Ways To Become Debt-Free And Credit Cards Smart Use

                                          Image by: Alpha Stock Images

 

The fact that you are reading this article shows that you have come to the decision that you want to reduce your debts or you want to be equipped so that the next time you fall into it then you can easily get out of it, and this is quite commendable. However, consolidating your debts is not as easy as it sounds; you need wisdom, strategy, and determination.

 

You first need to know the adverse effects that debts have on you. You may be in dire need of property, a car, or starting capital for business, and you may need some sort of financing. As long as you have a trail of debts after you, then you can rest assured that no financier will look your way. Therefore, your hands become tied-up.

 

Debt consolidation is usually the first step you should take in mending your broken credit history. Debt consolidation does not make all your debts vanish into thin air; what this does is that interest rates go down when debts are consolidated. The fact that you pay less interest on your debts means that you are able to pay your debts much faster than you would have if you had not consolidated them. 

There are many financiers who give nice debt consolidation loans, and you should consider getting one. I must mention at this point that the better your credit history is, the easier it is to get a debt consolidation loan.

 

You might want to consolidate your debt by other means except getting a consolidation loan. Well, if you own a home, there is good news for you. You can put up your home for a mortgage refinancing scheme that can be used to pay all other creditors, leaving you with only one lender – the mortgage financier.

 

However, if the above options do not suit you because you are limited due to one reason or the other, then all is not lost. You can get yourself a debt management agency to get the consolidation job done for you. The advantage with such agencies is that they can get your debts consolidated without you necessarily having a home or any other form of security. Consider consolidating your debts especially when you have gotten to a point where your debts are unmanageable and they are driving you crazy.

 

You can do the application online to the relevant agency. Searching for the agencies via the internet is advantageous because you have a range of agencies to choose from. Go through various agencies online before deciding on which one you will choose to work with.

Once you've picked the suitable one for you, please apply the advice from Dave Ramsey, the author of the book: The Total Money Makeover: A Proven Plan For Financial Fitness, who said that: "I tell everyone never to take more than a fifteen-year fixed-rate loan, and never have a payment of over 25 percent of your take-home pay. That is the most you should ever borrow.”

"Just as the rich rule the poor, 

so the borrower is servant to the lender." 

Proverbs 22:7, NLT.

4 Smart Tips To Using Credit Cards

 

Plastic money, which comes in the form of credit cards, is really loved and highly used. There is nothing you cannot purchase with one swipe of the credit card. Credits companies generate multi-billion dollar revenues every year on credit card users. This revenue is made when they deduct their charges and when they find you for late payments, transfers, and over-limits. 

However, a credit card can be a good servant if used wisely but a bad master when used unwisely. As a matter of fact, you can even get bonuses when you learn how to wisely use your plastic card. The following tips will be of great help to you if you apply wisely.

 

1. There are many credit card companies to choose from; choose the best. The best credit card you can have is one that has good interest rates and an open bonus system. Some credit cards usually have rewards for you, if you use it wisely. The rewards range from cashback to college fees for your kids. You can have a look at the customer reviews on a credit card before choosing it to be your financier. Such reviews will give you the best image of the credit card, and the experiences of other customers will help you make the right choice.

2. Avoid carrying balances on your credit card. These financial companies reward those who have a clean record when it comes to having balances in their credit cards. Paying off the balances usually relieves you of the burden of paying huge amounts of interest rates. Make it your aim to pay off any balance in your credit card at the end of every month.

3. Learn how to communicate with your credit card company. When you have a balance that has been forwarded to the next month, pick up your phone and talk to your credit card company and see whether it is possible for the interest rate to be cut down. However, you can only benefit from such a step if you have previously kept a clean record of clearing balances with the company.

4. Avoid cash advances like plague. As a matter of fact, use cash advances only when you are faced with an emergency and there is no other way out. It is very easy to ask for a cash advance because when you get it you feel as if you have been given free money. However, such advances usually attract heavy interests and charges when you delay payment.

 

Use these smart tips when you use credit cards and then you will not feel them be the monster that they are usually touted to be. They truly help in the time of need, but in the long run, the solution can not be lethal than its problem.

 

Here's an episode by Philippine's J3 Patino of Pinoy Money Academy that explains, how smart are the rich in using the credit cards. These are the smart practical applications of using the credit cards.