BASIC CREDIT CARD AND LOAN MANAGEMENT
How To Cut Your Household BudgetConsumer guide to frugal living. Discount and money-saving household budget and personal finance strategies. Reduce living and home expenses with no extra work and no change in your lifestyle once you learn all of our simple easy tricks.
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7.2 BASIC CREDIT CARD AND LOAN MANAGEMENT
7.2.1 KNOW HOW MUCH YOU ARE PAYING FOR EACH CARD YOU CARRY
Go through your old statements and add it up all the charges; include membership fees and any extra charges such as late fees. Many people are getting gouged without realizing it.
7.2.2 ALWAYS PAY MORE THAN THE MINIMUM EACH MONTH
If you only pay the minimum, you will pay a small fortune because your payment goes mostly for interest and very little for principle.
For example, paying only the required payment on a $3000 balance at 17.9% interest with no new charges, comes to almost $3700 interest over 16 years! However, paying just $25 more a month, will take you only 6 years with about $1500 total in interest.
Credit companies deliberately make their payments small so that you will pay more in interest and not worry about adding additional charges onto your balance. These and other actions by card companies, like varying interest rates, can lead to credit trouble. If you fall behind, take action and repair bad credit, early, to save yourself from future credit related woes.
7.2.3 STORE CHARGE CARDS MAY HAVE THE HIGHEST RATE OF INTEREST
It could be as much as 22%. Cancel all these cards and transfer the balance to your regular charge cards. Almost all stores accept Visa or MasterCard these days, anyway.
7.2.4 CONSIDER GETTING A REGULAR LOAN FOR AN APPLIANCE OR BIG TICKET ITEM
A loan with regular standard payments will often be paid off sooner with less money paid to interest, even if the loan interest rate is a bit higher than one of your credit cards.