Say Cheese Climbing Out Of The Bottomless Pit Called Credit Card Debt Mileage Credit Card Strategies For Using Your Miles Credit Card Debt Consolidation And The Middle Class Trap

The Smile credit card was in 2005 awarded the accolade of being the “best credit card” at the Guardian Consumer Finance Awards, quite an achievement but when you consider it is the four year in a row that it has done so, speaks volumes of what type of credit card you will be buying into, if you feel that this is the right credit card for you.

Launched by the Co-operative bank the smile credit card will also give you a better rate of APR on your card if you already bank with the company, so rewarding existing customers is high on the agenda. For example the standard APR for new customers is a competitive 12.

8%(variable) a great rate, but if you are already banking with the company, you could see almost 3% cut from this APR, which will give you an annual APR of 9.9%(typical/variable) and add to that 0.5% cash back.

Here are some crackers.

Typical APR of 12.8% (variable) for new customers.

Typical APR of 9.9% (variable) for existing customers.

Cash back of 0.5%.

First class customer service.

Online account management.

Ethical Policy.

90 day free trial on card protection.

Smile! you will if you apply for this credit card and you will have a grin that you will find hard to wipe from your face, if you are a current customer or decide to bank with the Co-Op as well by having a current account. At last a credit card and bank that will reward custom.

Credit cards are actually a loan in disguise. They are not free money. If this golden rule is understood it would prove to be the first step towards avoiding the never-ending credit card debt. Taking a credit means taking a loan from someone who has extra at this time when you don’t. But this is the beginning of the credit card debt. Credit card debts come in handy while traveling and other expenses where cash is hard to find or hard to carry. Moreover it is good to have credit card debt limit free for times when cash is sparse.

Many people overspend on credit cards and end up in credit card debt. The vicious circle never ending high credit card debt interest start and finally leads to total loss of peace of mind. To avoid credit card debt some important note should be made about spending patterns. Credit cards should not be used for non-essential things neither should any spending via credits cards be unplanned. To avoid the credit card debt one should use credit only if repayment of the debt is ascertained. Impulse shopping on the credit card can be gross to your credit limit and start the vicious trap of credit card debt.

Beginning of the student life or college life is the starting point for the credit card debt. Every credit card company offers various student credit cards with different lucrative offers for students. Most of the student credit cards offer 0% for first six months, after the introductory period the regular period offers an APR of 16.49%. Usually offers on student credit cards do not have annual fee. Such offers help in avoiding the credit card debt if the student pays regularly each month and carries less revolving credit on their cards. Redemption of reward points against annual fee is another way of avoiding the credit card debt trap.

Credit card debt is a major cause towards losing credit ratings of an individual. Also credit card debt can vaporize the cash limit that may be required for a money emergency. One of the great ways to avoid the credit card debt is to pay bills promptly to keep finance and other charges to a minimum. Many people seek professional help to eliminate their credit card debt. Professional help is available in most of the western countries where people drastically suffer from credit card debt problems.

These professional help via internet and other agencies convince people that more than 75% of their debt can be eliminated. Moreover, they also provide help to prevent problems like bankruptcy and court proceedings which are an outcome of credit card debt. One can devise low monthly payment plus these external help also provide alternative solution for credit card debt management.

Credit card debt creates bad credit rating for an individual. Credit card debt creates penalties. It also provide a history to financial institutions and banks who can decline any further issue of credit cards or refuse a loan to consolidate the debts. Credit card debts also drive towards struggling repayments and demands from creditors.

A mileage credit card is practically identical to a frequent flyer credit card. Mileage cards gained popularity when the airlines companies, to gain customer loyalty and patronage, introduced mileage points on every flight that a customer would travel. Once a certain level of points is reached, they can be redeemed for free travel to various destinations. Many airlines collaborated with credit card companies to offer these benefits on the mileage card Programs.

Partnerships between credit card companies and mileage cards allowed the credit card holder to convert their reward points into air miles, typically, at the rate of one mile for every dollar charged on the card. This encouraged customers to use the credit card frequently so that more miles could be accumulated. The mileage cards in turn allowed customers to redeem points apart from air tickets for free hotel accommodations, car rentals and a host of other services.

Miles are equivalent to currency. Most of the times, customers accumulate many miles only to realize that it will not take them to the place they most wanted to go. A mileage credit card is very similar to a traditional credit card, but prudent use of mileage credit cards can maximize benefits. Consider the following pointers to decide on the use of those valuable accrued miles.

1) Flights – The best way to use your miles is for free flights. Using some extra miles, you can upgrade your tickets to get a business or first class luxury flight. To get maximum benefits use the miles for longer trips, not short ones.

2) Flight and Seat Upgrades – It is always better to exchange miles for upgrades on long distance international flights where comfort is a good value added perk due to the length of the journey. It is not a good idea to spend miles for upgrades on shorter flights (less than 4 hours). Sometimes, customers buy economy tickets and upgrade them by

spending miles.

3) Travel Itinerary – Certain mileage cards allow passengers to book open-jaw flights (fly into one city, return from another city or fly from destination A to B, depart from B to reach destination C). In an international routing, certain airlines might permit a stopover.

4) Hotel Accommodation – Airlines partner with hotels and provide accommodation benefits to members by exchanging miles. You can convert your miles for hotel stays and other services in the hotel.

5) Car Rentals – Car rental companies exchange miles to rent cars. It is recommended to research all of the partner services thoroughly in order to use miles most effectively.

6) Dining – Certain airline specific mileage cards allow members to exchange miles for restaurant vouchers or dining certificates. However, in order to properly evaluate the benefit of the redemption value, cardholders need to determine if the miles converted are really worth the credit received.

7) Cruises – Cruise trips can be booked by exchanging miles, though there could be minimum a miles requirement for this type of reward redemption.

8) Shopping – There are web sites that allow purchase items to be bought by exchanging miles. Customers can bid on these items. The choices may be limited and the value may be low. It is recommended to first calculate the value of the miles to determine if it is worth buying the item with miles.

9) Miscellaneous – Cardholders can often times buy magazine subscriptions and a host of other items with their earned miles as well. It is advisable, however, to use these options as a last resort, either when the miles are about to expire or there are very few miles left before the expiration date.

10) Bonus Mile Offers – If you need a few more miles to earn that much-awaited free trip, numerous sites list up-to-date bonus mile and purchase miles offers. Many of these offers do not require you to fly, but can still get you those extra miles to get your dream trip.

If all these methods fail, some mileage cards allow conversion of miles to points and then back to miles with a financially better carrier. However, there might be a charge for the conversion.

When using your mileage credit card, there are several factors to consider in order to earn that free or reduced trip. The timing of your travel booking (booking 6 months earlier has more chances of winning free seats), being flexible with your travel dates, including off season travel as well as weekday travel can get you the travel deal that you desire. However, it is recommended that cardholders research the reward programs in advance. More specifically, be aware of the eligibility of your accumulated miles on the mileage card. With certain airlines or websites, it may not be possible to use accumulated miles or earn any miles on special discounted fares or routes. Mileage cards offer great benefits to frequent as well as non-frequent travelers. However, if you want to get maximum benefits, it is essential to read the fine print and terms and conditions before actually signing up for one.

Credit card debt consolidation is something many of us will have done at least once or considered doing. The immediate advantage is to save money on interest rates by moving balances on to a loan which will charge a fixed rate of interest with fixed repayments.

The wise move to make then is to cut up your cards and then just pay off the loan. So how many people actually do that? Having a clear credit card in your wallet is too tempting a thing to have now you are under the illusion of it being clear. Typically we’ll hang on to it ‘just in case of emergency’.

Then a few months down the line we find it maxed out again, we’re back where we were making the loan repayments and card payments with their high rates of interest again.

The credit card debt consolidation cycle can repeat itself a few times before the consumer realises what they are doing,- by which time their overall debt has plunged so far into the red that it’s a serious problem.

In the worst cases payments will have been missed or made late so obtaining loans from established lenders will not be an option leaving debt management, bankruptcy or bad credit loans as the only options.

This scenario – sometimes referred to as ‘the middle class trap’ is so commonplace that the question arises – “Why do the lenders allow it to happen?” Recent reports have shown that some lenders are in fact very actively and aggressively engineering their customers to get into situations like this.

Credit card debt consolidation is a very profitable line of business, not only for the high street banks but also for the independent lenders, bad credit loan companies and debt management companies.

When someone has their credit card limit extended, or gets upgraded to a higher grade of card they feel special. They feel like they’ve been accepted into an upper echelon now that their ‘financial status’ has been upgraded. They are made to feel that all of a sudden they can afford to spend more because they have more credit at their disposal.

All the while the lenders know exactly how much they have to spend, how much they earn, how much their outgoings are and exactly how far they can be stretched.

Credit card debt consolidation is best done onto another card with a period of 0% APR giving you the chance to pay off the premium amount and not interest. Of course you will have to exercise extreme discipline to avoid the middle class trap if you are to be successful. The alternatives to forming your own debt busting plan will only cost you a lot more in the long run and keep you in debt for longer than you need to be.

The most effective and self serving way to do it is to make your own custom DIY debt busting plan which does not involve paying fees or interest on top of your overall debt amount. There are a lot of people out there preying on those in need of credit card debt consolidation – The DIY method is really the best way to go.

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