• Lower your monthly payments
  • Reduce stress and live your life
  • Avoid personal bankruptcy court

Cashing In On Your Credit Cards

Credit cards have given new life to finances and the ability to spend money. Nowadays, purchasing merchandise and paying for services do not require cash or check writing transactions. All you need is a credit card with a sufficient balance on it to cover your expenses, and you are able to buy whatever it is that you need to purchase. However, with the increasingly rising use of credit cards, few consumers are aware that even with swiping the credit card, the purchase is only made temporarily because eventually, you have to make payments on the card to cover the amounts already taken off of the card. Not only that, you have additional processing and interest fees that must be paid as well. Because of that, consumers are constantly battling with credit card debt, either getting out of it or trying not to get into it.


Credit Card Spending Trends

In a study conducted in 2013 by the Federal Reserve, payment trends including long-term and short-term that took place during the years 2000 up until 2010 were examined.  It was concluded that there were various transactions that involved card not present transactions on general purpose credit cards. This type of transaction means that the consumer was not able to present an actual credit card. These types of transactions typically take place over the internet or the telephone. The information taken from the study also showed that these types of transactions are becoming increasingly popular as the sale of merchandise online constantly increases. In fact, the trend increases at a rate of 25% or more each year, and currently almost $1 trillion is made in online spending.

Credit card companies are very mindful of this increasing trend. In fact, more credit card companies are shifting their standards in an effort to get more individuals interested in using their credit card. This puts consumers at risk for racking up further debt. In America, the average credit cards debt is approximately $8,000 per credit card user, and the APR averages at almost 13%.

Exchange Traded Funds (ETFs)

Because of the above study conducted in May of 2014, investors who have their funds invested into the world of retail have strengthened their investments by turning to exchange traded funds, or ETFs. Exchange traded funds gives a solution for retail investors who are looking for more exposure to more industries, commodities, and investment opportunities. However, exchange traded funds are not available to help those investors gain access to the credit cards industry. Any investor who wants to purchase stock in a credit card company is recommended to focus on the publicly traded credit card companies. Those companies are:

  • Visa with a market cap of $163 billion.
  • American Express with a market cap of $94 billion.
  • MasterCard with a market cap of $89 billion.
  • Discover with a market cap of $29 billion.

Credit Card Growth and Predictions

When it all boils down, consumer credit depends primarily on the state of the economy as a whole. When the economy is good enough for consumers to benefit financially, they are more able to make more purchasing leading to the retail industry increasing in profits and the economy improving all together. However, when the economy is decreasing, consumers become overwhelmed with making enough money to cover the expenses that are on their credit cards. This causes a decline in customer spending and an incline in consumer debt. This also results in the limited use of credit cards in general. Overall, the negative impacts that credit cards have on the economy of the country and the overall debt of consumers have made possible investors turn a blind eye to the credit card industry.

Out of all of the popular credit card companies, Visa seems to be the strongest competitor among MasterCard, Discover, and American Express. Each trade on the market as resulted in a strong up-trend. If any investor were to pinpoint an ideal credit card company to invest in, Visa would be a good start, especially with its reported market cap being approximately $163 billion. Discover card, being the least used credit card company is slowly but surely making its way into consumers’ purses and wallets. Although its market cap is barely at $30 billion, it has improved on its quality as a credit card company, which is another company investors could be more interested in. its increasing quality has outdone its competitors in performance.

The rise of using credit cards as an alternative to using cash or writing checks have become a popular trend for Americans. Although credit cards are a convenient way to make purchases, it is also responsible for placing a huge debt on consumers and the country as a whole. So where does that leave investors interested in cashing in on credit cards? It is difficult to tell, but it is apparent that credit card companies are aiming at increasing their business to encourage more investors to hop on board.

Need To Know Information About Your First Credit Card

You’re new to credit cards – you know that some people use them, but you’ve never even applied for one and you don’t have a clue as to how you can land good deals on rates.  Well, let’s give you a helping hand, and let’s start with the basics: why get one, and where can you get your first credit card?

Why a Credit Card Is a Good Move

First of all, it’s convenient – really convenient. A sliver or plastic is easier to carry around than a wad of cash – especially if you need to make a larger purchase, whether it’s buying a plane ticket or applying for a home. In this day and age making sure that you have good credit is important: few people can just pay in cash, and for those who can’t, good credit scores can help in life!

  • You can get lower rates of interest when applying for loans, be it for a home or a car!
  •  Employers might check your history before taking you on.
  • Certain utilities might do the same before letting you get a contract established.
  • If you ever want to buy something that isn’t local, a credit card is almost the only way – if you’re getting a car imported or ordering something online, you’ll need a credit card.

It’s important to make sure you have a good credit score as early as your first credit card, so it’s important to have a credit card: but where can you get one?

 First Credit Card

Getting Your First Credit Card

So where can you start off? The first place to check might be your bank – they know you, and if you have been a solid customer so far and can prove your income, they’ll be more than happy to give you a credit account. Credit unions or smaller banks might be a little bit more comfortable in offering a card to customers without credit so far – but either way, you’ll want to dig around! Take close looks at the deals available to you: stop in bank branches, check online, or make some phone calls.

Sometimes card companies will come straight to you. Are you already receiving offers in your mail box from week to week? You can use these to compare the deals you’re getting – the hook is easy. Rewards, a low introductory rate and other things to entice you – but it’s on the back that you’ll find important details like fees, finance charges or interest rates.

Otherwise, look online! Comparing credit cards is easy if you look around, and you can get all of the little details which are important – that you might not know when you’re getting your first credit card. This is all new to you: you need a helping hand.

Comparing Offers

After you have a few offers on the table, it’s time to study them. Do they come with annual fees? What’s the yearly percentage rate? How long do introductory rates last, and what happens if you make a late payment?

Some companies give you a bit of leeway on late payments – and others will slam you with a penalty as quickly as they can. Read the fine print! It’s all there, and it’s all incredibly important for your first credit card – you don’t want to pick something that’s going to work out poorly for you.

Some credit cards will boost your interest rate if you miss even one payment; others will wait until you pay ate on two payments before slamming a penalty interest rate into effect. It’s all in the fine print of the card offer. So get out that magnifying glass and take a look. Once you’ve looked over the offers, pick a favorite and apply.

Be Good, Prompt and Loyal

So you’ve gotten your first credit card – what’s the etiquette like? Make sure to pay on time every time that you possibly can to get your credit history set up right, and make sure to stick to a single card at first. You really don’t need more than one when you first start off.

If your credit card happens to come with a nasty annual fee, start shopping around again. A year of payments done on time will get you better deals, so look around, and once you find one, tell your old credit card company – unless they ditch that annual fee, you’re canceling the account. Be loyal as long as the company is loyal to you.

Alternative Options: Sharing an Account

Is this a good idea? It was in the past, but now things have changed – making it even more important for you to pick up your first credit card. Before 2007 you could get a shared account, but after that, the Fair Isaac Corporation decided that – in their credit rating formula – they would no longer let linked accounts contribute to the dependent’s score. That’s right; if you want to start up a solid credit history and a good credit score, you need to get your first credit card in your own name.

Analyzing and Finding the Best Debt Consolidation Loan

Are you facing debt problems and failing to manage them? It definitely makes you crazy when you spend your nights worrying about your debt payments, starting with a dozen credit cards you have been enjoying using. You should not end up on any settlement instantly. You must obtain accurate and sufficient knowledge to choose what’s best for you. It’s unwise to make a decision without doing proper homework.

Finding the Best Debt Consolidation Loan

Considering Your Options

If you are out of money and have to do something about your dues right away, look out for all possibilities.  Bankruptcy is one option but you would be scared of loosing you assets as stated in Chapter 7 bankruptcy. No one wants to be in such a position unless there is no hope.  You would have also tried talking to some credit counseling agency but all they could do is to lower your monthly payment a bit and lessen their harassing calls. This would be no good if your situation is serious. Here you are, ended up thinking about the best debt consolidation loan as you can find no other way out of your nightmares!

Analyzing a Debt Consolidation Loan

What is a best debt consolidation loan?

A best debt consolidation loan lets you merge all your credit card debts into a single debt. The benefit by doing this is that becomes a lower monthly payment, more affordable, and you avoid the hassle of dealing with plenty of loans separately. It basically makes your life simpler and easier.

Difference between credit card debt and a debt consolidation loan

The main difference between them is same as the difference between a secured and an unsecured debt.

Secured loans

These are debts that are secured by collateral such as a house or anything you own. The risk attached to such a debt is that you will eventually lose your asset if you fail to make your payments. It gives the lender the authority to sell the collateral.

Unsecured loans

These are loans that are not secured by any asset. If you fail to pay for them, the lender can do nothing but to hand you over to collection agency and ask you for payments. Credit cards are a type of unsecured loan.

However, it is not at all easy to meet the requirements for a loan to consolidate your debts. It requires a high credit score such as 700 FICO normally. Sometimes 740-760 is needed to obtain a low rate to make the consolidation useful.

Pros and Cons of a Best Debt Consolidation Loan

  • As we mentioned earlier, the debt consolidation loan is an unsecured loan. If ever you fail to make your payments you merely have nothing to lose. You are not obliged to use your property, car, or any valuable asset against the loan. As debt consolidation loans are unsecured debts, a few companies that offer such loans include Lending Tree, the online lender and Instant Debt Consolidation Loans.
  • Another benefit of such a loan is that it requires you to give fixed monthly payments. Well, this applies to a secured loan as well.
  • When applying for a debt consolidation loan, you must make sure that you agree on a fixed interest rate. There are options of fixed as well as promotional interest rates. Certain banks and credit unions will try to convince you by tempting you with a special promotional rate. You should remember that such rates normally last only for around six months and then jumps into the stratosphere.
  • A problem with unsecured loans like debt consolidation loans is that they are normally offered with a higher interest rate as compared to secured loans. In a secured loan, the lender feels protected because he knows that can has the authority to sell the collateral you offered him. In unsecured loans, however, is taking a bigger risk by giving you the money without exchanging anything. Thus, you will be charged a higher rate.
  • Even the best debt consolidation loan has a downside! This is a just a means to merge your loans, therefore, the amount you owe is same as before. On the contrary, some companies manage to negotiate with credit card companies to reduce your total debt amount and sometimes lower monthly payments. Such companies are known as debt settlement or debt relief companies.

It’s better if you go for actual reduction in debt. National Debt Relief is a company ranked among top three debt settlement companies. Isn’t it great if you get a debt analyses and seek advice from them free of cost. They charge you nothing for advice. Only when they are able to negotiate a suitable settlement with your lenders they charge their fee. When you are already short of money, this seems like the most appropriate alternative.

Managing Credit Card Debt

managing credit card debt

Managing credit card debt can become very difficult if you allow the balances on a number of credit cards to approach their credit limits, start missing payments, or find yourself needing to get cash advances on one card in order to make the minimum payment on another. Sometimes problems managing credit card debt occur solely as the result of one or more unplanned events such as loss of a job, the uninsured loss of a major asset such as an automobile, or a natural disaster such as flood. In most cases however, credit card debt has risen slowly over months or years until the cardholder suddenly notices that their credit card balances have begun to spiral sharply upward as late penalty charges are added to already high balances, and making even minimum payments on all cards sometimes requires taking on extra debt extra debt through “payday loans” or other high interest sources.

What to Do When You Become Aware You Have a Growing Credit Card Debt Problem

Unfortunately, the first reaction of many individuals when they realize that they are beginning to have serious problems managing credit card debt is a combination of guilt, fear, and simply not knowing what to do. That combination often makes them unable to take any immediate actions to resolve the problem. Delays in taking action always makes the job of bringing credit card debt under control more difficult and time-consuming. The first step on the road to financial security is to shine a bright light on the problem. Here how to get started:

  • Clear a table, and make a stack of all of your credit card statements, student loans, home mortgage, and other installment loan contracts such as auto loans.
  • Copy the outstanding balances, interest rates, minimum payments, and other pertinent information for each debt onto a single sheet of paper.
  • On a separate sheet of paper, put your monthly income at the top of the page. Below that, put three list of expenses.
  • In the first list, include expenses that are always the same every month such as your cable or internet service, rent, club memberships, etc.
  • In the second list put estimates of monthly expenses that vary from month to month such as groceries, public utilities, clothing, transportation to and from work, and discretionary spending for entertainment, etc.
  • In the third list put expenses that are not paid monthly, but which occur on a regular basis year after year. This list should include costs such as tuition payments, taxes, insurance policies, costs related to vacations or attending family reunions, etc.
  • As a final step, order a free copy of your credit report from one of the three national credit reporting agencies.

Working With a Qualified Debt Counselor

Getting all that down on paper may not make you happy, but it will make it easier to take the next step toward managing credit card debt, finding an experienced and qualified debt counselor. Here are some suggestions:

  • Call one or two of your credit card issuers and ask them for lists of nonprofit organizations providing debt counseling services in your area. Federal law requires credit card issuers maintain such lists for every community they serve.
  • Improve your chances of getting a well-qualified counselor by focusing on organizations that have been in business for at least five years in the same location. Before visiting any of the organizations meeting that criteria, run their names past your community’s Better Business Bureau or your state’s Office of Consumer Affairs.
  • Walk into at least two of the organizations Okayed by the Better Business Bureau or state Office of Consumer Affairs to pick up a brochure and to get a feel for each place. The brochure should include a clear list of services provided and fees. It also should provide a list of the organization’s national accreditations, and the training and accreditation requirements for debt counselors.

Working Out the Recovery Options

When you have selected an organization to work with, set up your first appointment. Bring your credit report and the two sheets of paper containing your debts, expenses, and monthly income to that first session. Much of the first one or two sessions will involve analysis of those documents and working out a livable household budget that includes savings for non-monthly payments, savings for unexpected emergencies, and an allocation for debt repayment. Based on the availability of funds for debt repayment, the debt counselor will present recovery options that make sense for your financial circumstances. Some of those options might include:

  • Providing guidance on how to approach your creditors to request lower interest rates or other modifications to existing credit terms;
  • Helping you to prioritize the debts you should focus available resources on first;
  • Offering you support in the form of money management training courses or literature;
  • Suggesting that you explore the possibility of a debt consolidation loan, and providing guidance as to the terms you should be able to get, and the banks or specialized lending organizations you should consider applying to;
  • If your income, debt level, or credit score make a consolidation loan inappropriate for your circumstances, the debt counselor may suggest enrollment in a formal Debt Management Program. In typical Debt Management Programs you make a single monthly payment to the plan provider, which in turn negotiates with your creditors to obtain lower interest rates, extended payment terms, and possibly forgiveness of accrued penalty charges or a portion of the outstanding balance. In exchange for those concessions your creditors are guaranteed a portion of the monthly payment the company receives from you. Your credit counselor will explain the impacts participation in such a program will have on your credit score.
  • If you’re only practical option for managing credit card debt is to file a petition in Federal Bankruptcy Court, the debt counselor will explain which Chapter of the Federal Bankruptcy Code you should file under, the costs involved, and the impact filing will have on your credit score.