January 29th, 2010
If you have ever owned a credit card then you probably would also been caught up in the clutches of credit card consolidation companies who make promises to reduce your credit debt interest rate through doing your job of paying on time for you. These credit debts are tedious to repay and can make you wish they would disappear instantly. However, there is no easy way out of these debts. The first step here is to have only one or two credit cards with you, get rid of the remaining. The surest way to achieve debt free living is to spend prudently only on the important stuff we need and reduce any new purchases which could add extra debt to the bank balance. This way overhead is kept to a minimum and there is no added pressure on the part of the card owner.
Once you have decided to reduce credit debt, stop using the credit card for purchases which can be paid for by cash. Paying through credit cards for every purchase will eventually worsen the situation for you. Your ultimate objective is to own credit cards to make online purchases and emergencies. If you are prone to purchasing items on impulse, take a moment to think about it. A debt free living is not difficult if you can figure out a plan to deal with the debts. You don’t need to be intimidated even if you are knee deep in credit debt.
Once you do the math, you will realize your first step towards managing credit debt is to stick to your deadline each month for payment. You will have a large interest accrued to your sum, if you don’t pay it regularly. Come up with $20 more than your minimum due if you are attempting to pay off your credit card. Begin doing this with the card that has the highest interest rate and you will find yourself free from the credit debt in a few years.
You might be think, how can this affect my auto insurance rate? It affects because auto insurance companies takes people with credit card debt to be risky people. They think that if you are in debt, that means that you rely on your credit card to pay your bills. What if the credit card company denies your transactions, that means that you wouldn’t be able to afford to pay out of your pocket. So you in debt makes the auto insurance company think that there is a possibility that one day, you wouldn’t be able to pay your premium. And that would make them to stop insuring you.
But with the help of the credit card consolidation companies, you would be able to reduce your debt and that would make the auto insurers happy to insure you.
Categories: car insurance tip