By James H. Dimmitt
Consumer Debt ManagementIt was fun whilst it lasted. You applied for a couple of credit cards, had a store card on the go and even took out a hefty car loan not so long ago. The more purchases that you made on your cards the higher your monthly repayments became and now you find yourself in the position of making repayments each month with nothing left in the bank. It was easy getting yourself into debt but it`s a lot harder digging yourself out of this hole. Having lived the life of Riley for quite some time the reality has hit you hard and you now need to find an effective solution that can help you to manage your finances better in the future. Help with
Consumer Debt Managementcan be found through debt solution teams. They provide structured
Consumer Debt Managementadvice to tons of people and can provide you with a plan to help you to get yourself back on your financial feet. One of the schemes that the debt management firm can provide you with is a structured plan for all of your unsecured loans. They will calculate what you can afford to pay each month, negotiate with your creditors and you`ll then pay the
Consumer Debt Managementfirm one fixed monthly figure from then on.
You?ve just opened your credit card bill and attached to your statement you find a ?convenience check? included. It may already be filled out with a dollar amount such as $300, $500, or even $1,000. Your mind fills with ideas of what you could buy with this ?instant? money. A new summer wardrobe, a nice dinner and tickets to a concert, a weekend getaway.
But before you go off on a shopping spree, you should be aware that your ?convenience check? is nothing more than a cash advance on your credit card. Cash advances on credit cards carry many extra fees, often overlooked or misunderstood by consumers.
Here?s a quick look at the types of fees most card issuers charge for a cash advance:
1) Upfront fee of 2-4% of the amount advanced. On a $1,000 cash advance your fee will range from $20-$40 in addition to the interest charges.
2) Higher interest rate than on purchases. Many credit card companies charge 18% or more on cash advances. In addition, most companies apply only a small percentage of your monthly minimum payment toward the cash advance.
Some require that you pay down the balance on your purchases first before applying payments to the higher-interest advance. In other words, you?ll be paying fees and interest on your cash advance for a long time, especially if you only pay the minimum payment.
3) Cash advances normally carry no grace period. This means interest charges accrue as soon as you withdraw money or cash the convenience check.
By law your credit card company must disclose any fees associated with a cash advance. The easiest way to find out what fees are charged is to carefully read your credit card statement or to call your credit issuer?s toll-free customer service number and ask questions.
Credit card companies charge these fees for two main reasons. One, to cover the costs to process this transaction which are often higher than a regular credit card purchase. And secondly because of the percentage of defaults among credit advance users. These costs are then passed along to you the consumer in the fees and interest rates associated with a cash advance.
The next time you are tempted to cash that convenience check or withdraw money from an ATM using your credit card, be sure you understand the fees and long term effects of using a credit card cash advance.
