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.

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.

The new personal loan offer from GE Money is sure to save you money on interest charges.

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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.

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.

There are many advantages to owning a credit card including online payments, no need to carry cash around and having credit available for large purchases. However, there are also many pitfalls which you need to be aware of.

Before applying, or when you receive your credit card, you need to thoroughly read thru your contact and the terms and conditions.

Make yourself aware of the penalties and additional fees for things such as late payments and exceeding your credit limit.

Being aware of the consequences can help you to stay in control and avoid getting into the credit card debt cycle.

The most important things are to:

• be aware of your credit limit
• pay your bills on or before the due date
• understand the interest free period
• pay at least the minimum monthly balance each month

Choose an appropriate credit card and take into account interest rate and annual fees and balance transfer rates.

By understanding the penalties of your credit card and the terms and conditions you can use your credit card to its full advantage without falling victim to credit card debt. For further information check out our credit card tips and learn how to manage your credit cards wisely.

Today’s market has seen Credit Card providers offering all sorts of incentives to apply for their Credit Card. This competition for your business has provided us with many great deals, but can also be overwhelming with all the different cards available.

There are several important factors to consider when deciding which Credit Card is best for you:

Age
• Credit Ranking
• Spending needs and habits
• Income
• Special Interests

Before you choose a credit card, you need to ask yourself a few important questions about how you will use the card. By understanding some important factors, you should be able to find the right card to suit your needs. By selecting the right card, you can save hundreds, and maybe even thousands, of dollars.

The main things to consider are: What is the interest rate? Does it have an Annual Fee and if so, how much? Does it offer interest free days on purchases? Does it have a different rate for balance transfers? How long does the reduced balance transfer rate apply for? Are there any reward programs with the Credit Card?

Interest Rate: Probably, the most important aspect when choosing a credit card is to determine if you plan to pay the card off each month before any interest is charged, or if you use the credit card as a source of credit and pay it off gradually.

If you are the latter, a credit card which offers a low interest rate is best for you. If your monthly balance is $2000, and are paying 18% compared with a card that charges only 6.99%, this is equivalent to a saving of $220 per year! Many companies now offer Credit Cards with interest rates as low as 5.99%, whilst some are as high as 19%. There are some great offers currently for

low interest rate Credit Cards.

However, if you are a person who pays off the balance before the due date, then the number of interest free days if a more important factor to consider than the interest rate.

Annual Fee: The next important factor to consider is the Annual Fee. There are Credit Cards now which offer no annual fee at all, whilst some can be hundreds of dollars. Some providers choose to waive the annual fee for the first year as an enticement to new customers. But be careful, as quite often, cards with no annual fee can sometimes have a higher interest rate.

Balance Transfers: In a bid to try and get your business many providers now offer great deals for balance transfers. Some offer 0% interest on balance transfers for specified time periods. Some even offer this for the life of the balance. If you have a large credit card debt on a high interest card, you can save you hundreds of dollars in interest payments by transferring to a card offering 0% or even low interest balance transfers.

Rewards: If you do most of your spending using your credit card and regularly pay it off each month then you should consider the benefits from a credit card offering a rewards program. Often rewards credit cards have higher interest rates or annual fees than other types of credit cards. However, interest rates are not important so long you pay the bill each month and the rewards could well exceed the card fee. Rewards Programs offer many things including Flybuys, frequent flyer and extra points can be earned by paying for everyday items including groceries, bills and even your rent.
One last important thing to consider is Late payment penalties. When evaluating which credit card is right for you, it is important to consider late payment penalties. If a late fee is charged, what is it? Some providers can more than double your interest charges if you pay late even by one day. It is definitely something to take into consideration.