Credit Card Debt? Why not cancel it?
A real Eye Opener! The true cost of your Credit Card!
Most people use credit cards, but do they understand the charges involved? Apparently not. The figures show that 50% of card users only pay the minimum balance every month.
I have joined a Club which helps people to address this issue.
Steps 2 Passive Income
Fetching RSS feed... please stand byA typical scenario
A typical scenario may start with you receiving a credit card offer in the mail: borrow up to $2000 and pay only $40 a month. The interest at 18% ( could easily be higher) but the payment is still only $40 a month. Sounds like a great deal! You've been thinking of buying a new big screen TV for ages, and now you can have it all for only $40 a month. Who COULDN'T afford this, right?Before you sign that offer and run out to purchase your new TV, let's look at the mathematics and see how long it will take you to pay off this purchase at $40 per month, what you'll end up paying in interest, how long it will take to pay off the balance, and the total amount you'll end up paying for your $2000 TV.
The minimum monthly payment on most credit cards is usually calculated as a certain percentage (often around 2 percent) of your total balance.
Remember, however, that this payment includes interest as well as payments against the principal amount that you borrowed.
On the $2000 TV, 2 percent of the balance is $40. At 18 percent interest, your $40 payment would include $30 in interest and only $10 towards the amount you borrowed. If you pay the minimum balance each month (calculated as 2% of your outstanding balance), it will take you over 30 years to pay off your $2000 TV, which will be gone long before it's paid for. What's worse, you'll have paid nearly $5,000 in interest. The $2000 TV will have cost you nearly $7000!
To make matters even worse, think of what you would have earned if you had simply put $40 a month into an investment earning a conservative 8 percent for the same number of years (30). Your £40 a month would be worth over $60,000 and you would have earned almost $46,000 in interest on your investment.
Many people get caught up in credit card offers that are "too good to pass up." The question is: "good for whom?" Certainly not good for you! The example of the TV purchase illustrates the extremely high cost of paying the minimum balance on your credit cards.
The Independent on Line 19 Feb 2006 confirms this with their statement:-
"Separate studies reveal that a £2,000 credit card debt at an APR of 15.9, repaid at only the minimum 2 per cent, would take more than 28 years to clear!"
USwitch spokesman Nick White said:-
"Today, there's the possibility that some people could finish off paying their mortgage before their credit cards."
It's a real eye-opener!
By way of this example, we see how the credit card companies, or banks, manufacture debt! If only minimum payments are made each month, the so-called "debt" is multiplied by a percentage interest charge which is increased over the period by compound interest. The majority of people struggle to pay this "debt" off, but are often unsuccessful is doing so, as the "debt" multiplies continuously.
What if there was a way of cancelling it altogether? In one simple step!
The Ultimate Entrepreneur Club has been helping its members to cancel debt, including credit card debt, over a period of 15 years'. The UE Club provides an educational program to help its members to learn the truth about debt and of making real money.
Now it's YOUR turn!
Armed with the knowledge, you can cancel your debts - it will be as if they never existed. There is no need to stay in the trap of feeling that you must pay a debt that was manufactured in the first place!
What can you do about it?
If you have already built up credit card debts, you can challenge the credit card company or bank.It is a little-known secret, that the credit card companies do not set up the correct procedures in contract and consumer law, and so they do not like going to court if you challenge them. They don't want to let the cat out of the bag!
So you can ask them for prove of the debt, and refuse to pay it. Many people have successfully negotiated with the credit card companies, either to cancel their debt or to significantly reduce it!
I see that even as respected an institution as the BBC backs this up with the same advice1 Please see this interesting article from the BBC web-site
HERE
You have nothing to lose by trying.
It is an unsecured loan, and so it is not attached to property.
Avoid allowing Credit Card Debt to pile up
The best solution is not to let credit card debt pile up in the first place. Now that you are aware of how the interest rates are applied, it is easy for you to see that obtaining credit on a credit card is one of the most expensive ways of doing so.It is most important that you refrain from burying your head in the sand. Please do not ignore your debts. You need to take ACTION and do something to eradicate it.
It follows, that if you want to buy something, it is much cheaper to take out a loan. The advantages of a standard loan as opposed to credit card debt, is that you know the rate, it is a set rate, and you can calculate how long it will take you to pay it back. In other words, it puts you in control, and not the banks and credit card companies!
So think ahead of your expenditure, and take out a loan rather than let it pile onto your card.
Check your credit card statements every month. Many people just pay the minimum, and never look at the detail. However, it is much better to empower yourself, and study the statement.
Credit card companies do make errors, and can add bills arising from the cards belonging to other people, so check them with a fine tooth-comb!
The best thing, is not to spend more than you can afford, and pay the credit card off in full every month. This then puts you in the category most disliked by the credit card companies, as they are not making money out of you! You get a period of credit each month for FREE!
Detonate your Debt!
This is for UK citizens only.I have been interested in helping people to eliminate their credit card debt, and, as a result, I have come to know a company, called Detonate Ltd, which specialises in credit card and loan debt, which has excellent results.
We have found that credit card companies and banks did not follow the terms of the Consumer Credit Act of 1974, which makes most debts which were incurred prior to 6th April 2007, when the act was amended, completely unenforceable. This is the reason that it is only applicable to the UK.
Detonate Ltd offers a very professional service, including consultation with solicitors, so that clients are given complete peace of mind. It even includes the clearing up of your credit file, so that you can start with a clean slate.
Detonate does all the work for you, so that you no longer have to speak to the banks or credit card companies, and you can STOP paying them immediately!!
They have had excellent results, with over 800 satisfied clients, and I would not recommend a service that I did not know to be fully professional and ethical.
If you would like further information, please click through to this web-site HERE,
leave your email address, and I will forward further information to you.
The site has my contact details, and I am very happy to speak to you to help you to reach a satisfactory solution to your debt problem, and to forward your case to Detonate Ltd if your debt was incurred during the relevant period.
All best wishes,
Diane
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Reader Feedback
sethhahn wrote...
Diane,
Thanks for your sound advice.
A quick tip for those looking to consolidate: stay away from consolidation scams! They're horrible for your overall financial health. I got so mad when I was researching debt consolidation for myself, and these companies were pitching their services to me as if it were GOOD for my financial health. I took the better approach and opened a low-APR consolidation loan through a friend's (he has a good FICO score) credit union. My FICO score is still intact, and my debt is going down! Having friends and family with sound financial habits are good assets to those of us who are in trouble.
I started a blog on safe, healthy ways to reduce credit debt.
To our collective financial freedom,
Seth
Posted April 28, 2009
DebtSolutions22 wrote...
Credit card debt is a huge stress especially when you you have almost maxed out your credit card and can only make the minimum payments. If you cannot pay off your credit card balances in full every month, you should at least call your credit card company to reduce the interest rates. Most credit card companies will lower your rate as most do not want to lose you as a customer. Pay CASH whenever you can and NEVER use credit cards unless you need it for an emergency.
Posted January 04, 2009
DebtSolutions22 wrote...
Credit card debt is a huge stress especially when you you have almost maxed out your credit card and can only make the minimum payments. If you cannot pay off your credit card balances in full every month, you should at least call your credit card company to reduce the interest rates. Most credit card companies will lower your rate as most do not want to lose you as a customer. Pay CASH whenever you can and NEVER use credit cards unless you need it for an emergency.
Posted January 04, 2009
DebtSolutions22 wrote...
Credit card debt is a huge stress especially when you you have almost maxed out your credit card and can only make the minimum payments. If you cannot pay off your credit card balances in full every month, you should at least call your credit card company to reduce the interest rates. Most credit card companies will lower your rate as most do not want to lose you as a customer. Pay CASH whenever you can and NEVER use credit cards unless you need it for an emergency.
Posted January 04, 2009
DebtSolutions22 wrote...
Credit card debt is a huge stress especially when you you have almost maxed out your credit card and can only make the minimum payments. If you cannot pay off your credit card balances in full every month, you should at least call your credit card company to reduce the interest rates. Most credit card companies will lower your rate as most do not want to lose you as a customer. Pay CASH whenever you can and NEVER use credit cards unless you need it for an emergency.
Posted January 04, 2009
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by Diane1
I feel that every individual should have the opportunity to live the life they want to lead. I want to progress to real freedom, and to he...
