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Consolidation of Debt
Many banks and financial institutions will help you combine all your debt into one lower interest rate loan. Put the money you would have had to use to pay the higher credit card payments in a savings account. This can be very beneficial—but only if you DO NOT continue to incur more debt. Throw away those credit cards and buy only when you have saved money for the item and have it available in your bank account.
Credit Cards
The best advice is not to use your credit cards. Very few people are disciplined enough to use them wisely and only charge what they are able to fully pay at the end of each month. Long-term interest on credit card debt can be staggering. One way to manage your cards is to write the amounts you charge in your checkbook, as though you were writing a check. Subtract the amount from your checkbook balance and when you run out of money stop charging. When your credit card statement arrives, check off each item from your checkbook as though your were balancing it against your bank statement. Then write a check to pay the total—you have already subtracted it from your checkbook balance (item by item) so you know you have the money to pay it in full.
Do not get a cash advance! Read the fine print on your agreement disclosure. You may have a low rate on purchases but you have an entirely different rate on cash advances, and it will be much higher! Also, there is almost always a transaction fee and there isn’t a grace period…you start paying interest on the advance immediately.
Everything is negotiable and there is more than one credit card company! If you don’t like the rate they are offering, talk them down! If they won’t budge, switch companies!
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