The purpose of this article is to outline some very important, yet often overlooked bits of information regarding the feasibility of utilizing credit cards to actually get out of debt. I am sure that most of you are inundated daily by credit card applications and the latest greatest credit card offers. It should be obvious that these offers are simply a prime example of the famous bait and tackle method. However, it is very possible to utilize these offers to your advantage. I will list a few methods below. If you are currently bogged down by credit card debt and really feel stuck due to the high rate you seriously need to consider opening another credit card. That is probably the last thing you thought I would recommend, however, I firmly believe it is the best option for some people. Many will look to debt consolidation companies for a quick fix and you may have looked into them as well. You need to consider this before taking that step. Most debt consolidation companies affect your actual credit score almost as badly as filing bankruptcy does (one step up from Bankruptcy). Also, a majority of the debt consolidation companies out there are owned by the credit card companies. So, why open a new credit card? You must utilize the credit card companies bait and tackle method to your advantage and open up a new card. I should preface this first by saying that it is likely something youve already thought about, maybe even done already. This requires pure discipline and if you dont have it dont do this. I am aware that an abundance of people are already doing this and it is nothing new, all I am here to say is that it works and should be considered. The first thing you need to do is focus on offers on balance transfers that give you either 0% or below prime for the life of the balance transfer. For example, I currently have two credit cards, one with a rate of 0% on the entire balance (for the life of the balance) and the other with a rate of prime minus 2% (also for the life of the balance). 100% of my credit card debt falls across these two cards and I can sleep at night knowing that I am not getting charged 20+% and that my debt snowball process will actually be effective. You should also consider that the offer is void if you make a late payment. This is where the discipline comes in. You need to use your banks online bill payment option, make sure your account has over draft protection and set it up to make your payment automatically. Also, and even more importantly, DO NOT ACTUALLY USE THE CARD! Finally, there are a ton of misconceptions that opening/closing multiple credit cards will negatively affect your credit score. I am here to tell you that it will negatively affect your credit score, however, no where near like going to a debt consolidation company would. |
