“Change begets change”
- Charles Dickens
There is one sure fire way that is guaranteed to get you out of debt.
STOP CHARGING!
Simple as that may be, if you just stop charging now, you still may have debt obligations that you need to take care of. So what would be the best way to achieve the goal of eliminating this debt.
There are many strategies that you can employ to get you out of debt but there are several things that you nust do first to lay the groundwork for becoming debt free. It all starts with you.
Excessive credit card debt is a growing sickness in America, and like many illnesses, people tend to ignore the problem until it's of epidemic proportions. Take control now and eliminate credit card debt before it threatens your financial health.
You must change the way you think about money, credit and debt. You must change the way you act and feel.
You must change.
PERIOD.
To eliminate credit card debt as rapidly as possible at the lowest possible cost to you, I recommend using a tried-and-true credit card debt elimination method often recommended by financial experts. I call this method the Credit Crunch.
1. List all of your credit cards, including the balance, the interest rate, and the minimum payment percentage and the minimum payment according to the latest statement. The minimum payment percentage can be found in the small print on your credit card statement or your cardholder agreement, and is usually between 2 and 2 1/2 percent of your balance.
2. Rearrange the list so the credit card with the highest interest rate is at the top and the credit card with the lowest interest rate is at the bottom.
3. Add up the required minimum payments for all the cards.
4. Decide how much money you can come up with each month, in addition to the total minimum payments on all your credit cards, to apply to your credit card debt. If you don't believe you can afford to pay any additional amounts over the minimum payment, it's time to do a budget and find ways to cut your expenses
5. Each month, pay the minimum balance on each credit card except the one with the highest interest rate. On the credit card with the highest interest rate, pay the minimum balance PLUS the additional amount you've identified to reduce your credit card debt each month.
6. Continue to do this until the first credit card (the one with the highest interest rate) is paid off entirely. Then take the amount you were paying on that credit card (which is now paid off) plus the amount of the minimum balance on the second credit card, and apply the total to the second credit card each month until the balance is paid off, continuing to pay the minimum balance on all the other credit cards.
7. Continue crunching your payments on the credit card with the highest interest rate as described above, until all credit card debts are paid off.
Some financial experts recommend paying off the credit cards with the lowest balances first, rather than working on those with the highest interest rate. I disagree with that approach because although it might make you feel better to see the number of credit cards with balances decline, that good feeling will cost you money.
Balances with higher interest rates accumulate interest costs more quickly, meaning you pay more to the credit card company in interest and less in actually paying down the principal amount that you owe.
Wednesday
Tuesday
Managing Your Debt With Education
“It is better to be prepared for an opportunity and not have one, than to have an opportunity and not be prepared.”- Whitney Young, Jr.
Do you want to learn how to manage your finances better?
In title V of the Fair and Accurate Credit Transaction Act, the Financial Literacy and Education was established, for the purpose of educating consumers on financial matters such as budgeting, credit, financial planning and other important issues.
http://www.mymoney.gov/ is the website the United States Government has put together to teach all Americans the basics of financial education. The resources available can help a consumer get the information needed from twenty federal agencies government wide.
Featured agencies include the Federal Reserve, FDIC, The Small Business Administration, The Department of Labor and many other federally funded government agencies that provide resources and information that will educate consumers about key financial issues.
“Money shouldn’t drive your future. Neither should debt” claims http://www.feedthepig.org/, a website hosted by Benjamin Banks, whose weekly email newsletter provides money saving tips and other financial strategies. Their sister website http://www.360financialliteracy.org/ provides a state by state listing of financial literacy programs available.
The Jumpstart Coalition for Personal Financial Literacy http://www.jumpstart.org/ is a wealth of information about personal finances, whose mission statement reads:
“JumpStart is a national coalition of organizations dedicated to improving the financial literacy of kindergarten through college-age youth by providing advocacy, research, standards and educational resources. JumpStart strives to prepare youth for life-long successful financial decision-making.”
It’s high time that someone has finally realized that this education is needed in our children. The credit card companies are targeting a younger market, some even in high school, for their credit card programs. The problem arises when the young card holder has no knowledge or experience in how to use their newfound money without getting in trouble. College students are now using their credit cards to help cover the cost of tuition.
“The average student who graduates from high school lacks the basic skills in managing of personal financial affairs. Many are unable to balance a checkbook and most simply have no insight into the basic survival principles involved with earning, spending, saving and investing.”
The National Endowment for Financial Education http://www.nefe.org/ is a non-profit organization whose mission is to assist Americans acquire the information necessary to “take control” of their finances. The website is composed of four distinct areas including; education programs, collaborative programs, multimedia access and innovative thinking.
Financial education is vitally important in today’s society with credit offers becoming more complex and the credit card marketing campaigns becoming more aggressive. Unfortunately, there is no standardized program that can be taught in schools, but even if there was, that would only address part of the problem. Adults, beyond the age of student, are now accustomed to the buy now, pay later lifestyle. The current economic conditions are forcing families to use credit cards to help pay living expenses and our children are not having a good example set for them. They need to be taught the value of money and the importance of personal financial education.
There is a growing number of websites and organizations that are addressing financial literacy and education. It will take the desire and willingness to learn and to face your financial problems head on to change the course of your life to become debt free and to make sound financial decisions based on education.
Through these types of educational programs, consumers will continue to gain important financial information. It is up to the consumer to become educated about their finances and to locate the financial literacy programs available.
Do you want to learn how to manage your finances better?
In title V of the Fair and Accurate Credit Transaction Act, the Financial Literacy and Education was established, for the purpose of educating consumers on financial matters such as budgeting, credit, financial planning and other important issues.
http://www.mymoney.gov/ is the website the United States Government has put together to teach all Americans the basics of financial education. The resources available can help a consumer get the information needed from twenty federal agencies government wide.
Featured agencies include the Federal Reserve, FDIC, The Small Business Administration, The Department of Labor and many other federally funded government agencies that provide resources and information that will educate consumers about key financial issues.
“Money shouldn’t drive your future. Neither should debt” claims http://www.feedthepig.org/, a website hosted by Benjamin Banks, whose weekly email newsletter provides money saving tips and other financial strategies. Their sister website http://www.360financialliteracy.org/ provides a state by state listing of financial literacy programs available.
The Jumpstart Coalition for Personal Financial Literacy http://www.jumpstart.org/ is a wealth of information about personal finances, whose mission statement reads:
“JumpStart is a national coalition of organizations dedicated to improving the financial literacy of kindergarten through college-age youth by providing advocacy, research, standards and educational resources. JumpStart strives to prepare youth for life-long successful financial decision-making.”
It’s high time that someone has finally realized that this education is needed in our children. The credit card companies are targeting a younger market, some even in high school, for their credit card programs. The problem arises when the young card holder has no knowledge or experience in how to use their newfound money without getting in trouble. College students are now using their credit cards to help cover the cost of tuition.
“The average student who graduates from high school lacks the basic skills in managing of personal financial affairs. Many are unable to balance a checkbook and most simply have no insight into the basic survival principles involved with earning, spending, saving and investing.”
The National Endowment for Financial Education http://www.nefe.org/ is a non-profit organization whose mission is to assist Americans acquire the information necessary to “take control” of their finances. The website is composed of four distinct areas including; education programs, collaborative programs, multimedia access and innovative thinking.
Financial education is vitally important in today’s society with credit offers becoming more complex and the credit card marketing campaigns becoming more aggressive. Unfortunately, there is no standardized program that can be taught in schools, but even if there was, that would only address part of the problem. Adults, beyond the age of student, are now accustomed to the buy now, pay later lifestyle. The current economic conditions are forcing families to use credit cards to help pay living expenses and our children are not having a good example set for them. They need to be taught the value of money and the importance of personal financial education.
There is a growing number of websites and organizations that are addressing financial literacy and education. It will take the desire and willingness to learn and to face your financial problems head on to change the course of your life to become debt free and to make sound financial decisions based on education.
Through these types of educational programs, consumers will continue to gain important financial information. It is up to the consumer to become educated about their finances and to locate the financial literacy programs available.
Monday
Credit Facts
Credit was first used in Assyria, Babylon and Egypt 3000 years ago. The bill of exchange, the forerunner of banknotes, was established in the 14th century. Debts were settled by one-third cash and two-thirds bill of exchange. Paper money followed only in the 17th century.
The first advertisement for credit was placed in 1730 by Christopher Thornton, who offered furniture that could be paid off weekly.
From the 18th century until the early part of the 20th, tallymen sold clothes in return for small weekly payments. They were called "tallymen" because they kept a record or tally of what people had bought on a wooden stick. One side of the stick was marked with notches to represent the amount of debt and the other side was a record of payments. In the 1920s, a shopper's plate, a buy now pay later system was introduced in the USA. It could only be used in the shops which issued it.
In 1950, Diners Club and American Express launched their charge cards in the USA, the first "plastic money". In 1951, Diners Club issued the first credit card to 200 customers who could use it at 27 restaurants in New York. But it was only until the establishment of standards for the magnetic strip in 1970 that the credit card became part of the information age.
The first use of magnetic stripes on cards was in the early 1960’s, when the London Transit Authority installed a magnetic stripe system. San Francisco Bay Area Rapid Transit installed a paper based ticket the same size as the credit cards in the late 1960's.
The word credit comes from Latin, meaning "trust".
A credit card is a system of payment named after the small plastic card issued to users of the system. A credit card is different from a debit card in that it does not remove money from the user's account after every transaction. In the case of credit cards, the issuer lends money to the consumer. It is also different from a charge card (though this name is sometimes used by the public to describe credit cards), which requires the balance to be paid in full each month. In contrast, a credit card allows the consumer to 'revolve' their balance, at the cost of having interest charged.
A user is issued credit after an account has been approved by the credit provider (often a general bank but sometimes a captive bank created to issue a particular brand of credit card, such as Wells Fargo or American Express Centurion Bank), with which the user will be able to make purchases from merchants accepting that credit card up to a pre-established credit limit.
When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates their consent to pay, by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a pin. Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a customer not present. (CNP) transaction.
An Electronic Verification system allow merchants to verify that the card is valid and the credit card customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment system or Point of Sale (POS) system with a communications link to the merchant's acquiring bank. Data from the card is obtained using from a magnetic stripe or chip on the card; the later system is commonly known as Chip and PIN but is more technically an EMV card.
Other variations of verification systems are used by ecommerce merchants to determine if the user's account is valid and able to accept the charge. These will typically involve the cardholder providing additional information, such as the security code printed on the back of the card, or the address of the cardholder.
Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees, and the total amount owed. After receiving the statement, the cardholder may dispute any charges that he or she thinks are incorrect. Otherwise, the cardholder must pay a defined minimum proportion of the bill by a due date or may choose to pay a higher amount up to the entire amount owed. The credit provider charges interest on the amount owed (typically at a much higher rate than most other forms of debt). Some financial institutions can arrange for automatic payments to be deducted from the user's accounts.
Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid.
The first advertisement for credit was placed in 1730 by Christopher Thornton, who offered furniture that could be paid off weekly.
From the 18th century until the early part of the 20th, tallymen sold clothes in return for small weekly payments. They were called "tallymen" because they kept a record or tally of what people had bought on a wooden stick. One side of the stick was marked with notches to represent the amount of debt and the other side was a record of payments. In the 1920s, a shopper's plate, a buy now pay later system was introduced in the USA. It could only be used in the shops which issued it.
In 1950, Diners Club and American Express launched their charge cards in the USA, the first "plastic money". In 1951, Diners Club issued the first credit card to 200 customers who could use it at 27 restaurants in New York. But it was only until the establishment of standards for the magnetic strip in 1970 that the credit card became part of the information age.
The first use of magnetic stripes on cards was in the early 1960’s, when the London Transit Authority installed a magnetic stripe system. San Francisco Bay Area Rapid Transit installed a paper based ticket the same size as the credit cards in the late 1960's.
The word credit comes from Latin, meaning "trust".
A credit card is a system of payment named after the small plastic card issued to users of the system. A credit card is different from a debit card in that it does not remove money from the user's account after every transaction. In the case of credit cards, the issuer lends money to the consumer. It is also different from a charge card (though this name is sometimes used by the public to describe credit cards), which requires the balance to be paid in full each month. In contrast, a credit card allows the consumer to 'revolve' their balance, at the cost of having interest charged.
A user is issued credit after an account has been approved by the credit provider (often a general bank but sometimes a captive bank created to issue a particular brand of credit card, such as Wells Fargo or American Express Centurion Bank), with which the user will be able to make purchases from merchants accepting that credit card up to a pre-established credit limit.
When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates their consent to pay, by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a pin. Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a customer not present. (CNP) transaction.
An Electronic Verification system allow merchants to verify that the card is valid and the credit card customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment system or Point of Sale (POS) system with a communications link to the merchant's acquiring bank. Data from the card is obtained using from a magnetic stripe or chip on the card; the later system is commonly known as Chip and PIN but is more technically an EMV card.
Other variations of verification systems are used by ecommerce merchants to determine if the user's account is valid and able to accept the charge. These will typically involve the cardholder providing additional information, such as the security code printed on the back of the card, or the address of the cardholder.
Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees, and the total amount owed. After receiving the statement, the cardholder may dispute any charges that he or she thinks are incorrect. Otherwise, the cardholder must pay a defined minimum proportion of the bill by a due date or may choose to pay a higher amount up to the entire amount owed. The credit provider charges interest on the amount owed (typically at a much higher rate than most other forms of debt). Some financial institutions can arrange for automatic payments to be deducted from the user's accounts.
Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid.
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