One late payment can cost you dearly with credit cards. Not only will you have to pay a late payment charge but your interest-free benefits and low-interest rates could be at risk. Here are 5 reasons why you should eliminate your credit card debt today.
Even missing a payment on your car loan can mean a hike in your credit card bills.
There are millions out there who have paid off heavy credit card debt, and you may be one of them. This was accomplished using guides like the Debt Destroyer to help give them a plan to reduce their debt.
To get rid of credit card debt, it won’t be enough, however, to just make minimum monthly payments.
Monthly payments are purposely kept low by the credit card companies so that they can earn as much as possible from the interest rate charged to you the consumer.
Paying just the minimum payment will keep you tangled in credit’s web for years and years to come. Do you know how long it takes to pay off your credit card if you pay only the minimal amount? 20 to 30 years!
In fact, you just need to do a little more than just paying the minimum monthly payments; you can save thousands on interests and shorten many years in settling your credit card debt.
1. Credit card companies can change almost all of the terms of the credit card by giving just 15 days’ notice.
We get used to credit card companies adjusting their lending rate by 1/4% as interest rates fluctuate but did you know they can alter any of the terms for any reason.
For example, they can increase the late payment fee and they can increase the interest rate without the need to justify it.
If you are late or miss just one payment the low rate you are currently being charged can double or even treble almost overnight.
2. Credit card companies can increase the cost of a purchase months after you bought it.
If you purchased a widescreen plasma TV 3 months ago, using a card which at the time was costing 9.9% apr, and you are late with just one payment, the credit card company can charge you a late payment fee, say $40, and increase the interest rate to 29.9% apr, or even more, and there is nothing you can do about it.
They can, in effect, increase the cost of your TV months, or possibly even years after you purchased it. The TV retailer wouldn’t be allowed to do this but your credit card company can.
3. Discount offers are only good if you keep up all your payments.
Interest-free balance transfers and initial periods can disappear for any minor omission. Failure to keep to all the terms of a card will result in special terms being withdrawn and possible penalty interest being applied.
If you have interest free purchases and balance transfers make sure you keep up the payments.
4. It’s not just your card payments you have to keep up.
If you miss a payment on your mortgage, or your car, or any other financial payment, your credit card companies can re-assess your credit score and increase your interest rate accordingly.
If you, therefore, miss a loan payment on your boat or car but still pay the payments due on your cards, you can find that your credit card interest charges jump to 2 or 3 times the original rate.
5. Credit card companies are today making record profits from you.
If you don’t pay your cards in full each month credit card companies make the majority of their profits from you and a substantial portion of that is in the additional charges they levy.
It makes little or no sense to keep money in the bank earning 5% maximum and pay 29.9% or 19.9% or even 9.9% on your cards.
Pay off the card and use the card for emergencies rather than the savings. Without the card payments, you will be able to rapidly replace the savings.
Without your knowing credit card companies can hold you, hostage, at the very time you may really need financial assistance.
Don’t allow credit card companies the continuing opportunity to make record profits at your expense, and at the same time the opportunity to benefit from any misfortune.
If you can pay the balance off within 3 to 6 months do so otherwise consider some form of a consolidation loan to remove the noose credit card companies have around your neck.
Another option if you really want to eliminate your credit card debt.
As soon as possible and your finances are able to support it, you could double the amount of your monthly minimum required payment.
There are a number of things you could do, but this is one of the simplest and it’s something you can start doing right now to begin eliminating your credit card debt. Start a Household Budgeting regiment that will show you how to better take control of your spending.
- Track your expenses for one month.
- Set your expenses up in categories.
- Write down every penny you spend.
This will help you get a really good grasp on how much you’re spending.
If all you do is stop charging on your credit card and continue making the same minimum required monthly payment you will be lowering your debt on your credit card this month.
Every month from now on, you will make significant progress towards totally eliminating your credit card debt once and for all.
A person with credit card debts can properly manage their credit card debts with credit card debt management techniques.
These techniques are available to all the people i.e. both the people with good as well as with bad credit history.
So, for the people who have credit card debt, the advice would be to eliminate credit card debt rather than letting things go out of hands.
Are you ready to eliminate credit card debt? If so, check out the resources recommended to you by Inker Street Consumer Credit Advice.
- Household Budgeting: Will show you how to stick to your budget. So, soon you will have a monthly surplus, and you will see your savings start to grow.
- Debt Consolidation Strategies: When it comes to debt consolidation, you need to practice techniques that are a little unique and very much focused on getting you out of debt within a stipulated period of time.
- Debt Destroyer: Finally you can fully equip yourself with these “must-have” tools for busting debt and live a life without having to worry about debt collectors!
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