If you have multiple credit cards and a lot of debt, debt stacking is the best method to maximize your payments to the credit cards. I was once in $12,000 worth of unsecured debt, and used this method to pay the balance off in less than 2 years. Simply put, the system uses the principle of attacking the highest interest rate credit card first, while only making minimum payments to the other cards. Let’s look at an example:

* CC 1: $5,000 at 12% APR, minimum payment $100
* CC 2: $5,000 at 18% APR, minimum payment $100
* You are able to pay $300/month towards all credit cards

Spreading the Payments evenly ($150/month to each card):

By spreading the payments evenly, CC 1 would be paid off in approximately 3 years and 5 months. CC 2 would not yet be paid off. After paying off Credit Card 1, if you applied the $150 left over to CC 2 (thereby increasing the monthly payment to $300) you would finish paying off CC 2 about 7 months later. This makes a grand total of 4 years to pay off both cards.

Using the Debt Stacking Method:

With the debt stacking method, you would apply the maximum amount possible to the highest interest rate card. Therefore, you would pay $200/month to CC 2, while only making the minimum payment of $100/month to CC 1. It would take approximately 2 years and 8 months to pay off CC 2. If you applied the left over $200/month to CC 1 (thereby increasing the monthly payment to $300) it would take and additional 12 months to finish paying off CC 1. This is a grand total of 3 years and 8 months to finish paying off both cards.

This is the power of compound interest. Using the debt stacking method instead of spreading the payments evenly, you would have paid off these credit cards 4 months earlier. And based on making $300/month payments, you would have saved $1,200 with the same total monthly payment!!!

So if you find yourself in a situation with multiple credit cards and varying interest rates, think of the total payment you can make towards credit card debt every month, and then make minimum payments on all the credit cards with lower interest rates, while paying the maximum amount possible to the highest interest rate card. You’ll be debt free much faster, and you will save a lot of money!

There has been a lot of talk lately about the mortgage crisis in America. Is there a similar crisis looming in the car finance industry? Many analysts say yes.

The Danger of the Rollover Loan

One major source of problems is when people buy a new car before the old one is paid off. With some auto loans, online lenders may offer to roll over the balance on the old loan. In order to make the loan affordable it is extended longer than a normal loan, often to seven or more years.

Rolling over a loan is already an expensive choice. The remaining balance on the first loan will charge the borrower interest over a longer period and cost more money. More importantly though, since the loan is for more than the car is worth, the borrower is in an “upside-down” situation. In the event of financial setback, the buyer can’t sell the car to settle the debt.

This is made even worse when a couple of years later, the borrower decides to buy another new car, getting another rollover loan, falling deeper in debt, and making it harder to break the cycle.

Why Is This Crisis New?

In the past, repayment terms for car loans were 36 to 48 months and most owners kept their cars longer than the life of their loan. One driving force for this was the high rates on car loans, which peaked at 17.8% in the early 1980s and made people want short loans to minimize total interest payments. According to Comerica Bank, a company that tracks car prices in relation to median family income, cars were also less affordable so people had less incentive to buy cars often.

Today, with some rates on auto loans online falling to 5% or below, the cost of debt isn’t as high. Buyers opt for long loans to get lower monthly payments or to buy more car than they can afford. The average auto loan term is over 5.3 years now, nearly half of loans are over six years, and the average size of car loans is forty percent higher than a decade ago.

In addition, car prices are lower compared to average income and people are replacing their cars more frequently than in the past.

Who Is To Blame?

The ease of shopping for auto loans online has given rise to a small community of disreputable lenders and brokers of the “take the money and run” variety. This has added to the problem but that doesn’t mean that online car loans are dangerous. Many disreputable online and brick-and-mortar lenders are contributing to the crisis.

As with any internet or non-internet dealings, there are many reputable and honest lenders looking for your business. You have to be a smart shopper who takes the time to find an appropriate lender and who makes sure this loan makes good financial sense.

Financial institutions are increasingly offering low interest credit cards to entice people to transfer their credit card balances (and hopefully their banking business) to them. This is a highly successful marketing strategy that you can take full advantage of. The only difficulty you are likely to face is the amount of time required to wade through the incredible number of these offers available.

Researching low interest credit cards to find the best offers for your needs is no easy task. An internet search will certainly locate hundreds, if not thousands, of these special card offers, however you will need to be very savvy to negotiate the fine print and sort the truly beneficial offers from the rest of the pack.

There are all sorts of categories of low interest credit cards to choose from, including special accounts for students, business people and those who have had a poor credit record in the past, as well as rewards cards which will give you free access to all sorts of utilities and services from free gas to air miles. You just have to decide which type is more convenient for you at the time of application, and then choosing the one with the most competitive rates or a combination of competitive rates and the most attractive offers.

An online one-stop service that does the initial culling of the less competitive credit card offers can take this stress off you, save you a lot of valuable time and potentially save you money as well. Most of these websites also offer online applications but those that offer an alert service to notify clients when their low (or zero) interest introductory periods are due to expire, are pure gold. If you are given enough warning that you will soon be paying normal interest rates, you will have time to choose another low (or zero) interest credit card with a decent introductory period. By doing this, you remain in charge of your finances and a huge amount of your money will not be siphoned off to financial institutions in interest payments.

The most beneficial low interest credit cards are those with the longest introductory periods (most range between three to fifteen months), the lowest interest rates (preferably zero) and the lowest fees for transferring your balance (this can be a flat fee or a percentage of the balance). You also need to be aware of the penalties for making a monthly payment late and choose an option that is the least painful.

Constantly transferring your credit card balances to low interest credit cards in order to avoid high (or any) interest payments may be an unusual financial strategy, but it is a highly effective one. Hundreds of dollars every month could be bleeding out of your income through credit card interest payments. By stopping this financial blood letting you can quickly regain control of your finances and even begin to get out of debt. With the right information and support the process can surprisingly quick and easy.

Transferring your credit card balances to 0 interest credit cards with decent introductory periods can be the easiest way to immediately free up income for important expenditure and/or debt reduction. Far too many people struggle unnecessarily with high monthly credit card payments, the bulk of which is interest. While most people are aware that they could apply to consolidate their credit card debts into one lower rate personal loan, very few consider the option of using an introductory zero or low rate credit card for this purpose. This is unfortunate because it is by far the best option available to them if they continue to transfer their balances before the end of each introductory period to another zero rate card.

The quickest and easiest way to find the best 0 interest credit cards is to use an online service that provides a range of good introductory offers from reputable companies. Without the benefit of one-stop shopping for credit card deals, you could well find yourself wading through pages of internet search results and associated information trying to discover the best deals.

You have a vast choice of many different types of category, from cards with very long introductory 0 interest periods to rewards cards of all types, and accounts for students, business people or people with a bad credit history.

These all-in-one online credit card facilitators usually offer online applications as well and a few of the better ones even provide a reminder service to inform clients when their introductory period is about to run out. A reminder service is highly valuable because it enables you to transfer the balance of your credit cards to other 0 interest credit cards so you never actually have to pay interest.

Instead of spending hundreds of dollars every month on credit card interest, you will have more disposable income for other things. If your family budget has been stressed because of high interest payments, the decision to take advantage of these special credit card deals can immediately alleviate the situation. 0 interest credit cards can also offer a painless way to consolidate and reduce debts. If the balances of a few different credit cards are transferred to one single introductory offer card, not only will you not have to pay interest for the introductory period, you will only have to find one minimum payment instead of many.

No matter how you look at it, transferring credit card balances to 0 interest credit cards is a good thing. Not only will you not be paying excessive interest to financial institutions, you will have placed yourself in a strong financial position to get rid of debt, save and invest, and be able to afford to pay important expenses. Debt stress will quickly be relegated to the past if you take full advantage of the introductory period and transfer the balance to another zero rate card before interest payments kick in. It makes great sense and it is easy to organize. You just have to make a decision.

It is important for college students to be able to pay for their tuition, books, fees and living expenses while they are attending post-secondary school. A student loan and a scholarship can cover most of the associated costs, but there are still other day to day expenses to consider. If an emergency occurs and the student needs extra cash, then they need a financial back-up plan. A bank credit card can help with these unforeseen expenses and it will also help them to build their credit score.

Credit Score Can Affect Your Bank Credit Card Application

If you have applied for unsecured credit cards or a bank credit card and have had no luck with those, you may be running into the same problem which many people with little or no credit scores face. You must have credit in order to achieve credit. This can be very frustrating for those who have either tarnish on their credit rating due to paying bills late, or don’t have a credit history at all.

If having a credit card is your goal, then you need to start off small. There is a card for bad credit that many people utilize. It may require a deposit to assure the lender that funds are available to match the credit limit. Many people who have bad credit or no credit rating will utilize these cards, as a way to start or re-build credit scores. The downfall is being forced into paying high interest rates and a yearly membership fee that is often ridiculous. Use these as a last alternative.

If you are determined to have a credit card from your bank of choice, then you may want to consider asking your parent to co-sign the application with you. You will have the card in your name, but your parent’s credit score will determine your interest rate and your credit card limit. This is a great way to get a 0 APR credit card and start to build your own credit rating.

Do Not Go For A Shopping Spree With Your Credit Card

Okay, you have obtained a bank credit card and now have the freedom to spend up to your credit limit. What comes next? Well, it should not be a shopping spree. This is the time to use some restraint. It can be thrilling the first time you hand over that piece of plastic to the store clerk, but you must always remember to use it wisely. With that small piece of plastic comes great responsibility. You will need to make your payments on time and always try to keep a minimum balance that you can pay off.