Credit card providers are in the business of making money. They provide us with so called generous offers such as minimum monthly repayments on our balance. Whilst sometimes helpful, these ploys can land us in a cycle of spiraling debt.

If used correctly, credit cards can reward us with a supply of free credit without incurring any interest charges. As long as we repay our credit card balance in full, we can avoid interest charges all together. However, this type of controlled spending on credit cards is in the minority. Most credit card holders choose to pay, or cannot afford to pay, more than the minimum monthly repayment.

Even those who use their cards wisely can get into trouble quickly. All it takes is a large unexpected expense such as car repairs or household maintenance to get you into trouble. If you are unable to clear this large debt within a month or two you will start to pay interest on this amount. The longer it sits there the more the interest charges will accumulate.

In recent years we have seen credit card debt spiral out of control. Many people are living beyond their means and rarely if ever clearing their credit card debt. The interest charges on this type of debt are very high.

This cycle of debt can be difficult to get out of. Firstly, you need to be aware of just how much your debt is costing you. You then need to make a decision to increase your payments as much as possible whilst cutting back on spending.

Other things you can do to help ease the situation is to look at transferring your existing debt to a low rate credit card. Another thing to consider is transferring your balance to a good balance transfer credit card. These options may give you a little time to clear some of the debt whilst reducing the amount of interest you will be paying back.

Whilst paying the minimum monthly repayment only can seem helpful in the short term, we need to be aware that it can be very costly in the long term. Even if you’re unable to clear balance each month, paying as much as you can will ensure that you avoid certain debt.

The following lists the many extra charges which may apply to our credit cards. It is wise to make yourself aware of these charges, and whether or not they apply to your current credit card and if so, the penalties which will apply.

• Annual Fee – The annual fee for credit cards varies widely from $0 up to $400. If you do pay an annual fee, it is likely that it is covering other items such as travel insurance, higher rewards and other benefits. If you are paying an annual fee you should make sure that what you are receiving in return is worthwhile.
• Late Payment Fee – Many of us have been slugged with this fee at least once or twice. If you fail to keep track of your due date and miss a payment, even by 1 day, you will pay. This extra charge can be avoided by ensuring that your payment is received on time each and every month.
• Exceeding your Credit Limit – Another charge which can apply is if you go over your credit limit. This charge can be avoided by keeping track of your monthly credit card purchases.
• Balance Transfer Charges – If you transfer your balance to another credit card you may be charged this extra charge. Be sure to take this into account when considering a balance transfer.
• Additional / Lost or Damaged Cards – Many credit cards have a fee for an additional card holder. This is most likely to be a fee which will be charged annually. Also, lost or damaged credit cards may also incur an extra charge.
• Low Usage Charge – Some higher end reward credit cards can impose an extra charge if you spend less than a certain amount per annum.
• Cash Advances – Many credit cards have much higher rates for cash advances. Cash Advances should be avoided unless absolutely necessary.
• Using your Credit Card Overseas – Some credit cards can attact an extra charge for making purchases abroad. If you’re planning on travelling, make sure you look into this to see if this applies to your credit card.

Be sure to read the fine print of your credit card agreement. This way you will be aware of all the situations which you many attract extra fees and charges and avoid them.

Now is a great time to check out the many tempting offers available. Even with all the recent interest rate cuts, we still have not seen the equivalent in credit card interest rate cuts. So why keep paying high interest rates on your credit card balance, when you can consolidate your debts and get a very competitive rate.

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A GE Money Debt Consolidation Loan lets you roll your debts into a single easy-to-manage loan. We will even assist you to pay out your existing debts, so you have just one loan with one fixed repayment each month. What’s more, by setting a loan term that suits your budget, you could actually reduce the amount you spend on repayments each month and by the end of the term you choose, the debt will be gone.

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When you take out a cash advance from your credit card, you are simply borrowing against your credit card balance. The amount you can take out with a cash advance is usually determined as a percentage of your overall credit limit.

If you’re stuck and need cash quickly, your credit card can save the day. However, you should be aware of the downside of using cash advances in this way.

Things to be aware of when using credit card cash advances:

• Interest Free Period – The normal interest free periods that you are offered on your purchases, DO NOT apply to cash advances. You will start paying interest on this amount from the day you withdraw it.
• Interest Rate – The interest rate you will pay on a cash advance is in most cases substantially higher than your standard interest rate. In some cases, it is 8 to 10 percent higher. The most common interest rate for a cash advance is around 20 percent. This means, if you were to take a cash advance of $1,000, the interest you would pay is $200 per year.

Whilst credit card cash advances can be convenient, we should use them only in an emergency and not make a habit of sourcing cash in this way.

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However, there are a few very important reasons why we should pay careful attention to our credit card statement as soon as it arrives.

• Interest Rate – Our credit card statement shows us our current interest rate. Many of us just spend on our credit cards without giving a second thought about the interest rate we are paying. Next time your statement arrives, check out your current interest rate. If it seems high, maybe it’s time to start searching for a credit card with a competitive interest rate.
• Current Balance – We often spend on our credit cards through the month without ever checking our balance. We can often be running up huge debts without even realising. Our credit card statement is a reminder of how we are spending. By being aware of our spending, we can make decsions to cut back on further spending if necessary.
• Fees & Charges – By checking our statement we can identify any extra fees and charges. If you have set up an automatic payment to pay your minimum balance then you should keep track of your balance. A rise in your usual balance can mean that this automatic payment may not cover your minimum payment. This could lead to extra fees and charges. You also need to be aware of any late payment fees. Sometimes public holidays can delay our credit card payments. You may need to set up your payment 1-2 days earlier to be sure you’re not hit with a late payment fee.
• Credit Card Fraud – Without checking your statement you have no way to know if you’re credit card has been compromised. Many people believe that credit card fraud involves huge amounts of money and that you would certainly know about it. However, many times criminals take smaller amounts which are less noticeable over a period of time.

Checking your credit card statement only takes a few minutes every month. Checking your statement helps to evaluate your spending habits and modify your spending if necessary, check for credit card fraud, review your current interest rate and check for extra fees and charges. Next time your credit card statement arrives, I’m sure you’ll be more willing, if not interested in opening it.

Have you ever been at the checkout using your credit card and the operator informs you that your credit card has been declined. This can be an alarming moment. Have I reached my credit limit? Has my credit card been compromised?

If you have cash or another credit card you can complete your transaction with no further hassles and set about finding the reason why your credit card was declined.

Imagine that you are travelling overseas and this happens. Having a backup credit card can save a lot of headaches.

Most of us use our credit cards for just about every purchase we make both online and in stores. If you own only a single credit card this can cause immediate problems and hassles. If you need a replacement credit card, this can sometimes take up to a week. During this period you need to find other ways to fund your purchases.

We are all so used to the convenience that credit cards bring to our lives, that without them we would find it quite difficult. Many of us use our credit cards wisely making use of the many reward programs.

If you can pay your balance off in full each and every month, then there is no reason why a second credit card would not be a wise choice. For more advantagses of owning more than one credit card, check out our earlier article, Multiple Credit Cards – The advantages and disadvantages.

This should be a question we ask ourselves when making a purchase. Many people like to keep a supply of cash for making small purchases such as a cup of coffee. However, we should be paying by cash for moreIt is often too easy to pay with your credit card and deal with the bill later. However, this approach could be getting you into further credit card debt.

You should ask yourself the following questions?

Am I nearing my credit limit? Have I cleared my balance from last month? Am I able to pay off the credit card by the due date?

If you are up to date with your credit card payments and are able to clear your debts by the due date, then there’s no reason why you should not use your credit card for purchases.

If you still have unpaid debts on your credit card and are not paying your balance off in full each month, then you are better off to pay for your purchases with cash. By continually spending on a credit card which you are unable to pay off, you will only get yourself into further trouble.

Avoid Fees & Charges by using cash instead of your credit card.

Avoid paying interest on your purchases by using cash until you clear your current credit card debt.

Whilst using your credit card is a tempting and easy way of paying at the checkout. Stop and think about the consequenses of your actions. By using cash instead of your credit card, you can save you on extra fees and charges and avoid paying high interest rates.

In these uncertain times, you should be thinking about reducing any unnecessary debt. If you can you should be paying regular amounts off any credit card debt you have. For some useful tips on how to reduce your credit card debt faster check out our earlier article.

Managing Credit Card Debt

However, if you can pay your balance in full each and every month by the due date, effectively you will have a credit card with a 0% interest rate.

This may take some discipline but it is certainly possible. Avoid overspending on your credit card and pay your full balance every month and you will be getting all the great benefits of owning a credit card without any of the pitfalls.
Choose a credit card with a low annual fee and you will be sure to reduce your credit card fees even further.