If you’re the kind of person that lives off borrowed money, as in cash that’s extended from different lending companies, you are lucky – why?
Because you of all the billions of people out there have a deeper understanding of the importance of credit history. Everyone that patronizes the services of this creditors knows that having a good credit score is but of the utmost importance when it comes down borrowing money. But not all of them have good history; some even should be ashamed of the scores they got, which inevitably leaves them with one option: suicide. Not the type of suicide where as to intentionally get yourself into a fatal accident, cut your wrist, or jump off a cliff into a pool of sharks (very effective method to get killed), but the type where you pay more than what you have to.
People with poor FICO scores know this; they have to put up with high interests rates and agree to ridiculous terms just to pull out a loan. I feel for you, and I completely understand how frustrating it can be. That’s why today I’m going to share with you a little trick you can use to make good with your creditors, by repairing your credit through a certain method – want to know what it is? Come closer, I’ll tell you: secured credit cards. Nothing fancy here, but it’s a sure fire way to build your credibility. Do you have any idea what it is anyway? If you don’t listen to this: secured credit cards are of course a credit cards, but they were “engineered” specifically for chumps with poor rating, or no rating at all.
The good thing here is that it functions the same way any credit card would, only with a stricter limit. Whatever you put in this security deposit, it’s generally the exact same amount you get to spend. Let’s take a look at the example that’s coming up, so that you can better understand what I mean: if you place $1000 into the account, you will be given a spending limit of $1000 dollars. This is a safety precaution against default payments; they anticipated the tardiness of people when it comes to paying, that’s why no withdrawals can be made while the secured credit account is open – clever little monkeys.
But hey, that’s good news for you, why? The reason behind that is you get better control over your expenses. Spending money you don’t have, as rendered by the regular cards, gets you into debt. A man given the opportunity to get his hands on goods will do so, especially if he’s given more than a month to pay for it. He’ll do so, even though he feels that paying it all back won’t be difficult. That’s when man finds himself deeper and deeper into the hole, to the point where there’s no way out. That then results to lower his score drastically, and then finds it harder and harder to apply for the loans he’ll really need.
All that could have been avoided if he had gotten a secured credit card instead, right? Opening an account doesn’t just grant you better control over your expenses, but builds your credibility in the eyes of the credit companies. They view such as a sign of “responsibility”, which makes you more trustworthy, which can lower the rates and improve the terms you agree to.
Clever Ways To Cut Credit Card Debt
Credit cards are a convenient method of obtaining credit and can be used in ways that provide the cardholder with a flexible range of benefits. If you stay savvy when it comes to your credit card spending and repayments, it is possible to save yourself money in the long term, especially if you can afford to clear your balance in full on a regular basis.
However, many credit card holders cannot do this, and if you have existing debts on a credit card or store card, the chances are you are probably paying interest each month on the outstanding balance. Depending on the amount of your outstanding debt you could be paying anything from a small amount to a three figure sum every month and just on interest. This makes it difficult to clear your actual debt and it’s easy to become stuck in a seemingly endless circle of debt.
If you fancy eradicating any interest you are paying on credit and store cards then a balance transfer is one such solution to your wish. A credit card balance transfer simply means moving your debt from your existing cards onto another new card which usually has a lower rate of interest. This means you’ll save some money on the interest you’ll pay back against your borrowing; making balance transfers a preferred way for many borrowers to axe interest and pay off outstanding debt, as many credit card companies offer an interest free period on balance transfers to new customers.
If you think that this sounds like a good idea then you will be pleased to hear that the balance transfer process is a straightforward one, and the first step is to search for and find a new credit card to transfer your existing debts onto.
You need to look for a credit card that offers 0% on balance transfers as this allows you to transfer any existing debt and then enjoy a period of interest free credit within which to repay the outstanding amount. As there is no interest to pay during the 0% period, any repayments you make will go towards solely paying off your debt, and not interest accrued. Be aware that there is usually a small fee applied to balance transfers, but even with this in mind, the savings made by making the transfer often far outweigh the cost of the fee.
Another factor to look out for is the amount of interest charged for purchases as this differs between credit card companies. This is particularly important if you want to use the card to make new purchases as well. If you can find a credit card that offers 0% on balance transfers and 0% interest on new purchases then you’re onto a winner as this means you’re not paying interest on any of the outstanding balance.
Some credit card companies even offer loyalty schemes where you can earn points as you shop in certain high street stores so look out for this added bonus.
Once you’ve located your ideal card then all you need to do is apply, which is generally a user-friendly procedure and often done online or over the telephone. If your application is accepted you can then transfer your existing balance simply by giving your new card issuer the details of your old credit card and stating the amount you wish to transfer.