3 Ways To Use Credit Cards Without Racking Up Debt

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Credit card debt can be devastating and hold you back from reaching many of your financial goals. However, that doesn’t mean that credit cards themselves are evil. In many cases, credit cards can be a part of your lifestyle, allowing you to take advantage of free travel and other perks. I regularly fly for free or enjoy free nights in a hotel because of my credit card approach.

With the right attitude and planning, it’s possible to use credit cards successfully – without racking up debt and paying thousands of dollars in interest charges.

Here are 3 keys to using credit cards without falling into the debt trap:

1. Stop Digging The Debt Hole

Before you start using credit cards as part of your financial plan, make sure that you are no longer digging the debt hole
. The first step is to get your spending under control so that you aren’t living beyond your means. Realize that debt is a symptom of the problem. Get rid of your credit card debt, make sure you aren’t building any more of it. Go at least six months without borrowing to make ends meet.

This doesn’t mean that you have to have your student loans completely paid off, or your mortgage done with early. However, you shouldn’t have any credit card debt or payday loan debt hanging over you when you start, and you should be in a place where you don’t need debt to meet your obligations each month.

2. Have A Plan For Your Spending

Next, make sure you have a plan for your spending. It even makes sense to have a specific plan for the credit cards you use (and the rewards you are trying to focus on).

I have three main credit cards that I use on a regular basis.

Business card: Even though I’m a freelancer, I still have business expenses. I use my business card to earn cash back when I buy things for my business or go on trips for business. This helps me keep my business finances separate from my personal finances, and I get cash back.SkyMiles card: This is the card I use for everyday purchases and costs. I even pay rent automatically using this card, as well as pay my utilities, Internet and other costs.

It’s also the card I use for groceries and gas. I earn miles quickly, and my son and I usually fly free when we travel. Upromise card: Finally, this is the card that I use for online purchases. It is the card saved at Amazon and other online retailers. When I order things online, the cash back rewards are automatically deposited into my son’s 529. Even though I contribute regularly each month, the credit card earnings add a nice bump and the account as a whole benefit from the compound interest.

Each card has a purpose, and my spending is done with my priorities in mind. While I could probably get a little more benefit out of putting everything but my business – including the online purchases – on the same card, I do like the idea of having these things split so that if my saved online card is compromised, it won’t affect my other card, and vice versa.

3. Pay Off The Card Each Month

The reason planning is so important is due to the fact that you need to be able to pay off your credit cards each month. Each of my cards has a plan and a purpose, and they fit within my overall financial plan. I don’t make extra purchases “just for the rewards” or justify over-spending with the rewards.

In order for this plan to work, you have to pay off your credit cards each month in order to avoid interest charges. My income (what doesn’t go toward retirement contributions and other long-term goals) sits in a money market account, earning interest for the month. When it’s time to pay the bill, I can do so and avoid interest.

If you don’t track your spending, or don’t have a plan for your money so that you live within your means, this won’t work, and you should probably rethink using credit cards.

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Why Emergency Loans Are So Highly Desired

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Need money to fox your car? Do you have outstanding debts and are looking for the solution to sort out your financial problems? Looking for finance to kick start your business or expand your new venture?  Obviously, emergency cash loans would be the right option for you to meet these financial problems and help you reach your financial goals.

Why Are Personal Loans Preferred Choices For Your Financial Problems?

A personal emergency loan can turn out to be a viable solution for various financial needs. But what is exactly an emergency loan?

Emergency loans are unsecured personal loans which are offered on the basis of borrower’s creditworthiness and his ability to repay the loan. Repayments of these loans are generally carried out through regular installment payments over a fixed term.

Although some lenders expect to provide a reason for the loan, however, when your requirements are genuine and legal, you will not incur any problems in getting the loan.

One of the major difference between an unsecured personal loan and other types of loans are, unsecured loans don’t carry collateral to back up the loan. Since it is a highly risky option for the lenders, they generally charge a high-interest rate the finances.

However, for a few circumstances, emergency loans are regarded as a highly desired option.

Consolidate Credit Cards –

Taking out a personal loan to pay off high-interest credit card debt is one of the most flexible and scalable options. According to Federal Reserve statistics, credit card debt in the United States was summed to a total of 1.02 trillion dollars. If you are one of those Americans, then eventually you would be paying high interest rates. Instead of getting rolled on multiple credit card balances, one big personal loan can bring a solution to your problems.

Refinance Student or Payday Loans –

Student loans are really overwhelming for most parents. When these debts become outstanding, both parents and graduates seek ways to pay off student loans. Apparently, a personal loan is an ideal option to pay these small loans and saves you from curling up in the high-interest loans. There are many advantages of using a personal loan to refinance your existing student loan.

  1. Secured personal loans can be obtained with a lower interest rate than 2nd chance payday loans with no credit check, so you can make use of this finance to pay for the high-interest payday or student loans.
  2. When your goals are to pay your loans in shorter terms, perhaps personals emergency loan is the perfect options for you.
  3. If you have an emergency loan, you can release the co-signor of your student loans and get relieved off the pressure from various sources.

Starting Your Business –

Starting a business can take you on a toll financially. Though you might have funds for getting your business licenses and completing your paperwork, yet to kick start your business, probably you would be in need of more finance. There are different types of personal loans that you can use to finance your business. Let us see a few of them:

  1. ElcLoans (payday and installment loans) – When you are looking for a secure and faster loan solution from reliable direct lenders, perhaps Elc Loans could be the right option for you.
  2. Mogo Personal Loan – These loans are exclusively for immediate options. Mogo loans can get approved just in 3 minutes when you have all the relevant credentials with you with appealing credit scores.
  3. Ferratum Money – Individuals, who require finance up to 10,000 dollars, Ferratum money is rather a desired choice. Funds are transferred overnight, and the duration of the loan typically ranges from 1 to 5 years.
  4. Wedding Expenses – The most important day in your life shouldn’t be cheap. The wedding involves a multitude of expenses right from the wedding suit to catering, arrangements and music parties and many more. If you don’t have sufficient money, how can you make it memorable? Here comes the personal loan options, one of the preferred choice to finance your wedding. Although many people use their credit cards to carry out their expenses, however over a period of time it can turn as a bigger financial burden and can make your marriage turn sour. However, emergency loans are good to avoid spiraling into credit card debts and help you to cover the wedding costs.
  5. Improve your credit scores – emergency loans are often borrowed to consolidate high-interest debts especially the credit card debts and to improve your credit scores. Lenders evaluate your credit card utilization (which is a relation of your spending and your credit limit) to determine your creditworthiness. When your credit utilization is much higher, then lenders regard you as a higher risk applicant. Apparently, emergency loans help individuals to replace credit card debts.

Closing Thoughts

Although emergency loans are a really good option to manage your finances, there are many factors to consider before deciding what type of credit is better to manage your situation. Consider the interest rate, origination fees, pre-payment penalties, and a few others and make a wise decision.

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How To Select The Best Credit Card?

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Credit cards are tempting, however getting close to it, you can probably get burnt. Nevertheless, without a credit card, it is difficult to build or establish credit with which you can make large purchases. If you choose to live without a credit card and a credit score, you have to jump potentially through a number of hoops. Perhaps, choosing the right credit card can better organize your spendings and credit situation.

Picking The Best Credit Card

Like any other American, you would have probably bombarded with a multitude of credit card offers from a number of banks and retailers. Although there is a number of options and offers, you would finally end up with a credit card that is issued from your home bank. Nevertheless, choosing the right credit card is a combination of art and science.  Shopping the right credit card will save you hundreds and thousands of dollars to your credit wallet in terms of interest and surcharges.

While choosing a credit card, you should know for which reasons you would require a credit card. Your purposes can vary from buying things online or paying your bills or making bigger purchases. Apparently, you should also determine whether you would be able to make the repayment every month for your purchases. Exceeding your limit will put you in hassle, and you would be spiraling in debts. However, when you have the potential to repay your bills in full or stick on to regular payments, you can even take advantage of the interest-free period.

To make a well-informed decision, this article would help you find the best credit card for you with some useful tips

Annual Percentage Rate

The most important loan term is your interest rate stated as a yearly rate, which is the rate, you will be charged for borrowing the money.  Individuals, who are applying the credit card for the very first time will not consider this factor.

So, they usually tend to pay high interest rates.  If you are applying the credit card for the first time, you probably might carry a balance to the following months, so the most important aspect that has to be kept in consideration is the interest rate.  Even carrying a few months of balance will cost you hundreds in interest charges, so lower the interest rate greater would be your credit card experience.

Check Your Credit Scores

Check your credit scores and determine the credit card offers.  A credit score is a three-digit number, typically between 300 and 900 that relates to how likely you are to repay debts. Credit scores are very sensitive to credit report inquiries, so you should avoid applying for random credit cards.

There are online tools that will help you to provide a list of credit cards based on your credit scores.  If you are not aware of your credit score, you can get an estimate of what is your score using the credit score calculator, which will require several pieces of information like payment history, the amount owed, length of history, new credits, types of credit and few others.

Determine Your Minimum Payments

Most credit cards only require you to make a minimum payment every month which is basically 20 – 25 $ based on the interest of your credit card. This payment is required to avoid late payments and damages to the payment history.  There are few methods of calculating the minimum payment

  1. Percentage method – Some lenders calculate the minimum payment as a percentage of the balance. For example, your minimum payment is 3 percent, and you owe 1500 dollars then your minimum payment is calculated as 1500 * 3/100 = 45 $
  2. Percentage and applicable interest + finance charges- The credit card issuer will also take a percentage of what you owe along with applicable interest and finance fees at the end of every billing cycle. For example, when your minimum payment is 2% for 1500$ you owe. If the applicable interest is 10% and there are no fees involved, then your minimum payment is calculated as (1500 *0 .02) + (1500*0.1) = 45$

Choose The Credit Card Which Will Serve Your Purpose

There are plenty of credit cards out there, but the best credit should be the one which would satisfy your needs. For instance, if you are a frequent traveler, you should certainly go for the travel rewards credit card which can save some percentage on interest for every spending. Low-income families, who have potential chances of carrying forwarding their balance should look for low-interest credit cards to avoid paying high interest rates for the balance amounts. However, when you are looking to improve your creditworthiness, you can go for secured credit cards that are backed by collateral. This would probably add more value to your credit scores.

Closing Thoughts

In addition to these aspects, look for the nuts and bolts to avoid getting trapped to the faulty providers who can ditch you in bankruptcy. Also, don’t forget about the additional benefits and bonuses to have a great experience with credit cards.

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How To Benefit From A Personal Loan

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You should know before you get a personal loan. Use this flexible online Personal Loan EMI Calculator to arrive at the EMI you are comfortable with Many people looking for debt consolidation loans with bad credit profiles contact their bank. A personal loan is a great way to tide over sudden personal emergencies or to finance a dream.

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Know Everything Related To Predatory Lending

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When you need credit, choosing the right personal lender is important. He has the potential either to make you or break you. The personal lender helps you to get out of the debt or get dragged you in debt and immerse you in bankruptcy.

What Is A Predatory Lender?

Predatory lenders are unethical lending practices carried out by the lender to entice, induce and assist the borrower in taking a loan that is accompanied by high fees, a high interest rate that the borrower cannot afford.

There are many times in life when you need a loan like purchasing a car, a dream home, emergency requirements, business expansion, educational purpose and many more.  You might also require at times to consolidate debts or pay off long term debts. During such situations, you will be in need a lender through whom you can borrow the desired finance.

Although there is a number of good lenders who genuinely help the borrowers to avail the loans at the best interest rate, they are equally accompanied by predatory lenders, who take advantage of the consumers and impose unfair or abusive loan terms. These lending practices are disadvantageous to the borrowers and most frequently occur with the low-income families and minority borrowers.

Predatory lenders often aim at the creditor’s profits when they are not able to make the payment. They use false advertising and foul sales tactics to make the borrower take loans from them. However, there are few signs from which you can make out these foul plays and stay away from this predatory lending.

Following The Signs Of Predatory Lending

Before signing any loan, do extensive conduct research online and feedbacks from your friends and relatives about the different types of loans. Make a comparative analysis against the interest rates to determine whether the lenders have any complaints against them. Stay away from a loan which requires

No Credit Check

For bank consumers, having a good credit history is important to improve the chances of getting a loan. Perhaps, the credit score is the most vital component to make yourself eligible for the loan. However, with predatory lending, it might be easier to get eligibility for the loan without a good credit history. Apparently, there are higher risks of paying huge interest. Paying higher rents would obviously put you in more financial burden making things even worse. So beware of this sign.

Alarming Interest Rates

One of the biggest signs of predatory lending is the alarming three-digit interest rates. For instance, the average APR rates of payday loans and car title loans are generally 35-37 percentage. Nevertheless, you cannot find these rates with the predator’s lenders instead their APR usually range from 280 to 300%. So, when you are borrowing a loan, ensure that you properly read all the terms and conditions and understand how the loan terms and interest rates are structured because agreement terms predominantly highlight the interest rates.

Needs Cautions When Loan Payment Requires ACH

Automated Clearing House or ACH are electronic payments that send payments directly from the checking account. Although it is easier for making your transactions yet there are plenty of risks behind it. You will not know how much you are paying. In many instances, you would be paying more than you should, and this could eventually drain your account, which ultimately results in missing other payments and rack up the penalties. It also leads to overdrawing your account.

Loan Flipping

People generally go for refinancing to consolidate debts. However, the predatory lenders make use of this opportunity and try to ditch you with the lending practice called loan flipping.

While the transaction can add a few thousand dollars to the homeowner’s account, however, the most amount is eaten by high-interest fees and prepayment penalties. Well-known investors and authentic money lenders are the best sources of flipping loans.

In fact, sometimes flipping turns out to be a criminal activity because some people illegally flip the property at the artificial inflation rate. So, when you find things fishy, it is wise to stay out of it.

How To Avoid Predatory Lending?

When it comes to purchasing an asset or property, predatory lending is something you should try to stay away from.  You must try doing these things

  • Make sufficient research and analysis before you approach a lender
  • When front fees are not convincing, don’t hesitate to question it.
  • Always go for a licensed lender
  • Establish your eligibility to get qualified for the loan
  • Do not sign on documents containing blank spaces
  • Do not let yourself rushed for the loan processes
  • Stay away from loans offered through phone, mail, and solicitations.
  • Do not allow anyone to convince you for the loan amount.

Bottom Line

Many states have laws preventing high-interest loans. But still, there are many greedy lenders who take advantage of the minority communities and make them spiral in debts. So, it is important to watch the signs of predatory lending mentioned above and stand firm to all the loan processes without getting pressurized or convinced by someone for a loan.

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What Are The Types Of Personal Loans?

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If money grew on trees, wouldn’t be wonderful? Although currencies don’t sprout on trees yet, there are options for accessing finances when you are in need, which comes in the form of personal loans. If you need cash to handle an emergency situation or need money for your business startup or consolidate debts, then among the different types of loans, a personal loan is one of the handiest choices.

Types Of Personal Loans

The personal loan is one of the most straightforward financial tools that comes to rescue and help you reach your financial goals. Most personal loans are secured with fixed payments. However, there are other types of personal loans depending on the range of lenders. Personal loans also vary depending on the amount you would require which range from a few hundred dollars to tens of thousands.

This article would help you understand the different types of personal loans

Unsecured Personal Loans

These loans help you to borrow money for almost any purpose. You can use these loans to kick start your new career in a specific industry, debt consolidation, make big purchases and a few others. However, before getting started with this loan, it is important to understand, how this loan works and how much extent can you be beneficial with this loan. An unsecured loan doesn’t require any collateral to guarantee your loan. The lender cannot force you to pay the loan immediately, and there is less risk involved with this loan. However, lenders can take legal action against you.

Secured Personal Loans

A secured loan requires collateral like a property or an asset to be pledged to guarantee the loan. In the case of failure of payment, the lenders have the authority to sell your property or asset to pay back for the loan. One of the major advantages of the secured personal loan, when compared to the unsecured loan, is, secured loans can be obtained with a lower interest rate because lenders have lesser risk offering you the loan. Secured loans are further categorized into mortgage loans, car loans, and secured credit cards.

Fixed Rate Loans

If you know the amount of credit required for your loan, say for example you need to buy a touch screen mac laptop, fixed-rate personal loans is perhaps a beneficial option for you.

These loans set a fixed interest rate throughout the term. Other notable features of this loan are

  1. They are long term loans with fixed rate interest
  2. Loans are repaid through monthly payments
  3. Helps the individuals to plan a monthly budget and stick on to the loan repayment.

Variable Rate Loans

Variable rate loans are quite the opposite of fixed-rate loans. They do not offer a steady interest rate, unlike fixed rates. The interest rate invariably depends on the current market conditions, so it keeps fluctuating. Variable rate personal loans are most suitable for people who wish to repay the loan in a shorter interval of time. For people, who can foresee the economic conditions can go for this loan if conditions are favorable.

Debt Consolidation Loans

When people begin to experience financial difficulty, they often look for debt consolidation loans to find a solution to the debt problems.

A debt consolidation loan is, where a bank provides you with finance to pay your outstanding debts. For example, if you have three lines of credits and you owe close to 15,000 dollars.

Then typically, this loan would help you to repay the debt and close all the credit cards.

However, when you don’t do effective budgeting, you will end up with doubling up your debts. So, in order to use your loans effectively, proper budgeting is rather important.

Co-sign Loans

This is a great loan for individuals, whose credit histories are not much appreciable. Creditworthiness is one of the important factors to get qualified for a loan. However, borrowers with low credit history can make themselves qualify for this loan. When you co-sign a loan, you will be the guarantor for the person who is borrowing the loan. The co-signor will agree to pay the borrower’s debt if he/she defaults the loan.

Personal Line Of Credit

Personal line of credit loan will help you boost your cash reserves. Perhaps, a secure and flexible option to meet your daily expenses. You don’t require to carry money in your wallet when you have a personal line of credit. However, there will be a certain credit limit based on your creditworthiness. This usually varies between lenders. One of the major side back of this loan is, it is usually accompanied by high interest rates.

Closing Thoughts

Personal loans are straightforward tools to reach your financial goals; however, you need to consider whether you have other options with lower interest rate before going for a personal loan. Getting loans may sound excited but repaying is a real burden. So, make extensive analysis before going for loans.

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Ways of Making the Best Retirement Savings

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People who don’t understand the essence of savings often turns a blind eye towards retirement savings. Most people are unprepared for retirement. A shocking report says that 30% of North Americans have no retirement savings and purely depend on the welfare system or another service to make up their living after retirement.

Importance Of Retirement Savings

Savings for retirement is essential to ensure that your golden years are comfortable and fruitful.  Although there are government aid services that provide Pension plan to the senior citizens, apparently this will not provide the comfortable life you are looking for. Even though you haven’t started the savings yet, it’s never too late to start your retirement savings.  By investing your money for the savings today can reap more benefit for the future. It is not necessary that you need to make a big contribution to retirement savings. A small percentage of your income can make bigger contributions.

There are two components of retirement planning

Personal Planning

Although both are essential components, yet personal planning is more important because it is the determining factor which decides, what kind of lifestyle you wish to live in your future. Whether you want to be taken care of the old age homes or live independent and spend your life the way you want.

Financial Planning

This determines the source of income and expenses based on your budget. You can really enjoy your retirement life when you have structured your income in the early part of your life.

People are often confused when to start their retirement savings?  Apparently, the answer is simple and straight forward. It is very crucial to start your retirement savings as early as possible. The early you start, the more money you can contribute.

With numerous financial responsibilities to juggle and a big chunk of paycheck going towards your monthly expenses, how to save for retirement is a growing concern for many Americans. Most people are wondering and more scared, how they are going to spend their retirement years when they are no longer earning.  However, there are ways to do it!

Easiest Ways To Make Your Retirement Savings

Increase Your Retirement Contribution Size Whenever You Get A Hike

This is one the easiest and ideal way of increasing the retirement savings amount.  For example, if you get a hike of 5% on your basic salary, then it is not essential that you need to contribute all the 5% towards the retirement savings; instead, you can make 2-3% towards retirement contribution.  Although the concept of saving more is difficult and unpleasing, however, the benefits you enjoy out of your savings are abundant.  This approach will definitely guarantee you to save more to lead the happiest retirement life.

Pay Yourself First

Most people often think that the percentage of contribution towards retirement savings should be done after you are met with the other expenses and your family budget. However, it should be on the contrary!

Paying yourself means that you need to allocate funds for the retirement savings first before you think about the other expenses. Though it is a small number, say, for example, you are contributing 50$ per month, and you are doing for a period of 30 years. This will account to around 40,000 dollars by the time of your retirement. In addition, you will have the interest rate added, so your final savings could be around 85,000$, which is really good money to make your retirement life more cherishable.

Set Up An Automated Budget For Your Retirement Savings

Automating the deposits towards retirement savings is one of the simplest and easiest ways to do it efficiently. Once you have determined, how much you can contribute to your retirement savings, you can set automated payment so you will not skip making the contribution. One of the major advantages of automated savings is, the amount you have budgeted for the 401K will directly get deposited towards the account, so you will not have the chance of spending the money out of impulse buying or unnecessary expenses.

Take Advantage Of The Catch-Up Contributions If You Are Already Through Your Retirement Age

Once you turn age 50, you become eligible to make additional catch up contributions to an amount of 6,000 $ towards your retirement plans. By doing so, you can shield up to 24,000 from tax exemptions. Retirement savings have a huge impact on tax savings. This program perhaps provides people with an opportunity to make up for their past savings sin. Benefits are profound with catch up contributions

  • You will have more money for retirement
  • Considerable tax savings
  • Savings are done automatically

Bottom Line

Knowing how much you will need and how much you will spend will not only create a process of savings, rather paves the way for investment.  Unless you set benchmarks, you cannot pursue your retirement goals. So, use all these strategies right now and make your retirement years more peaceful and happy.

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