When It Pays to Make a Balance Transfer

When It Pays to Make a Balance Transfer

In a perfect world, you’d pay your credit card bill in full each month. But, life happens — your basement floods, your daughter needs braces, your refrigerator dies — and before you know it, you’ve got a balance that you can’t pay off. Fast forward several years later, and you’re still carrying a revolving balance.

As a result, those balance transfer offers that show up in your mailbox each week sound pretty enticing. But you’re wary because you’ve always heard that they are simply a way for the card issuers to make even more money off of you. After all, many cards charge a balance transfer fee around 3 percent.  (This means that it’ll cost you $150 to transfer a balance of $5,000.)

But transferring a balance can get you out of debt. And not only can it get you out of the red quicker, but it can do so for less money, too. Here, three scenarios when it pays to make a balance transfer:

If you have good credit

When your credit is strong, card issuers are going to throw their best offers your way. So if you have a good credit score, it’s likely that you’re going to have your pick of 0% APR balance transfer offers to choose from. Transfer your balance to one of these cards and take advantage of the promo period, which typically offer 12 to 18 months to pay off your balance interest free. Remember though, the goal is to pay off the debt and save on interest while doing so,  so you’ll want to avoid charging anything on the old card after you clear the balance with a balance transfer.

If you have an extremely high interest rate

Are you paying 20 percent or more in interest on your plastic? If so, you have to ditch it ASAP. With that high of an interest rate so much of your payment is going towards interest that it can feel next to impossible to pay off your balance.  Transfer your balance to a card with a 0% APR introductory period  (or one with a low teaser rate) and work to pay off the balance within the promo period. If you can’t completely ditch your balance during that time, transferring it can still make sense — provided that the regular interest rate is lower than what you’re currently paying. To avoid any surprises,  be sure to read the fine print before you apply and make sure you know what the interest will revert to after the promotional period ends.  Remember to keep it open and use it now and then to keep the monthly reporting on your credit file to keep your "A" rating.  It is an odd fact lately, that the credit monitoring websites are stating that the number of credit and loan accounts on your credit report is graded as well. They are stating that whether open or closed, 22 accounts will get you an "A" rating with the new FICO scoring system.  Every account, good or bad, stays on your credit report for 7 years, so 22 accounts showing on your report is not impossible.

If you’re carrying a balance on several cards

It goes without saying that keeping track of the due dates of several credit cards can get confusing. And if you’re not diligent, you can easily miss one of them, leaving you on the hook for a costly late fee. Make your life easier by consolidating all of your balances on one card — with only one interest rate and due date to remember. And if you do tend to carry a balance on your cards from month-to-month, use the promotional period to focus on paying it off.

A balance transfer credit card can be a great way to pay off credit card debt and save on finance charges. The goal is to save on the interest and get out of credit card debt altogether. Once you have paid off your balances, focus on only charging what you can comfortably afford to pay off — in full — at the end of each month when your credit card bill arrives. By doing so, you’ll never have to worry about credit card debt and you’ll never pay a dime in interest.

If you're ready to obtain higher credit limit cards with balance transfer options, please visit:  www.FreeDebitCardStore.com

5 Secrets to Earning Great Credit Scores

5 Secrets to Earning Great Credit Scores

Love them or not, credit scores have become an integral part of our financial lives. From lending to insurance to tenant screening credit scoring models are now one of the factors used to determine whether or not we’re going to get what we’ve applied for, and at what costs. It’s in your best interest to earn and maintain great credit scores, and here’s how:

1.  Don’t miss payments, ever.

Both FICO and VantageScore credit scores consider your payment history as being extremely influential. In all actuality this category could better be described as the presence or lack of derogatory information. You don’t ever want to give a lender an excuse to report something negative to the credit reporting agencies or your scores could suffer significantly. Late payments, defaults, collections, tax liens, judgments, bankruptcies, settlements, repossessions, and foreclosures can all devastate your credit scores for seven to ten years.

2.  Avoid too much credit card debt.

Despite the noise made by some of the self-proclaimed credit experts, credit cards are not bad for your credit scores. To the contrary, a well-managed credit card portfolio is actually very helpful to your credit scores. In fact, of the most common forms of credit (mortgage, auto, student loan, credit card) only the credit card allows you to choose whether or not you get into debt.

Still, maintaining a modest balance on your credit cards is a great way to improve your credit scores. The balance relative to the credit limit is an important measurement in credit scores. If you can keep that percentage as low as possible, less than 10 percent preferably, your credit scores will reward you.

3.  Apply for credit only when you need it.

While applying for credit isn’t necessarily a bad thing, applying too often suggests that you are credit dependent and can have an adverse impact on your credit scores. Each time you apply for credit a new hard inquiry appears on your credit reports. Hard inquiries are the type that can have an adverse impact on your credit scores. Note: I used the word “can” instead of “will,” as inquiries don’t always lower your credit scores.

4. Be careful when closing unused credit cards.

Closing an unused credit card can, in fact, lower your credit scores. The reason it can lower your scores is due to the loss of the unused credit limit. As explained in number two above, having low balances relative to your credit limits is helpful to your scores. If you close accounts that you no longer use, then you’re no longer getting the benefit of the unused credit limit associated with that account.

Note: There are some people that will suggest that closing credit cards can lower your scores because you don’t get the benefit of the age of the card any longer.  That’s simply not true. Closed accounts still appear on your credit reports and you do still get the value of the card’s age. In fact, closed cards continue to age.

5. Don’t co-sign for loans, ever.

If someone asks you to co-sign for a loan it’s likely because a bank has denied their credit application. Asking for a co-signer is their way of making the bank more comfortable because they’ll now have someone who is actually creditworthy on the hook for payment. You co-signing for a loan is really no different than you applying for the loan on your own. Not only will the debt show up on your credit reports but any mismanagement of the account will also blow back on your credit scores.

Sign up for a secured card to help rebuild your credit by clicking on one of our links on the right or visit the website directly at: www.FreeDebitCardStore.com

Email us at: info@CherokeeFinancialinc.com for the opportunity to make money from your excellent credit on any of your high limit credit cards that have at least 2 years payment history.  You'll be surprised to find that doing something simple that will put money in your pocket to pay down your debt or use however you want.

Networks To Help Women In Debt

There are many reasons women fall into debt. Student loans, credit cards and mortgage payments all contribute to the debt load many women carry.

While paying off debt can be challenging, the Internet has made it easy for women to access networks and resources that can help them become debt-free. Some networks aimed particularly at women in debt include the Women in Red Racers, the Women's Financial Network, and Debt Help for Women.






Women in Red Racers

The Women in Red Racers is an online network of more than 1,000 women from throughout the world who exchange advice on getting out of debt. Its name comes from the idea that each individual in the group is racing to pay off her debt as soon as possible. The group primarily interacts through message boards hosted by MSN Money. To join, members must disclose their general financial information and post updates on how well they are doing at paying off their debt. According to Good Housekeeping magazine, the community provides tips, feedback and encouragement for women and has helped its members pay off millions of dollars in debt since 2006.
   
Women's Financial Network

The Women's Financial Network is an online organization affiliated with Siebert Financial. It provides women with free tools needed to make educated financial decisions. The network offers an online course that helps women identify their debt problems, take action to reduce their debt and stay out of debt. In addition, the Women's Financial Network provides women with links to further reading, debt calculators and free debt-management worksheets.
   
Debt Help for Women

Debt Help for Women is a network that works with women to help them reduce their substantial credit card debt. It offers a free telephone consultation in which women can receive advice on reducing their debt quickly. By utilizing attorneys in this process, Debt Help for Women is able to come up with effective solutions and start women on a debt-free path. According to the network's website, women must live in an eligible state and have more than $10,000 in credit card debt to utilize its services.


Balance Transfer Credit Cards with Low Interest Offers at: www.CherokeeFinancialInc.com

How Long Does it Take an Average Person to Pay Off Their Credit Card Debt?

Unfortunately, paying off credit card debt is not always a simple and straightforward process -- especially when all you can make is the minimum payment each month. Continuous use of the card while trying to pay it off further complicates the matter. Examine how long it can take the average person to pay off credit card debt to understand the importance of a debt payoff strategy.

The average American carries about $4,200 in credit card debt. Consumers use credit card funds for everything from emergencies to buying gas and food. The best practice to avoid piling up credit card debt is to pay off the balance in full each month. Otherwise you must meet the minimum payment requirements of the creditor, which starts at about 2 percent of the balance.


   
Downsides of Credit Card Debt

Choosing to carry a credit card debt balance for a long term could negatively affect your ability to get other forms of credit. For example, mortgage lenders look at your debt-to-income ratio when evaluating you for a mortgage loan. The more credit card debt you have, the higher that ratio, which lowers your chance of approval. Credit card debt is also very costly in terms of the average rates and fees. Some creditors charge as much as 79.9 percent annually.
   
Average Time to Payoff

The average amount of time it takes to pay off debt varies according to the account holder's rate, balance and spending habits. The average credit card rate is about 14.72 percent (estimate as of 2011) and as discussed, the average person has about $4,200 of credit card debt (estimate as of 2011). Based on those figures (and assuming a minimum payment of 2 percent of the balance) making the minimum payment each month would take more than 24 years to pay off. Technically the debt can persist forever if the account holder continues to use the card.
   
Suggestions

 Determine how long it will take for you to pay off your own credit card debt using the Bankrate minimum payment calculator. Then take every step possible to reduce the amount of time it will take you to pay off your credit card debt. One way is to enact a debt payoff strategy that requires you to pay more than your required payment each month. The more extra principal you pay each month over the minimum, the less time it will take to achieve a zero balance. Another strategy to pay off the credit card early is to consolidate the debt into a lower interest account, such as a refinanced mortgage loan. Consult a financial counselor for advice before taking that step.

To Apply for Lower Interest Credit Cards with Balance Transfer Offers, Visit:  www.CherokeeFinancialInc.com

How to Pay Off Credit Card Debt with Micropayments

Making micropayments enables you to more quickly erase your credit card debt.  A micropayment system can help you pay down your credit card debt faster. Most people pay their bill monthly, which allows more interest to accrue because companies compute that on an average daily balance. However, making several payments each month as money becomes available enables you to lower your average daily balance, thereby lowering interest. As you pay off accounts through this micropayment system, more money becomes available to accelerate your payoff plan.


Instructions:    

1.  Create a budget, allocating the minimum payment due on each of your accounts. Be sure that you hold back money for paying regular bills as they come due. If you are depositing money into a savings account, be sure to include that in your budget. Even if you are in debt, it is wise to save money each month in an emergency fund.

2. Set up online bill pay for all your credit cards. This will save you money on postage and check printing, thereby providing more you can allocate to micropayments.
     
3. Pay your bills on time and as soon as possible, instead of piling up a stack of bills for your monthly or biweekly bill paying session.  If you have extra money at this point, add it to one of your credit card payments.

4. Make a goal to save or earn a specific amount of extra money for weekly micropayments. Most people should be able to come up with at least $15 to $25 weekly in savings and/or extra income.
     
5. Focus on paying off one account at a time with weekly micropayments in addition to your minimum monthly balance due. If your goal is to pay off the card at the highest rate first, then that is where you will apply those payments.

6. Continue paying the initial minimum payment on this card until it is paid off, regardless of how much your minimum payment is reduced.

When that account is paid in full, transfer the minimum payment you were making to the next credit card on your payoff plan and repeat the process.

 Reducing Credit Card Debt is Easier Than You Think.  You can combine the micropayment system with other payoff plans. If you are paying extra monthly to pay down your highest interest rate card
first, spreading out that extra money could actually reduce the total amount of interest you will pay.

For Credit Cards with Lower Rates with Balance Transfer Option, Visit: www.CherokeeFinancialInc.com

How to Transfer Credit Card Debt to Avoid Interest

Credit cards are an ever-increasing part of our capitalistic culture and the credit card companies know this. They are raising interest rates and penalty fees, making it very easy for the average person to become consumed by their debt even more quickly than before. However, by making smart balance transfers, you can pay off your credit card debt and avoid paying those astronomical interest fees. It just takes a little discipline and organization.

Things You'll Need: Credit card offers






Instructions:
       
1. Make a list of your credit card balances. Organize this list by highest interest rate to lowest interest rate.
       
2. Search for a balance transfer offer with an introductory interest rate offer of zero percent.
       
3. Transfer as much of your debt as you can to this card, starting with the balance on your highest interest rate card.
       
4. Find as many zero percent interest rate offers as you can qualify for, and continue to transfer your debt with the highest interest rates.
       
5. Create a spreadsheet to keep track of when your introductory offers will end.
       
6. Repeat steps 2 through 6 one month before the end of each of your introductory periods.

If you can make more than the minimum payment every month, do it. This will help you pay down your debt even faster.

Balance transfers can take a few weeks to be finalized, so if your due date is coming up, check with your credit card company to see if you need to make a payment. You don't want to end up with a late fee after you've done all this work!

Read the fine print with every offer!

NOTE: You must transfer your balances again to another zero percent interest offer before your existing introductory offer is over. Otherwise, you will get slammed with their interest rates while you are looking for another offer.

For Some Of The Best Offers for Lower Interest Credit Cards and Balance Transfer Credit Cards, Visit: www.CherokeeFinancialInc.com