The Cons of Individual Voluntary arrangements as a remedy for insolvency in the UK
Written by Don Ace

The following article has be written based on my own research, if you are in such a situation where IVA’s are an option, I urge you to seek advice from the Citizens advice bureau or your own solicitor.

IVA’s main aim is to ‘provide an alternative and beneficial process to that of bankruptcy for those individuals who found themselves in a position of the most serious financial difficulties.’[1]

It can be argued that the root of IVA’s is held in the old 19th century method of deeds of arrangements.[2] Both of the methods hold the same key ideology or makeup, the main difference though is that a voluntary agreement is binding where as a deed of agreement could be rendered void by a bankruptcy procedure.[3]

IVA’s have a number of areas that’s end result could be a detriment to the debtor. The first of being regarding the requirement of 75% majority approval of the creditors[4]. If the proposal is rejected (or due to the arrangement being challenged[5]) by the creditors the fee for the Insolvency practitioner (IP) still stands and this cost ranging from about £1,200 is another burden on an already bankrupt individual, as well as leaving them under threat of court action[6].

Also if successful with the application and the IVA is accepted the extra fees for the IP (or nominee) are still applicable and must be paid first before any repayments are made to creditors, therefore if at a later date the IVA should fail, the debtor may be at the same or worse position as when he started.

A further problem may arise if the individual who made it is not an IP but another ‘authorised[7]‘ personal.[8] Which is most cases are private companies such as Loan Direct etc.

‘…the IVA procedure is reliant on the skill and judgement of the professional individual fulfilling the roles of nominee and, usually thereafter, supervisor.’[9]

The problem being therefore that a lot of these private firms who run these IVA’s ’sell’ the process as a miracle cure for individuals in debt and according to research[10]has resulted in an increase of IVA’s taken up (up to 28% of all bankrupts take this route), the problem being though that due to the business like nature of this professions with the individuals profiteering from the method, the question therefore must be put whether when creating these IVA arrangement do these nominee’s have the debtors best interest in heart, i.e. does it have a chance of succeeding or are they looking at their own bottom line and risk a high amount of failure[11].

Concluding then on the individual voluntary arrangements the time frame in which it occurs (up to five years) is in equal to other procedure though a lot longer than a default bankruptcy discharge though its benefit[12] arguably justifies the extra time. On the negative side though the extra expenditure in doing an IVA is great especially when an initial deposit is required and become an extra burden if it fails.

[1]Green, M (November 2002) Individual Voluntary Arrangements — Over-indebtedness and the Insolvency Regime, Short Form Report, http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/policychange/ivapolicyresearch/ivapolicyresearch.htm — last accessed 14 April 2008.

[2] Tolley’s Insolvency Law and Practice, (1998) Vol 14, No 4 IL&P 230, 1 July 1998, The release of co-debtors under individual voluntary arrangements, Rick Munro Lamport Bassitt, discussing the judgment in Johnson v Davis.

[3]Page 79 Corporate and personal insolvency law.

[4] Consumer debt: causes and cures of financial distress by Sue Morgan. Ibid.

[5] S 262 IA1986 or s6 Sched A1 Para28 in the case of CVA’s

[6] http://news.bbc.co.uk/1/hi/business/1245757.stm

[7] Under s389A  IA 2000

[8] Page 87 corporate and personal insolvency. Ibid.

[9] Page 321 of Insolvency legislation, annotations and commentary 2007ed. By L. Doyle and A. Keay.

[10] Consumer debt: causes and cures of financial distress by Sue Morgan. Ibid.

[11] Tolley’s Insolvency Law and Practice (2002) Vol 18, No 1 IL&P 9 1 January 2002New rules and new roles for the individual voluntary arrangement by Keith Pond

[12] 17% better realization of assets as compared to bankruptcy, ibid.

Avoiding the Pitfalls of Credit Card Debt
Written by : Chris Guthrie

Falling into credit card debt is one of the worst ways to waste your money. Every month that you carry a balance on your credit card you’re wasting money, especially with some interest rates on credit cards in the 20 percent range. Now it’s easy to say that you’re going to waste money if you don’t pay off your credit card bill, but when you’re caught in a cycle of growing credit card debt things can get scary. So I’d like to give you a strategy for avoiding credit card debt:

Setting a Budget:

You’d think that people wouldn’t have so many problems with credit card debt when you simply need to avoid spending more money than you earn. However, it’s easy to run into a situation where you’ve made several purchases without realizing you don’t have enough money to afford them. So to help avoid credit card debt you absolutely have to set up a budget. Start by listing out all of the recurring monthy expenses you have such as rent, food, utilities, gas, car insurance, car payment etc. Now that you have listed out your monthly expenses, write out your monthly take home pay (which is what you get after taxes are taken out). If your take home pay is less than your monthly expenses you need to find a higher paying job or take on a second job because you’ll never be able to get out of credit card debt.

On the other hand, if you find yourself in a better financial situation with money left over after you take out expenses than you have something to work with. Take what money you have left over from paying your bills and try to save some of it. The portion you save will vary from person to person, but it’s very important that you do save some of your left over money and put it into a savings account. Now that you know how much money you spend every month and how much money you have to work with it’s important to keep a rough running tally in your head as you make purchases throughout the month. The key here is to always stay ahead and have more money left over at the end of the month than you started with so that when you stop by your local electronics store and absolutely “have to” purchase a new HDTV you can do so without having to go into credit card debt. I speak from experience when I say you never want to find yourself in the situation where you buy things now and pay later because in the end you’ll end up paying much much more later.

Join me next week when I cover what to do when you’ve fallen into credit card debt and can’t get out.

*I know you wanted both topics to be covered, but I thought it would be a perfect spot to keep the readers hanging on until next week by splitting the times up in two. I also found myself running out of room as well, so that’s why I didn’t cover them both in this post*

Appreciating Enough
written by Lightening

When my husband and I were first married, we were forced to live on quite a small wage. At the time he was working on the family farm and being paid a pittance for his time. During this period of time I felt we were somewhat hard done by and didn’t appreciate the struggle. Now that I have the hindsight of time, I can see that this period of struggle taught us many things which we’d find helpful in later life.

I remember sitting down and contemplating how much we would need in retirement. We plucked a figure from the air and decided that if we could retire on the equivalent of $30,000 in the current days figures, that would be a VERY comfortable way to live.

$30,000 sounds like SO much money when you’re attempting to live off around $15,000.

As time went on, my husbands wage improved little by little. Within a couple of years our income surpassed our $30,000 “dream wage” and yet for some reason we still seemed to struggle to have “enough”.

It seemed that the more we earned, the more we spent. In fact, we started to spend around 10% more than our income at the time. What had seemed like such a wonderful income to us only a couple of years earlier just didn’t seem to be enough.

After a couple of years of spending several thousand dollars a year more than we were earning, we started to contemplate the idea of returning to a two income family. With the justification of the expense of having children AND rising costs of living, my staying home until our children were at least 5 started to feel like an unrealistic dream.

It was at this point that we decided to sit down and take a long hard look at where our money was going. We’d always been good at formulating a budget but were rather poor when it came to keeping any kind of record as to whether or not we were actually STICKING to a budget.

In essence our budget was USELESS. A few scribbles on a piece of paper that at the end of the day meant NOTHING.

I started to record where our money was going. At first I just recorded our grocery spending. Without knowing WHERE the money was going, we were powerless to make changes.

The power that I felt in actually KNOWING how much we were spending on groceries inspired me to begin tracking other areas of our spending. The tracking alone seemed to slow down our spending somewhat. Having to be accountable, even if it was only to a piece of paper, seemed to reduce the urge to spend.

From there I started working on babysteps toward decreasing our spending in some areas. I found a wealth of information on the internet that gave me ideas for ways to achieve the same end with less dollars spent.

Within the first 6 months I had reduced our spending by $7,000. Enough to curb our ever rising deficit AND help us to catch up on money that had been spent BEFORE we earnt it.

So, what had happened to us? We had gotten caught in the trap of ENOUGH being “just a little bit more”….

You may be familiar with the saying that has made it’s way around in various forms where a rich person is asked the question “how much is enough?” And the response given goes along the lines of “just a little bit more”.

“Enough” isn’t a figure. It’s a mindset.

It’s about learning to live within your means rather than accumulating credit card debt in a bid to fulfill some kind of unspoken urge for more.

Lightening is the author of the Blog Lightening Online where she writes on a variety of topics including money management and frugality as well as a comprehensive series on Reducing the Grocery Budget.

Use Better Credit Cards
Written by Keith James Lock

The debt starts early. They have people hanging out at your college campus giving you guaranteed approved credit cards. They tell you that it is only a $500 limit but it will help you establish a credit history. And although those things can be true, for most of us, it was the beginning of our debt history.

$500 on a credit card to a college goer that paid his tuition with loans, doesn’t have a job and still lives with his parents is new found money. 4 of my friends and I were approached on the way out of class one day by one of these recruiters and we fell for the bait…an attractive young female throwing some subtle flirtatious remarks and offering us some “independence”.

Actually one of my buddies decided against getting one. Go figure, he was the one that had a paper route near the end of grade school and all through high school. His mom would “hold on” to his earnings and give it to him only if she approved of the purchase. He didn’t seem to care, I was furious for him. All she was doing though was teaching him the value of a dollar. And wouldn’t you know it, he was the one that paid his tuition without loans and he had a vehicle!

My other friends though, they were excited as can be. Instead of the usual 6 pack or king can at the weekend party they were showing up at the party with a case of 24. Yeah, the cabby even drove them to the beer store before the party and they were excited because the cab driver even accepted credit card!

Myself, I was somewhere in the middle of the two extremes. I bought clothes and other such boring stuff. I was pretty happy when the bill came because even though I had spent close to $300 I only had to pay $14. Then my next bill came and the balance was higher and I didn’t even use the card that month. Interest of course!

Well, I paid off the bill at that point to avoid anymore interest. Then my limit went up. I can now spend $1000. I guess since I demonstrated that I could pay the bill off they were “allowing” me to spend more. I decided a few things right then and there. Call the bank and demand they bring the limit back down to $500 so that I could avoid temptation.

Also, I would only use the card for emergencies. Now, my definition of an emergency back then is different than it is now but the point remains, no “unnecessary” purchases. And to avoid interest charges I decided to pay off the entire balance each time the bill came in.

Now, I was building a credit rating and being able to make purchases at places that only accepted credit cards. That was my strategy until I finally discovered “better credit cards”.

There are actually cards that pay you to use them. Cash back cards. You get cash back for every purchase. Some will provide other rewards like Air Miles for example. There are still a couple concerns though.

Purchases that you do not pay off in full are still privy to interest charges and the potential to go into debt is still there. Prepaid credit cards to the rescue.

You can use cards that you have to deposit money on before you use them. They are accepted just like regular cards and you can’t go into debt with them.You still have the benefit of making purchases where only credit cards are accepted and with some you can still build credit. They are better credit cards when forced discipline is needed.

What is Your Credit Scar?
Written by Rich Hill

In 1987 one of the most popular movies was “Wall Street.” The main character, Gordon Gekko, played by Michael Douglas, proclaimed the famous passionate announcement, “GREED IS GOOD !”

Well, as popular as that movie was, and even though it would be easy to fall in the trap to believe Mr. Gekko, we all REALLY know that is not true, as evinced as the outcome of the movie.

Well I have another one for you, and this one is actually true. “CREDIT IS EVIL !”

Our grand parents, those who lived through the Great Depression, and parents that had to scrape to make a subsistence living for their family, did not believe in credit. A mortgage for a farm or home might have been acceptable to them, but the idea of paying banks and other lending institutions usury rates for the mere sake of borrowing on advanced earnings to support childish and selfish habits, would have been totally out of the question.

If you were born in the time period since World War II, and most of you were, then you have lived through a time of fabulous opportunities and have witnessed a phenomenal growth in technology. The me me me generation that has to have everything RIGHT NOW has come to a rude awakening. CREDIT IS EVIL!

You have been assaulted by the buy it now, pay later, no money down, interest free for six months, low monthly interest rate, adjustable mortgages, and other advertisements that have been in your face from first thing in the morning until the last thing at night.

Your peers and you play a great game of keeping up with each other and you are both named Jones. It is a whirlwind of gotta have it, and gotta have it now, that is so easy to get caught up in.

The information here is taught each and every day by a man that is respected by millions of followers all over the country. Mr. Dave Ramsey is the man I’m referring to and the title of this article, “What is Your Credit Scar?” is a statement that he discusses constantly. Dave Ramsey is brilliant! He puts things in perspective and can show you exactly why you need to take some Baby Steps to get out of the debilitating mess that you have gotten yourself into.

I started listening to Dave Ramsey on satellite radio about three years ago and I only wish I had found him much sooner in my life. He speaks common sense and truth. Dave’s theory is that you must rid yourself of ALL debt! It is his opinion that each and every one of you are able to rescue yourselves and kick the habit that makes banks and credit card companies earn billions and billions of dollars off the backs of the enslaved minions.

When you listen to any of Dave Ramesy’s radio broadcasts you will hear callers scream out in family unison, “I’m Debt Free !” The pickle that many of these families have been in is just exactly what most of you readers currently find yourselves in. You have been taught to make sure you have a good credit score (Credit Scar as Dave says,) and that you must pay at least your current minimum balance on all of your bills. Well that is just a bunch of hooey!

The banks want you to be subservient to them. Suddenly the low interest rate card that you were so proud of and even consolidated all of your bills into, has jumped from low interest, or no interest, to the maximum allowed, which is somewhere up around 28% compounded! If a mobster loaned you money at these rates he would be eligible for arrest and imprisonment! The banks and lending institutions are allowed by the government to get away with it under the guise of handling charges, late fees, service charges, and other cockamamie phrases that are just plain stupid. Dave calls these idiotic payments a “Stupid Tax.”

It is time to put your life in order. Lean back and look at your situation. Listen to Dave Ramsey and take some baby steps. I am not able to articulate or describe in detail exactly how best to do it but Dave is a genius at it. You must find his radio program and start listening to it faithfully. After about a week or so, you will begin to understand exactly how easy it is and how you can get control of your life and be proud of your accomplishments in doing so.

Some of the ways that he will tell you over and over again are really absurdly simple. Take care of your immediate needs first. Food, Shelter, Utilities, and put ALL credit payments on hold, except your mortgage, until you are able to have a $1,000.00 Emergency Fund in a savings account, and do NOT touch it, other than for emergencies.

Dave will tell you exactly how to keep the illegal threatening bill collectors off your back and get them out of your life permanently. Once you have some breathing room things will start to come together much better for you.

Read any of the many books that you can either purchase at very fair prices or borrow from your local library. I have never read a Dave Ramsey book I didn’t like. If you are in or near any of the cities that Dave will be speaking at, then you MUST attend. Your life will change for ever, and it will be for the good!

There also is Dave’s famous Financial Peace University, and he also offers strong skill building programs that he calls EntreLeadership. If you want to succeed in life it will absolutely be able to be accomplished by following Dave Ramsey.

You owe it to yourself and family to visit www.daveramsey.com. Life, Money Hope!

Paying off Credit Card Debt – A GREAT return on investment
Written by Chris Old

Credit Card Debt is a nasty subject to many people. I often see people who are loaded with Credit Card Debt, yet spending money on “investments” or 401k plans that there employers do not contribute to. Whenever I see someone investing in anything while they still have credit card debt, it makes me wonder why they don’t invest the money into there debt.

Most credit cards have an interest rate of between 7% and 36%, depending on your credit. If you have a lot of debt most of the time it will be higher. What people do not realize while they sink there money into other investments is that they can get an instant 7% to 36% on there money just by paying off there credit cards. Any investor will know that a guaranteed 7% to 36% return on your investment is an opportunity that you should sink as much money as you can in. So instead of putting money into a 401k, stocks, savings accounts or whatever else, you can gain a guaranteed return on your money just by paying off your credit card debt, and not being charged that same money further down the road.

Here is a good example, our friend Bill has $1000 in his savings account gaining 3% interest, he is contributing $100 a pay check to his non matching conservative 401K gaining 7% interest and he is paying an extra $50 to pay down his car loan which is at a low 2% interest, all the while he is only making the minimum payment on his $3000 credit card debt which is charging him %25 interest. Bill thinks he is doing good because he is paying extra money towards his car payment to pay it off quicker, and he is saving money in both his 401k and his savings account. Bill thinks he is making money, but in reality if he where to take all of his savings, stop contributing to his 401k and stop over paying his car loan, he would get a much greater return on his money by paying off his credit card debt as quickly as possible and net himself a 25% return on investment. This would eventually allow our friend Bill to contribute much more to both his savings account and 401k, while making them minimum payment on his low interest car loan.

The bottom line is that we have to look at the interest rates of not only what we are making money on, but also the interest rates of what we are paying money on. If we are paying high interest rates on credit card debt, it completely cancels out the interest rates of our investments and we simply continue to lose money each and every month on our bottom line. Why make the Credit Card Companies rich when we could make a little interest ourselves!

It seems that everyone loves borrowing money to pay for things. There are even gimmicks to make people think they are saving money or getting things for free by using there credit cards, but someone has to pay for all of those frequent flyer miles, and if you have credit card debt then I should thank you for my flight to Hawaii! Credit Card Debt is nothing but paying someone to borrow there money. If you have the money to invest elsewhere, why not invest it in yourself and get to the point where you are not paying someone else to borrow there money.

The Love and Hate of Credit Cards
Written by Gord Boehler

My wife loves credit cards and I hate em’.

This is a typical scenario I hear about at work from my buddies and read in magazine articles, newspapers and online blogs. Recently my friend at work in the Jazz Air Hangar was on the cellphone with his wife and I could tell the conversation was getting a bit “heated”. After he flipped his phone closed he began walking around in circles muttering to himself.

“What’s the problem, Pat” I asked him. “She goes out this morning and buys all these clothes and charges $420 on the card and I’m trying to get it paid off, Jeez!” He yells.

Does this sound familiar to you? Similar instances are happening around the world probably a million times a day.

My first run-in with Credit Cards was when I left the Commercial Fishery when the Government of Canada closed the “Cod” fishery. The backbone and livelihood of Newfoundland Fisherman since the province of Canada was first discovered. This was the start of a declining industry especially for the owners and operators of fishing vessels. It would and is becoming a “big” company operation and the small business man (me) would be pushed out.

In 93′ I retrained as an Aircraft Maintenance Engineer and being at the top of my class landed a job with Jazz Air LP which was Air Nova at that time. This meant moving to Halifax, Nova Scotia in Canada. This was the first move away from Newfoundland and her parents. After working a couple months we bought a house and were given a “$5000.00 limit” Visa credit card.

My wife’s eyes light up when she saw the shiny new card and couldn’t wait to use it. I had reservations and thought we should cancel it but she won the debate. To make a long story short, within a year and half we were up to our limit with buying furniture and making up for my initial small salary working as an Aircraft Mechanic apprentice.

As my salary increased I managed to get the “card” paid off but since then it has been an up and down battle keeping the credit card bills to a minimum. A credit card can easily take over your life and push you into bankruptcy if you can’t control it. On the other hand my wife’s sister and husband use it everyday and pay off the balance every month. They don’t pay any interest and build up points for travel and hotels.

I can see a big change in the last few years where staying in a Hotel , booking a flight, renting a car, joining an online business and endless products and services, require a credit card. The struggle for most, like my me and my wife, is to keep it under control.

The Wonderful Invention of Credit Cards and How To Manage Them
Written by Jarret Cade

Ah, credit cards, what a wonderful little invention right? A credit card can be both a good thing and a bad thing. However, more often then not they turn into a bad thing. Why? Because a credit card allows you to spend money you don’t have. This is where most people get in over their heads instead of coming up with a plan and sticking to it.

Some studies report that in 2007, credit card debt that was past due 30 days or more totaled over $17.6 billion. Other studies show that close to 5.3 billion credit card offers were mailed out to U.S. households. No wonder why there are so many people in debt, the credit card companies just keep feeding the nation.

So, how exactly do you avoid credit card debt you ask? Well the obvious answer would be to never get a credit card. No credit card debt, no using money that is not yours, meaning you have nobody that you have to pay each and every month. But in today’s world, you almost certainly need a credit card. Credit is a big factor when it comes to renting an apartment, buying a house, and getting any type of loan. Considering that most people do one of those things in their lifetime, not having a credit card is really not an option.

Like almost every other person over the age of 18 in the U.S., I have a credit card. It is only at a small limit as I have not had it very long but that is ok since I don’t really buy a lot of stuff as it is. A few things here and there, but nothing that I cannot afford. Notice the last part of that sentence, “but nothing that I cannot afford.”. This is probably the best advice that I can give to steering clear of credit card debt. I have a pretty simple philosophy, if I cannot afford it I do not deserve it.

Honestly I would rather have something that I know that I own, then to have something that I technically do not own because I am paying somebody else for it. Yeah I may miss out on some things that I really want and I may not have a much fun as the person next to me. But I can be guaranteed that I do not owe anybody any money. And when you know that you do not owe anybody any money, you have a lot less to worry about.

If you are one of those people that just has to have something, set a limit on how much you spend each month. Only allow yourself to charge a certain amount to your credit card and stick with it. Because I can almost guarantee that once you go over that limit, you will continue to keep doing so. Just because your card gives you a credit line of $1500, does not mean that you have to go out every month and buy $1500 worth of items just because you can. Mind you, you are still spending money that is not yours and you will have to pay that money back eventually, but if you have the discipline to set a limit you probably have the discipline to make the monthly payments as well.

Like me, you have probably gotten more then a few credit card companies offering you all kinds of deals. And as good as some of those deals sound, you should really find one that suits you the best and stick to one card. You do not have to accept the first offer that you receive, take some time and check out the companies online and see what they offer. Some companies offer special rewards such as cash back on purchases made at the store. As well as some companies giving you points each time you make a purchase which in turn you can use to travel with. Having one card will obviously limit how much you can spend, but once you start using the card and make payments, you should start seeing your limit increase.

Ah, the monthly payment. This is how most people end up in debt and remain in debt. Because the companies only ask for so little, with interest and all the other fees, sometimes you are not even actually paying off the company. In reality you are paying the fees and interest while each and every month, more and more interest is applied. The monthly payment is usually extremely low and that is what attracts people so much. You can go out, spend a couple hundred dollars and when it comes time to start paying back that money, you only have to pay $15 each month. And that is what most people do, make the minimum monthly payment. Eventually you will be able to pay off the debt using this method, but it will not be quick and like I mentioned before, you could just be paying interest and fees instead of the actual debt. So make an effort to pay more then the minimum, in all honesty pay as much as you can afford because the sooner you pay off the debt, the sooner you do not have to worry about it.

Along with paying more then just the monthly minimum, you need to make these payments on time. Credit card companies will add a fee to your account each and every single time that your payment is late. Add this along with the monthly interest on your account, and it is a sure fire way to place yourself in a situation that can only get worse. These fees can be small and they can be large, in any event, it is extra money that you have to pay.

So how exactly do you go about getting out of credit card debt?

Like I stated in one of my previous paragraphs, make the monthly payments. Make more then just the minimum payment and even more importantly, make them on time. The possible fees that the companies may add onto your account when you do not make a payment will put you even deeper in debt. But I can barely afford to make the miminum as it is, what do I do? Simple, give up a few luxury items. Instead of spending $6 on a mocha at your favorite coffee shop, spend $1 on a bottle of water. Yes I know, it doesnt taste as good, but look on the bright side, you are saving $5 and the water is a lot healther for you. Take that $5 that you saved and put it towards your monthly credit card payment.

Eat out less often as well. It costs a lot more money to go out to a restaurant then it does to stay at home and cook. And like with the bottled water, chances are the meal will be healthier. Unless of course you are eating anything deep fried, but that is another issue. I know these things may be hard to do, but you are going to have to make some sacrifices to get yourself out of debt.

Hey, I just got this letter in the mail from Company XYZ telling me that they can lower my monthly payment and save me money! No, not really. This companies are out to make your already bad situation even worse. Sure, they may reduce your monthly payments but in the long run you aren’t saving any money. You are actually going to be spending more considering that Company XYZ wants to make some money as well, they are for sure going to figure out a way to get you to pay. So on top of you already owing your credit card company money you will also owe Company XYZ money, not a very good thing if you are trying to get out of debt. A great way to get even further into debt though….

Stick to the credit card(s) that you have and do not accept any more offers. You may end up finding that even your own credit card company is willing to give you another card to pay off your current debt with them. There are rare occasions where it may be a better option to move all your cards onto one card, but these situations are far and few. Another card means more interest, more fees and more debt.

So, lets review.

How to avoid credit card debt altogether:

• Do not get a credit card in the first place
• Do not spend more then you actually have in your account
• Make a full payment as soon as you get the statement
• Make the monthly payment and make sure it is on time
• Stick to one credit card
• Set a limit and stick to it

How to get out of credit card debt:

• Make more then just the minimum payment
• Make the payment on time, do not wait until the actual due date
• Sacrifice some luxuries to make more then just the minimum payment, in the end it will be worth it
• Do not accept more credit card offers
• Do not accept offers from companies claiming that they can reduce your monthly payment and save you money

How Go Beat Credit Card Debt
Written by Tim Kwiatkowski

The simplest way to beat credit card debt is to avoid it. OK, easier said than done! But seriously, credit card debt is evil. If you cannot avoid it (like most Americans), at least keep it manageable. Following are five tips to keeping your credit card debt manageable, and with a little luck, avoid it altogether.

1. Don’t impulse purchase. Said another way; don’t buy things the same day you see them. Sleep on it. If still in doubt, sleep on it for a couple of days. I have found that after a day or two of reflection, I usually realize that what I wanted is not necessarily something I really needed.
2. Pay with cash whenever possible. It’s not easy, but it’s amazing how differently you think about spending money when it’s cash versus a credit card. You are less likely to shell out hard earned cash (real Dinero’s) for “nice to have” things.
3. Negotiate the interest rate with your credit card company. If you are like most Americans, you get several credit card offers each week. Play those credit card companies against each other. When you get that next offer, call them up. Tell them the interest rate and benefits you get from your favorite credit card company and ask them if they’ll match it. Half of the time, they’ll meet or beat the deal you are currently getting.
4. Watch your credit card statement. As crazy as it sounds, I have experienced establishments that round up (in a big way!) when you make a credit card purchase. Get a 15 dollar haircut; your credit card is charged 20 dollars. Have a nice 75 dollar meal; your credit card is charged 95 dollars. It seems small in the whole scheme of things, but it adds up. Don’t get taken for a few dollars here and there. Save your receipts and verify your credit card statement each month. Don’t be afraid to call your credit card company and dispute a charge. If a charge is total BS, your credit card company will do the legwork and contact the vendor to dispute the charge. I have found that in most cases, your credit card company will resolve almost any charge that you do not agree with.
5. Number Five is the most important (and hopefully simplest) tip; Pay off your balance each and every month! This may be an incredible challenge, as credit is all too readily available, but it is essential to you and your family’s well being. If you avoid carrying a credit card balance, you avoid paying interest charges to the credit card companies. The credit card companies fool you by offering a low “minimum monthly payment”. Don’t be fooled. That minimum monthly payment is available only so you drag out your payments and rack up interest payments to your credit card company. It is not in your interest (no pun intended) to pay the minimum monthly balance. Be sure to pay off your balance each and every month!

So assuming you mastered 1 through 5 above, how can you beat the credit card companies? Take money from them! There are a number of credit card companies that offer cash back on the purchases you make. I did a ton of research on cash back credit cards and wrote up my finding on my blog about Getting Things Done. I would highly recommend that once you get your credit card finances in order, you find yourself a high quality cash back credit card and take money from the credit card companies!

Do you know how to get rid of credit card debt?
Written by Luke Jernejcic

It is not secret that the average American has a huge amount of debt. Just look at the state of our economy. I would venture to guess that every home owner who is going into foreclosure also has a significant amount of debt on their credit cards that they will be taking with them. I however fall into a different, though not uncommon, category of debtor: recent college graduate.

I graduated from college about year and a half ago. I moved back home with my parents but soon found myself in a situation where I had to move out. I got my own place and was doing well enough. However, I was barely making enough to cover all of my expenses. I used my credit card to help me get by, expecting my raises to help me stop relying and start paying my credit cards. As I found out, raises my company raises do not happen on time and cannot be counted on.

I knew that the time had come to stop trying to push through the wall of limited income and to learn to work within my financial means. I had to stop hoping that I would arrive in a situation where I could get out of debt and turn my current situation into onto a scenario that would accomplish it. The most important thing is that if you want to get out of your debt, then you must stop accumulating it. It can be very hard to stop using your credit card purchases.

You go to the grocery store, run errands, etc. and you are used to just swiping the card. Stop doing that. Go to the bank and get your allotted cash or use your debit card (just make sure that you are also keeping track of the account balance). By doing this, you can at least rest know that your credit card debit is not growing. Still, there may be times where it is just better to use the credit card. For example, Costco American Express gives three percent back on gas purchases. That is a nice reward for an expense that you cannot avoid, but that three percent is not going to compare with the twenty percent they are going to charge you.

If you find yourself tempted by such things, take this advice: as soon as you go home make a payment to your credit card for at least the amount that you just spent. Again, you are doing this so that you will not accumulate more debt. A very helpful and important thing that you can do is to let someone in on what you are trying to do. In fact I bet that it would greatly increases your odds of being successful in this endeavor. Tell a friend or family member your situation and ask them to keep you accountable to your plan of action. Make sure it is someone you trust and make sure that you put forth the effort to be honest.

Also, definitely do not let it change the relationship. They are doing this because you asked them to and because they care about you; listen and be appreciative. You hear this all the time, so I will not go into it too much. If you want to get out of debt, then you need to make more than the minimum payments. If you only pay the minimum then it will take you forever to get out. Credit card debit is so hard to get rid of. Often it can very much be a mental game. That is why it is important to create a plan to get rid of it. You can get rid of that debt if you set your mind to it and are persistent. Do not abandon your plan if you fail every so often. As I mentioned, I managed to accumulate a significant amount of credit card debit after college, and this advice is how I am going about to get rid of it.