Getting Your First Credit Card? Read This First

overwhelmed with debt

When applying for your first credit card, you’ll need to know the responsibility that comes it. It means the start to your credit score and monthly bills, so you need to prepare yourself for what you’re signing up for. Here’s what you need to know. 

What is a Credit Card?

A credit card can get tricky when you’re new to it. It’s a card that allows you to borrow money from a bank to make purchases, as long as you pay it back within the period. The “grace period” is the 25 to 30 days you’re given to pay back the money you borrowed. If you don’t pay it back in the time, you’ll have to pay interest. If you’re good with your card and pay your credit balance in full on time each month, you won’t have to face being charged for interest. The whole goal of a credit card is to build your credit, not hurt it. The better your credit score is, the better the cards you can qualify for. 

How Credit Cards Work 

Credit card companies make money in various ways: transaction fees, interest payments, annual fees, and late fees. The ones you should worry about the most are the interest payments and late fees. It’s best to pay more than the monthly minimum payment due every month, however, you need to make sure to at least make minimum payments on time. Not making on-time payments will result in late fees and higher interest rates. That will negatively affect your credit score.

If You’re Just Starting Out

When you apply for your first credit card, you’ll need to work on building your credit first. You can then qualify for the best credit card on the market. You can also get a secured credit card. With a secured credit card, you are required to put down a refundable security deposit that which becomes your credit limit. Credit companies are more willing to give secured credit cars to people with credit or no credit, so it’s a good option to have if you’re just starting out. 

It’s also smart to find a co-signer when you apply for a credit card (a parent or a friend). However, the co-signer will be responsible for paying your debts if you fail to do so, so make sure you pay your bills efficiently and on time. 

If You Fall Into Debt

If you so happen to fall in debt after opening your first credit card, we can help. Consumers can connect with a live person who will provide reliable information and help with debt reduction. Learn how to pay off your debt faster. Our repayment experts are online now to assist you with your questions.

How Not To Crumble Under the Weight Of Student Loan Debt

student loan forbearance definition

There are 43 million people in the United States who owe federal student loan debt. Student loan debt is more often discussed as an issue that only affects millennials, but it is an issue that cuts across all age groups. Federal statistics show that about 7.8 million people age 50 and older owe a combined $291.9 billion in student loans. People from age 35 to 49 owe $548.4 billion. That group includes more than 14 million people. The Average student loan debt in the United State is extremely high, making it impossible not to crumble under the heavy weight of it.

What Is Student Loan Debt?

Student loan debt is money owed on a loan that was taken out to pay the expenses of school tuition. These loans are used to cover the portion of tuition that has not otherwise been paid with grants, assets, scholarships, or the help from a parent or guardian. The tricky thing with repaying student loans is the system expects students to get jobs right after college. But there are no guarantees of immediate employment after graduation. This unemployment rate leads to students drowning in the average student loan debt after graduation.

Tips To Deal With The Pressure Of Student Debt

Student loan debt statistics say that 61 percent of more than 1,000 student loan borrowers fear student loan debt and their worries are spiraling out of control. More than 70 percent that took part in the survey said they suffer from headaches due to the stress. Here are some tips to not fall into debt and depression:

Choose the Right Repayment Plan

Federal student loan programs offer a repayment plan that automatically enrolls all users in a standard 10-year plan, with your first payments due six months after you graduate. The government also offers six other repayment options that could be more suitable for your situation.

Put Your Payments on Automatic

Majority of lenders either cut rates or offer some kind of bonus if you set your payments to automatic. If you pay your student loan payments automatically on your repayment option, some lenders will reduce interest rates by 0.25 or 0.50 percent as an incentive.

Reduce Your Rate

If you have a steady career and your monthly paychecks total $1,000 or more than your total monthly debt, there’s a high chance you can refinance a high-interest student loan into a lower rate. This reduction will reduce your monthly costs.

Who Can Help With Paying Off Your Student Debt

Learn how to pay off your debt faster. Our repayment experts are online to answer your questions. Connect with a live person for reliable information and debt reduction advice. Get in touch with us now.

Three Key Things to Know About Balance Transfers

balance transfers

Credit card balance transfer is a commonly used financial tactic to transfer the debt from one credit card (which has a high rate of interest) to another credit card (which has a relatively lower rate of interest).

It is important to have a clear idea of what is a balance transfer if you are aiming to get rid of your credit card debt faster.

With a balance transfer, you can apply a larger part of your payments to the principal every month instead of the interest charges.

However, before you choose balance transfer credit cards, take a look at the following key points:

How to Transfer Credit Card Balance

When you are assessing balance transfer credit cards suitable for your needs, you need to carefully go through the terms and conditions and make sure balance transfers are allowed.

If the terms list an APR and a balance transfer fee, then it is clear that you can use the card to transfer a balance.

But if these costs are missing from the listed terms and conditions, you should check with the credit card’s customer service to clarify whether balance transfers are allowed.  

With a balance transfer credit card, two APRs need to be considered: the introductory or promotional rate and the regular interest rate that will become applicable once the promotional period ends.

You should compare the regular (post-promotional) rate of interest with the rate you already have on your existing credit card. Also, take into account the balance transfer fee, which will be automatically added when the balance is transferred.

Ensure the Balance Transfer is Completed Successfully

Credit card balance transfers are not as swift as making a credit card purchase. It may take a few days or even weeks for the balance transfer to be processed. You should continue to make your monthly payments due on your old credit cards until a zero balance shows up in your account statement.

People often make the mistake of ignoring billing statements as they assume that their balance would have been transferred.

If the balance transfer is yet to be completed or there is some error, you may end up missing a payment on your old credit card. This will result in a late fee as well as a late payment entry in your credit report.

Saving Money on Interest

If you pay the full balance while you are still in the promotional period, you will be able to save the maximum on interest charges.

You can simply divide the balance by the number of promotional months to determine the monthly payment you are required to make in order to pay off the balance and entirely avoid interest.

In case your credit has a different type of balance, such as a purchase balance, it may sometimes take a longer time to pay off a balance transfer.

Credit card issuers typically apply payments to the balance with the lowest rate of interest until the balance is completely repaid. You will pay interest only on the balance transfer until the lower interest rate balance has been completely paid off.

Get the Answers You Need

Get answers to your debt questions here. Our debt specialists are waiting to hear from you. Get in touch with us now.

Ten Times You Should Not Use Your Credit Card

times you should not use your credit card

When we want something, the temptation is to use our credit cards to get it, even if we know we shouldn’t. Sometimes, however, we should listen to our better judgment. Here are ten times you should not use your credit card.

When You Can’t Afford to Pay the Balance

When it comes to using credit cards, the number one rule you should always follow is never to use your card if you cannot afford to pay off the balance. Charging items, you can’t afford is a sure-fire way to tank your credit score.

If You Don’t Know Your Available Credit Balance

While many banks have replaced credit limits with spending limits, this does not mean you should exceed your credit balance. Exceeding your credit balance may lead to huge fees from lenders. Also, maxed-out credit cards hurt credit scores.

When You’re Near Your Credit limit

Always try to stay at least a few-hundred-dollars away from your credit limit, as otherwise, it may negatively impact your credit score.

If You Receive Notice That Your Interest Rate Will Go Up

When a credit card company sends a notice informing you that they are raising your interest rates, this is, in essence, a plea for you to stop using your cards foolishly. Should you receive a notice, stop using the card, call your credit card lender and negotiate a new rate, or switch cards.

If You Use One Card to Pay Off Another Credit Card

Paying one card off with another is debt swapping, which is bad for your credit score. If you swap debt every six months, this may impact your credit score.

When Your Only Concern Is Getting Reward Points

When purchasing with a credit card, rewards should never factor into a decision to buy or not. The reasoning behind this is that focusing on maximizing rewards often leads to overspending what you can afford.

On Foreign Websites

If you are shopping on a website with a different extension, always avoid using a credit card, as thieves may steal your details. Always be aware of who you are dealing with and be confident that the retailer’s site is secure and legitimate.

Impulse Buys

Impulse buys are one of the fastest ways to destroy your credit. Don’t just follow your heart, be careful with all credit purchases and take a step back and ask, “Do I need this?”

If You Are Trying to Build Your Credit for the First Time

Building credit is essential, but so is keeping your balance in check. If you are building credit, always be sure to pay off your balances in time, or else your credit score will decline, not rise.

If You Are Trying to Rebuild Your Credit

Similarly, be careful with your credit cards when you are attempting to build your credit score.  Always try to keep your credit spends below 10 percent of your limit and be prompt with all payments, otherwise, you won’t see the results.

Finding the Right Solution for Your Credit Card Problems

If you find yourself struggling with credit card debt, the good news is that help is out there. We can help and do all the tough work for you! Talk to one of our debt experts about how to get rid of credit card debt. Chat with one of our debt experts by calling 866-858-3384 and get started today.

The Best Ways to Use Your Credit Card

best ways to use you credit card

The best way to use a credit card to build credit is to use it responsibly. When used carefully, a credit card has many benefits and it a useful to help build your credit. Consider the following approaches to avoid financially adverse consequences of mishandling credit card usage.

Begin by Using Credit Card for Everyday Purchases

If you are new to using credit cards or are making a fresh beginning after having suffered the ill effects of credit card misuse, perhaps it may be best for you to start slowly.

Do not try to max out the limits on your credit card right away. In fact, avoid maxing out your credit card under all circumstances. Who cares what type of deals this clothing store is offering customers right now?

Instead, the best way to use a credit card is to make small charges on the card and pay the full balance every month.

The objective of having a credit card is not to indulge in purchases that you cannot afford to pay for in cash, but to use it as a convenient and safe means of payment.

If you begin by using your credit card to make low-cost everyday purchases, it will be easier to pay the monthly balance in full. This will help you stay below your credit limits, encourage you to practice good credit habits, and mark the beginning of your strong credit history.  

Make Larger Transactions When Ready

Once you have developed a positive habit of never exceeding your card limits and never missing payments, you may be now ready for making somewhat bigger purchases using your credit card.

Even when you are fully prepared, the best way to use a credit card to build credit is to keep your purchases well within your credit limit and leave an adequate margin for any unforeseen situation.

Whenever you make a significantly large purchase on your credit card, you should set aside the money for it so that you don’t end up spending it before the credit card bill arrives. Again, who cares what price that car dealership has that car listed for?

This way, when it is time to pay the bill, your payment would be ready. You may even pay soon after you have made the purchase, without even waiting for the bill.

When you continue to use your credit card with this level of responsibility, chances are that your credit card company will increase your credit limits. On the other hand, if you handle your credit limits irresponsibly, the limits could be cut back just as easily.

Self-Discipline is the Key

Using a credit card for everyday purchases is not the only best use of a credit card. The right way is to exercise financial self-discipline, regardless of what type of payment you have to make using your credit card.

In each case, you should be in a position to comfortably pay your credit card bill on time every month.

If you have a weak track record with credit management, consider making a fresh start with only one credit card.

This will help you monitor your payments and balances in a better way. Multiple credit balances and due dates could be difficult to manage and may damage your credit score somewhere down the line or lead you into a debt trap.

Help is Here

Learn how to pay off your debt faster. Our repayment experts are online to answer your questions. Start chatting now.

Budget-Friendly Traveling Tips That Won’t Push Your Credit Over the Edge

Traveling is an exciting part of enjoying life. Unfortunately, it can also prove disastrous financially – especially if you don’t plan ahead. Here are a few budget-friendly travel tips that won’t push your credit over the edge.

Figure Out a Fun Budget Ahead of Time

One of the best ways to ensure your vacation won’t break the bank – or destroy your credit – is to budget your finances carefully ahead of time. Budgeting wisely can help you with all aspects of your financial life – fun included. A great way to plan your budget is to use what is known as the 50/30/20 rule, which stipulates that 50-percent of your post-tax budget goes towards paying for the necessities, 30-percent goes towards things you want, and 20-percent goes towards either your savings or paying down existing debt. This plan allows you to save an impressive 30-percent of your income for exciting, fun things such as travel!

Get the Cheapest Deals on Flights

If you plan to travel far, you’ll need to book flights. To save money, always try to book with budget airlines, as they typically offer the best deals. Also, make sure to check some of the flight-tracker sites which offer up to the minute deals on the best prices. Newsletters, such as Scott’s Cheap Flights, provide insights as to when airlines hold sales or lower their rates, and are another great resource.

Use Public Transportation

When people travel to exotic locations, often they don’t speak the local language. This language barrier, along with the fear of getting lost in a new city usually leads to an aversion to taking public transportation. In reality, however, public transportation in most big cities is excellent and easy to navigate – even for novices. Before you travel, always take the time to research the local public transportation offerings, including printing out a map, downloading any local apps to your phone, or even getting a travel guide. Traveling with public transportation lets you experience more of the local flavor – and you may also find some out-of-the-way gems you never knew existed!

Don’t Waste All Your Money on Food

Part of the excitement of traveling is easing exciting new foods. Unfortunately, this is also one of the fastest ways to burn through your budget. Instead of continually dining out in trendy bistros and cafes, why not check out the local markets for budget meals that are big on taste? You can even get a better understanding of the local culture and try the delicious foods that the locals eat!

We Can Help You Get Out of Credit Card Debt

Debt consolidation is an excellent way to get out of credit card debt and free up funds for travel.  Imagine not having to make multiple card payments every month, only making one payment and saving the rest for fun things. We can help – and do all the tough work for you! Chat live with one of our debt experts about how to get rid of credit card debt. There’s no time like the present.

 

Five Creative Ways to Pay Off Debt

ways to pay off debt

We all dream of leading a debt-free life, but only a few of us actually manage to do so. A study by Northwestern Mutual shows that the average American carries approximately $38,000 in personal debt (excluding mortgage).

In many households, people spend most of their paycheck on debt repayments and are left with next to nothing for savings and investment.

The good news is that it is entirely possible to pay off debt – no matter how insurmountable it might seem to you now. Given below are five creative ways to pay off debt fast and improve your financial situation.

Itemize Your Deductions

If you are not itemizing your deductions, you might be paying more taxes than you need to. The IRS allows you to deduct a wide range of expenses – from medical expenses to mortgage interest.

If your itemized deductions are more than your standard deduction, you should definitely take advantage of it and save some money. Data from the IRS shows that the average tax refund in 2018 was $2,640, which gives you an extra $220 a month, which could be used to pay off debt.

 

pay off debt

 

Swap Your Credit Card Debt for a Personal Loan

If you have multiple credit cards and cannot keep up with the repayments, it might be a good idea to get a personal loan to pay off your credit card debt.

If your credit score is above 650, you might be able to get a loan with a lower interest rate compared to your credit cards. By doing so, you can save a lot of money on interest, which you can use to pay off your debts.

Rent out the Extra Space

If you have an extra room, garage, or parking space at your place, you can rent it out and earn some money. You can become an Airbnb host, rent out your spare room, and earn a steady stream of rental income.

There are also several websites where you can sign up as a host and rent out your driveway or garage for people who are in need of parking and storage space.

Save on Shopping

This is one of the most creative ways to pay off debt. Businesses tend to spend a great deal of time, effort, and money to turn first-time buyers and casual buyers into loyal customers.

 

creative ways to pay off debt

 

From special discounts to reward points, cash back offers, and members-only deals, you can find a wide range of offers using which you can save money on groceries, clothes, and essential household items. Make full use of these offers, save as much money as possible, and use it to pay your bills and debts.

Move In With Your Parents

This is an option that you might be hesitant to consider, but it can help you save a lot of money. By moving in with your parents, you can get rid of your rent payments and save a huge chunk of money, which you can put towards debt repayments every month.

Struggling with Debt? Talk to Us

If you are struggling with debt, it might be a good idea to talk to one of our debt repayment experts. By doing so, you can learn how to pay off debt faster. Paying off your debt is easier than you think. Start chatting now to find out how.

What You Should Know About Income-Based Student Loan Repayment

income based student loan replacement

Are you someone who is struggling with student loan repayments? If so, you are not alone.

The United States is currently undergoing a student loan debt crisis and experts say that nearly 40 percent of borrowers are likely to default on their loans by 2023. It’s amazing how easy someone can get so much money from the federal government while choosing to major in a subject that does not pay that much.

The Problem with Student Loan Repayment Schedule

Federal student loans generally have a standard repayment schedule, wherein you are supposed to repay the principal amount and the interest within a span of 10 years. The monthly payments are fixed and remain unchanged for the entirety of the repayment period.

Such a repayment schedule might not be a problem for you if you manage to secure a good job right after college and receive a substantial starting salary.

If, on the other hand, you do not have a stable job or a steady source of income or if you have substantial financial obligations (large family, high cost of living, personal debts, and so on), you might find it hard to cope with the repayment schedule.

If you find yourself in such a situation, an Income-Based Repayment (IBR) plan might be a good option for you.

 

 Repayment Plans

 

What Is IBR and How Does It Work?

IBR is a debt-relief program offered by the federal government for people who are unable to keep up with their student loan repayments.

It is one of the four Income-Driven Repayment (IDR) plans offered by the government – the other three being Pay As You Earn Repayment Plan (PAYE), Revised Pay As You Earn Repayment Plan (REPAYE), and Income-Contingent Repayment Plan (ICR).

Unlike a standard repayment plan, IBR does not have fixed monthly payments which remain unchanged throughout the repayment period. The monthly payment is determined based on your income and it can be adjusted based on your financial situation.

How Your Monthly Payment Is Calculated

It is important to understand the payment terms of the loan before you sign up for it.

If your loan was issued before July 1, 2014, your monthly payment is usually capped at 15 percent of your discretionary income.

You are required to make monthly payments for a period of 25 years, after which you can become eligible for loan forgiveness.

If your loan was issued on or after July 1, 2014, your monthly payment is usually capped at 10 percent of your discretionary income. You are required to make monthly payments for a period of 20 years, after which you can become eligible for loan forgiveness.

 

federal student loans

 

Advantages of IBR

Advantages include:

  • The monthly payments are much lower compared to what you are likely to pay under the standard repayment plan.
  • Your monthly payments can be adjusted based on your financial situation. Depending on the terms of the loan, you can recertify your repayment plan and lower your monthly payments for a number of reasons including the birth of a child, getting demoted at work, getting treated for an illness or injury, or losing your job. In some cases, the monthly payment can be as low as $0.
  • You become eligible for forgiveness after 20 or 25 years, depending on when your loan was issued.

Disadvantages of IBR

Some disadvantages are:

  • Since the repayment period can be anywhere from 20 to 25 years, you are likely to pay more towards interest compared to a standard repayment plan.
  • The loan amount which is forgiven after the mandatory repayment period is taxable.

Is IBR the Right Choice for You?

IBR can be a good option for anyone who is struggling with student loan debt. It is, however, not the only option available for you.

There are several other ways in which you can tackle your debt and improve your financial situation. If you want to learn how you can pay off your debt faster, you should speak to us.

Get answers to your debt questions here. Our debt specialists are waiting to hear from you. Get in touch with us now.

Can I Pay Off My Credit Card With Another Credit Card?

can i pay off my credit card with another card

If you are carrying a large amount of credit card debt, this question is likely to pop into your head from time to time.

While it is possible to pay off your credit card with another one, there are a number of things you need to know before you go down that route.

Paying Your Credit Card Debt with a Different Credit Card

There are two ways in which you can pay a credit card with another one.

  • Cash advance or convenience check
  • Balance transfer

Cash Advance or Convenience Check

A cash advance is the amount of money that you can withdraw from an ATM using your credit card.

There is usually a cap on the amount of money that you can withdraw using your credit card. You can withdraw the money, deposit it into your savings or checking account, and pay your credit card bill.

You can also use a convenience check, which is mailed to you by your credit card provider, to pay off credit cards. You deposit it into your savings or checking account and use the money to pay the bill.

 

pay off my credit card with another credit card

 

While it might sound really convenient, paying bills using a cash advance or a convenience check might be a really bad idea for two key reasons.

  • Credit card companies tend to charge a fee, which is usually a percentage of the amount you withdraw, for cash advances as well as convenience checks.
  • The money you withdraw from your credit card starts accruing interest right away and the rate of interest could be as high as 25 percent in many cases.

Balance Transfer

This is a better and cheaper alternative to a cash advance. In this method, you simply transfer your existing credit card’s balance to a new card, which typically has a lower rate of interest.

You can also take advantage of the low-interest or zero-interest offer provided by credit card companies. The offer usually lasts for a specific period of time, during which you will be charged a very low interest rate or no interest at all on the transferred balance.

Once the offer ends, you will be charged a higher interest rate, which is applicable to the total balance (the transferred balance from the old card and the balance on your new card).

 

can i pay off my barclaycard with another credit card

 

While a balance transfer is a better option than a cash advance, it has its own downsides as well.

  • The first thing you need to know about balance transfers is that they are not free in many cases. The credit card provider is likely to charge you a fee, which could be 2% to 5% of the balance you transfer.
  • Once the low-interest or zero-interest period is over, you will be charged the regular rate of interest, which could be anywhere from 14 to 22 percent. If you are unable to pay off your credit card debt within this period, you will find yourself in the exact same situation again.
  • Not everyone is likely to qualify for a balance transfer. If you have a poor credit score and a less-than-satisfactory repayment record, you could be declined.

Finding the Right Solution for Your Credit Card Problems

If you are a homeowner, a reverse mortgage might be a better option than piling up your credit card debt with more and more cards. Particularly, if you are a retiree, you are better off using the built-up equity in your house rather than adding more debt, which you might find it hard to pay off.

If you want to know how you get rid of your debts and be financially secure in your retirement, get in touch with us today.

Three Things to Do When Your Credit Card Bill Gets Out of Control

credit card bill out of control

You may have seen it coming – or not. Your credit card debt has gotten and higher, and now it’s out of control, stressing you out, and keeping you up at night. Something has to be done, before your financial situation becomes worse, impacting your credit score beyond measure. Fortunately, all is not lost. We can help you get your finances back on track and show you how to pay off high credit card bills. It’s time to tighten the belt!

Manage Your Credit Card Debt

Sounds like you need a plan to immediately start managing your credit card debt. You should begin by organizing your credit cards. Make a list of the cards and their balances, required monthly payments, and the interest rate charged for each card. Once that’s in place, check out these tips to pay off your credit cards:

#1: Tackle the Card with the Highest Interest Rate

The general rule of thumb is to pay off the card with the highest interest rate first. When you’re done paying that one off, tackle the next one in line, and continue this until they’re all paid off. However, another line of thought is to pay off the card with the smallest balance, which will give you a sense of accomplishment.  

 

how to pay off high credit card bills

 

You might also consider applying for a credit card with a low-interest rate or better yet – a credit card with a zero percent interest rate. You can then roll over the balance from the card with a higher interest rate, also called a credit card balance transfer. But be sure to read the small print.  Some cards offering low or zero percent interest rate, do so with a promotion. Be sure to pay off the balance, before the promotional period ends.

#2: Stop Using Your Credit Cards Immediately

This may sound like a no-brainer when trying to get out of debt, but many people have trouble letting go of their credit cards. You see something you want or need, so you whip out your credit card and buy it. Back away from the credit cards. Studies show that people tend to purchase more when using credit cards, as opposed to using cash.

#3: Consolidate Credit Card Debt

Consider getting a credit card consolidation loan. Here’s how it works: instead of making multiple monthly payments, you will have to make only one payment into an account. And get this – your overall debt will be lower because the company negotiates with your creditors to accept less than what’s owed, and then pays them from your deposited account until the debt is resolved. No more stress.

 

how to pay off credit cards

 

Call Experienced Debt-Relief Experts

If you want to learn more about how to pay off credit cards, contact the debt relief experts, and get help from one of our experienced financial counselors.  Call Your Consumer Services at 866-858-3384 and let us help you get started today. Erasing or reducing your credit card debt is just a phone call away. Imagine the good sleep you’ll start getting gain, once you know you’re handling your debt, the right way.