7 credit card traps to avoid at all costs


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As this presentation reveals, credit cards can be a very good thing or the path to debt help. However, if you learn to avoid these seven credit card traps you will be able to stay out of debt and enjoy the benefits of credit cards.

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7 credit card traps to avoid at all costs

  1. 1. Helpful Financial Information from National Debt Relief … 7 Credit Card Traps To Avoid At All Costs Have you ever been in credit card hell? This is the financial state when you realize that your credit cards are not really doing you any good. It is when you are put in a situation where you have been sucked into one of the credit card traps that is keeping you buried under loads of debt (Continued) Brought To You By:
  2. 2. Helpful Financial Information from National Debt Relief … What makes debt easy to fall into is the fact that you can use it over and over again. It is not like the traditional loan that you apply for once and when you have used up the funds, you have to apply again to get more money. A credit card allows you to use it again and again - that makes it a dangerous habit to get used to. If you are not careful, you could end up burying yourself under a mountain of debt. In fact, TIME.com reported that the current debt of Americans has reached really high amounts already - scary high rates to be exact. That is how the article described it. They cited data from the Federal Reserve Bank of New York that the current debt is not $11.52 trillion. It is an amount higher than it had ever been since 2011. Not only that, the article said that it is still rising quite rapidly. The debt increased by $241 billion during Q4 of 2013. That is the highest growth with 2007 - which was the start of the most recent recession. Does that mean we have to brace ourselves for another financial crisis? That all depends on how we act now. 7 credit card qualities that double as a financial trap One of the things that you can do is to avoid the tricky debt pitfalls that can ruin your financial situation. In particular, you may want to be a smart credit card user. That begins by learning the credit card traps that will put you in danger of too much debt. Here are the 7 qualities of a card that you need to be careful with. If you do not know enough about them, they can end up putting you in debt. 1. Minimum payment requirement. The first is about paying only the minimum payments on your credit cards. If you do the calculations, you will realize that it will take you a lifetime (sometimes literally!) to finish paying off your credit card balance in full. That is because the minimum payment requirement is only around 4% of your balance. The rest are finance charges. If you want to significantly reduce your debts, you have to learn how to pay more than the minimum. 2. Late payments. Another one of the credit card traps that you need to be cautious of is late payments. This is not just the $25 to $35 charge that you will be paying on top of your balance and finance charge. It can also include the APR (Annual Percentage Rate) penalty that you will be imposed until after you have made six payments on time.
  3. 3. Helpful Financial Information from National Debt Relief … 3. Payment processing schedule. In line with number two, you need to be aware of the specific schedule of your payment cut off. It is usually in the afternoon of your due date. If you sent in your payment even a minute late, that can trigger a late payment fee. You can call the credit card company and ask it to waive this penalty so that you will not be charged - at least, if you have been late for only a minute or a day. But if you know that you are going to be late, you may want to call your creditor immediately to ask for an extension. 4. Introductory fixed interest rate. The law allows credit card companies to change your APR anytime they wish. They only have to give you advice ahead of time. Sometimes, credit card companies will offer a fixed interest rate on new accounts but do not be blinded by that. In most cases, that will change after the first year is up. Make sure you are aware of that before signing up for the card. Ask when the new rate will take effect and how high it will be. 5. Balance transfer. Credit card traps also include the debt relief option known as balance transfers. It is true that a balance transfer can help you get debt relief but you have to understand the rules first. This is a new card that is offered with a 0% interest rate. This is only for a specific period - usually between 6 to 18 months. After that, your rate will change to the usual high interest rate of credit cards. Unless you can pay the credit card debt completely within the promo period or at least a significant part of it, this debt solution will not help you a lot. 6. Cash advance. Be careful of cash advances in credit cards. While this can help you during emergencies, it will have a very high interest rate. If you cannot pay it back immediately, it can accumulate quite easily. Try to search for other options to finance your need. Credit card cash advances should be one of your very last options - along the same level as payday loans. 7. Reward programs. The last of the credit card traps that you may want to be careful with are the reward programs. If you are only getting the card because of the rewards, you need to come up with a better reason than that. Also, you may want to maximize these rewards to benefit from the card.
  4. 4. Helpful Financial Information from National Debt Relief … These credit card traps can put you in debt if you ignore them. Make sure you pay attention to them so they will not become pitfalls. How Americans use their credit cards Although these traps will cause you to fall into credit card debt, the main blame will still be on your own spending habits. It is just in our culture to be spenders. In fact, the US economy relies heavily on consumer spending to thrive. That being said, you can expect that the government, businesses and everything around you will be encouraging you to keep on spending your money. Based on an infographic from The Credit Examiner, credit card usage statistics reveal that in 2012, Americans spent their credit cards on the following: • 81% on travel expenses • 77% on expensive purchases • 46% on personal items • 44% dining out • 38% on groceries • 37% on entertainment • 20% on household bills • 15% on small expenses Most of the expenses here are actually unnecessary, if you think about it. In another infographic, The Credit Examiner showed some interesting statistics and facts about overspending in the country. Apparently, in 2012, the picture of consumer spending was as follows: • 52% of consumers are spending beyond their means. • 21% of them have monthly expenses that cannot be covered by their income.
  5. 5. Helpful Financial Information from National Debt Relief … • 13.5% of consumers are forced to alter their budgets to accommodate the overspending of the previous month According to the last infographic, some of the reasons why consumers are overspending is because they do not have monthly saving goals. Another reason is they can easily access credit and cash. Plus a lot of us misuse our credit cards. It is apparent that managing multiple credit cards without ending in debt is a huge challenge for all of us. But you do not have to get rid of these cards if you do not have to. You just have to learn how to use it wisely.
  6. 6. Helpful Financial Information from National Debt Relief … Does this sound familiar? • You are tired of worrying about money… • You are losing sleep due to mounting credit card debt… • You are fighting with your partner about the bills… • You are living paycheck to paycheck… • You are falling behind on your debts… • You are losing hope… It’s time to talk with National Debt Relief! Call Toll Free 1-888-703-4948 Now! Or Go To http://NationalDebtRelief.com