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CREDIT CARDS AND UNSECURED DEBT

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• Avoid Balance Transfers & Consolidation Schemes
• They usually charge an up front fee of 3% to 5% which often is the equivalent of 7% or more interest during the so called "0%" Introductory Period
  
• When the 0% runs out the rate often goes to 20% or more
• Large balance transfer transactions look bad on you credit report and lower your credit score and a fee of 5% instantly adds $500 in debt on a $10,000 transfer
  
• It could cause you problems in the event that you should have to file for bankruptcy soon after the balance transfer is made
• Making too many balance transfers will reduce your chances of getting 0% credit cards for purchases with offers that give large cash back bonuses
  

Here Is A Better Idea

• Take Advantage Of 0% Credit Card Offers For Purchases, Especially If There Is A Cash Bonus Of $100 to $500 or more. Using this approach can save up to $1000 per $10,000  if used for purchases instead of a balance transfer. Follow this strategy:
  
• Make all of your everyday purchases with the 0% credit card including gasoline, groceries, phone bills, electric bills, medical bills etc., as long as the merchant dosen't charge a transaction fee
  
• Use The cash you save to pay down your other credit cards that have interest charges
  
• It looks better if you pay down other accounts on a gradual basis and pay much more than the minimum each month. You will also become more familar with your debt and credit
• It looks better when you have a 0% purchase account which show small purchases on a regular basis and a balance that increases gradually as opposed to a large balance tranfer
  
• Concentrate on reducing your spending and expenses as much as possible
  
• You will earn cash rewards on purchases that you can apply to your balance due
  
• On some offers you can earn a cash bonus of $100 to $500 if a target amount of purchases is attained (usually within a 90 day period)
• You will be able to maintain more and larger lines of credit
• Do not hold onto to much cash or bank balances; use it to pay down your credit card balances; use your available credit lines as your "virtual cash reserve" and apply for additional 0% purchase credit card accounts (when appropriate and practical) to increase your reserve
  

• Maximize Your Availability Of Unsecured and Credit Card Debt (if rates are 0% or very low)
  
• Increase Your Credit Card Lines Of Credit
• Keep Your Balances On Credit Cards At or Below 25% On Each Card or Account
• Don't Make Automatic Double or Extra Payments On a Mortgage, Loan or Credit Card
  
• Be Actively Involved In Your Payments and Adjust Those Payments Based On Your Situation

MAINTAIN A HANDS ON APPROACH TO YOUR CREDIT AND DEBT

• Credit is not necessarily debt.
• Too Much Debt  at high interest rates is bad.
• Increase Your Credit. Decrease Your Debt (as a percentage of your credit)
  
• Actively manage your credit and debt
  
• Be flexible with regard to payments and credit lines
• Maintain a filing system. Keep handwritten journals and ledgers
• Setting up a system of "automatic" minimum payments is OK, BUT, Make extra payments manually as funds become available to you
• Actively managing your credit and debt are essential if you want to improve your chances of financial success.

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