How to minimize using your credit cards abroad.

It can be very tempting, when you go on holiday to take your credit cards with you and whip them on numerous occassions. This is all well and good, if you know full well that you can pay back whatever you spend once you get back to your home country, within a reasonable time frame.

However, relying on the credit card whilst in a foreign country can cause all sorts of problems apart from the foreign exchange rate charges and interest rates. What happens if you're wallet or purse is lost/stolen whilst on holiday. This is one of our worst fears, and dealing with such a scenario in a foreign country can be a nightmare. So before you go abroad, make sure that you've set up the necessary security measures for your cards that safeguard you against card fraud and also make notes on your bank's lost/stolen card contact details - in case it does happen to you. With a simple call you'll be able to cancel the cards stolen.

However, you may then realize you've got a problem with funds and getting access to them. This alone, can be a very stressful and worrying situation. But, this scenario can easily be avoided if you make sure you've got backup measures in place, such as traveler's cheques. Also, before you go you can look into western union money transfers and perhaps organizing someone to send you funds in case of an emergency. You may be able to wire the money through online banking back to the person from your account whilst you're abroad. Technology has enabled more ways of getting access to our money, but we should still rely on other traditional methods in case we run into trouble whilst abroad. If you do a lot of traveling it's perhaps a good idea to select a card that has low foreign exchange rate charges ideally 1% or less or just charges a low flat fee. This can help reduce your final holiday bill.

Credit card interest rules change

Following August's new Credit Card Accountability, Responsibility and Disclosure or otherwise known as CARD, consumers have been given more protection from the industry. This is because, now consumers have a right to Say NO to interest rate hikes and other changes in credit card agreements. There are going to be several phases of this new initiative under UK law.

But some of the main points that we can expect from it now include:

• A change from 15 days of warning about charges to credit card accounts, to now where at least 45 days of warning needs to be applied by the credit card company if the customer has incurred any charges on their credit card.
• Customers have now at least 21 days to pay their credit card balances, without the threat of late fee payments
• Consumers have the right to opt out of interest and fee increases, whilst they can still pay off the balance at the previous lower interest rate. Before, issuers offer opt-out preferences at their discretion, and it was not a consumer right. All this has changed now.

There will be further regulation changes in 2010, and some of this changes will include not being able to market credit cards to young adults, a reform on shopping gift cards and the regulation of said shopping cards, as well as further regulations and restrictions on interest rate increases.

All this is good news for the consumer, who for too long has been taken for a ride by the credit card companies and hit with interest rate increases for sometimes no valid reason.

Ways to avoid getting in the red again.

The trouble with amounting credit card debt, is that one day or month you may find that you're able to pay off all your credit card bills and leave you balance at a nice healthy big fat nothing to pay off. However, all too often people will fall into the trap of thinking that it was easier than they'd expected to pay off their credit card debts, and will therefore be tempted to start using the plastic again. After all, if you've done it once and got out of the red, then surely a little bit of debt back on the cards is alright. In no time at all you'll be able to pay it off again. Here's way the dangerous thinking lies, just because you did it once doesn't mean that you can do it again ad infinitum. It simply doesn't work like this.

A much more sensible approach to take after getting yourself out of credit card debt hell, is not put yourself in the position again. This means doing whatever it takes, to not rely on that bit of plastic. Quite frankly more people should follow the rule, that if they can't afford it then don't buy it. Often it's the purchases that we can't afford, that we don't really need that land us in the most trouble. Buying stuff that we can't afford and don't need, just makes more money for the credit card company and puts more stress on you to come up with the payments. So do yourself a favour, if you manage to get out of red, stay in the black for a while and see how that feels.

The dangers of debt consolidation

You may have noticed that interest rates currently are extremely low, but be careful as you just because the interest rates are as low as they have been you should still proceed with caution when trying to consolidate all your higher interest rates debt into one lower one. What looks like a cure for all your debt woes, usually ends up as just a symptomatic relief cure and more often than not you're back where you've started.

There are several approaches people may take to combat their debt and loans, one is to seek debt consolidation loans as previous posts have looked at. Another may be zero balance transfers on credit cards, and others include home equity loans and lines of credit. However, research has shown in America that people who took out home equity loans to pay off credit card debts have ended up with the same, or in some cases a higher, debt loan than when they started off.

The trouble is with seeking debt consolidation, it basically reinforces why you got in trouble to start with as it relies on the same borrowing tendencies that you got into debt with. Effectively adding more fuel to the fire. Plus if you're looking to take advantage of the low interest rates currently offered, with a bad credit score it's more than likely that these interest rates will not be offered to you but higher ones as you're considered too much of a credit risk.

However, if all options have been explored and credit debt consolidation is your option we recommend you do your research thoroughly on the company before comitting to anything. If you're going to take out a home loan you should always read the contract and understand the risks involved - that you could lose your home if you default on repayments. Where possible seek an IVA. Also if you are not a homeowner, and seek a zero percent credit card option, make sure you know how long this interest period lasts for and when the rate jumps back up.