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How Best to Approach your Partner about your Household’s Credit Card Debt

Credit Card Debt

You may have a good idea about how to budget your income and pay off your credit card bills; but your spouse or partner may not be on board.

In order to make the most out of your income and live without mountains of credit card debt, it only makes sense that both partners must find a compromise between what is spent and what is paid each month.

If you have a spouse or partner who is unwilling to go the distance to get your credit card debt in check, then it may be time to be a bit more creative when it comes to negotiations.

1. Don’t approach the conversation in attack mode. If your partner feels that he/she is being attacked or accused of accumulating the bulk of the credit card debt, he/she will certainly react by becoming defensive. Instead, approach the conversation using “we.” For example, “We should come up with a game plan for reducing our credit card debt so we can begin saving for a home.”
2. Include your partner in on the discussion. Instead of approaching your partner with all the answers, encourage him or her to become actively involved with finding a solution. You can certainly come with a list of ideas or suggestions; just avoid being the one with all the answers.
3. Sweeten the pot with a little incentive. You may try something like: “we could begin to put money aside for that Caribbean cruise if we just pay off this credit card debt first.” Having something to look forward is often a good incentive for paying off credit card debt.
4. Put it in writing so there are no misunderstandings or miscommunication. Detail clearly what is expected of each of you so that there won’t be any problems down the road. If you are both income earners, detail what portion of each paycheck should go to paying off the debt. You may also want to discuss the ways in which you can begin cutting back on your spending. But, once again, make sure you approach this conservation in a calm, non-confrontational manner so that you can better accomplish your overall goal of living debt-free.

What you don’t know about Credit Card Debt Settlement Services can Hurt you

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Have you ever been tempted to take advantage of those commercials or ads that promise to eliminate or greatly reduce your debt? Because of the sour economy and the credit problems so many individuals are facing, these types of companies are popping up at astounding rates. Some of the companies are quite helpful; others are merely looking to make money off your unfortunate situation – and leave you in worse condition when they are done with you than when you started.

So, the question is: can you settle your credit card debt for less than you owe? Can you settle with your credit card company for a fraction of your balance and make more realistic payments?

Here’s what you need to know when considering a credit card debt settlement company:

• Not everyone can negotiate a lower payoff amount for their debt. In other words, your overspending may not qualify you for debt settlement. Instead, reputable debt settlement agencies work specifically with people who are in hardship situations, like a loss of a job, divorce or medical situations. In other words, if you are still making money the credit card company will expect you to pay back your debt – so don’t expect a “get out of jail free” card if you simply overspent beyond your means.
• You may be better off trying to negotiate a deal with your credit card company. Because so many people are turning to debt settlement companies many credit card companies simply won’t deal with them. Simply, if you are experiencing financial hardships and are having a difficult time paying your credit card debt, the best course of action may be to simply contact the credit card company yourself and forgo the debt settlement company.
• Don’t approach the debt settlement business the same way. Simply put, not all debt settlement companies are the same. There are unscrupulous, even dangerous, companies that are out to take your money and there are non-profit organizations that may prove to be quite helpful. In other words, do your homework before choosing a debt settlement agency.
• Understand that using a debt settlement company will adversely affect your credit score. There is no way to avoid this, as any time a credit card company is willing to settle for less than you owe them your credit score will take a hard hit.

Should you Consider Credit Card Debt Settlement?

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You see the commercials all the time; companies promising to slash your credit card debt and give you affordable repayment plans for your mounting credit card debt.

You may have begun thinking about turning to a debt settlement company, but are quite leery of the promises.

If you have questions about credit card debt settlement, then consider the following factors before picking up the phone and taking the next step:

1. Don’t consider credit card debt settlement if your credit card bills are still manageable.
2. Don’t consider credit card debt settlement if your credit card bills total less than $10,000.
3. Most credit card debt settlement companies require that you prove a financial hardship. This may include the loss of a job, a great deal of medial bills or other type of unforeseen circumstances. Expect the company to ask you to provide proof of your financial hardship.
4. You may consider debt settlement if the credit card laws make it too difficult for you to file bankruptcy.
5. Although Congress has made a point of flushing out many of the unscrupulous debt settlement companies, it is still in your best interest to research the debt settlement company before agreeing to proceed.
6. Although credit card debt settlement will allow you to pay off your credit card debt in less than five years, and for a fraction of what was originally owed, understand that your credit score will be negatively impacted. For individuals who already have suffered a blow to their credit score, this won’t be too much of an issue.
7. Consider researching many debt settlement companies online through debt relief networks. The Internet is a great source of information on debt settlement companies, so use this resource to your advantage when researching debt settlement companies.
8. Consider a debt settlement company only after you have exhausted all other possibilities. Often times, debt settlement companies have much more success in negotiating better repayment terms, but it never hurts to contact the credit card company and request better terms. If you get nowhere fast, you may then choose to use the services of a debt settlement company.

Signs that your Credit Card Debt may be out of Control

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Has your credit card spending spiraled out of control? Are you struggling to make the minimum payments on your credit cards?

If so, then your credit card debt may be more than you can handle. Here are some signs that your credit card may be out of control:

1. You are near the limit (or maxed) out on your credit cards. If you have charged you credit cards to their limit then you could be putting yourself in danger of not being able to handle your monthly credit card payments.
2. You have a large stack of credit cards in your possession. Too many credit cards with too many balances are a recipe for disaster. Often times, multiple credit cards with multiple balances can create confusion –and in return missed payments. Remember: it is much harder to keep track of your spending if it is spread out over many credit cards.
3. You have a lot of debt, but you prefer to play ignorant. If you refuse to recognize the extent of your credit card debt or if you have no idea how much you have in credit card debt, you could be in for a rude awakening when it comes time to pay your bills each month. Remember: hiding your head in the sand accomplishes little more than the downward spiral of your credit card score.
4. You are skipping one or more credit card bills each month. Picking and choosing which credit card bills get paid each month is a sure sign that your debt has become overwhelming for you.
5. You are only able to pay the minimum payments on your credit cards each month. Paying just the minimum payments can result in big trouble and year’s worth of debt and finance charges. If you are only able to pay just the minimum payment or if you are not even able to manage the minimum payments any longer then you are likely in deep in credit card debt.

The best thing you can do if you find yourself in over your head in credit card debt is to take immediate action. Contact your creditor and arrange a payment plan; contact a non-profit debt counseling company; or seek the advice and guidance of a qualified financial expert.

Credit Cards: Your Best Bet for a Personal Loan

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Personal loans are often a convenient means for getting fast cash for a variety of expenses and purchases. A personal loan can best be described as any unsecured loan that does not have collateral attached to it. Because of this, personal loans often come with higher APRs than other types of loans, like automobile or home loans, for example.

Although you can expect a personal loan to have a higher APR than a secured loan, you still can find plenty of good rates. To get a personal loan, you must first consider where to look. Although you can certainly head to your bank for a personal loan, many individuals are instead turning to their credit cards for personal loans.

The Convenience of Credit Card Personal Loans

Personal loans through your credit card are often rather convenient, as they are typically easy to get because you are already an established customer. Unlike traditional credit card purchases, a credit card personal loan will provide you with a set period of repayment and set repayment terms.

You may also want to use a credit card for a personal loan for a number of reasons, such as a vehicle purchase, a vacation or home improvements. Personal loans, because they are unsecured, can be used for nearly anything at all, including debt consolidation and college expenses, just to name a few.

Learning about your Personal Loan Options

If you need a personal loan, consider contacting your current credit card company and asking them about their personal loan options. If they don’t have personal loans available, you may want to consider using one of the convenience checks that often come with your credit card bill. Convenience checks are, in fact, quite convenient because they allow you to write the check for whatever you desire; you may even want to write the check to yourself and deposit it into your bank account so that available cash to meet your financial needs.

If you have high interest rate debts to pay off or you simply want to finally finish the backyard deck you’ve been dreaming of, consider the many advantages of taking out a personal loan through your credit card.

How to Say Good-Bye (once and for all) to Large Credit Card Balances

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Your credit cards can become the heaviest thing you have in your wallet if you carry around large balances on those cards. Many Americans have become credit card junkies, as is evident in the fact that the average American now carries an average credit card balance of over $7,000.

Dealing with high balances on credit cards, however, doesn’t have to be a life sentence. In fact, there are a few, simple tips that can have you waving good riddance to those credit card balances, once and for all:

• Pay more than the minimum – Paying just the minimum on your credit cards will surely ensure that you will be spending the bulk of your future paying them off. Even paying just a small bit more each month on your balances will greatly reduce the time you will spend repaying them. Aim to pay double your minimum payment each month; if you can’t swing that, make yourself a promise to pay at least 20 percent more than the minimum balance.
• Make a plea to your credit card company – If you have been a solid customer and have always paid your bill on time, then you will likely be able to swing a lower interest rate on your credit card. Luckily, all it takes is a phone call, so you have nothing to lose! Plead your case for a lower interest rate and you may be very surprised to find that your creditor is willing to comply.
• Don’t bet on rewards programs – Rewards-style credit cards are for individuals who pay their credit cards off each month; they are not designed to benefit those individuals who carry a balance. After all, any type of rewards you may be earning will be quickly erased when you consider the finance charges you pay each month. Instead of hanging onto rewards credit cards, which often come with higher interest rates, switch to a no-frills credit card with a low, fixed interest rate.
• If in doubt, cut it up – If you are having difficulty managing your credit, the very best thing you can do is simply cut up your credit card. Then, work on paying it off.

Credit Cards – Spending Habits and Blame

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That little plastic card can be a blessing. It can also lead to financial ruin. The most important aspect of owning and using a credit card is using it wisely. There are a lot of people who use their credits cards for nearly everything. For those who can afford it, that’s just fine and dandy. However, the truth is that the majority of Americans – those in the working class -  really can not afford to do that; not without getting in way over their heads. Yet, those cards still keep getting used and people don’t seem to know at which point their financial lives took a turn for the worst.

Spending

Credit cards have always been enticing. Who can really resist the idea of by now, pay later? Unfortunately, the idea has been taken way too far out of context. Plastic is a nice idea for quick and easy purchases, especially large and expensive purchases, giving you the chance to get what you want  now and pay the balance plus interest over time. In a way, it is much like the concept of layaway, only you get to take the item home before you have paid in full. Credit cards are very convenient for emergencies, air fare when you don’t have the cash, deposits on hotel rooms and rental cars, etc. They are not a bad option if you can afford to pay the price.

Unfortunately, far too many credit card holders, especially with the downturn in the economy, have resorted to using their credit cards to buy groceries and household necessities and to pay their living expenses. Credit cards were never intended for this purpose. You have to ask yourself two things, in this case: a) Do you want to be paying for your food and necessities a year or two after they have been consumed? After all, with interest rates and possibly being unable to pay the full balance at the end of the month, that is exactly what is going to happen. b) If you can’t pay your living expenses without the help of your almighty credit card, how in the world can you expect to pay off the credit card itself?

Blame

When people find themselves in over their head in credit card debt, most knew it was coming, even if they won’t admit it. Call it being overly optimistic, but many people think if they can just do what they need to do now, they can handle the financial repercussions later on. Unfortunately, “later on” is when the financial trouble really begins. At this point, you often hear “I don’t know what happened.” Or “It’s the credit card company. My rates are too high. They should not have given me the card.” Other people blame low income, their personal situations and the economy. Blame is great, right? It makes you feel better about the situation at hand, right? Takes some of the responsibility off of you. No, no and no.

You still have the financial responsibility for yourself, your bills and your credit card usage, no matter what your situation or who or what  you try to blame. Yes, life happens and we often can not control those circumstances entirely on our own. Yes, the credit card companies reel people in with their tantalizing offers and convenience. However, life itself is not fully to blame. as for the credit card companies, they are a business with a job to do. That job is to get the customers. It does not mean they forced you into obtaining the credit card or using it.

If you find yourself in financial dire straits, come up with a plan. Try to improve your income, focus on paying down your bills and expenses, putting your basic expenses ahead of your credit card use. This does not mean do not pay the credit card bill; however, put the credit cards aside and stop using them until you have your head above water. Using your credit card to bail yourself out of a tight situation that you could never afford in the first place can and will only result in more headaches down the road.

Couples and Credit: What to Discuss

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For those who are married, getting married or involved in a serious and committed relationship, finances are an important part of your life together than should be considered and openly discussed. This includes credit. Few couples keep their finances separate, therefore, it is vital to be in the know and be in agreement on every aspect of money, debt and credit. This helps to avoid conflicts and confusion that could lead to a disruption or destruction of the relationship. Many break-ups occur over money. This is unfortunate and can often be avoided with open communication. Here are some important things that couples must discuss when it comes to credit.

Joint Accounts or Individual

While few couples maintain separate accounts, some do, for various reasons. It is important for those in long-term relationships to weigh the pros and cons of their individual situation to decide whether or not to combine accounts or keep them separate. Couples need to consider the ramifications of each decision and must have complete trust in each other for either situation to truly work.

How Often to Check Credit Scores and Activity

This one is pretty straightforward. For the most part, people will opt for checking on things annually. However, if there is suspicious activity or large purchases have been made, it might be a good idea to take a look more often, especially for those looking to build up their credit rating.

How Much Debt is Acceptable

Debt is an unavoidable part of life. However, couples need to discuss and set a limit on the amount of debt they are willing to carry at any given time. This could make the difference between financial stability and financial disaster. This should be based on income, expenses and ability to pay and should also take changes in income into consideration.

Then When, What and Why of Credit Card Usage

Couples should discuss and be in agreement on the specifics of using their credit card or cards. This plan should be made, with trust in mind, and both parties should adhere to it. Surprise debt can really hurt a relationship, and if harmony is what you’re going for, then a credit card usage agreement is vital.

Couples also need to discuss the opening of new credit lines prior to ever doing so, determining what is right for them and their situation. No spouse should open a new line of credit without consulting the other spouse, as the financial situation affects both of you, as well as your children. If one spouse winds up in credit trouble, it can affect the other spouse, thanks to community debt.

You will need to decide which of you will manage which accounts and create a plan of action for financial and credit disasters. If you follow these simple steps and have these conversations, your relationship with each other and your money could remain much tighter than without having discussed these things.

Save Yourself from Credit Card Debt – Tips to Curb Your Spending

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Having a credit card is nice. It is convenient and can even bring you many benefits and perks. However, it is also a tempting little piece of plastic that could have you singing the financial blues if you’re not careful. Before you race of to the store and say “Charge it!” here’s a few things to consider that will help your curb your credit card spending.

Money in the Bank

If you don’t have the money in the bank to write a check or make a cash withdrawal to cover your purchase, can you expect to pay off the balance on your credit card? The answer could be yes or no. It all depends on your particular financial situation. This does not mean you should not make the purchase with your credit card. You simply need to consider if the purchase will be worth the added fess and interest or if it would be better to just pay cash.

Minor Purchases

Try and make the interest rates worth it. Don’t run out and buy something on credit that will only cost you a few dollars. You could wind  up paying double. Save your plastic for the bigger purchases and make the interest worth the money you will have to pay.

Can You Afford It?

This is not so much about your bank balance as it is asking yourself if you can really afford to use that plastic. If you’re struggling to pay your basic living expense, you probably need to put the card aside an not use it until things get better for you financially. Sure, you might have a minimal credit card bill to pay every month, however, you won’t be racking up the charges, fees and interest.

When times are tough, that credit card can seem even more enticing than ever; almost like a lifeline. However, credit cards were never intended to pay your living expenses for you. Using them when you do not have the money to pay can only add to your stress and debt. Remember, a credit card does not entitle you to a freebie. You are still responsible for payment. It’s simply a way to get something now and pay later or over time. Finding yourself unable to pay at the end of the month could lead to not having that card, or any credit card at all, in the future, and could seriously damage your credit score.

The Bottom Line

Only use your credit card for bigger purchases and only when you know  for sure that you have the finances to back it up. If you’re in a bad boat financially, put it away until things are looking up. For those who really only intended to have a credit card for emergencies, remember to keep it that way. A nice new dress does not qualify as an emergency. Hide the card so you are not apt to use until you need it.

By putting these simple tips into practice, you will find yourself thinking more consciously about your budget and spending habits, curbing your debt and easing your financial burdens.

A Closer Look at Credit Card Dependency

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No one wants to be dependent on credit cards all the time. Credit cards have their place: they can provide unmatched convenience and practicality; they can provide a safe, secure way of spending; they can increase our credit score so that we can be eligible for the lowest interest rates on other types of financing; and they can offer us rewards and perks for simply spending.

However, for many individuals, credit card debt has become a monkey on their back, so to speak. If you are afraid to open your credit card statement each month then you could very well be the credit card consumer who is in desperate need of a credit card intervention.

You can learn to use credit cards responsibly, and you can learn how to effectively eliminate your credit card debt so that you can lead a more financially secure future:

• Keep track of your spending – OK, so this sounds like a bit of a scary proposition; but the fact of the matter is that if you simply take one, full month and record each and every purchase you make, you may quickly become enlightened. If you scratch your head at the end of every month and wonder what in the world you did with all of your money then recording your purchases may be a great way to begin understanding where your money goes and how you can begin changing your spending habits.
• Take the extra money you found and put it towards your credit card debt – Take your newly found money – and there will be money after you begin understanding where, when and how you are spending your money – and immediately put it towards your credit card with the highest APR.
• Pay yourself first – Before you pay your first bill or spend the first dollar of your paycheck, take the time to pay yourself, however small. Better yet, set up an automatic deduction from your paycheck to a high-yield savings account through your employer or bank and you won’t even miss the money.
• Slim down the credit card pile in your wallet – There is absolutely no need to carry around multiple credit cards. One, competitive –rate credit card is all you need for your day-to-day living. Eliminate all of the retail cards in your life (the often have way too high APRs and fees) and take out all but one major credit card. Having a couple major credit cards is a good idea, but leave the others at home, in a safe place, instead of in your wallet. Eliminate the temptation that comes along with carrying around credit cards!