Use best debt management program to Eliminate Debts
Being selective about your debts and carefully managing your loans can help you improve your financial position. Carefully handling your accounts can improve your credit score, leading to more attractive financing opportunities. When you know the right information, you can take control of your financial future.
Responsible payments and credit use
Avoid late fees and extra interest charges by making payments on time. Leave at least half of the credit line open to show that you are responsible, and don’t open new accounts just to get ten percent off on a purchase. Being responsible with your credit will reward you with a higher credit score. When your score goes up, you can take advantage of lower interest rates to help you get out of debt.
Terms and conditions
Know the terms and conditions of every account, and watch the statements for changes in account terms. This is important because making a late payment can result in a sudden increase in interest rate, and that will drive up your payment and make it harder to repay the loan. Follow the rules of each lender as outlined in your agreement to avoid penalties, increased interest rates and negative credit ratings.
When you have poor credit, your loan options are severely limited. However, earning a higher credit score will result in the ability to shop around for better terms. When you do have to buy a car or borrow money for a new furnace, you will be able to get loans with better interest rates. Lower interest charges make it easier to pay the loan off, allowing you to eliminate the debt quickly. If you have a good score, then you should be very selective about the credit offers you accept. Look for lower interest rates and cards without annual fees.
Refinancing for better deals
The excellent credit you have worked so hard to develop can repay you with fantastic refinancing deals. From your car to your charge cards and the mortgage, you can find better deals for your debts. Refinancing a car from a 15 percent interest rate to a six percent rate will result in substantial interest savings and allow you to pay the loan off faster. As you find better rates for your loans, you can use the savings to start eliminating the debt in your life.
Beware of introductory rates
Taking advantage of introductory rates will save you a bundle on interest charges, but you should read the fine print before moving the balance over. Some cards charge fees as high as $300 dollars to transfer a balance, and that could easily wipe out the interest savings. The transfer is generally not worth it if you will jump to a higher interest rate six months after moving the balance. If you do decide to move a balance to another card, do not make the mistake of putting new charges on the original account. The goal is to take control of your finances and improve them, not to sink further into debt.
Careful management of your debts will make it easier to eliminate them. Avoiding higher interest rates and shopping around for better terms will help you pay accounts off and move towards a debt-free lifestyle. You will start reaping the rewards of your diligence immediately by avoiding extra fees and slowly improving your credit score.
Carol Seiler is an insurance claims adjuster and freelance blogger writing on behalf of www.ppiclaims.org.uk.