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Choosing A Payment Plan For Your Credit Card

Regardless of what type of credit card you may be carrying, you obviously need to be informed about the annual and monthly rates, fees, equipment rentals, account maintenance, and possible late payments. Well, the truth is you should be able to determine which type of credit card is best for you based on your particular situation, so that you won’t have to deal with those financial ruin that every prospective borrower would feel in the present. And at the same time that you are aware that you are investing in a credit card to put there own debt under control, then you should be aware that credit card costs.

A couple of general tips in choosing one of these credit cards from another website that you can visit before the statement is mailed.

Check to see how much each month the credit card bill does not go to interest. This can be a problem if you charge cash to your credit card. Too much interest also means that you will have to pay higher interest rate and then a higher credit card fee if you use your credit card.

The other major tip though is that if you have a high telephone bill pay, you should always check to see if there are any toll free phone lines you could call in advance to discuss your payment options in order to secure a better future.

You can use your credit card to pay for all of your expenses. But once you make your purchases, your credit card automatically becomes liability for those expenses from what was actually billed to you.

You should not limit yourself to taking advantage of the many benefits offered by credit card companies for you. From the introductory offer for an initial 0% introductory APR, to the rewards program that features a 3% balance transfer at 50% APR on purchases up to $100,000, credit card companies are out to get you every day.

Opt-Out Of The Average Credit Card Payment

In December 2005, the Consumer Council for Financial Services issued a report warning of an alarming trend: credit card debt is “unavoidable” and “an addiction for enormous financial and lifestyle costs.” Many more Americans have defaulted on credit than have simply paid no one with their loans, overpaid or overcharged their bills and lost their homes to foreclosure. Just how many more will continue to rack up credit card bills in the years to come.

Among the many costs the report noted:

— Unsecured debt; as well as unsecured personal debt; medical and hospital costs; loan balloon charges; late payments on credit cards for the life of the loan; legal fees if necessary; legal actions against credit companies that discriminate against certain groups or individuals; attorney’s fees and costs; judgments against credit card companies; and new and replaced accounts.

According to the report, overall credit card debt has risen by more than 40 percent between 1999 and 2005. In other words, the average U.S. household owes $3,100 in credit card debt.

Significantly, while the annual average household’s income and total debt amounts vary, the ratio of income to total credit card debt is roughly the same, the average American household is owed $4,631, according to the report. The staggering amount of debt is worse among people with less than $75,000 in income.

So why is there such a difference between the millions of people who pay their credit card bills in plastic and those who spend millions to repay those bills in the first place? As Credit Daily reports,

There are three main reasons:

— Tax penalties. In 2005, American taxpayers paid an average of $6,226 on credit card debt, an amount equivalent to twice the national average of $16,000. What’s more, these payments came with interest-free periods.

Basically, the American taxpayer pays for each credit card transaction in annual interest. The interest rates applied on gifts, cash advances, deposits and withdrawals are usually much higher than those charged by credit card companies.

Another reason may be that Americans are drowning in debt. According to the Federal Reserve’s most recent Survey of Consumer Finances, more than half of all households own less than $2,500.

In effect, the credit industry is creating a debt crisis that should be expected by anyone who intends to pay off their credit card and file for bankruptcy. As a result, it looks as though the consumer debt burden for 2005 will reach levels not seen in nearly 15 years.

The solution may not be to get out of the credit card business altogether, but rather to make it easy for people to repay the debt for a variety of different purchases:

— College tuition.