You receive an offer in the mail for a credit card.  You send in back and within weeks you have a credit card at your disposal.  It becomes the perfect recipe for a financial disaster.  It seems as though many people are living beyond their means.  While convenience is wonderful with regards to your credit card it also comes with a price.

Even fast food retailers know that consumers will be more likely to spend more on plastic than with cash.  Needless to say, they are racing to make it easy that every outlet is now card friendly.  The last thing you would want to do is purchase that hamburger on a credit card.  Especially, if you’re buying it on credit, paying it off slowly or worse, finding out that your credit card company has increased its interest rates.

You need to read those little booklets that often come in the mail.  Do not discard the material – if you have questions call your credit card company.

Finally, if you find yourself in doubt – pay the minimum payment on time.  Big payments do not impress lenders: timely payments do.  For example – if you make a late payment your lender may waive the late fee however your other credit card company’s can raise the interest rate even if you made no late payments to them.  How can they do this?  It’s called “universal default”.  The basics of universal default are simple – if you’re more than 30 days late on a payment to anyone the interest rate on any card with a universal default clause can increase your interest rate.

With that being said – don’t take anything for granted.  read the small print and if you have any questions – give your card carrier a call.  Be proactive not reactive to the situation at hand.

The new credit card laws will come into effect in about nine months.  President Barack Obama signed the bill into law.  The credit card companies will not be happy about the new laws because it will limit their ability to make money off of you now.  So really, who cares about them.  They are assholes any.

Universal Default Rate Changed- Minimum Credit Card Payments

The old universal default rate rule will be changed.  It used to be if you were late on one card, the credit card companies could raise your interest rates on all off your credit cards.  So if you were having a difficult stretch financially, you really go nailed.  That seemed fair.  The new credit card law will eliminate this practice.

Get A Lower Credit Card Interest Rate

If you did make a late payment and your interest rates were raised, there is hope.  Under the new law you only need to make six months of on time payments to get your interest rates lowered.  With this measure the credit cards companies will not be able to trap you into a lifetime of debt.  Lets face it, minimum credit card payments is a financial death sentence.  I don’t feel bad for the credit card companies.  They are only interested in pumping out slaves.  They don’t make huge profits from people paying off their bills.  They only make money on peoople that go into debt and stay in debt.  The love customers that can’t control themselves and buy things that they can’t afford.

Don’t spend money you don’t have.  Get used to paying cash for your purchases and have a life and a future.

The universal default rate is the highest interest rate a credit card company can charge you if you are late or default on your credit card. If you read the fine print it is in the contract that you sign with your credit card company. Some credit card companies can charge you as much as 30% interest once you miss a payment. Make sure that you have a plan to pay your credit cards on time every month. A missed credit card payment can be a costly exercise.

Remember to use your credit wisely. Being in debt is no fun and it is not a great way to live. Live by your needs and not your wants and you will always be happy.

How Does Debt Consolidation Work?

This article is about the advantages of doing a debt consolidation program. You may not be aware of this but debt consolidation, CCCS, credit counseling and consumer credit counseling are basically the same thing. Doing a debt consolidation plan is different than doing a debt settlement program. In debt settlement you are reducing the amount of principal that you will pay back and in credit counseling you are negotiating the amount of interest you will pay back. In consumer credit counseling you will pay all of the principal back plus some interest. Continue Reading »