The customer is always right!
11 years ago
Tuesday, July 7, 2009
One of the part of payments system is credit card which is the small plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. This was result numberous of consumers or credit card holders overload their credit limit and caused credit card debts. Credit card debt is an example of unsecured consumer debt, accessed through credit cards.
Debts are caused by a client of a credit card company purchases an item o
r service through the card system. Debt accumulates and increases via interest and penalties when the consumer does not pay the company for the money he or she has spent. The results of not paying this debt on time are that the company will charge a late payment penalty and report the late payment to credit rating agencies. Being late on a payment is sometimes referred to as being in "default". The late payment penalty itself increases the amount of debt the consumer has.
Debts are caused by a client of a credit card company purchases an item o
r service through the card system. Debt accumulates and increases via interest and penalties when the consumer does not pay the company for the money he or she has spent. The results of not paying this debt on time are that the company will charge a late payment penalty and report the late payment to credit rating agencies. Being late on a payment is sometimes referred to as being in "default". The late payment penalty itself increases the amount of debt the consumer has.In order to prevent the accumulated credit card debts, there are several methods to stay out the credit cards debts:
1. Photocopy the credit card offer, including the interest rate and terms
Create a letter to your credit card company/companies stating that you are thinking of switching to their competition because they are offering a far more reasonable interest rate. Credit card companies do not want to lose your business. Nine times out of ten they will match or even offer a lower rate than the competition has offered.
2. If you can afford it, pay double the minimum payment
The minimum payment usually pays just enough to cover the interest and a little more that pays down the balance. Paying extra will pay your balance more quickly.
3. Pay off smaller balances first
It is common for a person to try to focus on their cards with larger balances first. Pay off the smaller ones. It will take less time and you will feel a sense of satisfaction when you have actually completed your goal. This will boost your confidence and make it easier to tackle the higher balances.
4. Cut up your cards
So that you are not tempted to use them. Save one card for emergencies.
5. Refinance or fixed-rate home equity loan
If you have equity in your home, look into paying off credit card debt with a refinance or fixed-rate home equity loan. Do not use a home equity line of credit, the rates will rise as the prime rises and suddenly you may find it impossible to keep up with your bills.
1. Photocopy the credit card offer, including the interest rate and terms
Create a letter to your credit card company/companies stating that you are thinking of switching to their competition because they are offering a far more reasonable interest rate. Credit card companies do not want to lose your business. Nine times out of ten they will match or even offer a lower rate than the competition has offered.
2. If you can afford it, pay double the minimum payment
The minimum payment usually pays just enough to cover the interest and a little more that pays down the balance. Paying extra will pay your balance more quickly.
3. Pay off smaller balances first
It is common for a person to try to focus on their cards with larger balances first. Pay off the smaller ones. It will take less time and you will feel a sense of satisfaction when you have actually completed your goal. This will boost your confidence and make it easier to tackle the higher balances.
4. Cut up your cards
So that you are not tempted to use them. Save one card for emergencies.
5. Refinance or fixed-rate home equity loan
If you have equity in your home, look into paying off credit card debt with a refinance or fixed-rate home equity loan. Do not use a home equity line of credit, the rates will rise as the prime rises and suddenly you may find it impossible to keep up with your bills.
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