A few tricks to stop your credit card debt spiralling (Debt Help in General)

Member Name: iamasadlittleboy

Product:	Debt Help in General
Date:	04/08/09 (40 review reads)
Rating:

Advantages: A few little tricks

Disadvantages: Most of them are common sense and followed anyway

In today's economic meltdown where money is almost being hemorrhaged by the financial systems put in place to look after it, we all need any tips, tricks and secrets to save money. Obvious those of you with credit cards, will be wanting some inside information that you may not have known about. So here you are with an insider who will reveal 6 things you may not know about Credit Cards, that may be costing you money. so heres some tricks to save you money and use them wisely.

1- Making payments on time: If you make a monthly payment like most credit cards do, make sure you pay it on your due date. Paying it too early may end up with your being charged a fee for a late payment because the system picks up the payment as being made towards your balance, not your monthly payment. This causes lots of trouble between customers, the banks and the bank's collections staff, who regularly need to point customers onto disputes (which in turn causes the customer to pay for the phone call). If a customer pays their payment too early, they will likely be charged a further 12 GBP over here, they will need to re-make the payment for the amount and they will take a negative hit on their credit rating. It's not worth the hassle, the time or the cost to make your payments too early.

2- Remember, you can change your due date. Following on from the previous point almost seamlessly, remember if you call your bank they are often able to change your due date for whatever reason. So if you're missing your monthly payments every month because they're due in the middle of the month and you don't get paid until the end of the month, call them and explain that to them. There may be conditions on this (HBoS will only do it three times in the life time of the account), but it will save you money once again. For example in an average year missing your payment, you may end up incurring 144 of charges, whilst you could sort it out with a free 5 minute phone call. This seems to be something customers are either unaware of or have just forgotten. But it's a brilliant little thing to realise.

3- The evil Roso: In Britain it's currently legal for a credit card company to do what is known as a Roso, if a customer has a current account with the same bank, the bank can go into your current account to reclaim the owed debt from you. Though this is almost verging on theft as far as I'm concerned, it is totally legal and you (as a customer) have signed contracts agreeing to it. Sadly many customers are again unaware of this and whilst no one wants to sit and read through a load of legal mumbo jumbo just to to find out all these little morally objectionable tricks, it's in the customers interests to read them. An obvious way to avoid this is to bank with a different company to one where you have a credit card. Simple really when you consider the hassle that a Roso may cause you, with banks taking out money that was left there for you to cover your bills.

4- Over-limit: This is something I still can't understand myself, but customers can go over their limit, which, let's be honest, means that the limit is non-existent. The customer could go over it for a wide variety of reasons, though, so let's go through them first: A lowering of a limit- The bank may have lowered your limit for some reason. Interest has taken you over- The interest on your account has taken your balance over your limit A reversed payment- A Direct Debit has been reversed on your account (advice would be to speak to your bank) Overspending- You've spent over your limit

Now the first 2 of those are almost "tricks" by the credit card provider to catch you for an over limit fee (of again around 12), but the customer is responsible for being in a position where the interest can push them over their limit. The lowering of a limit should be spoken about directly with the provider, as I'm unsure on that side of things (sorry). A reversed payment could be because, for example, a direct debit has been refused, which would mean your bank will charge you (around 8) and the credit card provider will charge you (12 late fee, 12 over limit), which is rather costly. To prevent this make sure you have the funds needed in your bank account. Over spending, I'm unsure on whether or not it's possible to over-spend on your card, though it presumably isn't. With the card providers you never really know.

5- Debt Management Companies: Not to be confused with a debt consolidation company (who will give you a loan to cover your debts then put you in a position where you make payments to repay the loan), a DMC will talk to your creditors about your financial situation and try to arrange a repayment structure with them so that you can make manageable payments to all of them. They are brilliantly useful. Some have been known to actually reduce a persons credit card debt by up to 45%, and banks do regularly push for you to use them. Free ones such as PayPlan and CCCS are often advocated for use by customers struggling to make payments to their creditors. However, when you first meet them they will swiftly tell you not to make any payments to your creditors, which is poor advice. You should continue to make payments until your DMC and your creditors have made an agreement between each other as to what the payments will be, as your account will still be incurring charges and interest, making your repayments larger. You also wiil be receiving negative credit marks for the future by following their advice.

6- Personal Details: With todays society of scare mongering and identity theft many people are now refusing to talk to people from the banks who call them. Regular tasks such as informing someone of a missed payment quickly over the phone has become a chore due to people's over-protectiveness concerning personal data. But what they don't seem to realise is that banks actually ask for data that's in the public domain such as post code (can be found in a typical phone book, or online) and a year of birth (can be found at a registry office and anyone you have ever applied for a job will have these details).

People working for (or on behalf of) a bank will NEVER ask for bank details (barring card details for a payment, or a direct debit), if they do, feel free to hang up. The reason they ask is to stop people from getting your card details. Let's all be honest now, if they got the wrong number (i.e you'd moved out and not informed them) and someone said they were you, and they then got told all your details you'd be pretty rightfully fuming. Thats why the security checks are done. A bank will never ask you for details such as "Confirm your card number." They already have this so why would they need to ask? Yeah they have your post code, get it wrong and they will ask for the first line of your address, get it wrong and they will terminate the call. Emails are rare from your bank unless you do e-mail banking, if you get them, phone your bank to see if they're legit, and NEVER type your bank details in a reply or a link that looks suspect.

And the biggest secret of all credit cards, is to know how to make the most of them, use some common sense and read the terms and conditions. -

Summary: Use your brain with your card