Personal Finance and Money Management

Consumer credit declines in May.
Consumers across America are slowly paying off their debt, continuing a trend has been exhibited in 18 of the last 20 months.

According to the latest report from the Federal Reserve [Board], the amount of money consumers owe to creditors declined at an annualized rate of 4.5 percent in May. That number equates to a drop of about $9.15 billion in consumer debt. The new national number for total consumer debt is $2.42 trillion. This was the fourth month in a row that consumer credit declined. There was an even sharper decline the previous month, when consumer debt fell $14.86 billion.

The drop in consumer credit was driven by a deep decline in revolving credit, which is typically associated with credit card payments. Full Article

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If you plan to pay back a credit debt, but do not have enough cash for it, then there is one way that you could possibly try, and that is a 0% balance transfer. This is a scheme that credit companies promote to attract potential customers and to maintain the debt held within the accounts. To repay the credit of the previous account, you can take out this new credit card account with 0% interest and repay the previous credit debt.

This scheme however doesn’t last for long and has a limitation of only 6 months or at most one year. After this time you have to pay the required interest, so use the months effectively for repaying the debts. This scheme is quite profitable for creditors but for borrowers too it could be well affective if the proper use is understood.

Before applying for the scheme however, you have to know the timeline of the promotion as each of the companies have their different timelines, and within that timeline you have to understand your budget level.

Remember that the payment has to be done before the promotion period ends, or you will end up paying interest rates for BOTH the credit companies!

Calculations for 0% Credit Balance Transfer

When transferring balance, a 3% standard fee is applied, but you have to decide whether enough money will be saved to make the 3% fee worthwhile. Depending on your credit scores and also on the credit company, there can be around 5% to 20% interest rate and this amount is critical for your monetary situation.  If a balance transfer is just for six months then considering you have $1000 balance then you will have to pay a fee of $30 to save $23.37 in interest. On the contrary if the balance transfer is of a year then there will be a rate of $12. Now it’s up to you to decide if the transferring is worth the shift or no.

Now considering you have a 15% interest on the credit card along with $1000 balance and payments at 3%/month then tehre is $71.66 interest in six months and $134.94 in interest over the year. And finally for a 20% interest rate, you will pay $96.59 in interest over 6 months and $184.48 over a year. As it is, the higher the interest rate, the more of a need to do a balance transfer.  Considering all these options, you should take on a balance transfer only if your financial status is good enough. Always remember to get professional help and guidance in these acts, as you may never know what is hidden in the box until and unless you don’t understand the terms and conditions well. Also do not take balance transfer for granted, as if you are not careful about them, you might just find yourself in great debts.

Ever stopped by a convenience store to quickly buy a drink with your credit card only to have the cashier point to a tiny sign taped to the wall that says “Sorry—The Minimum Credit Card Purchase is $5″? How inconvenient is that?

I understand all the costs small business owners must endure to accept credit cards, but as a consumer, I think minimum purchase requirements really stink. Credit cards are all about convenience, and businesses that choose to accept them in an effort to conveniently grow their revenues shouldn’t be allowed to inconvenience customers by placing restrictions on when they can or can’t use credit cards.

Besides, it’s really embarrassing when I have to run back to the car to search for loose change.

If a business wants to make the decision to not accept credit cards at all, that’s perfectly fine. Put up a big

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