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Using a credit card



In modern days like this, many people have at least one credit card. It is a plastic money that you use to pay for almost everything from buying books online to paying your airplane tickets. Although the number of city dwellers that use debit card is increasing, credit card users is still high and growing steadily. Credit card issuers which are banks and other financial companies compete one another to attract youth especially college students to apply for the credit cards scheme that they offer. When you use your credit card to pay for consumer goods that you buy at a supermarket, actually you use a bank's money. In other words you are borrowing money from the bank that has issued the card for you. You will have to pay back the money that you borrow (loan) plus some interest that is accrued to the amount of money that you owe from the bank or financial institution.
Banks such as city bank or HSBC as the issuers of your credit card make money from the interest rate that they accrue to your loan. The higher the amount that you owe from the bank the higher will be the amount of interest you will have to pay. So, when purchasing a new electronic product at a mall, be aware of the annual interest rate and other hidden fees that will be charged upon your credit card when you pay it back. It is important to be always informed with the current interest rate on your card so that you know the best time to shop, which is when the rate is low. When you purchase goods with lower interest rate, you will be able to save money. This strategy can help you keep out of being trapped in debt. Also read: What she thinks about credit card; Robin pays off her credit card debt; Getting Out of Credit Card Debt; Best Student Credit Card

How to pay off your credit card debt After watching the above video and feeling that you face the same problem, read the following tips to help you get out of your debt. Credit card is a plastic money that you can use for paying almost everything. It is so easy to get one but it will be your big enemy when you use it uncontrollably. When you are being trapped by credit card debt, you might blame the credit card company for charging too high interest rate. As a matter of fact, you have to realize that you are the one who created the debt. These are what you need to do: 1. Stop creating more debts. Don't pay your debt by using another credit card. It means you cover up a hole by digging another new hole. This will not solve your financial crisis. 2. Pay more than the minimum. If your minimum payment is 200 dollars, pay more than the amount. The higher you pay, the faster you will be getting out of your credit card debt. You might say that your salary is not enough for paying the minimum because you have other important spending such as food, electricity, gas, and school tuition of your children. If this is your situation, then write down your spending starting from your basic needs. You need to have a monthly budget. If you like eating out for dinner with your friends and your loved ones, skip it. Eating dinner at home with your family will save you more money that you need to pay back your loan. 3. Renegotiate terms with your creditors. Perhaps, you are reluctant to inform your creditors about your situation. But when you have worked hard and you still find that the money you earn every month is not enough to pay for the minimum, then it is the right time to talk to your creditors. You have to tell them that you need flexible terms that will help you pay your debt. Creditors do not want you to declare bankruptcy because they will suffer significant loss if you do that. When you renegotiate your debt with creditors, request a lower interest rate. 4. Discipline your self by paying regularly. Getting out of debt can be done in very short period of time if you pay regularly. Don't be distracted with other materialistic temptations. I believe that if you pay more than the minimum, and control your spending, you will be able to get yourself out of credit card debt.

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