Debit Cards, Credit cards, gift cards, point cards the list goes on and on. We are a society of plastic cards and it is plunging us deeper and deeper into debt every year. Sure they are convenient and fit nicely in your wallet but that convenience comes at a price.

Here are what I believe to be the 3 best reasons to cut up the plastic and start paying with cash again.

1. Discounts

Retailers are charged fees by various financial institutions for the ability to accept credit and debit cards. Sometimes it is a fee per transaction and other times it is a set monthly fee. You can bet that they are going to find a way to pass those fees on to you. Weather it’s a simple price increase or a 25 cent fee added at the time you swipe your card, they will charge you for the privilege of using your plastic.

Besides the fees retailers are charged there is the time it takes to collect, store, reconcile and process all those little transaction slips. Cash all but eliminates that.

You can save a lot of money by just offer to pay for the item in cash. The key to this is to offer 10% less (at least) than the retail price and pull out the cash right on the spot. You can almost always use the power cash to negotiate a better price.

2. Easier to stick to a budget

When you are on a tight budget managing your spending using debit cards may seem like a good idea but you are actually more likely to overspend and blow the budget.

There is something about handing over the cash that stings a little; it no longer becomes just a number on your monthly statement. You can physically see that you have less and that alone can be enough to spend it a little more wisely, even make you question if you really “need” that item that you can’t live without.

3. Security

Credit card numbers are stolen thousands of times everyday, and if your card numbers are stolen the thieves will withdrawal cash or make unauthorized purchases right up to the limit. Many times you are covered and not required to pay back the stolen money but you do have to have your cards replaced and many times there are forms that need to be filled out in order to prove that you are innocent.

This also happens to debit cards, and a simple everyday transaction can result in your bank account being wiped out.

As long as you aren’t carrying around a briefcase full of money, cash is a much safer and cheaper way to pay for those everyday purchases.

Reducing Credit Card Debt With a Debt Snowball
By David Kimball

If you are interested in reducing credit card debt, know that there are no instant solutions, no matter what the slick salesman says. If you are in a situation where it is causing you fits, remember that you did not get where you are overnight. Nor will the problem go away as quickly. But it will go away. And the best way to do it is with a debt snowball.

The Illusion

Be careful. Do not fall for come-ons telling you that you can lower your payments overnight. Oh yeah, in a lot of cases you can lower your payments almost immediately, but that is only by raising your overall debt.

It is how debt consolidation loans work. And is usually an illusion to really living debt free. The loan provider, many times a third party to a debt counseling service, provides you with a loan that lowers your monthly payments. You may reason that by doing this they are saving you money, when they are actually costing you more. In order to lower your monthly payments they are combining your debt. Maybe you have three credit cards they combine or a couple of credit cards and a car loan. They combine this debt together and give you a consolidation loan that costs less per month than the total of the combined bills. They are able to do this by extending the term of the debt. You pay less per month, but over a longer period of time. Therefore, these types of debt consolidation loans cost more in the long-term in extended payments and interest.

The Real Way

The real way to reduce your credit card debt is to pay it down with what is called a debt snowball. Do not fall for any other credit card debt solutions. If you are only making minimum payments, you will practically never get financially free. Even paying a little more on your credit cards each month will help you in a big way.

It is not a stretch to find $10 a month out there somewhere that you are spending on non-essential items. Take that $10 a month and add it to your payment each month on the card with the smallest minimum. You will be surprised how fast you can pay off a credit card this way with a debt snowball. It will not be overnight, but once done you never have to worry about it again — unlike a debt consolidation loan.

Now that you have paid off that first credit card, take the monthly payment from it and add it to your next largest card. If your first card was costing you $20 a month minimum, and you added $10 a month to that, you now take that entire $30 a month and apply it to your second credit card. You will probably pay this one off even faster than the first. Now, you are drastically reducing credit card debt with the goal of complete elimination. What a great feeling!

You Have Made That First Step - This is just one step on the way to your goal of living debt free. Spend less than you make and live on a personal budget to round your plan. This simple feat of using a debt snowball is key to permanently reducing credit card debt and, eventually, how to live a financially free life. Take the next step now and make a household budget. David Kimball is an author and speaker providing financial coaching to help you get out of debt in 24 months or less.

Article Source: http://EzineArticles.com/?expert=David_Kimball

Lower High Credit Card Balances Now
By [http://ezinearticles.com/?expert=Marilyn_Katz]Marilyn Katz

Why Reduce Credit Card Balances?

It can be no secret that the interest rates on unsecured credit (i.e. credit cards) is getting out of control. Many companies have raised rates in the last year, and these were not small increases. Many cards doubled or tripled interest rates for consumers. A higher interest rate on an existing balance is not a trivial issue either, and it can turn an affordable monthly payment into a real financial burden.

I am not against credit cards either. I think that having some emergency credit is essential for security in our society. When you need to get your car fixed or visit the dentists, it is very important to make sure you have a way to handle the cost. The problem is not with using a credit card, but in letting the debt run up until it gets to be a burden.

Credit Card Minimum Payments are for Suckers

You know that if you only pay the minimum balance, you risk extending your payoff date into some distant future. You may not be working towards getting your debt paid off at all. Try to pay more than the minimum due. It would be great to add in an extra $100, but if $10 is all you can afford, then add that to the lowest payment your company will accept. Just get in the habit of paying more than the minimum!

Is your account balance still going up every month? You might want to check those extra services your card sold you on. Did you sign up for payment protection or some other type of service? These are very sneaky ways to insure that your card is always getting charged every month. If you really don’t get a benefit from these services, cancel them!

Plan Your Attack

Look at your various credit cards and plan your attack. Credit experts often tell us to knock down the higher balances first. Our credit scores will tend to rise when we are not close to our credit limit. But I find some satisfaction in totally eliminating the lower balances first, and then moving on to the higher ones. You need to come up with a plan that you can stick to. A clean credit cards feels great!

Lower Payments with Low Interest Rate Transfers

If your credit is decent, you can still find offers to transfer your balances. Some offer 0% balance transfers, while others offer the transfers at a very low rate. These offers usually expire after 6 months ot a year, but then it might be time to shop for another offer!

Is it worth it to shop for lower credit card interest rates?

If you have a balance of a few thousand dollars on credit cards, the difference between paying 0%, 8%, or 28% will be substantial. A lower interest rate means more of your payment goes towards paying down the balance, which means your minimum payment will also go down every month.

Besides, as consumers, we need to vote with our pocket books. If our current credit card company wants to be a pig, we need to shop for a leaner lender!

Do you have high credit card debt and interest rates?

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Article Source: [http://EzineArticles.com/?Lower-High-Credit-Card-Balances-Now&id=3518000] Lower High Credit Card Balances Now