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How to avoid credit card debt! Banks work against you!
Loads of credit card deals are available on the market at the moment, and all of them are trying to tell you that they are going to work you the best.
By: Solvemybadcredit Laura F Wolf
Unfortunately not all of us do read the small print, and sometimes the devil can be found in the details. There are some things credit card companies don't want you to notice and take into consideration when you are presented with a new credit card deal.
Zero percent balance transfer -the bait
Yes, we all want to avoid paying interest on our credit cards, and many credit card companies have already realized that they won't get much money out of you for a while. Therefore they found some easy tricks to get you on the hook.
Some companies started to charge you a percentage of the balance for the transfer, and therefore made your existing debt instantly 3-6% more.
After the initial period you get charged a full interest on the balance. Therefore a debt you consolidated for free is not free anymore. If you managed to spend more on the card as it was still interest-free, you might face a huge bill you are not necessarily prepared for.
Your credit card debt accumulates so quickly that you will soon find that what was once a tiny little credit card debt has ballooned into a huge amount which you find almost impossible to pay each month. The interest charges add on to your credit card debt each month to create a new balance or the new credit card debt. If you cannot make full payments (or no payments) the interest charges are calculated on the top of the credit charges and balance.
Insurance on your card -do you need it?
You might be talked into some kind of card protection when taking out a new card, but you have to know that insurance of the card and ID protection comes absolutely free with most of the cards. There are many companies offering the same service for all your cards for the proportion of the monthly amount your credit card company is planning to charge you. If you have a subscription for your credit file, you can even get a text message every time your credit file changes, and all your purchases are protected with most cards.
Your credit card company is determined to get the money out of your pocket as soon as possible. Therefore you might be charged a high amount as a “monthly fee” in exchange for the zero percent balance transfer deal.
Negative order of payment:
banks like paying off the least expensive debt first, therefore the more expensive credit will keep on piling up debt interest for longer.
Never use your credit card for more than one purpose, purchases and balance transfers at the same time, or you might end up in an even bigger credit card debt mess.
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I have seen many people struggle with bad credit in the UK recently. We have to find a solution for eliminating debt and starting a new, debt-free life. More on credit cards: http://www.solvemybadcredit.co.uk/