Taking Full Advantage Of Cash Back Credit Cards A Do It Yourself Debt Reduction Program Getting The Cheapest Online Contents Insurance Quotes Cheap Mortgage Protection Can Give You An Income To Help You Keep The Roof Over Your Head Is It A Good Idea To Pay Points On A Mortgage
Everyone has heard of cash back credit cards. For every purchase you make on your card, some percentage of that amount is returned to you at a predetermined date, usually on an annual basis. While this sounds like a situation where you can’t lose, that may not be the case.
Should you decide that you will be carrying a balance on your credit card on a regular basis; your highest priority should always be the APR that your credit card is associated with. Your interest rate will have a greater impact on you financially than the small percentage you might get back at the end of the year by using a cash back card. Remember that your returns will only be from 1%-5% annually from many of the cash back offers, and this pales in comparison with the amount of interest you will be paying by carrying a balance. If you can find a cash back credit card offer with a lower APR than a regular credit card offer, then of course take it. Chances are you won’t.
Creditors make a profit from charging an interest rate on the balance that your carry on your card. Cash back cards tend to have a slightly higher APR than other card offers. This is not always the case, but it can be used as a general rule of thumb.
The cash back credit card offer began in the early 1980’s with a credit company called Discover. As the market they were late entering was already dominated by MasterCard and Visa, they needed an edge that would let them push their way in. Although they were slow to move into the credit card industry, they were steady and over the years became almost as recognized as Visa, at least from a branding perspective. The cash back offer worked.
The cash back card is a simple idea. As you use your credit card to make new purchases, a certain percentage of the amount spent is returned. The first Discover offer was 1% on all new purchases, and this set the standard for a long time. It is possible to finder high returns, but these offers are generally centered on specific spending, such as groceries, gasoline, or specific merchants.
Now it seems every credit card issuer has a cash back offer, with a myriad of options available to the consumer. A program that is becoming more and more popular is the tiered offering. With this program the percentage you receive back is related to the amount you purchase with your credit card. A general example would be 1% back for less than $2500.00, 2% for $2501.00 to $5000.00, and so forth.
The bottom line with these cards is, if you want to take full advantage of the offer there are several rules you should remember. These are:
* Don’t make balance transfers
* Don’t use cash advances
* Always pay your balance in full each month
In the terms and conditions of every credit card agreement, balance transfers and cash advances are handled differently than new purchases. Unless specified in the contract, these two options have interest applied to them immediately and with a much higher APR than new purchases, and with balance transfers there is almost always an additional fee on top of that. While this interest may be considered a small amount, it begins to lessen the value of your cash back offer, often to the point of making it irrelevant.
When used in a responsible manner, cash back credit cards can save consumers money. If not managed well however, it is possible that they can cost more then they are worth.
Need a debt reduction program? You are not alone. Here are 5 tips on reducing debt that you can do right now.
1 – Knock Off Using Credit
If you haven’t done this one, then this is the place to start. Put the credit cards and line-of-credit checks under lock and key, and operate as if you don’t have them at all. Figure out how to make more income and pay cash instead. This is the single most effective action you can take.
2 – Never Commit to Spending More Than Your Income
When you pay for an item with credit because you don’t have the cash, you are committing your future income to pay the credit company. Then you experience economic slavery. Ask yourself if you just want the item or if you really need it to increase your production of income. If you need it, figure out how to make the cash to pay for it over a short period of time, rather than buying on credit. Find ways to increase your income and use it to pay both current expenses and pay off credit debt.
3 – Always Pay More than the Minimum Payment Required
Your debt reduction program will be most effective if you carve out a minimum of 10% to 15% of your income. Use this money to reduce debt. Set a target of paying 3 to 5 times the minimum monthly payment on every credit card. Set aside some of the payment money every week until the statements arrive. It’s always easier to save small amounts over 4 weeks than pay a big bill all at once.
Your credit card payment strategy should also include paying more on the highest interest rate card. Another strategy is paying off low balance cards as fast as possible. After you pay those cards off, the money you were paying on those cards can be paid against the highest interest rate cards.
4 – Never Pay Late or Spend Over Your Limit
Do not destroy your debt reduction strategy by getting hit with late payment or over-limit fees of $25 to $39 on which you’ll pay interest. Plus, if you pay over 30 days late, that black mark stays on your credit record for 7 years – a harsh penalty to pay.
Recently a Vice President of a U.S. bank stated that over 24 Billion dollars was paid out in interest, late fees and over-limit fees last year on credit cards. Do you think the credit card company really minds if you pay late or go over your limit? If they didn’t want you to spend over the limit they could have declined the charge, right?
5 – Cut Back on Expenses
Reducing debt requires as much cash as possible, as fast as possible. Look closely at where your income is being spent and cut back on any expenses that do not contribute to the production of more income. Before you spend, figure out how much money that purchase is going to bring back in to you, your family or your business.
TIP: If you are a business owner, always promote your business to everyone – don’t cut back on that activity. Just make sure you are getting more sales from your promotional activities than what it costs to promote.
Correctly managing the money in a business or household to ensure its survival takes more than a debt reduction program, but this is a great place to start. There are other steps that you can take to increase income, pay bills on time, have cash reserves for emergencies, increase profits and pay yourself more money. Who doesn’t want that, right?
When it comes to getting the cheapest online insurance quotes then you could spend hours searching the net yourself. However, by far the easiest way is to go with a broker who will be able to get you the most comprehensive contents policy while saving you on the premium.
The first factor you have to take into consideration when it comes to deciding on how much you need to be insured for is the total value of the contents of your home if the worst should happen and they were totally destroyed. It can be surprising how much the value of contents come to and sadly, many people find that they have underestimated the value of their belongings and as such are under insured. However on the other hand if you are just making a wild guess then you could over estimate the cost and end up paying out more for your premium than you need too.
When it comes to taking an inventory of your contents don’t forget to include such things as any collections you may have built up such as CDs and DVDs and also the contents of your wardrobe. All the little things can add up along with the bigger items. If you have items of particular value you may need to take out extra insurance to make sure that these are covered. Any very expensive items of jewellery or art for example might not be covered in a standard policy so it is always worth pointing out if you have such items in your home.
A broker will be able to get you the cheapest contents insurance quotes that are most suitable for the type of cover that you need and this includes any extras that you might have to take out to cover expensive and usual items in the home.
If you were to come out of work due to having an accident, suffering from sickness or through unemployment then you would still have your mortgage repayments to make. This could add stress and worry at a time when you don’t need it, but if cheap mortgage protection was suitable for your circumstances then it could give you an income which would help to keep the roof over your head.
Mortgage payment protection insurance is taken out to make sure that you would be able to continue repaying your mortgage by giving you a tax free income once you had been out of work for a pre-defined period of time which can be anything between the 31st day of coming out of work to the 90th day. The cover would then continue to pay out for up to 12 months and with some providers for up to 24 months which can give you great peace of mind and security.
Cheap mortgage protection has to be shopped around for as it isn’t suitable for all circumstances and you have to ensure that it would be right for yours before buying. You can find out if a policy would be suitable for your needs by checking out the small print and key facts of the policy. Some of the most common reasons which could stop you from being eligible include only being in part time work, suffering from a pre-existing medical condition or being retired. Of course these can vary between providers and it is essential that you check out policies.
Not only do you have to check out the small print but you also have to check the premiums because these can vary among insurers with the high street lender typically offering the dearest premiums and the specialist providers offering the cheapest. Cheap mortgage protection can help to save the roof over your head but you do have to buy it carefully to ensure that it is suitable for your needs.
When you go to closing on a mortgage, you have a number of options available to you. One of these is to pay points so that the interest rate can be reduced. Here is what you need to know to help you determine if you should pay points on your mortgage.
A mortgage point is equal to 1% of the total cost of the mortgage. So, if you are getting a mortgage for $150,000, then it will cost you $1,500 per point. For each 1% of interest, there are 8 points. In other words, it will take 8 points to bring down the interest rate one full percent. Each point paid will reduce the interest percentage by 0.125%. Usually, you can see some savings if you bring it down even one point.
Paying points at closing can reduce your interest and bring you savings, but not everyone can benefit from it. Generally, you would need to stay in your house for a number of years – it really will not help if you are not going to stay long.
The reason for this can be seen in the following example. This will show you how to determine how long it will take to break even. If you buy a house for $100,000 at 7.5% interest, then you would be paying around $700 per month. If you spend $1,000 to buy one point, this will reduce your interest to $7.375%, and now you will have a payment of about $691. The difference in your payments is now around $9. By taking the $1,000 that you paid, and dividing it by your amount saved ($1,000 / $9), that will give you an answer of 111, which is the number of months you need to live there in order to break even.
In the above example, you would need to live in that house for 9 years and three months to break even. This is why it is necessary that you want to live in your home for a while before you begin to realize any savings.
If you plan on staying for a shorter time period, then you may want to reduce your costs other ways. This can be done through paying a larger down payment, making sure your total indebtedness is low and your credit score high, or by simply paying more each month. In order to know which approach would be more beneficial, be sure to go online and find some good mortgage calculators to help you find out.
Also, when you go to get your mortgage, get a number of quotes from different lenders and find out which one offers the best deal. All you need to do is to compare them carefully in terms of interest rates, fees, total cost, and what options you have. Before long, you will find that choosing the best of the offers will enable you to save possibly thousands of dollars over the lifetime of the mortgage..
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