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.

Ways to save during hard times

Although there are signs in the world economy that things are slowly beginning to improve many leading economists fear it could be some time still yet before there is a full recovery from the economic downturn. In the UK it seems that things have picked up this summer, with the housing market beginning to show some signs of partial recovery with a slight rise in prices in some parts of the UK. With banks becoming pickier about who they issue credit cards and tightening up their policies you may find that the trusted credit card is something that can't be relied upon anymore.

Indeed many banks, are being stricter on credit card application forms examining closely your credit scores, raising interest rates, switching customers from fixed rates to variable ones and enhancing reward programs but at the same time adding more fees! It also looks like the banks could go down one of two ways in the future for offering credit cards: 1.no fee, no frills no cards that can be offered to a broad range of consumers and/or 2. "premium" reward fee cards, or annual fee cards that offer bonuses/incentives for using the card such as cash back on all purchases.

You don't have to rely on the plastic

There are many ways you can avoid using your credit cards for purchases. If you haven't got the money simply don't buy the item! As obvious as this sounds, a lot of people will let their emotions override their rational decision making process (not just when it comes to purchasing and financial matters either). You can always save up to buy that new lcd tv or go way on that two week holiday. Here are some ways you can do this:

• Collect coupons, vouchers for shopping to get discounts.
• If you have a car, get a BP, Shell, Esso loyalty card and accumulate the reward points for filling up at your respective station.
• If you have a loyalty to a certain chain of supermarket sign up to the reward card scheme and each time you shop there points will be added to your balance that enable you to get certain prizes once a certain level of points have been amounted.
• Take any old unwanted stuff to a jumble sale or auction house if you feel the items in question may of be some value. Use ebay for an online alternative.
• Consume all food and vegetables before the use by date. Don't let food go rotten in your fridge. Keep your fridge clean.
• Rather than buy new clothes, customize old ones and use hand me downs for the kids if they don't object too much.
• Mix up your shopping at the supermarket, buy value items as well as non-value items.
  
• Shop at charity shops if you're after real bargains, don't pay too much attention to in-store discounts at leading high street fashion retail stores.
• Cancel any direct debits that you're not really making use of. You may have signed up to a wine club a while back, but perhaps not drinking as much wine as you thought you would when you first sign up. If you can, cancel any unnecessary subscriptions.

Most of these are fairly straight forward steps to take, but aren't the simple, straight forward steps always the most effective?

Finding the right solution to your credit card debt

We have looked previously on how to improve your credit rating score, and how to find the best conoslidation debt company for your needs. Perhaps the most important thing to remember if you are struggling with credit card debt, is to remember that you can get all the advice and help from these companies but ultimately it lies in your hand to change your spending habits. This means cutting back on the luxurious, and making do with only what you need and not what you want.

If you're looking to boost your monthly income, why not get a second or third job. Perhaps look into part-time work online as this can be a good way to start boosting your bank balance. There are many ways to make money online, but don't just think that it can be done with the press of a button. Like everything else it takes hard work. If you don't have any experience in designing websites and are not too IT savy, then there are still ways of making money. You can get paid for filling out questionnaires and surveys. You may want to advertise the skills you have looking for work on a freelance website. There are many ways.

If the online world and making money with websites, surveys etc. isn't for you. Then why not set up a service that people need in your area. It might be something simply such as a laundry or gardening service. You can either do the work yourself in your spare time or hire employers and effectively run a small business. Again, it's up to you and how determined you are to get out of debt that will dictate how successful you are. If you go into something lacklustred and with little enthusiasm it's bound to fail. But if you're concetrate all your efforts on one thing and with enthuisiasm, the chances of success will be a lot higher.

To summarize if lots of other people can get out of credit card debt, then there's no reason why you can't. Work on ways of improving your credit score, cut back on those little luxuries and look to boost your monthly revenue. These are all good ways of getting back on track and in the black.

Boosting Your Credit Score

So I'd thought it'd be of some value to expose the myths regarding credit score.
If you're unfamiliar with the credit score, it's a way from lenders to check on your previous credit history so that they can decide whether or not to approve you for a mortgage, home loan, credit cards etc.

A high credit score means that you are a relatively safe risk for lenders, and they'll be more likely to lend you money if you have a high score.

A low credit score, implies that you've got bad credit history and you are seen as much more of a risk. Therefore, lenders may be more reluctant to give you further credit.

Where does your credit score comes from?

A lot of the information on forming your credit score will come from the application form you fill out. It will also come from how you've managed loans in the past, and data from your personal bills will be used (anything from mortgage to phone or utility bills). If you've been bankrupt or had to use an IVA, these will stay on your credit report for 6 years.

Your credit score will be calculated differently by different providers. Points will be assigned based on the information gathers, and your credit score will be a collected tally of all these points.
Your credit score will fluctuate according to your current circumstances. For instances if when you come to apply for credit, you've missed a payment on say your credit card bill then you will get a much lower score than if you haven't defaulted and you come to apply.

If you're preparing for an application, it's worth knowing your score beforehand as you can work on areas you need to perhaps boost in order for your application to be successful.

So here's some useful tips and techniques to boost your score:

• Close any unused accounts. Your current commitments will be based on the amount you could potentially borrow, and not the amount you actually owe.
• Keep up to date on all payments. An obvious one, but you'd be surprised how many people let things slip and then go to apply for credit. So make sure all bills are paid promptly
• Pay attention to joint bank accounts. If you have an account with an ex-partner, then make sure you close it. As your names could be linked on the credit score report, so if you're partner has financial problems, this will affect your score.
  
• Register to vote at your current address. Lenders use this information to provide confirmation that you live where you say you live.
• Check for errors on the form, even minor clerical errors can affect your score. Entering incorrect information will give the wrong impression and change your score for the worse
• Don't lie. For a starters you'll get found out sooner or later by lenders, and it's fraud.
  
• Don't make too many credit applications. Each application that you make is recorded, make too many and lenders thing you're either desperate for money or that your committing credit fraud.

Follow these steps and in no time at all you'll be on your way to a better credit score.
Hope you've found this useful.