These days credit card or plastic money is very popular and used extensively. It is indeed of great utility if used in a calculative manner, but it is also the main cause that leads many people trap into credit card debt. Let see how it happen to most of people.
Many of retailers are implementing easy payment scheme for their products or services, with some fraction amount of money for monthly installed, you can buy thousand of dollars of items or go for a luxury vacation which you can't afford to buy if one lump sum of money is needed, these monthly installment are automatically charge to your credit card. Every month, you just pay the minimum amount of your credit card balance and you continue spend on your credit card. Let use a case study to review on how a person credit card debt can grow and how it will take to get rid of it.
Case Study
Scott earn $2,500 a month, he is holding a credit card with interest rates of 12%. All his credit cards allow him to pay a minimum of 3% or $10 which ever is higher. His credit card limit is $15,000.
Scott's credit card balance at current month is $4,550 ($3000 in principle and $1550 interest). He tends to pay the minimum of his credit card balance and each month he will averagely swipe about $500 on petrol and other utilities.
Let see how's Scott's credit card balance grow:
Month 1
Credit card balance = $4,550.00
Minimum Payment = $136.50
New Credit Card Spending = $500.00
New Balance = ($4,550 - $136.50 + $500.00) = $4913.50
Month 10
Credit card balance = $7976.02
Minimum Payment = $239.28
New Credit Card Spending = $500.00
New Balance = ($7976.02 - $239.28 + $500.00) = $8236.74
Month 20
Credit card balance = $11109.85
Minimum Payment = $333.29
New Credit Card Spending = $500.00
New Balance = $11109.85 - $333.29 + $500.00) = $11276.55
Month 30
Credit card balance = $13662.60
Minimum Payment = $409.88
New Credit Card Spending = $500.00
New Balance = $13662.60 - $409.88 + $500.00) = $13752.72
Month 36
Credit card balance = $14961.02
Minimum Payment = $448.83
New Credit Card Spending = $500.00
New Balance = $14961.02 - $448.83 + $500.00) = $15012.19
If Scott continues his practice, his will hit his credit card limit after 36 month compare to current month.
Let say Scott stop using his card with the balance at month 36 of $15012.19 and continue paying the monthly minimum. It will take him 228 months which equal to 19 years to just to pay off his $15012.19 debt.
The above example is just a simple case study to show you how your credit card debt may piles up so quickly without you even aware of it. You need a lot of time and spend a lot of money on interest in order to get rid of this debt. In real life, many people have more than one card and other loans to support; hence situation may even worse.
How to get rid of credit card faster & affordable?
If you are already at this situation, the first thing you need to do is to change your behavior of paying the minimum only. Paying more each month will definitely pay off your debt faster but the question is you may say that you can't afford to pay more than the minimum. In actually fact, the easiest, faster and affordable way to get rid of your credit card debt is maintain your current minimum monthly payment.
For example, we use back Scott's case. If he affords to pay the minimum payment of his $15012.19 debt, which is $448.83, this is his affordable payment. If he continues to pay $448.83 every month instead of the minimum of his credit card balance, he will need only 43 months to pay off his debt as compare to 228 months. This mean, Scott will have his debt free life in less than 4 years instead of 19 years.
In Summary
Credit card will remain important in many people life, use it intelligently for your convenient, but you much carefully manage your credit card balance, don't let this plastic money drag you into financial crisis; the ideal way is pay the balance in full each month.
Saturday, May 30, 2009
Wednesday, May 20, 2009
Do-It-Yourself Financial Planning.
The fight for financial freedom isn’t fair. No matter what kind of spin you try to put on it, the path to comfortable living seems either impossible or too long to attempt. Many people these days are spending copious amounts of money going to see professional financial planners for advice on how to get their money situation under control. But let’s be honest, while a financial planner can show you how to prioritize your spending and how to go about consolidating your debt, surely there must be a way to plan your finances that doesn’t cost you visits to a professional? This article has been written to open some people’s eyes to the fact that it is possible to properly plan your finances from the comfort of your own home.
The main aim when planning your finances is to make everything as simple as possible. There is nothing worse than sinking so far into depression that you can’t see a way out. Whether you are in debt and looking to get out of it of if you are simply looking for a way to keep a little more spending money aside each month, the simpler you make your planning the better the result you will get. From the beginning, you need to be realistic. I’ll start with the example of a single income situation, firstly you need to calculate what your net pay is per month. If you’re self employed or not on a regular pay, always calculate the worst-case-scenario, what is the lowest you might get paid. Then go through your monthly bills and write down the ones that are a fixed amount. Do the same for all other bills but use the worst-case-scenario again, what is your estimation of the most that those bills might be. Add everything up and subtract it from your net income total.
Next onto the incidental expenses you might run into on a monthly basis. These might include petrol, car upkeep, public transport fares, food etc. make a list of all the little expenses you might need money for in a month. Even things that you’re not sure you might need to buy. Don’t add general spending money to the list, be specific. Always add more to the totals if you’re not sure as you can fine tune it later. Again, subtract your total from the money left over from your bills. Don’t worry if you’ve gone into the negative figures here, we can fix it.
Once you’ve got your expenses total in front of you, obviously any money that is left over is your profit for the month. In the event that you have nothing left or have gone into the minus figures, the next step is to minimize your expenses. Pretty straight forward, huh? Any incidental expenses that you might not need, remove them. And any expenses you know you will have, like food and petrol for example, really get down to the lowest spend on them. How much do you really need to spend on them? Your aim should be to save at least $50 per month after spending money. All that extra builds up and gives you a nice petty cash at the end of a few months!
If you are in a multiple-income situation, the same process applies. You need to start building up that petty cash tin. There will always be unexpected expenses, everyone knows that. In truth, the basis of comfortable living is really the knowledge that you can afford to pay for something unexpected.
To finish, all of this can be done on a piece of paper if you want to invest a little time, or you can lay it all out on an Excel spreadsheet. The way that saves the most time is to use a Financial Planning software program, you enter the numbers and the program gives you an automatic monthly planner. Whatever way you choose to go, always remember to keep it as simple as possible. When you’re following a plan, the pressure on you will decrease. What more could there be to comfortable living?
The main aim when planning your finances is to make everything as simple as possible. There is nothing worse than sinking so far into depression that you can’t see a way out. Whether you are in debt and looking to get out of it of if you are simply looking for a way to keep a little more spending money aside each month, the simpler you make your planning the better the result you will get. From the beginning, you need to be realistic. I’ll start with the example of a single income situation, firstly you need to calculate what your net pay is per month. If you’re self employed or not on a regular pay, always calculate the worst-case-scenario, what is the lowest you might get paid. Then go through your monthly bills and write down the ones that are a fixed amount. Do the same for all other bills but use the worst-case-scenario again, what is your estimation of the most that those bills might be. Add everything up and subtract it from your net income total.
Next onto the incidental expenses you might run into on a monthly basis. These might include petrol, car upkeep, public transport fares, food etc. make a list of all the little expenses you might need money for in a month. Even things that you’re not sure you might need to buy. Don’t add general spending money to the list, be specific. Always add more to the totals if you’re not sure as you can fine tune it later. Again, subtract your total from the money left over from your bills. Don’t worry if you’ve gone into the negative figures here, we can fix it.
Once you’ve got your expenses total in front of you, obviously any money that is left over is your profit for the month. In the event that you have nothing left or have gone into the minus figures, the next step is to minimize your expenses. Pretty straight forward, huh? Any incidental expenses that you might not need, remove them. And any expenses you know you will have, like food and petrol for example, really get down to the lowest spend on them. How much do you really need to spend on them? Your aim should be to save at least $50 per month after spending money. All that extra builds up and gives you a nice petty cash at the end of a few months!
If you are in a multiple-income situation, the same process applies. You need to start building up that petty cash tin. There will always be unexpected expenses, everyone knows that. In truth, the basis of comfortable living is really the knowledge that you can afford to pay for something unexpected.
To finish, all of this can be done on a piece of paper if you want to invest a little time, or you can lay it all out on an Excel spreadsheet. The way that saves the most time is to use a Financial Planning software program, you enter the numbers and the program gives you an automatic monthly planner. Whatever way you choose to go, always remember to keep it as simple as possible. When you’re following a plan, the pressure on you will decrease. What more could there be to comfortable living?
Sunday, May 10, 2009
Consumer Confidence In Banking Takes A Hit
A recent survey has shown that consumers' confidence in banks has taken a real hit, with one of the major causes of this decreasing confidence thought to be the recent situation with Northern Rock. According to the results of the survey close to 25% of Brits state that they do not trust lenders, and less than 50% thought that high street banks could be trusted. The turmoil and chaos that erupted after Northern Rock was found to have taken a loan from the Bank of England, fuelling rumors of a near collapse and resulting in many of the bank's 1.5 million savers withdrawing billions of pounds worth of savings.
As a result of this situation the Bank of England has stepped up assurance over the guarantee of savings of Northern Rock customers, as well as the savings of customers with other banks that fall into a similar situation. However, it seems that these assurances have done nothing for consumer confidence in banking, with over fifty percent stating that they no longer trust high street banks.
The survey revealed that of the 2484 people interviewed only 46% now trust high street banks. Building societies fared a little better, with 48% expressing confidence in building societies. Online banking has also taken a knock, with experts stating that reduced access to online bank accounts by Northern Rock customers also affecting this area of banking. Only 25% of consumers now trust online banking according to the survey results.
One industry professional stated that consumer confidence in banking and finance was already fairly low, and added that the recent turmoil with Northern Rock has contributed to this lack of confidence. It is not just the banking industry that has taken a knock, however, according to professionals. Lenders across the whole financial sector have been affected by lower levels of consumer confidence. It is thought that this could be as the result of problems throughout the whole of the financial sector, which has stemmed from the credit crunch sparked in the sub-prime sector in the Unites States, which has resulted in global repercussions.
As a result of this situation the Bank of England has stepped up assurance over the guarantee of savings of Northern Rock customers, as well as the savings of customers with other banks that fall into a similar situation. However, it seems that these assurances have done nothing for consumer confidence in banking, with over fifty percent stating that they no longer trust high street banks.
The survey revealed that of the 2484 people interviewed only 46% now trust high street banks. Building societies fared a little better, with 48% expressing confidence in building societies. Online banking has also taken a knock, with experts stating that reduced access to online bank accounts by Northern Rock customers also affecting this area of banking. Only 25% of consumers now trust online banking according to the survey results.
One industry professional stated that consumer confidence in banking and finance was already fairly low, and added that the recent turmoil with Northern Rock has contributed to this lack of confidence. It is not just the banking industry that has taken a knock, however, according to professionals. Lenders across the whole financial sector have been affected by lower levels of consumer confidence. It is thought that this could be as the result of problems throughout the whole of the financial sector, which has stemmed from the credit crunch sparked in the sub-prime sector in the Unites States, which has resulted in global repercussions.
Tuesday, May 5, 2009
Bad Credit and Unsecured Credit Cards
Bad Credit and Unsecured Credit Cards: Two terms that don’t often go together.
If you are a consumer that is suffering from a poor credit history you are likely to be aware of how hard it is to get an unsecured credit card. A good majority of consumers are enjoying the conveniences of being able to shop with a credit card carrying and unsecured credit limit. While it is extremely nice to be able to apply for and actually qualify for a credit card you do not have to put money down to get you will quickly see that an unsecured credit card is usually the type of credit card that someone with bad credit is not very likely to obtain.
Since an unsecured credit card isn’t very likely if you are having issues with your credit the best plan of action is to look into a secured credit card for the time being. There are many different types of secured credit cards out on the market for people with bad credit all with different options so be sure to shop around so do some comparison shopping so you locate the card that is going to best meet your needs.
Now while there is no rule set in stone about the exact time that you would be able to apply for and actually qualify for a credit card with an unsecured limit there are some factors that will determine what types of cards that you will qualify for. For instance your debit to credit ratio plays a big factor in whether or not you could get an unsecured credit card.
So while it is not unheard of for someone with a bad credit history to obtain an unsecured credit card the route that is easiest for most consumers is to obtain a secured credit card build up their credit and then apply for the unsecured credit card if they so choose.
If you are a consumer that is suffering from a poor credit history you are likely to be aware of how hard it is to get an unsecured credit card. A good majority of consumers are enjoying the conveniences of being able to shop with a credit card carrying and unsecured credit limit. While it is extremely nice to be able to apply for and actually qualify for a credit card you do not have to put money down to get you will quickly see that an unsecured credit card is usually the type of credit card that someone with bad credit is not very likely to obtain.
Since an unsecured credit card isn’t very likely if you are having issues with your credit the best plan of action is to look into a secured credit card for the time being. There are many different types of secured credit cards out on the market for people with bad credit all with different options so be sure to shop around so do some comparison shopping so you locate the card that is going to best meet your needs.
Now while there is no rule set in stone about the exact time that you would be able to apply for and actually qualify for a credit card with an unsecured limit there are some factors that will determine what types of cards that you will qualify for. For instance your debit to credit ratio plays a big factor in whether or not you could get an unsecured credit card.
So while it is not unheard of for someone with a bad credit history to obtain an unsecured credit card the route that is easiest for most consumers is to obtain a secured credit card build up their credit and then apply for the unsecured credit card if they so choose.
Saturday, February 28, 2009
Dollar Saving Tips on your Next Car Rental
One of the biggest vacation expenses is a rental car. Below are a few suggestions on how you can save money on your next rental car.
If you are flying to your vacation destination and have booked the flight either online or through a travel agency, you can more than likely get a discount on your rental car if you book it as part of the package. The majority of car rental companies collaborate with at least one airline to provide frequent flyer miles or other types of rewards when you rent a car. In addition, many airlines offer incentive and bonus programs where you get extra miles or extra credit, so be sure to inquire about these programs when making your reservation.
When choosing your rental car, a compact or subcompact economy car is usually less expensive than a full size sedan or minivan. Therefore, selecting an economy will not only be less expensive, but you will also get better gas mileage thus saving on gas expenses.
If you need a large sedan, SUV or minivan for the comfort of your family, it is well worth your time to shop around. There is usually a high demand for these types of vehicles and therefore a larger price tag. Travel related web sites are a good place to start your research to familiarize yourself with the average price in your vacation area.
The duration of the rental will have an influence on the cost as well. Weekly rentals are usually far less costly than a daily rate spread over a week. Therefore, if your vacation plans are for a week or more, be sure to inquire about special rates. If you are taking a weekend vacation, many companies offer weekend specials on certain makes and models of their cars.
In addition, a number of national car companies and local smaller companies rent their used cars for much less than a new car from a rental agency. In most instances, these cars are only a few years old and provide the same protection as a new car.
For the business traveler, joining a frequent renter club, or using the same rental car company each time, is a great way to get some special coupons and some very good deals that you could use for the family vacation.
Most people purchase car insurance from the rental agency. Usually, this is not necessary. If you have purchased your rental car on your credit car, you may already have coverage as part of your credit card plan. In addition, as an automobile owner, you car insurance may provide coverage for rental cars. Therefore, it is necessary for you to check your credit card plan and automobile insurance, if you are covered, then purchasing insurance from the rental car agency is not necessary.
If you are flying to your vacation destination and have booked the flight either online or through a travel agency, you can more than likely get a discount on your rental car if you book it as part of the package. The majority of car rental companies collaborate with at least one airline to provide frequent flyer miles or other types of rewards when you rent a car. In addition, many airlines offer incentive and bonus programs where you get extra miles or extra credit, so be sure to inquire about these programs when making your reservation.
When choosing your rental car, a compact or subcompact economy car is usually less expensive than a full size sedan or minivan. Therefore, selecting an economy will not only be less expensive, but you will also get better gas mileage thus saving on gas expenses.
If you need a large sedan, SUV or minivan for the comfort of your family, it is well worth your time to shop around. There is usually a high demand for these types of vehicles and therefore a larger price tag. Travel related web sites are a good place to start your research to familiarize yourself with the average price in your vacation area.
The duration of the rental will have an influence on the cost as well. Weekly rentals are usually far less costly than a daily rate spread over a week. Therefore, if your vacation plans are for a week or more, be sure to inquire about special rates. If you are taking a weekend vacation, many companies offer weekend specials on certain makes and models of their cars.
In addition, a number of national car companies and local smaller companies rent their used cars for much less than a new car from a rental agency. In most instances, these cars are only a few years old and provide the same protection as a new car.
For the business traveler, joining a frequent renter club, or using the same rental car company each time, is a great way to get some special coupons and some very good deals that you could use for the family vacation.
Most people purchase car insurance from the rental agency. Usually, this is not necessary. If you have purchased your rental car on your credit car, you may already have coverage as part of your credit card plan. In addition, as an automobile owner, you car insurance may provide coverage for rental cars. Therefore, it is necessary for you to check your credit card plan and automobile insurance, if you are covered, then purchasing insurance from the rental car agency is not necessary.
Friday, February 20, 2009
Seven Tips To Get The Best Discount Car Rental
Contrary to popular belief, car rental rates are not set in stone. Often, discounts can be found by doing your research, and simply asking for them. Rental companies are eager to rent out cars they are not using. Cars sitting on a lot are not making them any money.
Here are some tips to get best discount car rental rates
1. Do your research. Car-rental research can be done online, on the phone, or by reading newspapers magazines or even your mail. It is important to compare the rates from various car-rental companies. Most car-rental companies web sites, where they will show you rates for various locations. Also check the travel comparison web sites to compare companies against each other.
You can also get on the horn to the car-rental companies, but this takes more time. Check the business and travel sections of your local newspaper and check the inserts in your credit card bills. Often, you will find discount coupons in those places.
2. Book early. If you are planning your trip several months in advance, check car-rental prices available at that time. If you find what you consider fair, go ahead and lock it in. You can change it later, if you find a better rate. Many times, car-rental companies will give deep discounts to early renters.
3. Book late. As the time for your trip approaches, car rental discounts may be found as car-rental companies try to unload their excess inventory. Like I said, cars that are just sitting around aren't doing anyone any good.
4. Pick your car in town. You pay a price for the convenience of picking up your car at the airport. Ask your rental car company, about how much it would cost to pick up your car in town. Normally, free shuttles are provided from the airport to the car-rental location.
5. Get the smallest car available. Determine the number of passengers traveling with you and the amount of their luggage, then get the smallest car that you will all comfortably fit in. Ideally, the car-rental company will be out of this car and will upgrade you for free to the next higher class. You can also ask about complementary upgrades.
6. Ask about discounts. Ask your car-rental company if there are discounts for a weekly versus a daily rental, or if there are discounts for memberships such as AAA, USAA, AARP, or other organizations. If you work for a large company, ask about corporate rental rates.
7. Gas up your car before returning it. I remember when car-rental companies would charge more than three dollars a gallon to gas up your car up on return. These days, that would almost be worth it. However, car-rental companies are charging a whole lot more than that for a gallon of gas. You can save a lot of money by putting the gas in yourself on your way to return the car.
By following these tips, you can get a better rate on car rentals just about anywhere in the world. Have a great trip!
Here are some tips to get best discount car rental rates
1. Do your research. Car-rental research can be done online, on the phone, or by reading newspapers magazines or even your mail. It is important to compare the rates from various car-rental companies. Most car-rental companies web sites, where they will show you rates for various locations. Also check the travel comparison web sites to compare companies against each other.
You can also get on the horn to the car-rental companies, but this takes more time. Check the business and travel sections of your local newspaper and check the inserts in your credit card bills. Often, you will find discount coupons in those places.
2. Book early. If you are planning your trip several months in advance, check car-rental prices available at that time. If you find what you consider fair, go ahead and lock it in. You can change it later, if you find a better rate. Many times, car-rental companies will give deep discounts to early renters.
3. Book late. As the time for your trip approaches, car rental discounts may be found as car-rental companies try to unload their excess inventory. Like I said, cars that are just sitting around aren't doing anyone any good.
4. Pick your car in town. You pay a price for the convenience of picking up your car at the airport. Ask your rental car company, about how much it would cost to pick up your car in town. Normally, free shuttles are provided from the airport to the car-rental location.
5. Get the smallest car available. Determine the number of passengers traveling with you and the amount of their luggage, then get the smallest car that you will all comfortably fit in. Ideally, the car-rental company will be out of this car and will upgrade you for free to the next higher class. You can also ask about complementary upgrades.
6. Ask about discounts. Ask your car-rental company if there are discounts for a weekly versus a daily rental, or if there are discounts for memberships such as AAA, USAA, AARP, or other organizations. If you work for a large company, ask about corporate rental rates.
7. Gas up your car before returning it. I remember when car-rental companies would charge more than three dollars a gallon to gas up your car up on return. These days, that would almost be worth it. However, car-rental companies are charging a whole lot more than that for a gallon of gas. You can save a lot of money by putting the gas in yourself on your way to return the car.
By following these tips, you can get a better rate on car rentals just about anywhere in the world. Have a great trip!
Tuesday, February 10, 2009
Tips on Saving Energy Dollars in Your Home
A typical U.S. family spends more than $1,600 a year on home utility bills, yet making some simple changes around the home can save money and make heating and cooling systems more efficient, according to World Energy Solutions, a publicly traded energy services company based in St. Petersburg, Fla.
By evaluating facilities and equipment, World Energy Solutions (symbol: WEGY) helps businesses lower their utility consumption and maintenance costs and extend the life of their equipment.
"Many of the energy-saving strategies we use for our commercial customers can also be applied to the home," says Benjamin Croxton, chief executive officer of World Energy Solutions. "There are many common-sense, low-cost and no-cost ways to lower your home energy use as well as many new technologies that can be applied to your home's energy-consuming systems."
Here are some tips from the American Council for an Energy Efficient Economy on things homeowners can do to make their homes more energy efficient:
* Turn down the temperature of your water heater to the warm setting.
* Use energy-saving settings on refrigerators, dishwashers, washing machines and clothes dryers.
* Use compact fluorescent bulbs, which can save three-quarters of the electricity used by incandescents. First to be replaced should be any 60-watt to 100-watt bulbs that are used several hours a day.
* Have your heating and cooling systems serviced in the fall and spring. Duct sealing can also improve the energy efficiency and overall performance of your furnace or central air conditioner.
* Clean or replace furnace, air conditioner and heat-pump filters.
* Assess your heating and cooling systems to determine if you should replace or retrofit them to make them work more efficiently to provide the same comfort, or better, with less energy.
"If your home's central air-conditioning system is over 10 years old, a new state-of-the-art system can save you 30 percent or more of your home's air-conditioning expense," says George Walker, air-conditioning expert with World Energy Solutions.
By evaluating facilities and equipment, World Energy Solutions (symbol: WEGY) helps businesses lower their utility consumption and maintenance costs and extend the life of their equipment.
"Many of the energy-saving strategies we use for our commercial customers can also be applied to the home," says Benjamin Croxton, chief executive officer of World Energy Solutions. "There are many common-sense, low-cost and no-cost ways to lower your home energy use as well as many new technologies that can be applied to your home's energy-consuming systems."
Here are some tips from the American Council for an Energy Efficient Economy on things homeowners can do to make their homes more energy efficient:
* Turn down the temperature of your water heater to the warm setting.
* Use energy-saving settings on refrigerators, dishwashers, washing machines and clothes dryers.
* Use compact fluorescent bulbs, which can save three-quarters of the electricity used by incandescents. First to be replaced should be any 60-watt to 100-watt bulbs that are used several hours a day.
* Have your heating and cooling systems serviced in the fall and spring. Duct sealing can also improve the energy efficiency and overall performance of your furnace or central air conditioner.
* Clean or replace furnace, air conditioner and heat-pump filters.
* Assess your heating and cooling systems to determine if you should replace or retrofit them to make them work more efficiently to provide the same comfort, or better, with less energy.
"If your home's central air-conditioning system is over 10 years old, a new state-of-the-art system can save you 30 percent or more of your home's air-conditioning expense," says George Walker, air-conditioning expert with World Energy Solutions.
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