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Why are we in debt? Why is a majority of all people living with debt beyond their means? We all have debt, this seems to be the nature of life, but why is it that our debt at least equals or exceeds what we can afford?

It is really quite simple. This is what the credit card companies allow, this is what they want and this is how they make it rich. The worst part is that they love for us to fall behind.

Everybody likes to get paid on time, but your creditors actually prefer the opposite. They want you to be late!

Now granted they dont want you to be too late or to default, but a week or two is just great. Lets just think what a late payment means to them. You are still paying, but you are a week or two late. Their late fee is 30. They just made 30 for doing nothing. You are already maxed out, so this fee puts you over your credit limit. This earns them another 30 for, again, doing nothing.

You can now make your minimum payment of 20. The math does not work in your favor. Lets just say that you have 15 in interest for the month. Your total costs are; 15 in interest + 30 late fee + 30 over limit fee = 75 charged to your account. You pay 20, which leaves you 55 worse than when you started and you have nothing to show for it.

This is why credit cards are evil and we must learn to do without them!

The first step in this process is to gather up all of your credit cards and destroy them. You can save one or two, but get rid of the rest. Just pick the ones with the lowest interest rates and preferably no annual fee. Store your select few in a safe place that is not easily accessible.

This may seem extreme, but most people do not have the will power to simply not use the card. They look at their statement, see 50 or 100 pounds in available credit and look at it as free money. There is no such thing.

If you cant bring yourself to cutting up your cards, at least gather them all up and store them somewhere that would take some effort to get to. A safe deposit box is always a good idea. You can also have someone that you trust hold on to them or hide them.

The key is to not have them accessible for those impulse purchases that we come across every day. Once we pass the moment, chances are that we will realize that we dont need to make that purchase or probably forgot about it all together. We are now even closer to getting out of debt.

Dont forget to cancel the cards that you are no longer going to use. Most credit cards have an annual fee, anywhere from 30 to 100. This is wasted money that you can use to apply towards the balance.

Some cards may charge you a closed account fee to persuade you to stay with them. At this time you need to analyze the impact. I recently cancelled a card that is charging me 3.50 a month in closed account fees. My annual fee is 59. 12 months at 3.50 is 42. I am still ahead of the game by 17, or more, if I pay it off within a year. The most important part is that there is no way that I can use that card again and worsen my situation.

Now that the temptation is out of the way you can start paying them off. Just remember to pay at least the minimum, pay all accounts on time, and stop using credit. Now step back and enjoy the road to financial freedom.

As soon as you decide to get the card you face some questions what card finally to select? They arise because between both types we have more differences rather than commonness.

In fact on the surface cards are very similar. Cards are made of plastic, have some magnet or chip protection, shining bank logos and share the very size.

And probably that is all about their commonness. The first essential distinction lies in the logic of payments. The core sense of credit payment means, that in order to cover spending, money is “taken” from the future. Thus your credit is extended every time when you make “a purchase”. And all your debt events are listed so you need to make periodical payments for account prolongation. Paying system of debit type is merely another. Your bank will just transfer money from your account wherever you wish.
The fraud protection is really significant matter. Credit cardholder can receive return with no more than 50 of any stolen sum and only if he or she doesnt forget to report the fact quickly. The best cardholders may be given a possibility to decrease the rate on this sum. Bad cardholders may receive no more than 50.
As for debit cards you can also receive 50 of fraud protection especially if you report the event during first 2 days. Moreover, you can be responsible for even some hundreds of pounds.

As for payments duration www.yourcreditoptions.comBad-Credit-No-Credit-Card-Offers-870386-page.php” target=”_blankcredit cards give you a chance to postpone payments, moving them closer to the end of paying period. But keep in mind that one hand gives while the second takes away so the bank may suppress you with new higher interest rate. Оn the contrary, debit cards are the control tools of “real” money which is located at your account. This means that making payments has nothing common with extending debt. You just spend it and without any credit urgency.
Take into consideration one important similarity of all credit cards: due to Fair Credit Billing Act all the credit cardholders especially the U.S. citizens – have the right to restrain payments in case of poor quality of sold goods. This is called the “buffer zone” it exists between your account and merchants hands. So you can even get the recourse. As for debit card purchases money leaves your account immediately.
So, which card should be chosen is the matter of serious thinking and in this article I tried to help you. What you certainly have to conceive is the fact that any card being managed dowdily may bring you difficulties with fraud. And this is the pure truth; any kind of cards can one day show their hidden limitations.
In this case I guess that better variant for you is to apply for a debit card in order to easily buy. Else if you prefer the idea of delayed payment then you need the credit one. Just listen to yourself.

Does the credit card work for you or do you work for your credit card Most peoples answer to that question will depend on how they treat their old plastic as credit cards are known.

For many with burned fingers will tell you they didnt realize that things had gotten so bad until very late, because most credit card offers try much to sound like they are actually running a charity. Well, they arent.

And this is not a hate campaign against credit cards.

Surely they have their benefits – in America if you want to rent a car, you got to have a (major) credit card.

But, consider this scenario

You receive an offer in your mail that sounds good, maybe its a new generation TV or a fridge. But it costs $2000. Oh, but you have a credit card with a $5000 limit, and you immediately purchase your merchandise. Typically, here is how your repayment schedule will play out. Most credit cards charge a minimum of total balance (usually 2 percent) of the total per month. Assuming the interest rate is 18 percent and you choose to repay the minimum amount of $40, $30 of that will go towards interest and only 10 percent towards the principle. As a result, you will take 30 years to repay and end up paying over $5000 interest.

Sounds scary It doesnt have to be. The moral of the illustration is

Use the credit card the same way porcupines make love; very, very carefully.

There is a lot of truth in the advice that credit cards are not a substitute for not having money. Every time you use a credit card this should be the theme replaying in your mind. And you would do good to remember the following too.

Dos.

Always plan for the purchases that you need and those that you want. You need the essentials, and you want everything else. The ability of making a distinction might help you plan wisely.

If caught up in financial difficulties, its always good to talk to the issuer who might re-schedule your payments. If you simply default, that only helps to build up an unfavorable credit history and you might find yourself being denied credit next time.

Unless it is an emergency, staying within your credit limits will help you a great deal. If you must spend over the limit, ensure you are within the manageable levels, say within 30 percent.

And if your mails are flushed with more favorite deals than you currently are enjoying, you may approach your issuer for a better deal. They want to retain you as their customer, so they will listen.

Donts

Do not use your credit card to make house hold purchases. Its expensive in the long run

Do not just pay the minimal amount. You will end up paying exorbitant interest. The quicker you clear the debt the better.

Do not use the credit card to purchase things you cant afford.

Are You Allow To Keep Your Credit Cards In A Bankruptcy?

Many bankruptcy filers are wondering whether they are entitled to keep one or several credit cards for emergencies backup. In general, you may not because your credit cards will be cancelled regardless, since you file the bankruptcy. The credit card issuers tend to punish their card holders for filling any kind of bankruptcy; in most cases, the credit cards of bankruptcy filers will be terminated once they file for a bankruptcy. But there are some exemptions where terms and conditions will be applied to enable the bankruptcy filers to continue holding their credit cards.

There are some exceptions applicable only to chapter 7 bankruptcy filers. Some credit cards issuers will allow you to keep your credit card but with a sized down credit limit, and in return you need to repay them for some of your debts. In fact, some companies will automatically send you or your attorney a proposed reaffirmation agreement, a contract between you and your creditor that you will pay all or a portion of the money owed, despite the bankruptcy filing, in exchange for a minimal amount of new credit.

Beside the sized down credit limit, a chapter 7 bankruptcy filers may allow to keep their credit cards by some of their card issuers but the interest rate will be revised to a higher than the normal interest rate. But, if you can always pay your credit balance in full each month, you will never incur a finance charge, and the high interest rate wont hurt you.

Other than chapter 7 bankruptcy filers, all credit cards must be given up at the filling of bankruptcy. However, there are credit card holders who have maintained their credit cards at zero balance for a long period of time do not report their credit cards during the filing. This action can be considered illegal since in effect your preference on one creditor (your credit card issuer) over other creditors, because repayment ordination is a trustee job.

If you are not eligible to file under chapter 7 or even you are filling under chapter 7 but you didnt manage to get approval from your credit card issuers to keep your credit cards, the best thing is report all your credit cards and give them up. In most cases, your need to wait until the bankruptcy filing has cleared and then work with a debt management consultant to rebuilt your credit step by step. Of course, in the months and years after the bankruptcy filling, you may not be eligible for top-tier or even middle-tier credit cards.

But with some efforts and fiscal strategy such pay your monthly credit balance in full and on schedule will help you to rebuilt your good credit record and you can begin to erase the stigma of the bankruptcy; and eventually put you back in the realm of good to high credit score.

In Summary

In most cases, bankruptcy filers need to give up their credit cards. But, there are exceptions for bankruptcy filers in chapter 7, the debtors who file their bankruptcy under chapter 7 may allow to keep their credit cards with some terms and conditions.