Managing Credit Card Use

more detail information about credit management at our affiliated site: SayGoodCredit.com

First Thing, Learn About Credit Card Debt

• Credit card debt is the fasted growing debt among American households.
• Understand these basic facts:
  
  
  1. According to the American Bankruptcy Institute, nearly 85-90% of bankruptcy filings were due in part to excessive credit card debt.
     
  2. Households receive on average 20 credit card offers per year.
     
  3. Credit card companies make money when you become a "revolving" credit card holder — which means the holder maintains a balance from month-to-month.
     
  4. Credit card companies make money when you pay only the minimum required amount — which minimum amount is interest plus a small percentage (around 0.5%) of the balance outstanding.
     
  5. Credit card companies make money when you accept and then spend up to the credit limit offered.
     
     
• With this in mind, the card company's business strategy is to get you to:
1. accept their card using pre-approval offers;
2. charge out the maximum credit limit awarded;
3. pay interest-only payments each month;
4. and maintain a credit balance from month-to-month.
   
   Now consider this. If you paid just the minimum payment on a $4,800 credit balance at the average annual rate of 17% plus 0.5% for principal reduction, it would take you over 21 years to pay it off your balance (considering that you did not have any other charges).
   
   That means paying $13,376.35 in interest charges alone, for a total repayment of $18,176.35 for the privilege of charging $4,800!
   
   No wonder that credit cards are one of the lender's most profitable product lines.

Manage It

• How you manage your credit cards is a key measurement that credit reporting agencies use when quantifying the credit rating of an applicant.
  
  
• Card holders who pay their card balances on time, at the required amount, will receive a favorable credit rating that translates into lower interest rates on mortgages and consumer loans.
  
  
• Card holders who are late in paying their credit cards payments, often not paying the required amount as due, will receive a less-than-favorable credit rating that translates into rejected applications or higher interest rates for mortgages and consumer loans.
  
  
• We have two credit card management programs for review from our SayPlanning.com network on credit management:

  visit SayGoodCredit.com for:

  Program A:
  for card holders who control their credit card use and payoff credit card balances in full each month.
  
  Includes a FREE download on maximizing credit card rebates.

  Program B:
  for card holders who carry credit card debt and pay only the minimum balance each month.