Credit Cards - Reduce Your Debt (1 of 2)

In the spirit of competitiveness you can always get a better deal in the credit cards market. The idea of getting out of debt is to try and do it in the most efficiently way possible. We don’t want to be paying back our credit cards for the next twenty years do we. However, the creditors would love it if we did more interest to pay more money for them. So here are a few ways in which you can clear the debt on your credit cards faster without paying as much.

Reducing debt on your credit cards-Step 1

Always pay more than the minimum fee per month on your credit cards. Work this into your budget. The longer you take the more money you are paying.

Insurance on your credit cards-step 2

Insurance, do you really need it? There are two main types of insurance for your credit cards; minimum payment insurance and unauthorized use insurance.

Minimum Payment Insurance is there to ensure that your minimum payments will be made if you become disabled or unemployed. However, collecting insurance for credit cards is generally becoming increasingly difficult. This is often highlighted in the immense paperwork involved in this process. Additionally the fees charged for insurance on your credit cards can be up to 2% of your overall balance per month. This can actually be as much as your original minimum payment. Therefore in effect you are paying double the amount of money on your credit cards for very little compensation. Then if you do claim eventually they do only pay your minimum payment, which means your debt lasts longer therefore benefiting the companies of your credit cards yet again.

Unauthorized Use Insurance is there to protect you if your credit cards are stolen. However, your liability for unauthorized use of your credit cards is most often limited to $50 anyway. Few credit card companies will even attempt to make you pay that much as long as you have reported misuse as soon as you find out. The most important thing is, however, is that you are not liable for illegal use of your credit cards whether you have insurance or not!