Deliverance from Debt: Your Credit Card Management Guide

Got debt? Are you managing your credit card, or is it managing you? Does your monthly statement dictate how you feel for the rest of the month because the figures on it are so ghastly? If so, you need to take back some control. Let's face it, you are the one who is always calling the shots with your credit card. It doesn't jump out of your pocket and into the merchant's card reader of its own accord.Take charge of credit cards once and for all with your credit card management guide.

The credit card seemed like such a great idea, didn't it? But no one mentioned that credit and debt go hand in hand. Without proper management, your amounts owing can quickly spiral out of control.

Credit Card Management

If you are having trouble controlling your credit card debt, have a look at doing a balance transfer. With the Bankwest Breeze you get a low balance transfer offer for the first 12 months which will give you some financial relief

• $49 annual fee
• 0% p.a. for 6 months (reverts to 10.99% p.a.) on purchases
• 4.99% p.a. for 9 months on balance transfers
• Cash Advance Rate of 21.99% p.a.
• 55 days interest free
• Minimum Income Requirement of $20,000 p.a.

Read the Bankwest Breeze MasterCard terms and conditions.

Here are a few ideas to help you manage your credit card more tightly. They are not complicated, but they do require some effort and a sincere desire to put things right.

To save you the stress, we've provided you thirteen top tips for credit card debt prevention and reduction. Ignore this advice at your own risk-because the longer you are in debt, the worse off your overall credit score or credit rating will be. The good news is: you can get it under control. Fast.

Stress saving credit card tip #1 - Pay on time

The first tip is obvious for some and not so for others. Drum-roll please... OK, here it goes... don't say you weren't warned.

Always pay your credit card debt on time! Doing this will keep your credit rating intact and if you ever wanted to apply for a loan, your chances are pretty good, provided you actually have the financial means to pay it back.

Stress saving credit card tip #2 - Pay more than the minimum

If you can, pay more than the minimum required each month. Even better, pay the whole thing off each month and then start afresh. Your primary goal should be not to get into debt in the first place.

But if on the other hand you already struggle to make repayments, then every little bit helps to reduce those hefty interest rate penalties. Even if this means you have to forgo your weekly gossip magazine, a drink after work or coffee in town, then do.

Prioritise your card repayments. If you are paying off several cards at once you should consider consolidation or else pay off the card with the highest interest rate first, and then work your way through them, one by one.

You must pay your balance down as quickly as possible. The minimum payment is just that: the smallest amount you can pay without being considered in default. If you have a $2,000 debt at just shy of 20% interest p.a. and you only pay the minimum amount each month of 2% of your debt, it will take you over forty years to pay it back, and you will have paid over $5,000 in interest. However, pay an additional $50 on top of that minimum amount each month, and your debt will last for three years and you will have paid just $500 in interest.

Stress saving credit card tip #3 - Avoid the tipping point

If you fall off the bandwagon and acquire too much debt, you will be in a serious financial lockdown. You won't be able to get any further loans or credit cards approved. Plus, more debt always attracts higher interest rates, which makes it even harder to pay off the primary debt-all you end up doing is paying off the interest.

Stress saving credit card tip #4 - Don't get a store card. Just don't.

Avoid store cards like the plague. These are little suckers! They come across as being great to make purchases in your favourite store but beware if you fail to pay your bill. You will get hit with ridiculous amounts of interest.

Also, those offers of pay nothing until 2012 etc. are traps to suck you into financial oblivion. Do not succumb to them. If you can't afford it, don't buy it!

Stress saving credit card tip #5 - Keep your credit payable, plan for the rainy day

Focus on your debt to income ratio. Your loan or credit should be in direct relation to what you actually earn in income. If the ratio is too high, you are asking for trouble should you ever lose your job or your capacity to work is reduced.

Stress saving credit card tip #6 - Get the scissors out!

Memorise this formula: debt = bad. If you want to break the evil cycle of debt and credit, the best present you can give yourself is a scissors. Cut up ALL your credit cards, store cards, etc, and live frugally until you have paid off all your outstanding debts.

Stress saving credit card tip #7 - Pay Your Monthly Balance in Full

Pay your monthly balance in full: The first step towards sound credit card maintenance is simple. You should always strive to pay off your credit card balance in full every month. Anything left over will start to attract interest, and this can be the crest of a very slippery slope. If you decide to only pay off the minimum amount each month, then it will be even worse, because it may be that the following month your minimum payment only covers the interest accrued, meaning you are not touching your original debt at all. Obviously, it is easier to pay the balance in full if you have kept your spending in check over the month.

Stress saving credit card tip #8 - Haggle with your provider

Haggle with your provider: Competition is so fierce amongst providers that they are always keen to keep their customers on board. One credit card maintenance trick is to ask at regular intervals for an interest rate review, with a view to having it lowered. Your provider will be all too aware of the introductory low interest rates offered by other providers, because they will be doing the same themselves. They will not want to see you walk away for the sake of a slight adjustment to your rate.

Stress saving credit card tip #9 - Use only one credit card

Use only one credit card: Credit card maintenance is much easier if you only have to keep track of one card, check one statement, and pay off one balance. If you have a partner with whom you are happy to merge finances, then combining into one credit card again allows for easier account management. The one-card option will also look better on your credit history. You just need to make sure that the card you choose is the right one, and that will depend entirely on your personal circumstances.

Stress saving credit card tip #10 - Consolidating your credit card debts is a good idea, but it depends how you go about it.

Taking a credit card balance transfer offer of zero to 3% over six to eighteen months, or a little higher for a longer period, is the right way to do things. It may mean you are faced with a deadline and the pressure to pay off your debt, but that may be just what you need to get organised. The other type of debt consolidation is a long-term loan, or rolling your debts up into your mortgage, but this is not a great idea. Remember the sums in the above paragraph. Think how many thousands of dollars you are wasting by paying your debts back over such a long period.

Stress saving credit card tip #11 - Limit yourself

Limit yourself: Credit card companies are happy to offer credit limit increases at regular intervals, but these are not compulsory to accept, and they may make your credit card maintenance plans more complex as they potentially allow a tempting expansion of any budget you may have set for yourself. If you are very prudent with your spending, and know exactly what your balance will be every month, then you could even request a lower limit.

Stress saving credit card tip #12 - Be secure

Be secure: One credit card maintenance problem that is growing rapidly is the one of card security. You need to keep an eye on your account activity, and be very wary of scamming methods such as email phishing, where your details are requested by a bogus email purporting to come from your card provider. If you fall for this, you will end up at a site identical to your provider's, except that behind the scenes sits some rogue waiting for you to input your security details for their immediate misuse. Make sure to shred any statements or financial details. Tearing them in two will not confuse the densest of garbage-sifters.

Stress saving credit card tip #13 - Introductory offers should also be approached with caution.

You need to know that the period you are looking at is long enough to accommodate your repayment budget. Jumping at a 0% rate, failing to pay off your debt before the period expires, then being clobbered by a high regular rate of interest is a disaster. Especially as your credit rating may not allow for a second balance transfer to another 0% offer - if one still exists. The plethora of 0% offers at the moment is a sign of the economic crisis in general, and the credit card industry struggling to maintain its growth. When times picks up, there may be less need to lure customers, and those 0% deals may be a little thin on the ground.

Be careful also when buying online. Make sure that the website is reputable. There are free programs out there that will grade any website according to past user recommendations, such as Web of Trust (WOT).

If you are in any doubt as to the efficacy of your provider's own security measures, you could consider paying a nominal annual fee to a card protection company that will waive any liability on your part if your details are stolen. One fee can cover all your cards and provide peace of mind.

Stress saving credit card tip #14 - Create a budget and stick to it

Put your budget in place. If you don't have a budget you will probably end up spending more than what you are earning. Repayments to your debt need to be included in your budget, and if possible, they should be more than just the minimum repayments. You should also put some money aside for savings as well.

Stress saving credit card tip #15 - Ask about hidden charges

Sometimes merchants can make you pay extra if you use your credit cards. Before you make a purchase, especially for something expensive, ask about it first. Sometimes you can save a lot of money by paying cash or with your debit card.

Stress saving credit card tip #16 - Use cash whenever possible

Try to pay cash for most items. It is easier to stay out of debt and manage your money by paying with cash or debit. Of course, this may not always be practical, especially for any major purchases such as an automobile.

Follow these sixteen simple tips and you can get yourself out of debt. Change your life today and feel free from financial pressure.

The Best Practices In Owning And Using A Credit Card

One of the biggest problems that people experience when they own a credit card is having too many.

If you have a lot of store cards as well as credit cards that you use on a consistent basis it can be very difficult keeping up with all the different due dates and balances on each card. Your credit history can be impacted if you are carrying a lot of debt. Even if you have a high amount of available credit it can appear negative on your credit history and affect your ability to receive a car loan or a mortgage in the future.

The most important thing that you need to maintain, when you own credit cards, is making the minimum required payment every month. Of course it is always much better to pay off the entire balance if possible. In cases where this is impossible, the monthly payment of the minimum amount must be sent in.

You must also watch your credit card usage limit so that it you do not exceed it. If this happens it can damage your credit rating, which is something you need to avoid. The best practice for paying your credit cards is to always make payments before you receive your credit statement. You can keep your credit rating at a good level by keeping this practice in place.

Closing credit cards

There is a proper way to close credit cards and you need to be certain that it is done this way. Start by calling the company that issued the credit card to find out the right way to close your account. Every card issuer has a certain policy that is followed to close up an account. Once your account has been closed all of your cards should be destroyed.

Review your statements

Take a look at all of the statements you receive for your credit cards carefully to verify all of the amounts. Also review any charges or fees to find out what they apply to and how to avoid them in the future. If there is anything on the statement that you do not understand fully do not hesitate to call the card company to get a full explanation and get a better understanding of the card and its uses.

The best practices for credit cards involve all of the above. You must keep the credit file that you have protected so that in the future any purchases you want to make will not be affected by any mistakes you have made in the past. Treat your card responsibly and with a lot of respect and it will serve you well for many years.

Your credit card to-do list:

Make regular credit checks - This is all about making sure you know how your credit report is looking. This helps if you are about to apply for a new credit card or any other loan, because it gives you a good idea whether you will be accepted or refused. Credit refusals are noted in your report, so you must be careful. You should also be checking to see if all the information in your report is correct. Mistakes can be made, or old details can be left that should have been updated.

Check your statement - This is an important financial document and an important part of your credit card to-do list. You should not be simply noting the amount you need to pay; rather you should be poring over the statement verifying that everything tallies with your credit card activity. What you are looking for are any charges you do not recognise that could suggest your card security has been compromised.

Completely clear your debt - This may not always be possible, but this should be your intention every month. Do not get into the habit of leaving an unpaid balance on your statement. It will accrue interest and it allows you to become comfortable with the idea of carrying debt. This is perhaps the most important part of your credit card to-do list.

Pay as much as possible - If the above step is impossible, do not give up and start paying only the minimum amount requested. This is how debts get bigger and end up causing significant problems. Always try to pay off as much as you can afford, without leaving yourself short of the essentials for the coming month.

Compare credit cards - Last item on your credit card to-do list is to keep abreast of the latest credit card offers, and take advantage of a great deal if it can help reduce your fees or lessen your debt. There are many balance transfer offers on the market at the moment, and cards that offer no annual fees or purchase interest rates around the 10% to 12% mark.

If you're thinking that a credit card to-do list is not for you, remember that your credit card is an important part of your finances, and must be taken seriously if you are to maintain control of your financial situation.

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  Some people use credit cards under some strange impression that they are getting free money. The problem is that not only do you need to pay any money you borrow back, but you are also going to be subjected to interest charges if you pay your balance off over a period of time rather than paying everything off at once.

  Due to interest charges, what starts as a relatively small debt, can quickly grow into something far larger and harder to control. That is when the real problems begin. So how can we make sure that when we take on a credit card we are not going to get ourselves into trouble?
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  The first thing you need to do is create your budget. Write a list of all money that you earn over the course of a month and a list of all the bills and outgoings you have in a month. You want to include things like food shopping in your list of outgoings as this is a regular and vital expenditure.

  You then subtract your outgoings from your earnings and see what you have left. This is the money that you have spare at the end of the month once everything is paid for. In theory, this spare money could be used to pay off any credit card bills.

  If you are only left with a small figure after the bills are paid, for example $50, then there is not going to be much left for paying a credit card bill. Especially one that grows in size due to interest charges. If you have a larger sum of money left for yourself each month, lets say $200, then there would be much more left for you to pay a credit card bill if you had one.

  The argument here could be, “If you have that money spare then why not make any purchases with cash, rather than credit?”.

  The advantage of using a credit card is that it allows you to shop online and gives you the freedom to not carry cash around with you. As long as you only spend on your card what you can afford to pay off in full at the end of the month, you should stay debt free. Using your credit card without seeing what you can actually afford to pay is a one way ticket to debts-ville.

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Popular Credit Card Offers

			Interest rate (p.a.)	Balance transfer rate (p.a.)	Annual fee	Cash advance rate (p.a.)
	ANZ Platinum Credit Card	A unique platinum credit card offer with a low balance transfer and purchases rate.	0% p.a. for 6 months (reverts to 19.39% p.a.)	0% for 6 months	$0 annual fee for the first year ($0 thereafter)	20.99%	E-mail me this offer
	HSBC Credit Card	A 0% balance transfer, $0 annual fee for life credit card.	17.99% p.a.	0% for 8 months with 2% balance transfer fee	$0	21.99%	E-mail me this offer
	Westpac Low Rate Card	A low rate on purchases, balance transfer and a $0 annual fee.	1.9% p.a. for 9 months (reverts to 13.49% p.a.)	3.99% for 6 months	$45 annual fee for the first year ($0 thereafter)	21.49%	E-mail me this offer
	Citibank Rewards Credit Card - Platinum Card	An extended 15 month balance transfer offer with 20,000 bonus reward points.	20.99% p.a.	0.9% for 15 months	$199	21.74%	E-mail me this offer
	Bankwest Breeze MasterCard	Low ongoing purchase rate from Bankwest, with an introductory purchase rate credit card.	0% p.a. for 6 months (reverts to 10.99% p.a.)	4.99% for 9 months	$49	21.99%	E-mail me this offer