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Australians are in love with their credit cards and literally billions of dollars every year are slapped on the plastic. But failing to manage your credit card repayments or over-extending their use can lead to some harsh financial consequences. Be very wary of how you use them as well. Using a credit card to pay off other credit – whether it is cash loans or credit on a betting website where you backed a hot horse racing tip – is unwise. The interest rates applied to credit cards are much higher than other forms of credit. Here are some hints and tips to help you stay in control of your spending.

Know your credit card

How many of us actually understand every detail about our credit card? Probably very few. The fine print and often reams of paperwork associated with applying for a credit card hardly make for light reading. But it pays to understand exactly what you are getting yourself into. You need to be on top of how much interest is charged – for both purchases and cash advances – and when it kicks in after the transaction. Being aware of fees and interest-free days is also something that needs to be addressed. And with so many cards being linked to rewards programs, it is important that you understand exactly how much you are going to need to spend to actually get anything in return.

Make regular repayments

Treat your credit card like a loan – it needs a repayment regularly otherwise you will fall behind. Factor in a credit card repayment each week, or each pay cycle. Make sure it is enough to cover past and future purchases, if possible. A little extra put onto the card can’t hurt – in fact, it can be quite handy.

Know your limit

There is no point getting a credit card with a sky high limit if you know you will struggle to make the repayments. While providers will conduct a credit check, quite often they have been criticised for handy out credit cards too readily. So know your limit and don’t be tempted to raise it later on because you have your eye on something expensive. It could well come back to haunt you.

Reduce the fees

Some credit cards can have annual fees of more than $300 so it can pay to hunt around for a better deal with lower annual costs. There are cards available that have no annual fees, but generally any fees go hand-in-hand with interest rates. So it is important to weigh up these two factors together rather than being enticed by just one. It can often mean the difference between a significant saving and another cost. Also be aware of any other fees your provider may charge, such as overdue fees and over limit fees. Do your best to avoid them, because they can start to add up.

Be wise with rewards cards

It’s hard to find a credit card these days that doesn’t have some kind of rewards program attached to it. Quite often it can take a lot of spending to receive even the smallest of rewards. So do your homework before being enticed by a card that promises a world of wonderful rewards – chances are it will take a long time to reap those rewards. There are many good rewards cards that can benefit credit card users who make regular payments and manage their card well.

A question that all homeowners face when financing their property is whether to go for a loan with a fixed or variable rate. It can get quite confusing as to what is best, particularly in tough financial times. There are a number of factors that determine which type of interest rate is best for your situation and quite often expert help is necessary to help wade through all of the information. Using a broker who specialises in financing, including home loan and Read the rest of this entry »

Expect a considerable amount of harassment if you start avoiding your short-term loan company. Normally it is not even them contacting you. The debt collections agency is a completely separate business and many of the people in this industry earn their living only when they collect their debts.

If you are in need of cash loans, you are probably already in a very stressful situation. Now that you cannot pay, expect your situation to get much worse. Many of these companies will become very aggressive, and although they are not allowed to threaten you by law, it is just the nature of the business that many of them will.. Many people who work in this industry seem to have some kind of illness. They take their job a little too personally, and many of those in the business of recovery only get paid when they get the money back. This means you are going to get phone calls and more. There are a number of things you can do to limit the harassment. Here is a look at your options.

• Contact. Naturally enough you should contact your loan company immediately and try to come to a reasonable agreement. The longer you put of the situation, the worse it will become. Normally, if you come to an agreement you will find the situation does not escalate. When you default, it will spiral out of control.

• Make Some Payment. Making some form of payment is always better than nothing. Making a partial payment is the best way to show you are seriously trying to repay the money. Words alone will not be as credible. If you are making partial payments, and you have renegotiated your terms, the loan company will be making more money from you, and this is what they are all about. It is only when they are not getting any money, they will start becoming aggressive towards you. This business is about numbers and what is on paper inside their institution. They will not see a big issue if you are making smaller payments on time and have resettled your situation.

• Call in Friends and Family. You might have done everything you could to avoid this situation, but this might be the time to call in friends and family. If you start negotiating new terms, there is a possibility you will find the interest rates horrendous.

• Know the Law. Once you are defaulting, you can expect to be contacted by a debt collection agency. Some of them can start to make all kinds of strange demands and become extremely aggressive and threatening. Laws on what they can do are very clear, but that will more often than not, not stop them. They know that you actually need to take legal action against them, and you are not in the financial situation to do that. In most states, they will not be allowed by the law to contact you more than once a day, but that does not mean they will not be calling up many times, even telling other members of your family they need to repay the debt. The debt is explicitly yours. Your options are the inform the Fair Trading Commission and write a letter to the company. This will probably keep them at bay, as they know this could potentially be used in case against them in the future.

Going on the Run. Do not expect any fast loans company to give up in their quest for repayment. It is the business of those chasing you to earn money, and they will probably be an agent separate from the company that gave you the loan. Going on the run and trying to hide is not an option. Your debt will spiral out of control, and a huge amount of fees will be attached to the job of chasing you. This will go on for many years, depending on state to state. You will have to change your name, and for example, use pre-paid credit phones not in your name. You will have to do everything to become non-existent for around 10-15 years. Do not think it is only 5-7 years as many people do. The statute of limitations means they have that time to start proceedings. This is not an option over such a small amount of money.