Credit Cards

How to Avoid Growing Your Credit Card Debt

May 14, 2020 By Susan Paige Leave a Comment

Primarily, credit cards are financial products that can be a useful resource for making huge purchases. Whether it’s groceries, jewelry, travel packages, and other goods and services, these cards can be an alternative mode of payment when you have no immediate cash at your disposal.

However, cards that are maxed out can be harmful to your financial condition. When you have high balances, your debt becomes unmanageable to the point where you’ll find it difficult to pay them down.

If you believe that your credit card is getting out of control, keep reading this article to know how to prevent it from growing.

Minimize Spending On Your Credit Card

One of the best ways to avoid growing your credit card debt is to reduce spending using it. Although credit cards can be an alternative way of buying essential goods and other items, maxing out their set limit is no good at all.

Thus, if you want to save yourself from incurring debts, try spending without your credit card. If you can, use cash until you settle all your debts and normalize your finances. Remember, by challenging yourself not to spend on any of your cards, you can stop your debt from ruining your financial health in the long run.

Pay Off Your Credit Card Balances With A Loan

Sometimes taking back control over a growing credit card debt can be harder than you think, specifically if there’s a high interest rate being charged on your balances. To protect yourself from this financial turmoil, paying off your debt with a loan can be an excellent idea.

If you have a good credit, you can apply for an unsecured loan with a low interest rate. Once approved, you can utilize the loan proceeds to pay off your debt. Although you still have a debt to pay, this option can be a great way to avoid the growth of your credit card balances.

However, finding relief with a loan can also make a bad situation worse when used irresponsibly. As such, working with a loan coach can be an excellent idea. They can help you through the process of choosing the best financial solutions, like Lendvia loans, for your credit card balances.

Negotiate A Lower Interest Rate

You can prevent your credit card balances from growing by improving your interest rate. This means calling up all your card providers and asking politely for a low interest rate. To increase your chances of getting your request granted, explain to the company your credit card situation and show them that you’re serious about clearing your debt as soon as you can.

Although some credit card companies might have their own approach in handling your request, it’ll never hurt to give it a try. If you’re successful, then, you can avoid your debt from getting out of hand, thereby improving your overall financial health.

Create A Budget And Track Your Costs

If you’re looking for the simplest way to cut down your credit card balances and keep them from growing, creating a budget could be the way to go. Typically, your budget will serve as your guide to your monthly spending. By knowing the amount of money you’re willing to spend each month, it’s easy to make some sacrifices and little adjustments on your expenses, and these include the use of your credit cards.

This means that whether it’s cutting out a pizza party each week or downgrading your cable plan, your budget will be there to regulate your card use every month.

On the other hand, tracking your costs is an important part of creating a budget. When you know what your committed expenses are, calculating your budget in order to control your card spending will be more convenient and straightforward. Moreover, by keeping track of your finances, you become aware of your increasing credit card balances, and, in turn, you can look for ways to safeguard yourself from a potential financial problem.

Therefore, if you don’t want your growing credit card debts to be a source of your financial issues, using a reliable asset protection solution, like the one in Cook Islands, can be of great help. With this kind of protection in place, you can keep your assets out of the reach of creditors, like credit card companies, and potential lawsuits.

Finally

In reality, paying off debts is never easy, especially if they’re due to high-interest credit cards. And, if you don’t handle it properly, you might end up paying them off in your lifetime. So, if you don’t want to be pulled away from your financial independence, protect yourself from your increasing credit card debts by following the tips mentioned above.

For more great savingadvice articles, read these:

Should You Use Credit Cards to Pay off Student Loan Debt?

What Does The Average Millennial Debt Look Like?

How Do You Develop A Financial Strategy To Stay Out of Debt And Save Money?

Who Has The Most Debt In The US?

Should You Use Student Loans to Pay Off Credit Card Debt?

May 14, 2020 By Tamila McDonald Leave a Comment

In some cases, when a person takes out a student loan, they get more cash than they need to cover their tuition, housing, and other college costs. When this happens, figuring out what to do with the excess can be challenging. At times, the simplest choice is to send it back to the student loan company. But, if you have credit card debt, is that the best move? If you are wondering whether you should use student loans to pay off credit card debt, here’s what you need to know.

Student Loan Interest Rates Are Lower

Typically, the rate you’ll get on a student loan is far lower than what you’ll have on a typical credit card. For the period between July 1, 2019, and July 1, 2020, the interest rate on direct subsidized loans and direct unsubsidized loans from the federal government is 4.53 percent. Compare that to an average credit card interest rate of 15.09 percent, and it is easy to see why using a student loan to pay off a credit card would be an attractive idea.

With the lower interest rate, you’d pay less over time by paying off your credit card with your student loan. That’s an important consideration.

Streamline Your Monthly Payments

By rolling your credit card into your student loan, you’d streamline your monthly payments. You’d have one set amount to pay each month, making your budget easier to manage thanks to the increased predictability.

If stability is a goal, then using your student loan to pay off a higher interest credit card could give you that. The two debts become a single line item, making it easier to track.

Empty Credit Card Temptation

When you pay off a credit card, you have the ability to charge that amount all over again. If you don’t intend to close your credit card account, then that temptation may be hard to resist. As a result, you may begin ringing up a new credit card balance quickly, creating even more debt.

If you aren’t sure you could refrain from using the credit card after its paid off and don’t intend to close the account, you might not want to pay it off with your student loan. If you do, you could be getting yourself into deeper financial trouble, which isn’t ideal.

Issues During Bankruptcy

While few people plan to file for bankruptcy in the future, it certainly happens. If you get in a bad financial situation and have to file, credit card debts are often dischargeable. You could rid yourself of that burden during the bankruptcy process.

In contrast, federal student loans can’t be discharged during bankruptcy. They stick with you regardless of the financial hardship. If you pay off your credit cards with your student loan, you are effectively moving a dischargeable debt into one that isn’t. That’s a risk that exists, so it’s important to take it into consideration.

It Might Be Against the Rules

When you have money from a student loan, there can be rules about how you use it. Federal student loans are limited to educational expenses at your school. Usually, this includes tuition, room and board, certain transportation costs, and specific tools, supplies, and equipment.

Technically, if you use your federal student loan to pay off a credit card, you could be misusing those funds. You’d be violating your lending agreement, and that could come with ramifications.

Now, it could be hard for your lender to prove that’s what occurred, which is why some people decide to use the money inappropriately. But that doesn’t mean it’s impossible.

Additionally, it’s crucial to note that private student loans may have different rules. With those, each lender can decide what is and isn’t permitted, so you might legally be in the clear to take the funds to pay off other debts. If you’re considering it, review your agreement to find out whether it’s allowed.

Have you considered using student loans to pay off credit card debt? If so, did you go through with it? Why or why not? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Use These 5 Tips to Avoid Credit Card Fraud

May 12, 2020 By Trey LaRocca Leave a Comment

When it comes to having a credit card, we harp a lot on spending discipline. While that is arguably the most important lesson for cardholders, fraud is an unfortunate reality we need to come to terms with. While there is no way to guarantee your money is safe, there are many ways to bolster your security. Saving is great, but it doesn’t do much good if a stranger runs up your debt. So, to better equip you for times like these, here are some must-have tips to avoid credit card fraud.

Check Your Statements Weekly

As much as the monthly look-see is helpful, it is hard to remember every transaction in that timeframe. Checking weekly will ensure that you catch things in a timely manner, allowing you to cancel your card sooner. You never want to end up losing thousands of dollars because you didn’t open your banking app soon enough, so don’t get caught slipping on this. Keep your eye on your statements at least every week, though every time you use it is an even better standard to uphold.

Call the Issuer

Get used to calling your credit card issuer. If you want to avoid credit card fraud, you need to be comfortable asking questions about your statement. If it is something that does end up being you, you didn’t waste your time calling. The peace of mind you get knowing for certain that you are secure is much more important than the 5-10 minutes it will take you to ensure it. When it comes to fraud, time is imperative. Knowing doesn’t help if you don’t act, and act fast.

Be Stingy With Your Card Information

When it comes to retailers that you haven’t dealt with before, maybe hold back on the card info. Do everything you can to vet places that you are trusting with this information, especially with online retailers. If you can’t find a legitimate reputation that you can trust, you probably shouldn’t be trusting them with your credit card number. So, if it’s not a popular or storied retailer, do your research and be responsible to avoid credit card fraud.

Keep the Credit Card out of Your Wallet/Purse

Credit cards are typically for very specific uses, and you don’t need to always have them on you. When you leave the house, decide whether you are going to need your credit card or not. If you don’t, leave it at home. This will ensure that if your wallet is lost or stolen, you manage the damage that can be done. It also decreases the number of cards you need to cancel when you eventually find out.

Refer to the FTC

What we have given you here are the basics, but there are resources that go in-depth on credit card fraud. The FTC’s website has tons of tips on how to avoid credit card fraud, and what to do when it happens. So, if you still need some extra information, refer to the proper authorities for updated information on keeping your money safe.

What Should You Do With an Unsolicited Credit Card?

May 7, 2020 By Kathryn Vercillo Leave a Comment

If you receive an unsolicited credit card in the mail then there is a problem. It is illegal for companies to send you a card that you did not request. However, it’s possible that you’ve received something different such as a pre-screened offer of credit or a an advance-fee credit card offer. Here’s what you should do if you receive something like this in the mail.

Figure Out What You Received

There are many different things that can look like an unsolicited credit card. A few examples include:

Advance-fee cards including those that can only be used for very limited purchases such as items purchased through a specific catalog. SeattlePi has a good story explaining this type of situation.
An opt-out credit card. In other words, you receive the credit card account unless you choose to specifically deny it. While it’s illegal to send an unsolicited credit card, there’s a loophole in the Truth and Lending Act that sometimes makes this variation legal.
A replacement credit card for an existing credit account. Perhaps you thought you canceled the account but you did not.
Prescreened credit card offers. You might receive a faux credit card that looks a lot like a real credit card but is actually an offer of credit. It is not illegal to send these but they can be very confusing. Note that you can opt out of prescreened offered.

First things first, figure out what you were sent. That will tell you how to proceed. For example, if you received a prescreened credit card offer that you don’t wish to accept, then usually you can just shred that junk mail and forget about it. Alternatively, if you received a replacement credit card for an account that you thought was closed then you will need to contact the lender to complete cancellation of that account.

If You Received An Unsolicited Credit Card

If you did indeed receive an unsolicited credit card, then you need to take action. It is illegal for any lender to sign you up for a credit card that you did not request. In rare instances, this might be a mistake on the part of the lender. In many cases, it could be related to identity theft. Alternatively, you might be dealing with a nefarious lender. Regardless of the situation, here are the steps that you need to take if you received an unsolicited credit card:

Call the customer service number for the lender who has issued the credit card.
Speak to a representative and tell them that you received an unsolicited credit card.
Express that you do not want this credit card. Moreover, tell them that you want the account canceled immediately.
They should be able to cancel the credit card account while you are on the phone with them. Ask them to send you confirmation in writing that the account has been closed.
Send your own confirmation letter to them as well. In other words, document in writing that you have closed the account. Make sure you include the credit card account number, the date you canceled, the name of the representative that you spoke with, and any other pertinent information. Keep a copy of this for yourself as well.
Monitor your credit cards carefully. If you want to be extra careful, you could freeze all of your other accounts and ask the lenders to issue new cards. Alternatively, you can monitor your accounts carefully over the next few weeks to make sure that this isn’t a larger problem of identity theft.

If you believe that the lender violated the law by sending you an unsolicited credit card, then you might want to report them. You can contact the Consumer Financial Protection Bureau and/or the Federal Trade Commission to make this type of report. You can also file a report with your local police department.

Costco Members Needing A Credit Card-Try Costco Visa

April 29, 2020 By Tamila McDonald Leave a Comment

If you’re looking for a new credit card, it’s easy to become overwhelmed by choice. There are hundreds of options to choose from, spread across more than a dozen issuers (not including store cards). To put it simply, narrowing down the list of those that work best for you is a challenge. But, Costco shoppers may have an easier time making a decision. The Costco Visa could offer the right kind of perks based on your shopping preferences. If you’re a Costco member looking for a credit card, here’s what you need to know about the Costco Visa.

The Costco Visa Issuer

First, the Costco Visa is technically called the Costco Anywhere Visa. It is issued by Citi, one of the largest issuers in the country. It’s one of many cards issued by the company but is the only option on the market that specifically targets Costco members.

It is important to note that Citi actually offers two Costco Visa cards. One is aimed at consumers, while the other is specifically for businesses.

Visa Requirements From Costco

If you want a Costco Visa, you do have to meet the requirements. First, you have to be approved for the card. This includes passing a credit check and having sufficient income to repay any balance you create.

Additionally, you have to be a Costco member. Plus, you need to maintain your Costco members. Otherwise, you may have to pay additional annual fees to keep your card, and won’t have access to many of the card’s benefits.

Costco Visa Cash Back Program

The biggest benefit Costco Visa users get is access to a generous cashback program. When you use the card, you can earn 4 percent cash back on eligible gas purchases up to $7,000 a year, including at the buying gas at the Costco station. Once you hit that $7,000 threshold, the gas cashback doesn’t disappear. Instead, it’s reduced to 1 percent.

But Costco Visa users don’t just get money back on gas. Eligible restaurant and travel purchases earn 3 percent cash back. You get 2 percent for shopping at Costco and Costco.com. Finally, all other purchases earn 1 percent.

Overall, you can earn cash back on anything you buy. That can be incredibly beneficial and makes this rewards program incredibly competitive.

Redeeming the rewards is also incredibly straightforward. Once a year, you’ll receive a rewards certificate. You can redeem that for cash or use it to purchase merchandise from Costco. The process happens automatically, so you don’t have to worry about forgetting about your cashback.

Other Costco Anywhere Visa Benefits

While the cashback program is the superstar, cardholders also get access to other benefits. For example, there are no foreign transaction fees. That makes using your card anywhere you travel an option, and you won’t have to worry about extra costs.

You also get access to the Citi Damage and Theft Purchase Protection program. If an item you buy is damaged or stolen within 120 days (90 days for residents of New York) of purchase, you might be eligible for free repairs or a full refund.

As for Costco-specific benefits, there is one thing that can help members. If you forget your Costco membership card, you can flash your Costco Visa instead to enter and pay at the store.

Finally, when you buy with this Citi card, you get automatic extended warranties. The amount of time can vary, but it does give you some extra protection.

Costco Visa Interest Rate and Fees

By and large, the Costco Visa interest rate is competitive. The average cashback card comes in at 20.90 percent.

With the Costco Visa, you can get an interest rate below that average. It comes with a variable 15.24 percent interest rate, which applies to purchases and balance transfers. Cash advances do come with higher interest, landing at 25.25 percent. Finally, if you have a late payment or your payment is returned, it can trigger the 29.99 percent penalty interest rate.

There are some fees you may need to contend with as well. Cash advances come with a $10 or 5 percent of the amount (whichever is higher) fee. If you initiate a balance transfer, you’ll pay the greater of $5 or 3 percent of the transferred amount.

Is this Visa Card Right for You?

If you are a Costco member, then there is a chance this is a decent card for you. The interest rate and fees are competitive, and you can legitimately use this card anywhere that accepts Visa.

However, if you are going to take full advantage of the cashback program, then there are other points to consider. Often, those who buy a lot of gas, dine out frequently, or spend a substantial amount of time traveling will access the most generous rewards. In many cases, those purchases will earn 3 to 4 percent cash back, which is fairly high.

The cashback from shopping at Costco isn’t as impressive. There are many other cards that offer 2 percent for all purchases (which could apply to Costco), and some offer better rates on commonly used categories, like grocery stores.

Ultimately, you need to consider your habits to determine whether the Costco Visa is right for you. If you spend a lot on fuel, travel, and dining out, and are also a loyal Costco shopper, the Costco Anywhere Visa by Citi is worth considering. But, if your spending mostly focuses on other categories, it could be smart to compare your options to make sure you choose the card that gives you the most benefit.

Do you have a Costco Visa? What has your experience been like? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

What Are The Downsides Of Waiving Credit Card Payments?

April 9, 2020 By Kathryn Vercillo Leave a Comment

I have really been struggling financially in the past year or so. When COVID-19 hit, things obviously got even tighter. Therefore, I was thrilled to learn that many of my credit cards and other lenders offered the opportunity to waive payments. This is incredibly helpful. However, as with anything financial, it’s important to look carefully at the terms before assuming that this is a good move to make. What are the downsides of waiving credit card payments?

What Does Waiving Credit Card Payments Mean?

Many people didn’t ever even think about waiving their payments until recently. However, with the COVID-19 situation, more people than ever are under financial strain. As a result, more and more credit cards are offering assistance that includes waiving payments. This isn’t a new thing; most credit cards have always had various forbearance and hardship programs. However, they have recently increased their offerings and made customers more aware of what they can offer as a direct response to COVID-19 challenges.

What it means to waive payments varies a lot from card to card. Most often, the credit card company will allow you a one-month period during which you do not have to make your monthly minimum payment. You generally don’t incur any penalty fee. However, you may (or may not) accrue additional interest during this time. However, there are different plans. For example, some credit cards will waive your late fees but still require the monthly minimum payment when you do pay.

Each company typically offers multiple hardship programs; waiving credit card payments is just one of the options. Some companies will assist you by lowering the monthly minimum payment, but not waiving it entirely. Others will work with you to adjust your interest rates, change your repayment plan, or otherwise improve your ability to meet the financial burden of your debt.

Downsides of Waiving Credit Card Payments

For the most part, I have found it personally advantageous to take advantage of waiving credit card payments right now. I was able to take one month off of payments, penalty-free, across several different credit cards. This allows me to save a lot of money on my monthly minimum payments, which is helpful while getting on my feet during this time of financial strain.

That said, there are definitely some downsides in waiving payments. Those downsides include:

The underlying financial problem doesn’t go away. If I can’t make my minimum monthly payments this month, then what will change to allow me to make them next month? If I’m only offered a one-month payment waive, is this helpful? These are things to consider.
You aren’t paying down your debt during this time. The debt itself isn’t going to go away. The idea when waiving credit card payments is that you are in a temporary bind that will lift soon. If that doesn’t happen, you still owe all of that money. In some cases, you may still be accruing interest.
Remember that if you continue to accrue interest, and especially if you keep using the cards without paying down on them, then you’re going into greater debt. Not only is this a burden on you, but it can affect your credit utilization rate. In other words, you might end up with a lower credit score as a result of waiving credit card payments.

Waiving credit card payments isn’t good or bad in and of itself. It has benefits and it has downsides. Review all of your options carefully before making the decision that is best for your personal finances.