Credit Card Debt Relief Secrets

The "Envelope System"

On payday you write the name of each credit card on the front of blank envelopes. On payday you make out a check for each payment and stick it into each envelope. When you're done what's left is what you have to live on to the next payday - no exceptions.

If you can afford to - many people find that by paying credit card bills as soon as they arrive helps them avoid making mistakes with bills that lead them down the late payment path.

Some people just can't manage their own affairs without help. Their entire financial situation will continue to deteriorate until someone else enforces discipline from outside. Credit counselors are great here.

They can give you just what you most need - that little bit of discipline. You write them a single check and they pay your bills for you. This system has worked for many others and may be the right fit for you. (But be sure who you're dealing with, as some credit counselor firms are blatant rip offs that just take your money and run).

If you suspect you may be approaching bankruptcy, you should know that Discover and Sears are two cards you may want to get rid of. Both of these firms are particularly aggressive in bankruptcy proceedings. They play hard ball which you don't need. During bankruptcy proceedings they may force you into situations you should avoid. They just don’t care.

Continue to make payments using your regular statement and their pre-printed envelopes during a balance transfer. Many cardholders get tripped up here. You get a great low rate introductory balance transfer deal. You transfer a balance and ignore a single payment thinking that you've paid them this month. Guess what can happen next? You guessed it - the rate on the whole balance soars and the low introductory rate is swept away in seconds.

If you pay off a credit card and are finished with it, be sure to call them and officially cancel the thing. If you don't they may re-issue the card later (along with a new fee). Or even charge you an "inactivity fee".

Try to avoid using a credit card for expendable purchases such as vacations or food. Items that appreciate make the most sense (like antiques and collectibles) as they add value to your bottom line over the long haul.

Check your credit report annually. Also check it if you detect a sudden decline in your credit rating (also indicated by receiving high interest rate new card offers)

Pre-employment credit report checks are recorded on your credit file as "External Enquirer" which can damage your credit rating. Try to keep such checks to a minimum.

You receive an attractive offer for a credit card that includes a really low introductory period of six months. You get the card and transfer a balance onto the card at the juicy new rate. You make the first five payments on time but are on vacation when the sixth payment is due so it's a few days late.

What was the result? Not only do they kill the low introductory interest rate and charge you a hefty late fee, but they then calculate your interest charges all the way back to the card's issue date! And what is the motto of this little story? Be especially careful about making timely payments during introductory periods.

Sneaky Credit Card Tactics

Issuers have a new tactic that is particularly irksome. They call and say something like "We've received your last payment and credited it to your account. You sent in $100 when all you were required to send in was $17. You really don't have to send in so much Mr. Smith!"

Politely inform the caller that it is your personal goal to get out of debt and this is how you intend to reach your goal. They will realize that you are way ahead of them and quickly hang up.

The more balances you transfer, the more transfer offers you'll receive in the mail. The sharks smell blood and want to get you hooked as fast as possible.

If your existing issuer or a new one calls you and offers you a really sweet deal but you can't seem to get a handle on all the details (remember, the devil himself is prowling around in the details!), ask them to send you the offer and details by mail. Most will comply. It is in your advantage to take the time to understand the exact terms before you sign up.