Debt Burst Announces Tips for Better Credit Card Management http://ping.fm/mme5f

Fixed Rates vs. Variable Rates

A credit card can either pave the way for a good spending plan or make you a spendthrift drowned in debt. Hence, before accepting a credit card, a major factor for consideration is the type of interest rate you will pay on the credit card. There are two types of interest rates – fixed interest rates and variable interest rates. If you are confused about what kind of interest rate is right for you, it is important to know your options well.


Fixed Interest Rate


If you are a card holder with this option, you always know your interest rate. The credit card company can increase this interest rate after one year, but is liable to notify you 45 days in advance. You have the privilege of canceling the card and paying the balance at a much lower rate. 


Credit card issuers can increase your rate under the following circumstances:

• You have delayed a credit card payment for more than 60 days
• You had a promotional rate that has ended
• You have completed a debt management program your underlying interest rate has changed and you now have a variable interest rate

Unless it is for one of the reasons stated above, credit card companies cannot increase your interest rate within the first year. This type of interest rate can provide stability in making monthly payments because the APR (Annual Percentage Rate) remains consistent.


Variable Interest Rate 


A variable interest rate tends to fluctuate with the prime interest rate. Since it is linked to the underlying rate, it tends to go up and down. In this case, credit card issuers are not liable to send you any notifications of the changing rate. Unless you pay attention to your billing statements, you will not be able to know the change in interest rate on your credit card. However, if the credit card company increases the margin portion of the interest rate, they are liable to send you a notification in advance. The margin portion is the difference between the variable interest rate and the index rate. In this case, the rules of fixed interest rates apply. You also have an option to opt out of the interest rate.


The primary advantage of a variable interest rate is that if the interest rate goes down, your payment can become easy. If the margin portion is increased, you will always be notified. However, it is important that you pay close attention to the fluctuating interest rates. 


Choose Wisely


Choosing the appropriate type of interest rate is part of a good debt management plan. Determine your financial resources. If you can afford to pay a fixed interest rate, go ahead with that option. On the other hand, if you want to play with the odds and take full advantage of fluctuating rates, choose the variable interest rate.

If you know more about visit debt management services and how to solve debt problems.

Pros & Cons of Credit Card Balance Transfer

Credit card companies are making big business these days. With the extensive use of credit cards by their customers, finance charges mount up very quickly. When such conditions arise, a possible solution is credit card balance transfer. This involves shifting one credit card balance to another credit card.

Credit card balance transfer is encouraged by almost all credit card providers because it attracts new customers. And for customers this is an attractive option because the new bank may offer lower interest rates and temporary interest-free periods.

So, what is the real deal with credit card balance transfers? Is this process part of a good debt management plan or just an offer to lure customers? When should you opt for a credit card balance transfer? To have these questions answered, it is necessary to understand the pros and cons of credit card balance transfer.

Benefits of Credit Card Balance Transfers

• Interest-free Period – You can save money from an interest-free credit card balance transfer. With a low APR (Annual Percentage Rate) and a sizable balance, a customer can save a considerable amount annually.

• Reduction of Debt – If the rate of interest is low, it implies that monthly payments can clear the outstanding balances sooner.

• Budgeted Borrowing – If the transfers are managed successfully, the interest rates can be minimized. Furthermore, this method of inexpensive borrowing can prove to be cheaper than a personal loan.

• Unsecured Debt – Credit card debt is unsecured. Since the lender does not have collateral, an alternative debt solution can be initiated if the credit card balance transfer fails to reduce debt.

Disadvantages of Credit Card Balance Transfers

• New Lines of Credit – The purpose of a credit card balance transfer can also have a contradictory effect. Sometimes consumers are given higher spending  limits with their new line of credit, which may result in additional spending that can destroy the very purpose of the credit card balance transfer.

• Availability – Interest-free credit periods are available only to those with a good credit history. Those with late and missed payments do not qualify for full benefits.

• Transfer Fees – Card providers usually charge a flat fee or a percentage of the balance to be transferred. This fee is added to the owed amount, implying that a customer may only be able to start saving on interest payments after a few months.

• Expiration of Introductory Rate – Once the introductory rate expires, the APR can become higher again, resulting in the debt situation returning to its earlier scenario.

A debt management plan is usually only effective when it is well thought out. If the credit card balance transfer is not promising enough to improve your financial condition, then it is better not to do it. On the other hand, a good credit history and an effective management of credit card balance transfers can improve your financial status. So, use the pros and cons above to assess and determine your current debt scenario, and opt for a credit card balance transfer only if it is capable of improving your current financial status.

You might also be interested in reading about – Debt Management Solution

Debt Consolidation Loans for You

Expenses that exceed your income become debt. Repayment of these loans can become a challenge. Sometimes, you may have to resort to taking additional loans to cover the existing ones. In such cases, an individual needs professional advice from debt settlement companies or debt consolidation companies. Financial advisors often offer an option of debt consolidation loans.


A debt consolidation loan covers all the debt you have acquired. The idea behind a debt consolidation loan is to merge all your loans and credit card debt into a single loan. What is the benefit? Instead of paying separate debts to individual creditors, you can make a single payment to the debt consolidation company every month. The debt consolidation company then makes the payments to your creditors.


There are various forms of debt consolidation loans. It is important to determine which one suits you the best. A debtor should consider his needs and requirements before applying for a debt consolidation loan or plan.

To make a wise choice, it is wise to seek debt management credit counseling. When applying for a debt consolidation loan, it is important to consider the following –

• Life span of a loan
• Payback amount in gross plus interest
• Fixed monthly payment
• Effect on credit rating

After a thorough analysis of these factors, you can consider the types of debt consolidation loans available –

Home Equity Loans

If you have enough credit and a fair amount of equity in your home, a home equity loan is an option. Though the interest rates are lower, your home will become a part of your credit card debt. Hence, this option is not usually preferred unless fixed payments can be assured.

Credit Card Balance Transfers

This option involves transferring all of your credit card balances to a single credit card. Although the interest rates are lower, they tend to expire after a certain period of time. If you are interested in this option, consider the life span of the low interest rate. Credit card balance transfers can also affect your credit score.

Personal Loans

Personal loans are unsecured loans with fixed payments over a period of time. Approval of personal loans depend on your credit rating. If your credit rating is good, your application will be approved. A bad credit rating could result in a personal loan with a high interest rate or sometimes no approval at all.


Remember that a debt consolidation loan is not a solution for getting rid of your debt. It is just a way of merging and organizing your payments so that it becomes easier to make a single payment instead of many. Choosing the wrong type of debt consolidation can become troublesome. Debt management counseling is a must. Consider your requirements and choose wisely.

To know more, please visit at Debt Management Solution

Top 8 Tips to Overcome Debts Faster

Debt can be overwhelming, and especially so when it gets out of control. In most cases, people reach a point when they are unable to manage their debt, and consequently end-up in deep financial crisis. While overcoming debt can be highly challenging, it is not impossible to achieve. All you need is some diligence and perseverance to effectively overcome debt.

Debt may result from poor money management or irresponsible spending, or sometimes due to unforeseen external factors like job layoff, illness, etc. Whatever the reason, managing debt properly is crucial for returning to a debt-free life.

Here are some basic tips that can help you get out of debt faster:

• Get a clear snapshot of your financial worth.Evaluate your financial position and calculate how much you owe. List out all your mortgage payments, credit card payments, loans or any other such expenditures. Then calculate your debt-to-income ratio.  This will give you important insights into which areas you should concentrate your efforts on.

• Create a realistic budget.Once you know your financial status, it is important to create a budget. List out all your expenses, your monthly bills and requirements, etc., and ensure that they are covered by your income. Keep a record of every expense; this will help you know where you are spending. List out your spending at the end of each day. At the end of the month you can look for areas where unnecessary expenses can be avoided.

• Avoid credit card debt.Never have more than one credit card at a time. This can lead to an unhealthy trend of rotating payments, which can get out of control very soon. If you have multiple credit cards with debt, pay off those with the highest interest first. If the balance exceeds 50% of your credit limit, pay the balance below 50% of your credit limit, as this can affect your credit score. Another way to tackle this is by applying to transfer the balance to a card that offers no interest or low interest.

• Learn new ways to save money.Draw a budget and cut all unnecessary expenses. Pay cash while shopping, instead of paying with your credit card. Look for ways to make an extra buck. If you have enough time, you could even take on a part-time job.

• Don’t borrow to pay off a loan.Don’t get caught in another debt trap. If you have to borrow, take it from friends or family who may not charge  interest. While this should be the last resort, try to avoid this situation by making regular payments.

• Ask for Help.If you feel that you need help to overcome your debt, do not hesitate to take debt management advice from professionals who can provide you with an effective debt managementprogram with customized and easy-to-follow steps.

While these tips can help you survive and overcome a debt crisis, you also need to remember that you have to follow some basic money management principles to avoid such a crisis again. And for this, the key is to control your expenses and keep track of your spending.

To know more, please visit at debt management program