Personal Debt Management and You

2007-03-08 10:33:40

( Financial )



Personal debt management is no easy task, but it is an important part of modern life. If you plan to live your life to the fullest and enjoy everything that life has to offer, it is very important that you learn to manage your finances. Your personal debt, of course, is a very vital part of this.

An important part of personal debt management is credit consolidation. Nowadays just about everyone carries a credit card; the result is that almost everyone has credit card debt. Many people manage to ruin themselves financially because of such debts. Both ignorance and a lack of discipline can contribute to such a situation.

Here are a few personal debt management tips that can help you keep your finances under control.

1. Pay up. It is really very harmful for you to make late payments to any of your credit cards. Believe it or not, credit card companies periodically review your credit report looking for signs of late or non-payments. If you keep on missing out your payments, they might classify the loan they gave you as high-risk, and use that information to raise the interest rate on your card. So as much as possible, pay up the amount you need to pay within the time specified.

2. Be aware of what your credit company means by a late payment. Usually, not only is there a cut-off date for a payment, there is a cut-off time! So if you have your bill due on a certain date, make sure you make the payment by the specified time as well. For example, if you make your payment ten minutes after the cut-off time, the credit company will charge you a late fee; they will also probably charge you a penalized APR. That can be expensive.

3. Beware of "fixed" rates. The term "fixed" rate is misleading. The truth is that a "fixed" rate can change, and they often do! All a credit company has to do is inform you in writing 15 days before they raise the rate. If you are not careful, you might not even notice it when they do so. Read all your notices carefully. Be aware of how much you should be paying, and at what rates.

Personal debt management is an ongoing process; you never really stop learning how to handle your money better. The more you know; the more money you will save, so keep learning!


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