Money Card

Credit card companies are growing more aggressive than ever, trying to win as many new customers as they can. The result? Piles of credit card invitations and offers in your mailbox. But how do you choose which piece of plastic to use? TotallyMoney advises consumers to be more discerning when it comes to choosing credit cards, especially during these difficult times when debt is at an all time high. Here we round up the major considerations you should look into before selecting your next card.

Interest Rate

The first and most important thing you need to check on your credit card is that of it’s APR or annual percentage rate, which you can divide into 12 to know how much you will be charged monthly. This interest rate is a major contributor to your expenses and so the lower they are, the better for you. If possible, look for companies that offer 0 percent credit cards, which cuts down on additional interest charges for your purchases for at least a period of 3 to 6 months.

To ensure that you make an informed choice, here are some of the questions you need to ask prior to signing off on your credit application.

Will the APR be for a limited time only?

Do you need to comply with a minimum purchase requirement to keep the current interest rate?

Will the disclosed interest rate be subjected for further approval? Will it vary upon review?

These questions will help you assess whether that particular credit card gives you more value for your money.

Annual Fee

Most credit card companies waive the annual fees for first time clients as a means to attract more customers. In comparing annual fees, it is best to know the exact terms of payments. Will they be divided into 12 months, or would you be required to make an outright payment? More importantly find out how you can waive the annual fee altogether.

Rewards

One factor that differentiates one credit card from the rest can be seen on how they reward their clients. Though recent credit card regulations and economic setbacks have prompted many credit card providers to cut back on their customer rewards program, it still pays to choose one that can provide you with the best rewards that are appropriate for your lifestyle and spending habits.

Ease of Use

Lastly, choose a card that offers you the most convenience. This includes everything from making purchases as well as accessing your account, making international purchases, and coordinating with their customer support.

Many people are struggling to settle large amounts of consumer debt at the moment. For example, one credit card with a balance of $5000.00 with an interest rate of 18% paying a minimum of $200 a month will take just over 11 years to pay off, and that is with no new charges going on the card! If you are struggling with debt and are considering bankruptcy, or worse a credit relief company, you should consider hiring a debt settlement attorney.

It is amazing how many television ads there are offering debt relief help. Even more amazing is the number of these companies who are being investigated for unfair or deceptive business practices or out right fraud.

Debt Settlement Companies

The first thing a debt settlement company will need is an upfront nonrefundable fee, which is based on the debt owed. Then they will likely advise you to stop paying your bills. The reason being is to supposedly encourage your creditors to settle. Then you will be required to make monthly payments to the debt settlement company. Do you see a gap in the logic?

Each month when you give the settlement company your check, they take their monthly fee off the top, then save the rest until a large enough amount is accumulated to offer a lump sum payment to one of your creditors. If you fall behind or are unable to continue making the monthly payments to the settlement company, they will stop working with you and keep your money.

Consider a Debt Settlement Attorney

A debt settlement attorney, on the other hand, must fully disclose their fee structure as well as the debt settlement process. Their conduct is governed by various laws and court rules as well as professional and ethics codes. Attorneys are licensed by their state to practice law, and have a sworn duty to represent your best interest. If your creditor takes legal action against you to collect the debt, unlike the settlement companies, a debt settlement attorney can represent you in court. An attorney can also legally stop the harassing collection calls!

If you and your debt negotiator have decided to call your creditors in an effort to negotiating credit card debt, you should have a clear plan of how to proceed. You are obviously struggling to pay your bills. Perhaps your creditors have been calling you and you have been too afraid (or embarrassed) to answer. You must remain calm and unemotional when you call to discuss your options for easing your debt burden.

The credit card company will probably want to work with you, particularly if you are in arrears. Thus, you must know what to ask for with regards to getting out of debt. Do you need a lower monthly payment? Are you hoping to have late payment or over-the-limit fees waived? Are you seeking out a better annual percentage rate (APR)? Are you on the verge of bankruptcy and looking to settle the account? Depending on what you need, you should be clear with your request.

One option if you are merely struggling to pay is to ask for a reduction in your interest rate. Some APRs border on usury, costing you hundreds of dollars in finance charges each month. Let’s say you have one credit card with a 12 percent rate and another at 27 percent. You could call the latter and ask for a rate that is closer to the other card you are paying. If agreed, you should have a reduced monthly payment, which could make it easier for you to pay on time and get out of debt more quickly.

If you are constantly over your limit, the first thing is to stop charging altogether. That said, you may be facing over-the-limit fees because you are so close to the limit that the interest tacked on each month pushes you over. Call and ask for the fees to be waived until you have the chance to pay down what you owe and have a “cushion” for the interest to be added. The same can be done for late fees; if you are struggling, ask for a courtesy waiver with the promise that you will send some amount every month, even if it’s less than the minimum due.

Finally, you can ask for a settlement fee, which is basically a lump-sum payment of part of what you owe. Just be sure to get any agreement in writing from the company, so that they cannot claim you defaulted later on.