Nicon Debt Management » credit cards

New measures in place for credit card users

admin — Tue, 20 Apr 2010 13:42:52 +0000

New proposals have been brought in to try and provide greater protection and flexibility to credit card users in the UK, according to recent reports.

The new measures form a combination of the proposals that were put forward by the government and proposals that were put forward by lenders. The government had put forward a range of proposals originally, but the credit card industry defended some of its methods with a lengthy report to respond to those proposals.

Whilst the package of measures does not go quite as far as some industry officials may have hoped they do provide some additional protection and flexibility for credit card users.

There had been talk of the minimum repayments being increased for credit cardholders but there was concern that consumers would struggle to manage, especially if they had more than one credit card.

However, lenders will have to charge new account holders a minimum of 1 percent of the amount spent, plus enough to cover any fees, interest, and charges.

The Consumer Minister, Kevin Brennan, stated: “In our consultation it was made quite clear by consumers that they might not be able to manage their current debts if they had to pay off more each month. People with several cards would have had less flexibility to deal with their debts.”

For this reason existing cardholders with balances on their cards will continue to make the minimum repayment requested by their individual lenders.

A number of measures have been put into place as part of the proposals, which are expected to come into play at the start of next year.

This includes a ban on increasing credit limits for those with financial problems, a sixty day period for cardholders to reject any increase on their existing debts, and the opportunity for cardholders to opt out of interest rate increases.

Those that want to reject increases will have to close their accounts, but will be given reasonable time to clear the balance by their lender.

New measures in place for credit card users is a post from: Nicon Debt Management

How To Avoid Debt While Using Credit Cards

admin — Tue, 27 May 2008 11:30:32 +0000

Credit cards are responsible for causing countless consumers an immeasurable amount of debt. It is believed that the average debt incurred by American families can be as high as $8,400 but is usually much higher. Credit cards are a useful tool for creating ease and convenience in a world obsessed with material and image. With 40% of households spending more then they earn, credit cards are deemed as a necessity in order to keep up appearances.

The marketing strategy of major credit cards centers on the idea that ‘You made the money, why not reap the benefits right away? This ploy is so successful that credit card holders are now using plastic in places that were once dominated by cash transactions. This translates to nearly 24% of all transactions being made by credit cards, a staggering leap from years prior when consumers used cash to purchase their fast food meals.

With a rise in holders using credit cards and the use of them in places that were once dominated by cash, more and more Americans are facing mounting credit card debt. Credit card debt is easy to incur and not so easy to remedy, however, as credit card holders are beginning to see the damages that they have done to their own financial future they are becoming all to willing to work towards the breaking even point. So, how can one avoid credit card debt?

Credit card debt is becoming the norm in today’s society, but this does not have to be the case. There are several ways to avoid or reduce the debt gathered from credit cards and all it takes is time and patience, and a willingness to give up a few luxuries.

Credit cards are mainly used to keep up an appearance of opulence and material wealth. In today’s’ world of high technology and high fashion it is important to maintain the air of a well to do lifestyle. Living beyond means is a dangerous lifestyle that leads to debt and financial ruins if it is not dealt with in a timely and efficient manner.

The main point to remember about credit cards is this, it is not a substitute for money and any charge made will have to be repaid. Credit cards should, in ideal cases, be used only in emergencies. The car needs a new transmission or the dog needs an operation are examples of an emergency, a new handbag or football tickets are not. If something must be charged on the credit card make sure that there is enough in the bank account to cover the expense and then repay the total amount on the statement when it comes at the end of the month. This way late fees and higher interest rates can be avoided. Besides, timely payments made in full or nearly in full each month will look fantastic on credit reports which will help in a manner of areas such as car buying or home refinancing not to mention it will stave off debt.

A budget is a time tested method of saving money but can also be used to create a plan that will deal with overwhelming credit card debt. Decide what necessities are required like rent, utilities, car notes, groceries, and whatever other requirements are needed on a monthly basis and set aside that money either in a savings account or somewhere that will be safe for large amounts of cash. Decide how much debt is owed and decide how much you can pay towards that debt each month and stick to it. A popular way to keep up with these payments is by creating a calendar or a spreadsheet which will show the amount of debt and how much it will decrease with each payment.

Of course, a sure fire way to avoid credit card debt is to meet each monthly payment and charge only what you must and only what you can afford. Many credit card holders are now using the card for cash advances, vacation funds, and general purchases like fast food meals and small toiletry items.

While credit cards can be used for good by those that are responsible there are just too many people finding themselves deep in debt. Credit card debt can have a negative effect that ripples far into the future effecting job opportunities and even retirement plans. By regaining control of spending habits and becoming diligent and serious in reducing the amount owned even the most financially irresponsible individual can gain a new lease on life and avoid further credit card debt.

Recent additions:

How To Avoid Debt While Using Credit Cards is a post from: Nicon Debt Management

Financial Experts Offer Credit and Debt Advice

admin — Tue, 27 May 2008 11:25:10 +0000

Financial experts are offering consumers some sage words of wisdom for 2008. One key message: Put some thought into the next credit card offer you agree to accept.

Experts in the field note that selecting a credit card can be nearly as crucial as choosing the right mortgage. In order to get the most out of your credit card, you need one that fits well into your financial lifestyle.

If, for instance, you’re good about paying off your debt each month, you don’t have to be too concerned about interest rates. Instead, you’re more apt to be interested in the special bonus features that come with the card and how long the grace period is.

If, on the other hand, you tend to carry a balance, you’ll be less concerned with grace periods and more interested in interest rates. You may want to shop around in order to locate a card which offers a 0 percent introductory rate. At the end of the introductory period, you may be able to transfer your balance to another card offering a 0 percent rate—or at least a relatively low rate. Some cards even enable you to keep a low interest rate until your balance is paid off.

However, if you do carry balances of debt on your cards, you may want to make a vow to eliminate them or at least reduce them. Having high balances of debt on credit cards is like throwing money down a deep hole and it could rob you of a secure financial future. While saving money for your retirement is important, you might want to also promise yourself that you will reduce your debt in order to improve your personal financial picture.

As you shop for a credit card, keep in mind, too, that it is critically important that you pay your bills on time. Otherwise, you may be hit with a late fee that can run as high as $39. In addition, failing to pay your bills on time can prove disastrous for your credit rating, making it difficult for you to take advantage of the best credit deals.

Financial Experts Offer Credit and Debt Advice is a post from: Nicon Debt Management