Posts Tagged ‘secrets’

You have probably heard credit card advice like “look for the lowest interest rate,” and “try to avoid cards with annual fees.” Those common sense tips won’t be covered in this article. This is about the credit card secrets you may not have heard. Here are four of them.

1. Get rid of annual fees. What if your cards already have annual fees? Can you keep the cards and get rid of the fees? Possibly. Most credit card companies don’t want to lose your business. If you have been making the payments on your cards on time, just call and say you want to cancel your account.

Your call will be immediately handed over to an account manager or “customer specialist” who will ask you why you are canceling your account. Explain that you have decided to keep only those credit cards that don’t have annual fees. At this point they should offer to drop the fees if you keep the card. This worked on three out of four cards I called on. I just went ahead and canceled the other.

2. Watch for changing due dates on your statements. It isn’t enough to get you for fees and interest. Some credit card companies are now purposely changing the due dates on your credit card statements so you’ll accidentally pay late.

Of course, this lets them collect a hefty late fee, but that’s not all. They’ll also be able to raise your interest rate, and even raise the rate on other cards you may have (see number three below). Bottom line? Check the statement – your payment due date may not always be the same.

3. Watch out for universal default rules. Read that fine print. Under “universal default” rules, if you are late on one card, or if you go over your limit, your interest rate can be increased on other cards as well. They love to get you with this one. Default interest rates can be 10% higher than the normal rate, which means you could pay an extra $400 per year on $4,000 in credit card debt.

4. Reduce credit card debt fast by paying only the minimums on most cards. Suppose you can budget $200 monthly to pay down your credit card debt. The best way? Pay the minimum on all cards but the one with the highest interest rate, and put all the rest of the money towards that one.

For example, if you have four cards, and the minimum payments are $25, $30, and $45 on the lower interest ones, pay just those minimums, and then apply the other $100 to the high-interest card. Once it is paid off, keep applying that $200 to the debts, again paying only the minimums on all but the highest-interest-rate card. This is the fastest way to eliminate your debt, making it perhaps the most important of these credit card secrets.

Credit cards are just a curse for many people. They make it too easy to buy on a whim when the money isn’t there to pay for the purchase. They raise the cost of everything bought by the amount of the interest that will paid over the years. They create debt levels that can prevent getting a mortgage to buy a home. I could go on.

Credit cards are a blessing for many people. They make it possible to effectively carry large amounts of money safely and easily. They let you rent cars and make reservations for hotels over the phone. They let you buy things online, without ever having to leave the house. They even make it possible to pay less for things, because you can pay later, after your money has earned more interest.

Now, if you can relate to the first paragraph more than to the second, you might want to skip the rest of this article. What you probably need is a good article on how to get out of debt. The techniques I’m going to cover here will probably just get you into more trouble. If you are able to handle your finances, though, you may appreciate what follows.

Credit Card Secrets

First, if you have more than one credit card, make a note of when the billing period ends for each card. Then, when you make a purchase, use the right card so you’ll pay as late as possible, so your money can stay in your bank account making interest longer. To understand this, suppose you have two cards, and their billing periods end on the 12th and 26th of each month.

Now, if you pay for your groceries on May 10, which card would you use? Well, the one that has the billing period ending on the 26th will go out two weeks later than the other. The other will be heading your way in a couple days, right? So use the one with the statement day on the 26th and you get two weeks of extra interest on your money before you have to pay. This assumes that you pay your balance in full every month (you do, right?), and so never pay interest on the cards.

Suppose you buy a $500 television on May 26. You use the card with the statement that ends on the 26th. It won’t make it to your account until the following day, meaning it will be on the statement that ends on June 26, and then you have 25 more days to pay the balance (generally, although some have just a 20-day grace period now). If you pay 20 days later, that $500 will have been in your account for 50 days earning interest.

Now, if you keep your money in a decent account yielding 4.5 % (what INGDirect.com pays as of mid-2007) you will have made a little over $3 in interest. This isn’t much, but it can add up over time. All you had to do was use a credit card instead of cash and pick the right card out of your wallet (and pay off those balances each month).

Another possibility is to take advantage of the no-fee, low interest cash advance checks we all get in the mail. I once made a very safe loan of $6,000 at 9% interest for six months, using a no-fee 4.5% cash advance check to get the money I loaned out. Since I was paying down the balance on the credit card over the months, I paid only $100 or so in interest, while collecting $270 in interest for the six months of the loan.

Again, a $170 profit isn’t much, but it all adds up, and didn’t cost me even an hour of time to make it. What if there is a fee? Run the numbers. Typically, the fee will be 3% of the cash advance, but may be limited to $50 or $75, so there still might be room for a profit, depending on the amount you borrow to loan out.

Are there other safe and profitable investments that you can make with borrowed money? Possibly, but that’s something you have to decide for yourself – and perhaps a topic for another article. But at least you now know a bit about playing with your credit cards.

When people find themselves at the lower end of the class in the credit score department they instantly start looking for ways to improve their position. What many may not realize is that they can have items that should not appear on their credit report removed on their own. In most cases negative information that is not true can be removed simply by notifying the credit reporting agency, along with proof of the misinformation and it will be removed. However, these bad credit debt relief repair secrets, which are not really secrets at all, are often kept from the average consumer.

Before buying in the prospect of buying bad credit debt relief repair secrets it should be well understood that while the three major credit reporting agencies are private companies they are controlled by the federal government and their reporting tactics have to adhere to strict government regulations. There are also rules governing the release of bad credit debt relief repair secrets by the agencies, which most will follow to the letter of the law or risk losing their license to conduct business.

One thing that many of the bad credit debt relief repair secrets peddlers will not divulge is that any information on the report that is accurate, cannot legally be removed until the time on the information expires, usually in seven years. Anyone that claims otherwise is either misinformed or passing on bad information.

Keep Watch On Report For Inaccuracies

One of the well known bad credit debt relief repair secrets is to keep a close eye on your credit report, and not just one, but the report maintained by all three agencies. Simply because an item is missing from one report does not mean it is not on another one. If an item appears on your report that you question, you have the right to questions its validity and if it can be proven the information is false, it has got to be removed.

People and companies that claim to be able to offer a clean credit report in 30 days are probably not being honest in their presentation. Some of the bad credit debt relief repair secrets they talk about include that fact that true information cannot be removed. What they may be offering is help in getting outdated or erroneous items on the report removed, something that can take time, but something that can be done with paying someone else to do it.

For more information please visit my Debt Relief – Debt Relief Service Management Website.