Many Easy Ways to Save Money and Lighten your Debt Load

by Steven on November 28, 2011

Credit cards were not a common buying method for our parents and earlier generations. Yet, since the early 1990s, credit card debt has increased significantly. Even people as old as 80-plus are suffering from the risk of potential bankruptcy and other losses due to their lack of advice or knowledge on how to manage their credit cards more efficiently.

Often people over 50 do not own a computer or are unable to navigate the Internet to locate valuable information. Even if you don’t own a computer, you may be able to use a computer at your local library. Contact your local community college and inquire about its adult education program for seniors. Ask about classes on Internet navigation and computer literacy skills.

Set-up fees are made when a new credit card is purchased. This fee is for all the work that goes into setting up your card.

Credit limit increase fees are paid for increasing the amount of credit that’s on your card. So if you had a card for $2,000, and you ask for $1,000 more, you’ll be charged a credit limit increase fee to get more money on your card.

Cash advance fees are used for setting up a cash advance. It could be a percentage of the cash advance, or just a flat fee.

Other fees include things such as customer service and looking into your account. Some credit card companies even charge you fees for using your card over the phone.

Interest rates for credit cards are fees you pay in addition to paying back the money you originally spent on the credit card. The card collects interest over time, and you pay this back inside your other payments. Really the only way to avoid or lower interest rates would be to pay your monthly bill, in full, on time each month.

There are usually three ways that credit card interest rates are calculated. The first is known as the previous balance method, the next is the average daily balance method, and the last is known as the adjusted balance method.

The first method (previous balance) is calculated by the finance charge based on the amount of last month’s payments.

The second method (average daily balance) is calculated by the daily balance on every day of your pay period, subtracting received (made) payments, divided by the number of days in your pay period. If you make your payment earlier, this method of calculating interest rates will not be as high.

The final method is the adjusted balance method. This payment is determined by subtracting all the payments you made during your current payment from the last balance you paid on your last pay period.

Credit card interest rates can be determined by several other factors. For starters, the more your card is worth, that is, the more money that’s on your card, the higher your interest rate is likely to be. Also, the amount of time you keep your card and the amount of time it takes to pay your monthly balance can have a role in your interest rate as well. Annual fees on credit cards can also determine how high your interest rate will be. Other random fees can influence the amount of your interest rates, too.

Some credit card companies have no interest rate, but most of them do. If a credit card company has no interest rate, this usually means that your other fees, such as annual fees and late payment fees will be higher, so the company is pretty much making up for the money they would have lost with no interest rate in the first place.

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