Credit Card and Loans

Loan consolidation converts multiple debts into a single manageable loan. Many debt relief companies provide the service of loan consolidation. But, the positives and negatives need to be pondered over properly before deciding whether or not to consolidate your loans.
 

ADVANTAGES:

§ Having all the loans under the same Social Security Number (S.S.N.) in turn helps you in lowering the interest rate on the accumulated amount and thus the total amount to be paid back is reduced.

§ Consolidation also helps to unify many monthly payments into a single one. This will help you manage the payments easily and effectively.

§ Apart from the benefit of having one large loan instead of many, the loan can be extended too.

§ The interest rate on the consolidated loan is also fixed and thus it does not change during the course of the loan.

§ A student with a consolidated loan does not need to spend time keeping track of the payment schedule for two, three or more loans as one can just make a single monthly payment. Often the student elects to make that single payment through an automatic debit.

§ You also get a chance to improve your credit score by consolidating your loan that can fetch you fresh loans in case of emergencies.

§ There is no fine charged if the installments are not paid on the right date.

DISADVANTAGES:

§ The disadvantage with consolidating loans is that you have to begin making your payments right away, when you consolidate student loans during your initial six-month grace period. This can be difficult if you have not found a job after graduation, although you can wait until just before the grace period ends to consolidate, and still receive the lower rates.

§ Furthermore, once you have consolidated your student loans, you cannot un-consolidate them again.

§ These are secured loans and thus require something that the recipient owns as collateral for the loan.

Zero Credit Cards – the concept of Zero interest on your credit cards sounds very attractive, but it just might not be what you need. All the fancy advertisements in the newspaper and on the internet emphasis the fact that zero credit cards are interest free.

Nothing in the United States is used every day as much as one of these credit cards. These cards are used to pay for food, gas, transport and other expenses that occur every day. Some of these expenses have very high interest rate on them which is why everyone obviously tries to get reduced.

Thus whenever you decide to get a zero credit card it is important that you read all the details of the product even those in fine print. Mostly these cards are only given to people with a good credit history. Also usually the no interest applies for a limited time only, say 12 months and then interest is charged on the balance.

Many of these credit cards offer exciting offers that can help you save that extra money. Some of these zero interest credit cards even allow you to combine your old credit card with the new one. This way you can not only save the interest on the old one, but even the money which otherwise would have been lost.

Getting a Zero Interest Credit Card can be quite a smart move especially if you can see yourself paying off the entire balance before the expiry of zero Interest time period.

If handled wisely, zero interest cards can be a very helpful asset to have.

Just so the high cost of university tuition does not prove to be a hindrance in the academic life of a brilliant mind, student loans come forward to the rescue. Student loans comprise of the total amount of borrowed money from a financing source or company to pay for university tuition, books and living expenses. These are designed specially to fit the schooling needs of the student and aid in the completion of the education of the student and thus helping to lay a strong professional foundation. Student loans gain relatively lower interest than most of its counterparts.

Basically, there are two sources of student loans; either from the government or private lenders.

Federal student loans supply financial help for students enrolled at schools that participate in federal aid programs. These loans are provided by the US. Department of Education through the Federal Direct Student Loan Program (FDLP). There are three main types of federal loans-

* Federal Stafford Loan – the basic building block of most students’ financial aid packages. Students using Stafford Loans can typically borrow a significant amount of money regardless of their financial need, for both undergraduate and graduate school programs. The interest rate and terms for Stafford Loans can vary depending on whether the loans are subsidized or unsubsidized.

* Federal Perkins Loans – Perkins loans are awarded to students based on extreme financial need, and usually have very low interest rates. The total funds available to be disbursed for these loans is limited, however, which means that the amount of the loan will likely be relatively low.

* Federal Plus Loans – These loans are available to parents whose children are attending college as full or half-time undergraduate students. They are awarded based on credit history and cost of attendance. The interest is low on this type of loan, but repayment usually begins within 60-90 days after full disbursement of the loan, or after the student graduates.

A private student loan on the other hand is offered through a bank or another lending institution. It is not available through the school. The government does not subsidize it and it does not have the same guidelines as a Federal loan does in regards to interest rates and repayment options.

You can even use your paypal account to transfer money or receive from other accounts than Paypal. Some employers even pay their employees for the work done online through Paypal. Applying for Paypal credit card is very easy. Paypal enables its users to apply for Paypal Extra Master Card from their account page itself. The application is filled in 3 steps, after which Paypal promises to respond in 30 seconds.

How to Apply for Paypal Credit Card

The option of applying for Paypal Extras Master Card is given on a user’s account page. The link takes the user to the Credit card main page which has card information. The online application form for credit card derives your details such as your phone number, your address, your email address, etc. from your email account.

Approval of your application would depend on your credit history and credit score.

Non – Pay Pal Users

To get a paypal credit account, a prerequisite condition is that you have a Paypal Account. Opening a Paypal account is an easy three step process. All you need to do is fill up your needed personal and bank details.

Basically, credit card insurance insures the credit card holder against any risk such as if you lose it or even worse, if your card gets stolen. The concept of credit car insurance is great and works great for people who are all the time worried about their credit card being misused or they being held responsible for some purchases they haven’t made. Cases of frauds and credit card steals have been increasing every day and with that these insurance really come as a big savior.

Now that we know what credit card insurance is; the next question is if it is really needed? The truth is that if ever your card is stolen it can really be a nightmare. Sure you can call up the credit card company and inform the company, but what sounds so easy can turn out to be extremely time consuming and especially if more than one card has been stolen. You might end up spending the whole day calling up the various companies.

Then why not live without stress when you have the option to. When you have Credit card insurance, you just have to call on one number to report and the number usually works 24 hours. Registering for credit card insurance is also pretty easy too. All you have to do give them your credit card details and provide them with documents such as your driver’s license.

Here is another benefit of getting credit card insurance. Even when you want to get your card cancelled all you have to do is just give your insurer a call. With the information that you provide them your insurers can do the task of informing the credit card company of your card status. They can also provide you with replacement card as soon as possible.

The best thing about getting Credit Card protected is that you do not have to worry about paying for purchases that you haven’t made. Also so many times we don’t remember that specific time we lost our cards. With the insurance we are only required to pay a fixed minimum amount in such instances.

Also the truth is that we are more and more relying on the plastic money. And if our cards get stolen we just might be left without any penny to spend. Credit card protection even permits you emergency spending money which is like more like a cash loan or advance extended by the insurance company for your times of emergency.

But before you go get your card protected, make sure to check if your travel or home insurance, they just might be covering your credit cards as well. Also most of the credit card companies these days offer insurance themselves. If such is the case you don’t need to go for a separate insurance.

The best way to avoid credit card debt would be to not to use credit cards altogether. If you pay all your expenses there and then and do not hold them up for a later day then you obviously don’t have to worry of any such debt. But that’s quite a hypothetical case and everyone has a few credit cards these days and more often than not one ends up paying with them.

So we start with the assumption that everyone is going to use credit cards and thus we try to find a plan that finds the best way of av oiding credit card debts. Although there are n number of Credit Card Companies in the market, Visa Card and Master Card are then the biggest ones. Getting a credit card is not much difficult but it is important that they offer you credit at decent annual percentage and don’t bankrupt you. So our first step would be to only sign up for companies that offer a low percentage rate.

One of the most important ways to avoid Credit Card Debt would be to avoid making purchases of expensive things that you don’t really need to buy on credit. Many a time people buy unnecessary and whimsical things on credit as they don’t have to pay for them there and then with actual cash. The best thing to do at that point of time is to keep in mind that sooner or later you will have to pay for it and also assume that you would have to pay at a high interest if you wait for too long. So the next time double the purchase in your mind and then think if it is worth all that paying for. Self control and rationalizing is the key that will help you avoid your credit card debts.

Another pitfall which is many a times overlooked consists of ‘Minimum Payment’. It seems very attractive as you only have to pay off a very small fraction of your credit balance say $10 or $15. But then, what we forget that later on you will have to pay the remaining balance at much higher an interest. The interest is charged on your total so once you have interest charge; it is added to the aggregate balance of the next month. Even the credit companies encourage you to make minimum payment as in the long run they will be making profit off you. That is why they are always so ready to extend credit because for them there would be nothing better than you delaying your payments. Thus it becomes very important that you plan your monthly expenditure including your credit card bills and not think that since the due balance hasn’t come as yet you wouldn’t have to pay it in future too. Always clear off your credit card balance as soon as you can.

Another important thing to keep in mind is that some credit cards offer a very low introductory rate, but they really hit you hard with sometimes percentages as high as 29.99%. One should make sure to read all the fine print details that come along with the agreement as there could be many hidden charges that the company might not inform you about. Once again it is important that you make timely payments for your credit card bills as the company might higher your interest rate in case of delayed payments. And that is why timely scheduling your bills on a spreadsheet before you becomes important. Write out what and when are you bills due, which payments are more important and this way it becomes much easier to keep a track of your credit bills. Once you start doing this, you will also get a better hold of your money and plan better in future.

All of the above stated ways might seem easy, but they are useful only when you put them in action. Use your credit card wisely and let it not become a tool to treat you for a good day or cheer yourself on a bad day. Once you get into the habit of using credit cards carefree, the debt can sometimes really build up. It is very wrong to think of credit as money in the bank as it really is not. It is just another tool to aid you with your expenditures, but something that can cost you heavily if you aren’t careful with it.

Before you use your credit card, plan how are you going to pay for it, when will you pay for it and set an approximate day to pay off your amount. Always have an approximate idea of how much can you afford to spend on credit can never exceed that limit.

If you take all the precautions and plan wisely, you will never have to suffer with credit card debt.

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