Make a guaranteed 15% on your Money
Copyright 2005 Steve Hoven
I know that many of us have credit cards with interest rates as high as 15-20% a year. Here are a few tips on how to lower your rates and to get rid of them all together.
If you have high interest rate credit cards and have a decent credit score, you can do one of two things to help reduce your interest rates. One is to call your credit card company and ask them if they will drop your rates (I have done that myself and it does work. It doesn't work every time but it could be a phone call worth $100's for you). In many cases, they will drop your rates for a short time. For example, if for a year, the credit card company drops your rates from 15% to 5% and you have a $5,000 debt, that is a great savings of $500 in interest for the year. This will free up some money for you to pay off the debt quicker. If a credit card company isn't willing to work with you and drop your interest rates, look for a better interest rate credit card. Just watch out for balance transfer fees, etc. Each situation is different but there are millions of people who are throwing away billions of dollars a year in interest because they either don't know that they can get a better rate or they don't know how to ask for one. It is really as easy as picking up the phone and asking your credit card company for a better rate.
I don't recommend using credit cards, of course. However, I know that many people do have credit card debt. By either calling the credit card company to get a lower rate or by looking for a credit card with a lower interest rate, you can cut down on your debt.
If you don't have the best credit and your credit card company isn't willing to work with you, and you can't find a credit card that offers a better rate, consider suspending any of your current investing and focus your attention on paying off your debt. For example, if you had a $5,000 credit card debt at 15% interest paying that bill off is like getting 15% on your money tax free and with no risk.
What do I mean? Well, if you had $5,000 in credit card debt at 15% interest over the course of the year you would owe $750 in interest. ($5000 x 15% = $750). So the total amount that you owe is now $5,750. Let's says you also happened to have $5,000 in the bank and instead of paying off your credit card, you just invested it. So you invested in the stock market or mutual fund and during that year the stock market had a decent year and you earned 15% on your money (Historically, it averages about 10% a year). So you made $750 in profits off of your $5,000 investment in the stock market/mutual fund. You then open up your credit card bill and the amount is $5,750 as well. This time you so decide that you want to pay off your credit card, even though you could have done that last year when the balance was $5,000. Well, now you sell your investment in the stock market/mutual fund. You pay $50 in commissions to your broker and 20% to the government for taxes ($150). So your net earnings are only $5,550, but you have a bill of $5,750. Even after you pay all the money you just got out of the stock market/mutual fund you STILL owe the credit card company $200 more (Of course that is just an example and those figures could change, etc.).
The point is that paying off credit card debt is the best investment that you can make. It is a GUARANTEED return, and you don't have to take taxes out of it as you are just paying back a debt. The above example showed a 15% profit in the stock market/mutual fund. What would have happened if the investment only went up 5% instead of 15% or what if it went down 15%? You would be in an even a bigger hole. In the example above you would have needed a 20% return in order to pay off the credit card in full after commissions and taxes. That is double the average return for the stock market. Historically, that is asking a LOT when you could just have paid it off from the beginning and not have to deal with the stress of the debt.
I always suggest paying off personal debt (which includes credit cards, automobile loans, furniture loans, personal loans, and student loans) prior to investing money in the stock market/mutual fund.
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Steve Hoven, has many years in the financial industry. He has started a financial newsletter that you can subscribe to for Free. http://www.biz4christians.com
Student Credit Repair Solutions for Building Credit
When it comes to life the majority are always assuming, and the most of them assume the worst. Creditors, debtors or anyone today all base their theories on assumptions and assumptions from the beginning of time have caused nothing but failure.
When people fail to pay their bills on time, many of the creditors assume that the debtor does not have the means to pay the debt. Many creditors with the assumption that you are not capable of paying your bills will often set up an arrangement or else lower the amount so that you can repay the debt. This is a step to credit repair, however it takes you to contact the creditors to let them know your situation.
If you have several bills on hand and all the bills are pressing it makes sense to payoff the debt that benefits you the most. After this bill is paid you can set aside an amount the following paycheck to payoff another of the bills. Once you follow this strategy it allows you to work your bills down gradually thus repairing your credit. If you don't have the funds to repay the entire bill at most pay the minimum amount so that you can continue using the service. Most debtors assume they are in debt and there is nothing they can do to resolve the problems that plague their lives everyday. Creditors are always on their back, and their paychecks are never enough to make ends meet.
This is the process of giving up on life. When we give up it often leads to stress. The answer is often in front of them or comes somewhere down the line. Sometimes we see Credit Counseling or Debt Consolidation advertisings and think, 'how can they help me." The fact is Debt Consolidation is only a lead to get creditors off your back for a moment. Credit Counselors are more prone to help you find a solution to repairing your credit. Credit Counselors is the solution when you don't see a way out on your own. The professionals work closely with your creditors, you, and work toward a resolve.
This is certainly a way to get creditors off your back, work out an agreement with your debts, and reduce the stress level that comes along with financial burdens. Some of the Credit Counseling Services offer a low fee for their services and provide you with a financial managing solution. The services often offer help with managing your money, as well as offering counseling to homeowners, students, and so on. There are many solutions for debt relief so the key then is not assuming the worst. Again the main solution is paying off the debts that are considered priorities. If you have secured loans it is always wise to find a way to pay these bills first. Unsecured loans pose a threat, but nothing compared to secured debts.
Some of the nonessential bills can include credit cards. Although you are responsible for this bill, however the worst that happens with credit cards is that you loose your privileges. Check your terms & agreements, since some credit cards may allow you to pay the interest on the cards. This will give you the time you need to find a solution for paying off the card. Some cards may even allow you to pay the minimum balance on the card and allow you to keep the card in your possession. If you have credit cards you might want to consider paying your bills, which will give you time to repay the credit card.
Pay the maximum amount on the credit card before the bill comes in so that you have funds available to pay your bills the following month in case you don't have the funds available. There is always a solution, so never assume that you can't deal with any problem. You might want to cut back on some of your spending so that you will have extra cash when those bills come in also. Cutting back only provides a solution for gaining money and repairing your credit.
J. Brian Keith is a Student Consolidation author and contributor at DebtRelief-DebtReduction.com, where innovative ideas and information about
Student Loans is openly shared. See
Student Loan and Student Consolidation related articles.
Debt Consolidation Service In Birmingham
Jane was a fun loving girl from Birmingham, you could say she lived for today. She wanted all the latest fashions and gadgets and certianly was not afraid to use her credit card to pay for them.
She had a weird philosophy on life. For some reason she believed she would die before the age of thirty, however thought that if she was still alive, she would by that stage be earning lots of money. This huge wage packet would be more than enough to pay for any debts that she accrued in her late teens and twenties.
Jane was a girl who could never say no to going on holiday with her friends. There were a number of occasions where she booked a holiday when in reality she could not afford it. Never mind, I will pay for it with my credit card and worry about it at a later date, she thought.
At the age of twenty four, Jane decided to buy a car. Not just any car, or a car for somebody on her earnings but a quite expensive model. You may be wondering how she paid for this car, it was a car loan of course.
Clothes shopping and actually shopping of any kind was a weekly must do thing for Jane. She was a true friends to shop retailers and signed up with many of stores card schemes, who's motto is buy now, pay later.
Jane had a very happy and exciting time during her late teens and twenties, however she did not die before the age of thirty. Companies started knocking at her door, asking for the debts to be repaid. Jane had loan repayments and credit card repayments coming out of her bank account on around eight different days in the month.
This was when Jane needed help and she sought the help of a debt consolidation service provider. For Jane it was now time to grow up and to live in the real world. This was very hard for her to keep track of.
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