual using it doesn’t cognize what you he or she’s getting into.

Studies show that debt and personal bankruptcies have got increased bank net income to the highest degree in the last five years. This also demoes that more than than and more credit card holders were not able to manage their finances that lead to credit card debt. If you are a cardholder and having some debt problems at this early stage, it’ now clip to believe over the possible results of this minor bug so that a more than serious problem would discontinue to arise.

Paying off credit card debt may take a long clip especially if the individual have high interest rates. But, it doesn’t mean value that you can make nil about efficient management of debt. When you happen yourself overwhelmed with debt, don’t autumn into a cavity of depression. You can get through it with subject and a change in disbursement patterns. Start eliminating problems with debt by getting tips and techniques on how to pay off your balances easier, how to consolidate of frequently encountered problems, expression for free debt audience agencies that tin aid you, and try—inch by inch—to rediscover ways on how you can recover your financial freedom back.

Eliminating debt

People who are having problems managing their debt or those who are near in bankruptcy often don’t recognize that the powerfulness to eliminate their problems totally is in their hands. Today, more than than and more Americans need debt aid badly. The chief problem is that these households are having hard modern times paying high interest for debt. And instead of lifting the load of debt, more than than people are paying much in interest every calendar month than that of the existent expenditure.

There are actually more lawful and moral ways to zero-out thousands of dollars in debts. And if you only take the clip to research and cognize your rights and how bankruptcy laws have got changed, you will discover that there are valuable facts to eliminate debt. Actually, the possibility of reducing or eliminating the high interest debt is now more than possible when a individual takes action to get his or her finances back on track.

Apart from knowing your arm in terminating debt, it is very of import that you develop a sense of control and doggedness first. The best thing to make is develop the subject to atop appending and start paying. Since you no longer have got resources to pay off your debt, this mightiness sound eldritch but you will recognize that you can work out your debt problems by going borrowing more money. Just do certain that the money you are to borrow wouldn’t transcend what you already owe, and maintain in head that that interest rate must be less than the rates you paying as of the moment. Since debt elimination procedure necessitates organization, clarity, and committedness to your ain growth, it is a must that you are ready for the duty and to stand up free and independent.

The best strategies to remain debt-free are to be prepared in extroverted expenditures, be disciplined enough not get tempted by things you don’t really need. In lawsuit you really need to purchase something, be originative adequate to minimise your expenditure.

For those people who see having a credit card indispensable but afraid of getting one because of the possibility of a debt nightmare, you must retrieve that credit card can be a powerful tool in managing your finances but there will always be bugs when not used properly.

Of course, there are infinite grounds why you should and shouldn’t get one depending on your needs. Whether you make up one's mind to get one or not, managing finances it still takes a sense of good budgeting, willingness to change disbursement habits, and the humbleness to help low interest consolidation loans when you are already burdened by too much debt.

Running up credit card debt, it’s sol easy to do, especially since we are all trying to accomplish the American Dream— A new chair for the life room, braces for the kids, a new outfit for Saturday nighttime dates, eating out with friends, and drive our new SUV that guzzles the gas and additions the insurance bill. It all looks to have got go a portion of normal day-to-day living. We pay the minimum due, ticker the balance travel up, and set on a happy human face because we’ve got it all.

Gerri Detweiler, writer of Cut Your Debt, Save Money & Secure Your Future and laminitis of DebtConsolidationRx.com, notes,

"Americans are pretty optimistic so it often takes a long clip for a consumer to recognize credit card debt is a problem. Most of us are counting on something to assist us get quit of the debt quickly. It could be a raise, business income, even an heritage or lottery ticket."

That’s what Bit and Shelley Ian Smith of Midland, Texas thought when they first got married. Happiness must at least partly come up from keeping up with the Jones’s. But old age later and upwards of $50,000 in credit card debt Shelley states they had nil to demo for it. They aren’t human race travelers and they weren’t having any fun. It was the day-to-day trips to Target and Pier One Imports for points they didn’t need but thought they might utilize one twenty-four hours that got them into trouble.

They finally woke up after attending a Dave Ramsey seminar and realizing the daftness of paying interest for pizza. After making changes in their lifestyle, selling tons of points on Ebay including household heirlooms, and working their manner out of debt, Shelley now kips well at nighttime free from wondering how to pay their bills.

You can kip well too! Detweiler states if you have got got credit card balances running up with no thought how to do them begin running down, if you have no thought how long it would take and how much it would cost to pay your balances off, or if you’re paying off a credit card with another credit card it’s clip to get serious about your debt.

Create a Repayment Plan

This is the first of import measure in your journeying because it put out the way ahead. A repayment program will clearly demo you all your debts, how long it will take you to pay it off, and how much it will cost in interest and fees to pay it all back. It will also give you a good thought of what options you have. For example, Detweiler states if your program shows it’s going to take more than than 3-5 old age to pay off your debt on your current budget, then it’s of import to seriously see debt counseling. Bankruptcy is also an option, but most consumer advocators emphasis that is should always be an absolute last resort.

For aid on creating your plan, visit EveryDayWealth.com. The land site offers everything from a personalized repayment program to monthly credit reports, and ways to lower your finance and insurance costs, construct better credit, monitoring device and protect your assets, and optimize your measure payments.

Finding Money for Your Payments

It’s clip consuming and costly to seek getting out of credit card debt by paying only the minimum, especially if you go on to charge purchases. But at modern times it can experience almost impossible to happen the extra money to be able to pay more. Here are some tips to assist you get started.

The "B Word"

While it’s not most people’s favourite thing to do, taking one calendar month to track every single penny you pass through a budget is an invaluable measure in getting out of credit card debt. You’re certain to happen countries where you can cut back. The biggest countries of overspending are nutrient and transportation. Detweiler states she’s seen consumers discover they were paying $200 a calendar calendar month for pizza pie bringing or $160 a month at the office vending machine. Don’t be discouraged, however, if you only happen $10 as any small spot can assist reduce your debt.

After trailing disbursement for a calendar month you may happen it necessary to do a few lifestyle changes. It may not be easy, but the changes aren’t necessarily lasting either. Here are some ideas to get you started life a more than moderate lifestyle.

If you have got good local populace transportation or good motorcycle routes, see living with lone 1 car. If you make need two cars see a trade down, which could also lower your gas and insurance bills.

Reduce your lodging costs by setting the thermoregulator a small higher in the summertime and a small lower in the winter. Or make you even have got an extra room you could lease out? Maybe moving to a smaller topographic point would salvage you money, assuming the nest egg outweighs the cost of moving. Perhaps it’s A matter of dropping some cablegram channels or life without Internet access at home.

Cutting your nutrient measure is one of the most effectual ways to happen extra money. Try not eating out as often, maintain a terms book, store alone, eat a bite before grocery store shopping, purchase in season fruits and vegetables, eat less meat, and avoid cold cereal grass grass (hot cereal is cheaper and healthier).

Making minor lifestyle changes can assist you accomplish the new American dream—freedom from debt for all!

Get Another Job

That’s right! It might temporarily take a part-time job delivering pizza pies to get you and your household back on the right path. Or if you are living off one income so ma (or dad) can remain home and raise the kids, see gap a home daycare or other home based business. That manner you still get to be with your ain children and earn some extra money at the same time.

Sell Some Stuff

Chances are you have got tons of sellable material you aren’t using packed in the dorsum of your cupboard or in boxes in your garage. And if you aren’t the sentimental type travel ahead and sell grandma’s china. Even if you are sentimental, see keeping only your most cherished heirlooms. Try not to overlook something that doesn’t look valuable. The Smiths inherited a picture that hung inch her grandmother’s garage for old age and it ended up being auctioned off for $40,000 at Christie’s in Boston!

Tap Into Your Assets

If you make have got some savings, see pulling some of it out to pay off your debt. You typically don't earn near adequate interest in a nest egg account (typically around 1-2%) to outweigh the interest you’re paying on credit card debt (typically around 15%). You can see tapping into a 401K program too, but be cautious with this option. You will need retirement nest egg some twenty-four hours and according to Detweiler, these types of accounts are usually protected during bankruptcy proceedings. It may be a good thought to talk with a lawyer about bankruptcy options before using retirement money.

Moving Forward

Once you’ve establish some extra money to begin paying more than than the minimum you’re ready to travel forward. Determine a fixed monthly payment you can set towards the debt. Wage only the minimum on all your credit cards except the 1 with the highest interest rate toward which you will pay as much as your budget allows. Detweiler adds,

"For most people paying the highest interest rate credit card is best. Once it’s paid off, then travel on to the adjacent highest interest rate keeping your same fixed monthly payment."

Another option that worked well for the Smiths is paying the lowest balance credit card first. Ian Smith said that quickly getting quit of the first credit card debt gave her the assurance and motive to travel onto the next.

Contact Credit Card Issuers

It’s always a good thought to reach your credit card issuer to seek and negociate a lower interest rate. If they won’t give you a lower rate, seek applying for a new low-rate credit card. The "Card Reports" subdivision of CardRatings.com is a great topographic point to shop and compare credit card offers. If you make get a new low-rate card then immediately transfer as much of the balance from your higher rate card(s) as possible. If possible, seek not to transcend 50% of the credit bounds of any of your cards as doing so could lower your credit score. By staying under the 50% grade you may happen new low-rate credit card offers look in your mail box, which could give you a valuable tool in negotiating.

If you are behind in your payments, some credit card issuers may even be willing to put you up on a hardship program where your required payment is reduced. Credit counseling agencies may even be a better alternative. Detweiler notes,

A hardship programme done directly with the credit card issuer won’t have got got this advantage, so as long as you are paying less than the contractually agreed upon amount your account will have a negative standing.

Final Thoughts

Getting out of credit card debt is never an easy process, but it can be done. The extra attempt definitely pays off, not only financially but also when it come ups to your peace of mind. We sincerely trust that these self-help techniques will assist you accomplish the new American dream— freedom from debt for all!

Does this Sound like You? There are 100 shopping Days left until Christmas and your Credit Card Balance is Higher now then it was in the beginning of the year. You may have thought of using your home and getting a debt consolidation loan, A Debt Consolidation Loan without a solid Long Term financial plan is a Recipe for Disaster. A One way ticket to Credit Card Purgatory

The Debt Consolidation Loan

Most credit cards require a Minimum Monthly payment of 3% to 5% of the Outstanding Balance. On a 10,000 Balance that is $300 to $500 Monthly. On a $20,000 Balance that is $600 - $1,000 Monthly. The Interest on your Credit card payments would not be Tax Deductible,

If you Refinance your House and Consolidate your Bills even at an interest rate of 6% you would only pay $60 a Month for $10,000 or $120 a Month for $20,000 (For many homeowners this would be tax deductible)Your Monthly Savings will be between $240 and $880 a Month. The Key to a Good Financial plan is to use this extra $240 to $880 a Month to build a Failsafe, your Economic Life Preserver. (If you don't own a home and still have fairly decent credit you might be able to get a signature loan from your bank or credit union.)

If you currently have a mortgage paymet based on an interest rate of 3% or Higher you may want to look at refinancing your House using a Loan where the payments are fixed for 5 Years based on a 1.95% interest rate. On a 200,000 Loan this can often mean an additional $400 a month or more in savings.

Let's Assume you save $700 a Month with a Combination of the above 2 Methods.

1 - Emergency Savings

You would want to keep at least 2 Months worth of Bills (3 Months would be Better) in a Savings or Money Market Account. Bills would include Rent or Mortgage, Utilities, Medicine, Food and Insurance Premiums. You need to make this account a Priority. Place at least $300 a Month into this account until you have reached your Goal of 2 Months Worth of Bills or $5,000 whichever is Higher. After you Reach Your Goal Continue to place $50 - $100 in this Account until you have reached Double your Goal.
(4 Months worth of Bills or $10,000 whichever is higher) Once you have reached Double your Goal you no longer need to place money in this account.

Some People will just Borrow an Extra $5,000 and place it directly in there Emergency Account.

2 - The Debit Card

After you have established your Emergency Savings you will want to establish a Debit Card Account. Open a Bank account and get a Debit Card. Deposit $100 or More Monthly into this account until your balance reaches $1500. Now If you have an Emergency car Repair, Home Repair, Dr Bill or any other type of unexpected expense use your Debit card rather then a Credit card. Your Goal should be to maintain this account at $1,500 to $3,000

3 - The Credit Card

Most people don't need to rip up all there credit cards they just need to manage them better. Cancel all but 1 or 2 of your credit card accounts. Credit Cards are an Important Part of Life, An unexpected car repair or Dr. Bill can be handled very easily with a credit card (If you don't have enough money in your debit card account). With the exception of an Emergency never charge more in any month then you can Pay in full when the bill comes. Pay off all new Charges in full within a week of getting the Bill.

4 - Insurance Needs

Insurance needs would be things like Life insurance, Health Insurance and Long Term Care Insurance. Contact an Insurance professional to discuss your needs. If you don't have any Life or health insurance look into low cost options like term Life and Discount health care until you have extra funds to go for the higher cost options (After your emergency account is established) Life insurance can often be combined with retirement planning see step 5.

5 - Retirement Savings

Use at least half your savings from your bill consolation loan to fund an IRA for you and your Spouse. Speak with your Accountant to see your IRA Funding Limits. In 2005 people who qualify could place up to $4,000 a Year into an IRA or Roth IRA. People over 50 who qualify can place up to $4,500 in an IRA or Roth IRA.
For more information and phase out rules you can view the IRS publication here http://www.irs.gov/publications/p590/. If you don't qualify for an IRA or you already have it funded look into other options like Universal Life and annuities.

6 - Some Girls (or Guys) Just Need to Have Fun

Everyone Needs and Enjoys to have a good time. Don't get so hung up on getting that emergency fund or building a retirement nest egg that you don't have fun. Budget something fun a few times monthly. Movies, Bowling, The Zoo a trip to the water park, a Nice dinner whatever it is. Even if it is only $10 or $20 a Month in the beginning when things are tight. You can always add $50 a month for a vacation fund later.

7 - The Budget Review

Once or twice a year review your budget. See how your Emergency and Retirement funds are doing. Look over your credit cards and make sure you are paying those bills in full.

If your situation changes for better or worse. You would want to do a review. Things that may trigger a review. A Salary increase or Decrease. An Added Expense like a Car Payment. A Major change to an expense, Much higher Gas Bill or Mortgage. Car Payment is Paid in Full. A child starting college or private school.

By combining a Bill Consolidation loan with the above 7 Step Financial plan you are taking the required actions to help insure you won't find yourself in credit card Hell Again.

How Lenders Operate – And How They’ll Brand a Tidy Luck from the Unknowing

Credit card companies might look like immensely clever, money making endeavors that work every loophole to maximise the interest payments – and net income – they are taking from you every month. Nothing, however, could be additional from the truth. These financial establishments operate on simple rules and work the fact that consumer demand and their customer’s naivete will maintain business turning endlessly over.

It doesn’t have got to be that way, however. Know what to look out for and you can cut your operating expenses and halt these businesses from making a dime more than they have got to.

Lenders work the fact that people utilize one card for many purchases. For example, if you utilize a balance transfer particular card rate for disbursement in the supermarket or mall, they deliberately construction repayments in such as a manner that you’ll wage a luck on the full balance. To properly play your plastic you need to deploy an regular army of cards as arms in the warfare against consumer debt. Using the right tool for the right occupation will nail your credit card costs.

If you already have got brawny credit card bills, transferring the balance will usually substantially cut your interest costs. What this agency is that your new supplier pays off the debts on your current credit Oregon shop cards for you.

You then owe the money at a (hopefully) lower interest rate for a fixed – or sometimes indefinite – clip period of time. The cardinal to making this work is by not using this card for spending. What this tin mean value is that credit card suppliers will then revert the interest rate for the whole of the balance up to a higher rate.

Consumers who pass on a card, but don’t clear the debt each calendar month should concentrate on minimizing the interest cost. Search the market for the lowest purchase rate available, but also maintain in head the twenty-four hours when you’ll clear the balance in full (e.g. Bonus time; when your chemical bonds mature, etc.) and don’t allow the balance spiral beyond your means.

If you pay off your balance in full each calendar month then the interest rate is irrelevant. Focus instead on the additions available from using the card for spending. The cardinal to this is the reward strategy offered. Many credit cards offer points strategies or even cash-back. There’s A huge array of different schemes, but by picking the right 1 you can profit substantially. It’s often simpler just to travel for a Cashback card, where the benefits are more than apparent, but sometimes reward strategies offer great incentives – particularly when they offer double points to new customers, and so on.

If you’re 1 of those lucky people to be debt free you can take REVENGE on the credit card companies and do free dollars from their products. The strategies are simple to manipulate. If they impart you money at 0%, you can bank the cash and earn interest on it. There are a assortment of chemical mechanisms that allow you to get money into your nest egg account quickly and easily. Once its in, just allow it sit down there for the continuance of the interest free time period and pay it back in full when it’s astatine an end. Significant amounts can be made from this, but it’s A strategy that should only ever be used by consumers with a good credit history, no debts and are prepared to do a small effort.

Store cards should be avoided under almost all circumstances. They charge the highest rates of interest, and by being offered at a section shop counter are an easy enticement into a mine of consumer debt. You should never utilize them to borrow money on, and if they offer any fringe benefits and benefits do certain they work for you. For instance, some offer a 10 per cent price reduction on first purchases. If they brand so – make certain you take them up on it when purchasing something big, thus maximizing your saving. As a rule, however, avoid these expensive options like a plague. Stick to a credit card that charges low interest on purchases and you’ll be fine.

Some people, however, simply can’t get new credit cards. Sometimes there are quite valid grounds for this, but on other occasions it can be owed to wrong information held on your credit mention file. Apply to a credit mention company, like Experian, and check that there are no inaccurate achromatic Marks on your record. Beyond that, there are a assortment of simple strategies you can apply that volition encouragement your credit score and assist enable you to get the best credit cards for your needs. In a place of strength, you can then do credit cards work for you.

There are credit card tips, and then there are credit card secrets. These latter are little known tricks that credit card companies play on you, as well as tricks you can use to get rid of fees and pay off your debt sooner. Here are some of the best credit card tips, tricks and secrets.

1. You can get rid of annual fees. If you have good credit, just call and ask for fee to be removed. This worked on three out of four cards I called on, and I just dumped the other. Of course the threat to do the same with the others is what got the fees dropped.

2. Read the fine print, and pay on time. Be aware that under "universal default" rules, if you are late on one card, your interest rate can be increased on other cards as well. They love to get you with this one.

3. Watch for changing due dates. This is a trick used by some credit card companies to get you to pay late, so they can collect the late fees. They will also be able to raise your rate, and the rate on other cards you may have. Don't assume that your payment due date will always be the same.

4. Use promotional checks with care. Transferring balances to 0 interest promotions can be a good idea, but watch out for those that charge "balance transfer fees." Transferring a balance that you were going to pay off soon anyhow will just cost you more if there is a 3% transfer fee.

5. Try credit unions for cards. Their cards usually have lower rates. My credit union Visa rate hasn't been over 10% in years, and I have zero liability for unauthorized charges.

6. Ask to have the late fee waived. If you've never been late before, some credit card companies will waive a late fee - but only if you ask. Why not try it? All it takes is a phone call.

7. Pay in full every month. Credit cards are for convenience, not for hiding the true cost of things. Don't pay interest - just pay the balance every month.

8. Don't buy the credit card insurance. This typically stops your payments when you are injured or unemployed. It is one of the most over-priced insurances out there, and doesn't eliminate the debt, but just delays it.

9. Avoid credit card security insurance. It pays for unauthorized charges when your card is stolen, but you are only liable for the first $50 if you report the theft in any case, and many cards already have 0 liability.

10. Pay high-interest cards first to reduce credit card debt. If you have $200 monthly to apply to your credit card debt, pay only the minimums only on all cards but the card with the highest interest rate. Put all the rest of the money towards that one. Once that one is paid off, work on the next highest. This is the fastest way to get rid of your credit card debt, and the most important of these credit card tips.

Credit card secret traps are the concealed side of plastic that maintains you in debt that is hard to pay off. The chief aim of credit card companies is for you to carry the largest balance you can possibly repay.

Trying to avoid these credit card secret traps is slippery because credit card companies constantly raise your credit limit, and offer you fringe benefits to get you to charge even more.

Credit card companies can get very originative with fees and interest rates and that's where you can get into financial trouble. To avoid this from happening here are some common credit card secret traps to be aware of when you compare credit card company terms.

Two Cycle Billing

The two rhythm balance method is where the interest on your average day-to-day balance is computed using both your purchases from that charge rhythm and charges from the calendar calendar calendar month before.

Even if you paid off your full balance from the month before, that figure is still used along with your current month purchases to cipher your average day-to-day balance. This credit card secret trap can maintain you in deep debt for decades.

Credit Card Grace Period

A credit card saving grace time period is the number of years before the credit card company starts charging you interest on new purchases. Most cards have got got a saving saving saving grace time time time period but mind of the cards that don't.

If you have a card with no grace period, you always pay interest on new purchases from the twenty-four hours you do the purchase, even if you pay your measure in full.

Cash Advances

You almost never get a grace period for cash advances, which intends you get paying interest on that advance right away. Also, the interest rates on cash advances are typically higher than the ordinary rate on card purchases. A cash advance is costly and one of the most common credit card secret traps.

Credit Card Late Fees

Credit card companies can enforce brawny punishments on any balance that you pay late or balances that transcend your limit. But the punishments of credit card late fees don't stop there.

If you go against even one of your credit cards terms, other credit card companies may also penalize you with punishment rates even if you have got never missed payments on them.

Interest Rate Changes

Credit card companies are allowed to change your interest rate anytime, provided they give you 15 years notice. So read what your credit card company mails you because some companies will mouse this by hoping you won't catch it.

The underside line is read the small black and white in the credit card terms provided by the card issuer regarding the credit card company regulations concerning the charge method, saving grace time period as well as the interest rates and fees.

Also, believe about how you will utilize the card, especially if you anticipate to carry a balance. Then, compare credit card company terms and seek to take the card that maintains you from falling into these credit card secret traps.

Copyright © 2005 Credit Repair Facts.com All Rights Reserved.

If you’re like the average person, allow me warn you ahead of clip about what I’m going to uncover in the adjacent few paragraphs. You may be angry after you complete reading this article about how you’ve been misled in the usage of credit card debt.

The American economic system is designed to do you work yourself to the point of exhaustion, only to construct wealthiness for those very same companies you work yourself to death for – not for YOU!

The most eye-opening example of this is with consumer debt. For example, if you purchase your home with a conventional mortgage, you’ll wage about THREE times the amount over the life of the loan. Think about it this way. It’s like taking your monthly mortgage payment and tripling it, then sending it off to the bank.

This is how much you will eventually pay back for the privilege of using their money. So you can see how two-thirds of the sum amount you’ll wage your mortgage company is primarily INTEREST payments. Interest is pure net income for the mortgage companies and a hurt to your financial well-being.

Ask yourself a serious inquiry – makes the Bank rate to get so much of your hard earned money? Bash you believe that they are doing such as an outstanding occupation that they should be compensated so well?

This simply intends that when you come up home from a hard twenty-four hours at work, you’ve just contributed to your bank or mortgage company’s underside line – not yours. THIS IS YOUR MONEY! I’m certain you’ve work hard to earn it. You’ll most definitely have got to pay taxes on it.

For instance, if you believe your mortgage payments are out of control --consider credit card debt. If you have got an average payment of $5,000 in debt, it will take you over 60 old age to pay that debt in full if you make the minimum payments.

I don't cognize about you, but I wouldn't desire to be retired and still making payments on credit cards I charged up in my twenties.

But you cognize the story, and you've probably heard it a million modern times -- the rich get richer and the poor get poorer. It’s certainly not just and I’ll give you an easy manner to get out of debt without loans or debt consolidation programs and more than importantly, stay out of debt.

When you cognize how to put the money you’re currently disbursement on mortgage payments, car loans, credit card debt and any other type of monthly installment debt, you’ll be pleasantly surprised at how quickly you can go debt-free.

Make a committedness to yourself to happen at least 10% of your monthly return home wage to assist you get out of debt. Look for ways to cut costs. Go over your cablegram bill, your cell phone plans, see if it still do sense to maintain your home phone, revisit insurance policies, etc. and see where you can redirect money to assist you get out of your debt situation.

Now travel and garner up your credit card bills, automobile loans, and any other installment loans you have got and entire them up. Keep in head there's a difference between debt and expenses. Expenses are things like utilities, nutrients and taxes.

After you've come up to expansive total, expression at the monthly payments for each debt. Select the monthly payment that is the smallest amount. Now, you'll add the money you've "found" to assist you pay down this debt to zero. Once this debt is paid in full, take the money you were paying on this debt, add it to your second debt, plus the extra money you establish and go on to final payment your debt in this manner.

It won't go on overnight, but you didn't get into debt nightlong either. Consistency is the name of this game. By faithfully following this method, it will take the average individual between 5-7 old age to get completely out of debt.

It's been a Catch-22 dilemma, especially for immature people, since the dawning of the Credit Age. You desire credit, but you can't get credit because you've never had credit before. It's a state of affairs everyone confronts as they get to seek to go creditworthy.

In order to measure up for a credit card, you must me at least 18 old age old (or 21, if you're a lasting occupant of Puerto Rico). From then on, the regulations get more than composite and are subject to reading by credit card issuers. In general, however, you'll need a regular beginning of income or savings, so the credit card issuer can be assured you have got the ability to refund the money. They'll also look at your credit history, which is where most immature people will get to have got difficulty, because they don't rich person any credit history.

If you go on to be a fulltime student when you fill up out a credit application, do certain to notate that on your form. In many cases, credit card companies will be more than indulgent with fulltime students, and will publish cards with lower credit limits, in order to assist them get to set up a credit history. As clip travels by and you turn out yourself to be a good credit hazard by paying your measures on time, you'll be able to inquire your cardholders to increase your limits.

Another good manner to assist credit card companies see you as a good credit hazard is to open up a checking account or nest egg account, especially 1s with debit entry cards. Debit cards are similar to credit cards, but they aren't loans. When you utilize the card in a store, they swipe it through their register the same as a charge card, but the money is automatically deducted from your checking or nest egg account. Using a debit entry card wisely can assist convert credit card companies that you're a good credit risk.

There are some section supplies that are very broad about issuing cards to customers. You may be able to get a card with very small credit history--or none at all. However, you must be careful with many shop cards, because the interest rates are often very high, sometimes 20 percent or more!

To set up a credit history using such as cards, purchase something relatively cheap and then pay it off in respective installments. Don't pay it off completely when you get the measure (although that's a great program for later, because you normally don't pay interest on charge cards if you pay them off in full every month). Instead, wage off the point over respective months, to demo that you can refund the measure on clip and in full. Once you've done that a few times, your credit history will get to demo creditworthiness, and you tin apply for lower rate cards that can be used in a wider assortment of situations.

Having a major credit card is critical in many situations, such as as renting a car, since they'll almost always inquire to see a major credit card, even if you're paying cash for the rental. Remember, there are ways to obtain that major credit card, even if you have got no credit history. Start small and go on to be responsible in edifice up your creditworthiness.

Copyright © Jeanette J. Fisher

There are a whole assortment of different types of credit cards available which can do choosing the right 1 a very confusing experience. In order to assist you decide, listed below is a utile dislocation of the assorted types of credit cards available.

Standard Credit Cards

Standard credit cards work as you might anticipate - with the cardholder using the card in order to pay for commodity and services up to their agreed credit limit. Repayments are made once every calendar month which must at least screen the agreed minimum repayment. These repayments will cover not only the capital borrowed but also the interest and extraneous charges collectible upon the amount borrowed, usually referred to as annual percentage rate. Standard credit cards should not be confused with debit entry cards where transactions are charged directly to your current account.

Charge Cards

Charge cards work in the same manner as normal credit cards with one difference, the balance of the charge card must be paid off in full every month. Charge cards are most regularly issued to either businesses or to consumers who may have got had a bad credit history in the past. If you have got a poor credit history then a charge card might be offered to you because the full monthly repayments would prevent spiralling debt. Charge cards are also popular with the affluent consumer as this kind of card can offer credit practically without boundaries. It should be noted that if the cardholder makes not pay off their balance once a calendar month as required then they could incur very brawny fines.

Platinum and Gold Credit Cards

Platinum and Gold credit cards are only available to appliers who earn a certain degree of annual income and, accordingly, offer a number of benefits to the cardholder which will change from supplier to provider. Higher credit bounds are usually associated with these types of credit card. If you fall into a higher income bracket and have got a good credit history then you will be able to profit from the advantages that such as a credit card offers.

Store Card

A fluctuation on the credit card, a shop card will allow the cardholder to do purchases with a peculiar retail merchant on a credit account. The cardholder can then effectively purchase merchandises without paying for them until a future date, when it is most convenient for them. You will often be offered price reductions on the commodity that you purchase with a shop credit card but it should be noted that the interest charged on such as cards are usually extremely high. This is an country that you must be certain to look into with prudence if you are considering obtaining; you might happen that the disadvantages outweigh the advantages.

Reward Credit Cards

Reward credit cards, or loyalty cards, operate in a similar manner to charity cards except that the chief receiver of any benefits is the credit cardholder. Incentives may include cash bonuses, points, price reductions and Air Miles. With this type of credit card it is of import that you believe logically about the rewards being offered, and work out exactly how much you will need to pass on your credit card in order to harvest the benefits.

Charity Credit Cards

Charity credit cards offer all the usual benefits of a regular credit card but also donates a peculiar percentage of what you pass to the charity to which it is affiliated. These charity contributions are made at no extra cost to the cardholder and the card allows consumers to assist a good cause simply by disbursement money in the manner they always would. You can obtain credit cards for a whole range of diverse charities as well as arrangements such as as football game baseball clubs or universities.

You may freely reissue this article provided the author's life stays intact:

Most businesses desire to be able to borrow money when they need it, without the proprietors having to vouch the loans personally. This agency less hazard to the owners. But wanting to get credit for your business and actually getting it can be two different things.

One company recently approached us because over the past two old age they had created a successful business, with over twenty employees. But they couldn’t get a business loan because they hadn’t taken the clip to construct a business credit profile and didn’t cognize where to start.

You may have got seen marketing ballyhoo about how a business credit profile can defeat a bad personal credit file. In most cases, however, it’s of import that small businesses have got both good business credit, as well as solid personal credit on the portion of the owners. This is especially true in the current environment where investors and venture capitalists aren’t handing money out to just anyone who can take a breath and have a business idea! Even established businesses will happen it necessary in some cases to supply the business owner’s personal warrants on some loans or credit cards.

Building business credit is completely different from edifice personal credit, though your personal credit may be linked in some ways. For example, credit reporting giant Experian sells a business credit score that is based on both the hazard of the business and the personal credit of the proprietor of the company.

In addition, you don’t have got the same credit protection laws with business credit that you make with personal credit. So you desire to do certain you begin out on the right foot, or it can be hard to do corrections.

The cardinal to properly establishing business credit is twofold:

1. Set up the proper business construction and take basic stairway to guarantee your business looks “real” and stable to the business credit bureaus. That agency getting the proper occupational licenses, and a phone number that is listed with directory aid in the businesses’ name, among other things. Your business will generally need some word form of corporate construction to effectively construct a business credit rating.

2. Borrow or purchase merchandises and services from companies that volition report your credit history to the major business credit reporting agencies such as as Dunn & Anne Bradstreet and Experian.

Unlike personal credit ratings, where you can have got a small income yet get a top FICO credit score, the best business credit scores are reserved for large stable businesses, those with respective million dollars in sales a twelvemonth and 25–50 or more than employees.

But don’t allow that halt you! By taking a few careful steps, you can begin small and still construct a nice business credit evaluation to get you the borrowing powerfulness your venture needs.

A few warnings:

1. Don’t attempt to “buy” good credit! Some companies will offer to “sell” trade mentions for a large sum of money of money. This is a rake off and if the credit reporting agencies happen out, they will purge those references.

2. Don’t pass large sums of money of money on a shelf corporation from a company that “guarantees” you will be able to utilize it to get loans. More often than not, the company won’t have got the sort of credit evaluation you’ll need to be successful.

3. Don’t attempt to get business credit as a replacement for bad personal credit. If you have got damaged personal credit, work on rebuilding it while you’re edifice business credit.

Entrepreneurs are usually hard-working, originative and willing to get the occupation done. Fortunately, those are the same qualities that volition aid you through the procedure of edifice strong business credit. Get started now! For more than information about edifice business credit, visit www.BusinessCreditSuccess.com

Nearly 20 old age ago I worked for a small consumer advocacy organisation in Washington, DC. Each hebdomad we received pokes full of mail from consumers across the country requesting our listing of credit cards with low interest rates and no annual fees. If you wanted a low interest rate on a credit card back then, you often had to apply to a bank in Land Of Opportunity where interest rates were capped by state law.

Those were the good old days.

Now, interest rates range from zero percent to a high 39 percent. It's tougher to happen (and keep) a good credit card than ever before. That's because there are many new traps that tin hang-up unsuspicious consumers.

At the top of the listing is the "universal default clause" which allows issuers to supervise you credit report and raise your rate if you are late on any measure that appears on your credit report. One major issuer, for example, will tramp a 0 percent rate to 24.99 percent if you steal up!

In fact, true "fixed rates" are rare. Many consumers don't recognize that a "fixed" credit card rate isn't the same as, say, a fixed-rate mortgage. In most states, card issuers can raise the interest rate on a fixed-rate credit card with just 15 days' written notice. The new rate can typically apply to existent balances as well as new purchases.

Fees are also on the rise. Take late fees, for example, twenty old age ago a late fee on a credit card was still fairly unusual, and typically wasn't charged unless you were 15 years late with a payment. Now you often must get your payment to the issuer by a certain hr in the morning time or you'll be charged a late fee of as much as $39. Go over the bounds and you'll not only pay more than interest, but a steep over bounds fee as well.

Foreign travelers are often charged a "currency transition charge" of 1 - 2 percent of the amount of their purchase. As the consequence of a social class action lawsuit, Visa and MasterCard were ordered to supply refunds of those fees in certain circumstances. The problem wasn't that the fees were illegal, but it was determined they weren't properly disclosed. The lawsuit is being appealed.

Here are some determinations from the non-profit-making Consumer Action's annual study of credit cards (www.consumer-action.org):

-- The huge bulk of surveyed cards have got got got significantly higher punishment rates that are triggered by one or two late payments in a time period of six calendar months to a year.

-- One-fifth of surveyed issuers have shifted to tiered late payments, which Consumer Action construes as a delusory manner of charging higher-than-average late fees.

-- The number of cards with $35 late fees have more than than doubled from last year.

-- More than one-half the cards surveyed necessitate cardholders to pay only 2 percent of the monthly balance each calendar month - a distressing tendency that dramatically increases the overall interest paid by cardholders.

-- More than one-third of surveyed establishments will not supply a firm annual percentage rate (APR) until they have screened the applicant's credit history. Instead, they give only a meaningless range of rates before screening, which do comparison shopping hard if not impossible.

Don't get me incorrect - I am not saying that credit card companies should not do money. In fact, easy access to credit have helped combustible our economy, especially when the going gets rough. But many consumers now are literally trapped by high-cost debt with few options. I've spoken to consumers who experience they have got no pick but to register for bankruptcy because their credit card companies all raised their interest rates to between twenty and thirty percent, and they simply cannot manage to pay the balances down. With all the landmines out there for credit card users today, the best strategy is still to pay down debt as quickly as possible and bounds yourself to a couple of cards to avoid problems.

Sometimes, of course, that's easier said than done!

For more than information on ways to construct great personal and business credit, visit www.BusinessCreditSuccess.com.

Julie, a 20 year old full time college student, married Bert, a 24 year old medical clerk. On the day she signed their marriage license, her credit report score began to worsen.

Julie knew Bert had been previously married, and though that marriage had lasted only two years, it was long enough to spread a bad credit virus onto her and Bert's joint credit report score.

Bert's ex-spouse, Camille, already had delinquent credit before she married Bert. And, she had continued being delinquent during her marriage to Bert and after the divorce. Unbeknownst to Bert, Camille's bad credit had passed onto him when he married her, and then passed on to his new bride, Julie.

Why? Because when couples marry, assets; as well as debts, become joint. Unfortunately, divorce does not nullify financial obligations, even if a judge specifies in a divorce decree which spouse is responsible for re-paying which bills.

But this is just the beginning of Julie and Bert's bad credit horror.

Julie had racked-up several thousand dollars in student loans. After she married Bert, she dropped out of college and that action initiated the loan repayment period. Like Bert, she also has a full time job, but it's hard to pay the debt because of other bills.

In the divorce decree with Camille, Bert retained possession of the car which still had loan payments due. Camille received all the furniture in the divorce settlement. Bert and his new bride, Julie, had to purchase new furnishings for their apartment. Additionally, they had spent a lot of money on their wedding and honeymoon. Together they had a lot of debts to repay, and some bills were being paid late. Their credit score continued to dive.

They got an idea. They would balance transfer Julie's credit card and Bert's credit card to a new credit card that offered 0 interest balance transfers for the first six months. Unfortunately, since their credit score was bad due to excessive debt-to-income ratio and late payments, they were rejected by the card issuer.

Bert refinanced his car to lower the monthly payment. Since his credit was bad, he had to extend the term (repayment duration) of the loan an additional two years and at a higher interest rate than the original loan, but he was able to get $1,000 in equity. He and Julie used the $1,000 to catch up on their bill payments.

Six months later, now that they had caught up on their payments which also lowered their overall debt-to-income, they reapplied for the 0 intro balance transfer credit card and were accepted. They transferred their credit cards to the 0 intro card.

Three months later, they received a letter from the new card issuer that stated their 0 interest period had been terminated. Why? Because Julie and Bert had mailed an auto loan payment a few days late. The late payment was reported by the auto lender to a credit reporting agency which lowered their credit score. The new card issuer's terms required Bert and Julie to maintain (or improve) their credit score by making all payments (not just payments on the card) on time. In addition to terminating the 0 interest period, the issuer also increased their APR rate.

Other than ordering credit reports before marriage, what could Bert and Julie have done differently to avoid the bad credit virus?

Before divorcing Camille, Bert should have made sure all debts assigned to her would be repaid, and repaid on time. Obviously, the only sure way to have done this would have been for Bert to make the payments himself. He could have refinanced his auto after divorcing Camille, used the equity to payoff her debts, and then have her repay him. He should have also ensured that all joint accounts with Camille had been closed to prevent additional charges.

Julie should have continued her full time student status; not only to improve her career opportunities, but also to delay the student loan repayment requirement.

And there are obvious things Bert and Julie could have done, such as buying used furniture whenever they had available cash instead of charging purchases for new furniture on their credit cards. Additionally, they could have spent less on their wedding and honeymoon.

Marriage and joint debts can indeed spread bad credit like a virus. Don't rely upon a divorce decree to separate you from bad credit.

Credit cards can earn you cash, airline miles, or rewards. To get the most out of your credit card company, you have got to take the right programme and usage your card often.

Pick The Right Program

Do you desire a free trip to Aloha State or cash at the end of the year? Credit card companies offer a assortment of reward programs, so take the 1 that you like the best.

If you are planning to earn airline miles, choice a finish and do certain your rewards programme covers that area. Some credit card companies spouse with a specific airline while others offer generic travel miles.

Cash rewards usually work out to 1% to 5% dorsum on all your purchases. At the stop of the twelvemonth you could end up with a ample check. Cash rewards don’t apply to transfers or cash withdrawals.

Generic reward programs offer points for your purchases. Those points can then be redeemed either for merchandises through the credit card company or gift cards for name trade name supplies like Starbucks, Home Depot, or Toys ‘R Us.

Earn Your Rewards

To truly get the most out of your rewards program, you will need to utilize your credit card often. By using your card to pay for all your purchases, including groceries, prescriptions, and household bills, you can earn an airline trip or over a thousand dollars in a year.

Also look for particular offers that are included in your monthly statement. Sometimes you can duplicate your points by using your card with a certain merchant. You can also have vouchers for further nest egg at these places.

Don’t Get Caught

Reward programs usually charge a higher interest rate than other credit cards. To do certain you don’t get stung on finance charges, wage off your balance every month.

Instead of snappy out your credit card every clip you desire to do a purchase, start with a monthly budget. Plan on how much you can afford to pass and lodge with it. If you make carry a balance, cognize how much it will cost you.

Not only can you earn rewards for your purchases, you can also better your credit score by making regular, on-time payments. The more than than than responsible you are with your credit, the more likely you can measure up for more. To see our listing of most suggested credit card companies online, visit this
page: Recommended Reward Credit Card Companies Online.

Learning how to consolidate credit card debt is one of the best things cardholders can do. Consolidation is perfect for those who are looking to break their credit for the future. There are many advantages for cardholders who consolidate credit card debt. If you are thinking about
consolidation, then there are a few things you should see before doing so. Use these tips as a usher while you consolidate your debt.

Why Consolidate?

There are respective great grounds to consolidate credit card debt. One of the best grounds is to
get better rates. If you can get a better rate on a consolidation than you currently have, then
there is no ground not to consolidate. Anytime you can consolidate credit card debt and salvage yourself
money, you should. Locate all of your interest rates from each card and compose them on a list. Then short letter the new rate you would be given. If the new rate is lower than the average of the old
rate, then to consolidate credit card debt would be profitable for you. If there are cards that have got got
a lower rate, then you don’t have to include them in your consolidation. Another ground people love to consolidate credit card debt is to do their lives simple. By
paying one bill, they can cut out a batch of emphasis and measure paying time. You should probably not
consolidate credit card debt for this ground alone however. You don’t desire to pay more than in the long tally
just to cut out a few pieces of mail monthly. Consolidation also gives those in a credit card messiness a opportunity to get out of it. By consolidating,
they may be making lower monthly payments than they would be if they didn’t consolidate credit
card debt. By shutting out the other accounts, their credit may also be improved.

Who To Bend To?

When you desire to consolidate credit card debt, you should turn to professionals. There are many
great credit card companies and banks that would love to assist you with your request. Brand certain you
make your research so that when you consolidate credit card debt, you are certain you are making a
determination that is profitable to you. Brand certain there are no concealed fees that come up with different
consolidation plans. Doing your research can assist you salvage money for the future.

Making The Choice

If you desire to consolidate credit card debt, you should first look at all of your debt in detail. Once you cognize what you have, it will be easier to reach people to assist you with your
consolidation. Don’t be afraid to state them you are shopping for the best deal. You should make
yourself the award of getting the best deal out there to making your consolidation as worthwhile as
possible.

You’ve probably never heard of Frank X. McNamara, but he revolutionized the way you shop on a daily basis.

One evening in 1949, McNamara—head of the Hamilton Credit Corporation in New York City—was dining out with two business associates. Their topic of discussion: one of McNamara’s clients, who was defaulting on a loan because he had shared his gasoline and department-store credit cards with some friends in need. Unfortunately, the friends didn’t have the money to pay back what they had borrowed, so the good samaritan was now facing his own financial demise.

As the meal ended, McNamara reached for his wallet so he could pick up the check. To his horror, he realized he had left it at home—and was forced to call his wife so she could bring him the cash he needed to settle the tab.

This fateful meal led to an invention that has transformed how the world handles money to this very day: the credit card. While previously available gasoline and department-store credit cards allowed users to make purchases at a single location, McNamara’s personal plight—and that of his well-meaning client—prompted him to create a credit card that could be used in multiple venues. The Diners Club card was born. In its first year, 200,000 consumers signed up for one.

The rest is history. After carefully observing Diners Club’s success, American Express and Bank Americard (soon to be renamed VISA) followed suit. Thank McNamara the next time you pay with plastic.

But has McNamara’s novel concept become more of a curse than a blessing in your life? Are your credit cards managing you—and is your debt spiraling out of control?

Here are 5 ways to tame the credit card beast.

1. Know Your Limits

If you have a tendency to overspend, limit your extravagances by relying on paper currency instead of plastic. Set spending limits before you leave the house, whether you’re shopping for groceries or heading to the mall to buy a new pair of shoes. If you find yourself reaching for your credit cards, freeze—and don’t move an inch until you can answer the following questions:

• Why am I breaking my own rule?

• Am I being self-destructive with my financial health?

• Do I really need this item, or is my ability to say “charge it!” clouding my good judgment?

2. Learn from McNamara’s Client

As McNamara’s client learned the hard way, loaning your credit cards to even those closest to you is a surefire way to accrue debt. You are giving your spouse, children, other relatives and/or friends carte blanche to spend up a storm—and you are the one who is legally obligated to pay the bills that will find their way into your mailbox at the end of the month. Be extremely selective when passing the plastic to anyone who can run up a bill—and fail to pay you back.

3. Show Interest in Interest

Surveys consistently show that most people make only the required minimum payment on their credit card bills each month, leaving them with an outstanding balance that continues to climb. Not only do additional purchases add up, but you are continually paying interest on your existing and new balances—a sometimes considerable fee that has catapulted many consumers into life-altering debt.

Today, the average American family, for example, owes approximately $8,000 on its credit cards—and the credit card companies could not be more pleased. If 115 million families owed you money—on which you earn finance charges and late fees every month—you would be positively giddy, too.

Let’s say you have an outstanding balance of $2,000 on a single credit card. Your annual interest rate is 9%, and your credit card company requires you to make a minimum $30 payment each month. Assuming you do not miss any payments (which would cause your interest rate to rise, as well as add late fees as high as $40 per month), it would take you 204 months to pay off this balance if you make only the minimum $30 payment each month—and by then, you will have paid an extra $1,028.43 in interest. This is how debt begins: A $2,000 charge winds up costing you $3,028.43.

4. Switch Cards

If you are still paying an annual fee on your credit card, it’s time to make the switch to a card that is not only free, but rewards you for using it.

Assuming you have good credit and can secure a new card, explore your options. Banks offer cards that award cash-back bonuses, airline miles, gasoline rebates and other perks each time you use them. If you can manage your credit appropriately, keep pace with payments and pay your bills on time, you may as well reap the benefits of your spending habits.

5. Read Your Statements—Carefully
Some consumers pay their credit card bills without carefully reviewing their statements. This is one of the most serious mistakes you can make—especially in an age of identity theft, when someone can use your card to make purchases in your name.

Always keep your credit card receipts, and check them against the bill when it arrives each month. Make sure every charge is accurate, and notify your credit card company immediately if there are any charges you did not make. The company can reverse the charge if it is a simple error—or if someone has used your card without authorization. In the latter case, ask the company to cancel the card, review any additional purchases made since that date and issue a new card with enhanced security features, such as a personal identification number (PIN), to be entered each time the card is used.

In addition, check due dates on credit card bills. You may be used to paying your bill by the 20th of each month, but credit card companies have been shortening the length of time consumers have to pay their balances. Very often, there is no notification of a policy change—or the fine print is buried somewhere on your statement. Note the payment due date each month, and try to pay the full amount to avoid accruing interest or late fees.

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