Credit Card Quick

How to Handle Finances with your New Spouse

Introduction

Once married, many of us begin to share finances. From checking and savings accounts to mortgage payments and credit cards, finances for newly married couples can be a tricky endeavor, particularly if you don’t plan ahead and ask the right questions.

Here’s what you will need to consider when it comes to finances and your new spouse:

• Don’t automatically begin sharing finances if you and your spouse aren’t prepared – If you are recently married, and you haven’t yet had serious conversations about everything from a household budget to credit card spending, keep your finances separate. Some couples keep their finances separate throughout their marriage, and that’s okay; it’s about whatever works best for you as a couple.
• Keep the lines of communication open – If you must make a large purchase, inform your spouse and get his or her input. Expect your spouse to do the same. Keeping financial decisions from each other is a recipe for disaster, and it may lead to trust issues within the marriage.
• Talk about debt and how to get rid of it – If you or your spouse has credit card debt or student loan debt, for example, make a game plan for paying it off. It just doesn’t make good, financial sense to enter into a marriage with loads of debt, so the sooner you pay it off the sooner you’ll have the money to afford large purchases, like a home.
• Talk about monthly spending – If your spouse is a spender, keep him or her in check by setting a monthly spending limit, and follow it yourself, too. Keep each other honest by charging purchases on one, joint credit. Doing so can also allow you both to examine your monthly spending habits and find ways to cut back.
• Order a copy of your credit report, and ask your spouse to do the same – It’s nearly impossible to set financial goals together as a couple if one or both of you has past credit problems. Carefully review both credit reports so you can better gauge where you stand in terms of finances. Then, aim to repair your credit, if necessary, or to correct any errors or discrepancies.

Should you Pay a Balance Transfer Fee?

Choosing Credit Card

There are a number of features now being offered by credit card companies, and competitive, balance transfer offers are one of them.

If you want to pay off your higher interest rate debt, you may be tempted to go after a balance transfer offer to erase this debt.  And, although there are many benefits to taking advantage of a zero-percent balance transfer offer, it is important to understand that there are fees associated with this credit card feature.

Should you or shouldn’t you?

It may seem like it doesn’t make sense to move higher-rate balances to a zero-percent balance transfer credit card if you have to pay a high transfer balance fee to do so.

A balance transfer fee is the amount charged by the credit card company for the luxury of transferring your balances onto the new card. This fee may be fixed, or it may be a percentage of the transferred balance. Most balance transfer credit cards charge three to five percent of the transferred balance. If you have a $10,000 credit card balance, for example, and the balance transfer fee is five percent, you will be charged a $500 fee.

Although a balance transfer fee is expensive, it is important to figure out what you would pay in interest charges if you didn’t transfer the balance, and then compare it with the balance transfer fee. If you come out ahead by transferring the balance, it only makes sense to make the switch to a zero-percent balance transfer credit card.

Considering all of the Advantages

There may be more advantages to transferring your balances to a balance transfer credit card than just monetary ones. For example, many consumers find that transferring all of their debt onto one credit card makes it easier to maintain their debt and pay it down. If you’re struggling to keep track of all your debt and pay on it every month, consider the practicality of transferring all of your debt onto one credit card.

Shop Around

Just like any other credit card feature, balance transfer offers and their fees vary widely from one credit card company to the next, so it is important to shop around and compare a variety of zero-percent balance transfer offers so you can decide which one is best for you.

Credit Card Interest Rates Continue to Climb: But Why?

Introduction

The trend continues. Credit card interest rates continue to climb, but the reason why is more than a bit murky.

Some experts say the increase in credit card interest rates — the average credit card rate rose to 13.44 percent at the end of 2010 — is due to the lackluster economy, while the credit card industry states the reason for the increase is because they are merely responding to the loss they endured as a result of the CARD Act. Finally, some creditors have pointed out that they must raise credit card interest rates because of a higher rate of delinquencies among their customers.

The Effects of the CARD Act

Some of the regulations under the CARD Act include a freeze on rate hikes on existing balances or during the first year the account is opened; a 45-day notice before the creditor can increase the interest rate on your card; and late fees can no longer exceed $25. It is these changes, the credit card industry notes, that have forced credit card companies to slowly raise interest rates.

Many economists expect that, even as the economy improves, we will likely continue to experience increases in credit card interest rates because credit card companies are still feeling the effects of the CARD Act legislation.

Economic Woes Play an Important Role

The economic woes of the country have no doubt also played a significant role in the rise in credit card interest rates. As such, it is clear that the credit card industry is imposing strict rules, and higher interest rates, on individuals with less-than-perfect credit.

Finally, the credit card industry will likely continue to raise interest rates because many credit cards of today are tied to variable rates. As the economy continues to improve, the prime rate will follow, thereby causing interest rates to climb.

As always, it is important to keep a close eye on your credit card’s interest rate and to read all information and correspondence you receive from your credit card company, as it could indicate a change in your credit card’s interest rate. If you don’t think you’re getting the best deal on your credit card, check out the many online credit card offers to see if there are more competitive rates available to you.