How to Keep Credit Card Bills Low and Save Your Credit – Advantages to Refinancing Your Home or Taking Out A Second Home Loan On Your House

March 19th 2006

Credit Card Solutions

Some credit card holders pay their bill off every month, and basically use the cards for convenience. Others may find themselves in a bind due to hospital bills or expenses due to operating a business. What ever the reason for the revolving credit card balances, there are things you can do to keep your bills lower.

Of course the first thing to do is pay the bills on time. If you are late, and it is your first time, the late fee could be waived. You will need to call your credit card company and ask though. If you are late, make every effort to pay it as soon as possible. Every negative entry on your credit could cost you.

Some credit card companies might raise your interest rate on your card even if you were not late paying them. In other words, being late on one card could affect the interest rates on all of your other cards. Credit card rates are adjustable, and a late fee may cost more than the $50 you pay that card company.

Let’s say you get a negative on your credit: Fight it. Even if you are guilty of the “negative” you should fight it. You might win if the credit grantor does not respond in a timely manner to your challenge. This happens all the time. It is a good idea to check your credit at least once a year, even if only to check for errors.

There are a couple of things that may have placed many American borrowers in jeopardy this last year. First was the passage of the new bankruptcy laws. This makes it harder for debtors to shake their obligations. Most credit grantors liked this law.

The other change in public policy was fought by the credit card companies. Recently credit card companies were required to double their minimum payments. You may think the credit card companies like this, but think again. Some credit card companies have indicated that they will have some major write-offs this year due to cardholders unable to pay the minimums. The credit card companies also make more money the longer they string their customers along.

There are some debt advirors that claim they can still get you off the hook, even with the changes in bankruptcy laws. According to Jim Vrana, a debt advisor “The process that is used to discharge debt is based off of U.S. Supreme Courts decisions, Title 15 United State Code (USC), the Fair Debt Collections Practices Act, the Fair Credit Billing Act, the Uniform Commercial Code (UCC), and numerous Banking and Lending laws.”

The new laws also require card holders to enroll in credit counseling from an approved agency six months prior to filing for bankruptcy. Vrana adds “the consumer may still be required to repay most of their debt. In addition, being enrolled in credit counseling will show up as a negative on a consumer’s credit report, as damaging to credit as a bankruptcy.”

Another alternative may include a re-financing. If you are lucky enough to own a home, you might be able to cut your payments in half by doing the unthinkable: “taking unsecured debt and securing it against your home.” There are some pluses in doing this. First, like we mentioned above, it can lower your monthly payments. You might be better off in the future, and inflation may make it easier for you to pay those bills. Make sure you get a loan without a prepayment penalty so you can pay early.

Second, you might save your credit. This can save you even more money. Also, if interest rates go up, your credit card interest rates will also go up. If you are able to get a fixed rate mortgage, your interest rates will never go up.

Finally, if you take an equity line of credit, you could help protect yourself from the unexpected. Keep your credit cards for back-up (you may not want to cut them up just yet).