Credit Card Debt Elimination
How to Save Yourself from the Spiraling Effects of Credit Card Debt
Credit Card Debt Elimination and Credit Card Debt Reduction
Credit card debt is becoming a problem of mass proportions in North America. People are spending more than they earn and using their credit cards to pay for everything from furniture to food. Although it is easy enough to use a credit card for your purchases, the debt you incur can be very difficult to handle. There are, however, ways to take control of your credit card debt regardless of how much you owe. Your financial health can be protected, but first, you need to commit to a sound credit card debt elimination process that works.
To begin the process of credit card debt elimination, you need to compile a list of all your credit cards. Start by writing down each credit card including the balance, interest rate and the minimum payment percentage each month, which is generally 2 percent of your total balance. Next, look at your last statement and note the minimum payment.
Once you have completed this list, rearrange your credit cards so that the card with the highest interest rate is at the top and the card with the lowest interest rate is at the bottom. Now add up the required monthly minimum payment for each card.
At this point, it should be your goal to devise a way to pay more money towards your credit cards, over and above the total monthly minimum payments. To do this, you may need to commit yourself to a strict budget, but it will all be worth it once you see significant results in your credit card debt reduction.
Each month when you receive your credit card bills, you should pay the minimum balance on all of your cards, with the exception of the card with the highest interest rate. For this card, not only should you pay the minimum balance, but you should also contribute the extra money that you have set aside.
You should continue to do this until you have managed to pay off the card with the highest interest rate completely. Now, you should take the amount that you were contributing towards the paid off card and the minimum balance on the second highest interest rate card and put both payments towards paying off this new card. While you do this, continue to pay the minimum balance on each of your other credit cards. You continue this cycle until all of your credit cards have been paid off.
It may well take you a long period of time to pay off your entire debt. Any plan for credit card debt elimination takes time and commitment. Remember that as long as you are paying the card with the highest interest rate, the interest costs will stay low. Be patient throughout this process and stay committed to a healthy way of spending that does not threaten your financial security.
About the Author: Mary Talbot is the content manager for Debt Consolidation Guides. She offers debt management solutions to help you get out of debt and stay that way.
Credit Card Fraud - Reduce the Risk
Credit Card Fraud - Reduce the Risk
The huge boom in credit card options and availability has resulted in an equally large boom in credit card fraud. An estimated £500 Million was lost to fraudsters last year, and that figure looks set to climb even further.
How to protect your cards
The first step is to make sure your credit cards are kept in a safe place, both at home and whilst you are out and about. A sizable percentage of the credit card fraud mentioned above occurs when cards are stolen by pickpockets (who often work in teams). The thieves then go on a spending spree, often before the rightful owner even realises the card is missing. To avoid or reduce the risk of this you can employ a couple of simple techniques. Firstly, always try to keep your wallet/purse in a zipped or buttoned inside pocket. If no inside pocket is available, the front trouser pocket can be used. Avoid patting your pockets to check if you wallet is there, this can alert a watching thief of its location. Finally, don't walk around in a daze! Be aware of people around you, especially in crowded areas.
It doesn't stop there
Pickpockets are certainly a problem, but you are more likely to fall foul of more sophisticated fraud methods.
Skimming
Any time your card leaves your sight (in restaurants, shops, etc) you are open to fraud. Skimming is a method that involves a member of staff in a restaurant or shop. When you hand over your card, the crooked staff member takes it and passes it through a small device called a skimmer. This stores the information on the card and allows it to be duplicated. They will then charge your card the cost of your meal/purchase and hand it back, with you being none the wiser.
Our advice here is to NEVER let your card leave your sight. It only takes a few seconds to skim a card, so even this amount of time is too long. Chip and Pin cards are making this method of fraud less prevalent, but it is still costing millions each year.
Phishing
This method is on the increase, mainly due to the massive surge in online spending. Thieves send you an email that appears to be from your bank or Internet service provider or retail website (Ebay, Amazon, etc) linking you to a fake website which asks that you verify personal information or input your password. The request is often backed up with threats that your account will be terminated within days of you do not reply. Don't respond in any way; financial service companies, banks and Internet service providers and reputable online stores NEVER ask you for information in this manner.
Card-not-present (CNP) fraud
This includes fraud conducted over the Internet, by telephone, fax and mail order. It is perpetrated when criminals obtain card details through the theft of your card details from discarded receipts or by copying down your details during a transaction. The problem in countering this type of fraud lies in the fact that neither the card nor the cardholder is present at a till point in a shop. CNP fraud is now the largest type of fraud in the UK. The only way to reduce your chances of being caught by this scam, is to be very cautious about who you give your details to. Sticking to reputable websites/mail order companies is probably the easiest measure you can take.
Shoulder Surfing
Despite sounding like a new extreme sport, shoulder surfing actually refers to one of the simplest methods of fraud. Thieves will peek over your shoulder as you use a cash machine (or Chip and PIN keypad), remember your PIN number and then steal your card at a later time. Usually by means of a pickpocket, but cases where the cardholder has been followed home and then burgled are not uncommon. Always shield the keypad when inputting your PIN and be aware of the person behind you. More sophisticated methods of this fraud can involve tiny cameras and skimming machines inserted into the card slot at a cashpoint.
Rummaging Through Your Rubbish
As unsavoury as this might sound to you or us, thieves are actively searching through peoples rubbish to find a whole host of useful information. An amazing number of people simply throw their credit card receipts and back statements in the bin and leave it out on the side of the road. This has become a open invitation to fraudsters (as reported by the BBC here).
Always shred any documents relating to your finances before throwing them away. It only takes 1 credit card receipt for a clever fraudster to be able to duplicate your credit card!
Mail Theft
As reported in 2005, the amount of mail being stolen by organised gangs is on the increase. By having a members working in sorting offices, these gangs are able to intercept new cards being sent out as well as the PIN numbers, which follow in separate letters. Experts believe this increase is due to the added security Chip and PIN cards offer against skimming, etc.
A Bit of Good News…
UK law states that cardholders are not liable for fraudulent purchases made on their card as long as it remains in your possession. In cases where your card has been stolen (or lost) and used fraudulently, the Consumer Credit Act states that you will be liable to pay up to £50 damages.
What is Chip and PIN?
Chip and PIN cards are helping to combat fraud by adding two new security measures to the common credit card. The Chip part of the card is a microchip which stores your information much more securely than the old magnetic strip. This makes it much harder to counterfeit. The PIN part is the addition of a unique 4-digit number you will need to enter before your card is accepted. Whilst these security measures are by no means fail-safe, they do reduce the chances of fraud considerably.
About the Author
This article was written and supplied by Finance-Extra, the place to find free personal finance advice.
Investment Strategy: The Investor's Creed, and
Fascinating, isn't it, this stock market of ours, with its unpredictability, promise, and unscripted daily drama! But individual investors are even more interesting. We've become the product of a media driven culture that must have reasons, predictability, blame, scapegoats, and even that four-letter word, certainty. We are a culture of investors where hindsight is rapidly replacing the reality-based foresight that once was flowing in our now real-time veins... just like downhill racing, grouse hunting, and Super Bowls.
The Stock Market is a dynamic place where investors can consistently make reasonable returns on their capital if they comply with the basic principles of the endeavor AND if they don't measure their progress too frequently with irrelevant measuring devices. The classic investment strategy is so simple and so trite that most investors dismiss it routinely and move on in their search for the holy investment grail(s): a stock market that only rises and a bond market capable of paying higher interest rates at stable or higher prices! Just not going to happen…
This is mythology, not investing. Investors who grasp the realities of these wonderful marketplaces recognize the opportunities and embrace them with an understanding that goes beyond the media hype and side show performance enhancement barkers. Simply put, when investment grade securities rise in price [As they are now, with the DJIA finally putting together a successful attack on the 11,000 barrier], Take Your Profits, because that's the purpose of investing in the stock market! On the flip side (and there has always been a flip side, more commonly dreaded as a "correction"), replenish your portfolio inventory with investment grade securities. Yes, even some that you may have just sold days or weeks ago during the rally. This is much more than an oversimplification; it is a long-term (a year or two is not long term.) strategy that succeeds... cycle, after cycle, after cycle. Sounds an awful lot like Buy Low/Sell High doesn't it? Obviously, Wall Street can't let you know that it is quite so simple!
[Note that Dow Jones 11,000 was last breached during the infancy of this century, and that the last All Time High in this much too widely followed average occurred late in 1999. When the DJIA banner is repositioned on that historical peak of 11,700 or so, it will represent no less than six years of zero growth in this, the most respected, of all Market Indicators! Would the media strip the gold medal from this Stock Market Icon if it knew that during these same years: (1) There have been significantly more stocks rising in price on a daily basis than moving lower. In fact, more than two-thirds of the last 68 months have been positive. (2) Since April 2000, there have been 120 more positive days in NYSE issue breadth than negative days. (3) 250% more NYSE stocks established new high price levels than new lows. (4) We are working on our sixth consecutive year of positive issue breadth!]
So understand that your portfolio statement values will rise and fall throughout time, and rather than rejoice or cry, you should be taking actions that will enhance your "Working Capital" and the ability of your portfolio to accomplish your long term goals and objectives. Through the simple application of a few easy to memorize rules, you can plot a course to an investment portfolio that regularly achieves higher highs and (much more importantly), higher lows! Left to its own devices, like the DJIA for example, an unmanaged portfolio is likely to have long periods of unproductive sideways motion. You can ill afford to travel six years at a break even pace, and it is foolish, even irresponsible, to expect any unmanaged or passively directed approach to be in sync with your personal financial needs.
Five simple concepts of Asset Allocation, Investment Strategy, and Psychology are summed up quite nicely in what I call "The Investor's Creed":
(1) My intention is to be fully invested in accordance with my planned equity/fixed income asset allocation. (2) On the other hand, every security I own is for sale, and every security I own generates some form of cash flow that cannot be reinvested immediately. (3) I am happy when my cash position is nearly 0% because all of my money is then working as hard as it possibly can to meet my objectives. (4) But, I am ecstatic when my cash position approaches 100% because that means I've sold everything at a profit, and that I am in a position to (5) take advantage of any new investment opportunities (that fit my guidelines) as soon as I become aware of them.
If you are managing your portfolio properly, your cash position has been rising lately, as you take profits on the securities you purchased when prices were falling just a few months ago… and (this is a big and) you could well be chock full of cash well before the market blows the whistle on its advance! Yes, if you are going about the investment process properly, you will be swimming in cash at about the same time Wall Street discovers the rally and starts encouraging people to weight their portfolios more heavily into stocks; the number of IPOs coming to market starts to rise exponentially; morning drive radio DJ's start to laugh about their stock market successes; and all of your friends start to talk about their new investment guru or the 30% gains in their growth Mutual Funds. What are you doing in cash!
This is what I call "smart" cash, because it represents realized profits, interest, and dividends that are just catching a breather on the bench after a scoring drive. As the gains compound at money market rates, the disciplined coach looks for sure signs of investor greed in the market place: fixed income prices fall as speculators abandon their long term goals and reach for the new investment stars that are sure to propel equity prices ever higher, boring investment grade equities fall in price as well because it now clear [for the scadieighth (sic) time] that the market will never fall again… particularly NASDAQ, which could double and still not be where it was six years ago. And the beat goes on, cycle after cycle, generation after generation. What do you think; will today's coaches be any smarter than those of the late nineties? Have they learned that it is the very strength of a rising market that proves to be its greatest weakness!
Steve Selengut
sanserve@aol.com
800-245-0494
http://www.sancoservices.com
http://www.valuestockbuylistprogram.com
Professional Portfolio Management since 1979
Author of: "The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read", and "A Millionaire's Secret Investment Strategy"