Here's part 2 of a piece from Yahoo where Suze Orman offers ways to save money:
We seem to be becoming a nation of reckless chargers. It drives me crazy how much money is thrown away because of sloppy card management, especially for those of you who carry a balance from month-to-month. If you aren't paying off your bill each month, you need to pay a lot more attention to your interest rate. The average is a whopping 15 percent!
Federal regulators recently put pressure on credit card companies to boost the required monthly minimum payment to 4 percent of your outstanding balance - that could more than double what you're currently paying. As painful as it may be to have a higher required minimum, it's actually a very good move in the long run, since it will force you to pay off the balance faster.
If your FICO credit score is above 720, push hard to get a lower rate. Call your current card issuer and tell 'em you're gonna move your balance to another card if they don't reduce your interest rate. Make sure the rate you'll be paying after the intro period is still a good deal. You'll also need to be super-vigilant about paying all your bills on time-not just the credit card bill-when you get a balance transfer deal. Because the credit card company will be scouring your credit report to see if you trip up on any debt payments; often, according to the terms of the balance transfer, that's all the excuse they need to immediately ratchet up your interest rate.
Another costly credit card trap to avoid is the "Two-Cycle Average Daily Balance" method some cards use to calculate your interest. I know that's a mouthful, but it's worth knowing about, so stick with me for a sec. If your card uses the regular old "Average Daily Balance" method, and you start your billing cycle with no balance, then you will not be charged interest on any purchases you make during that month, assuming you get the bill paid off by the due date. But the Two-Cycle method is a bit trickier, in that the card company is going to look at your outstanding average daily balance over the past two cycles, not just the most recent month, to determine your bill. Check the back of your most recent card statement to see what method is used, or call customer service and ask.
Whatever you do, make at least the minimum payment on time. That means the payment arrives before the due date, not that you mail the check on the due date. The fact is the credit card industry is getting fat on consumers' tardiness, given that the average fee for a late payment is now more than $30.
Screw up just three times a year and you are looking at paying close to $100 extra because you simply didn't pay attention to the due date.
Is Suze already running out of great ideas? We're only on part two of this piece, and I think this advice is generally off target. Not that it's not technically correct, but it's not the best set of money saving ideas.
My thoughts on this subject:
1. The best option is to get out of debt totally. You can do it, even if you have a great amount of debt currently. Here's one example with more found here. And be sure to check out nine ways to pay off debt.
2. Be sure you pay down your credit card the right way.
3. As she discusses, be on the alert for nasty credit card tricks.
4. If you don't think you can get to the point where you can pay off your debt, you can. If a single mom can make it on $31k, you can too. You can even get to the point where you use cash only.
5. One key to staying out of credit card debt is controlling the number of credit cards you have.
6. Know and apply the eight commandments of credit cards.
7. If you must use credit cards, be sure you maximize their use and get as many rewards as possible from them.
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