Ten Ways to Cut Expenses on Credit Cards, Mortgages, and Other Loans
Get the best bank loan interest rates, avoid payday loans and tempting
credit card offers, and learn how to cut expenses on debt. These ten
tips will get you on the right track.
Finding ways to cut expenses on credit cards, mortgages and loans will
free up extra cash for savings and fun.
Credit Cards
In a fast paced society, there are thousands of people who love fast
paced spending. A lot of times the the convenience of credit card
spending can get way out of hand. The main reason is because of the
sheer ability to obtain a credit card and the fact that many have
the capability of spending right there at their fingertips. Some of
these people don't even work to earn the credit that they get from
these cards. This is how the world of convenience plays on people.
Here are some ways to cut expenses on credit cards that will come
in handy even if you have perfect credit:
- Just Say No! - You will receive a million credit card offers in
the mail from time to time. The best thing to do is just tear the
whole unopened piece of junk mail and throw it in the trash. There
may be times that your curiosity will want to peek just to see what
the annual APR is, but even though it says 10.9% APR for 6 months,
how much will it be after that? 21.9%??
- Pay it Off - Sure, go ahead and use the card during the month and
when payday comes along, go ahead and pay it off. Yes, make sure that
you pay for the purchases that you made that month so you don't have
to pay interest. At the same time you are building your credit as
well.
- Lower Interest Rates - If you must get a credit card, be sure that
you get one that has a low interest rate. Make sure that the interest
rates actually stay low as well. Fixed APR is what you look for. The
lower the interest, the better off you will be. If you have bad or
no credit it can be very difficult to find a good fixed low APR.
- Low or No Fees - To own a credit card, there is usually an annual
fee. Then there is a processing fee, a over limit fee, a late fee,
etc. By the time it comes to actually paying the minimum that is due
on the card. you are swamped with all of these fees, so paying anything
really means nothing. Try finding cards that offer low or no fees.
Mortgages
Mortgages work in a similar way. There are high mortgage rates, so
there should be many questions that you need to ask. Why do you need
the mortgage? Are the intentions of using this money really worth
losing your home? Is the money for house renovations and is your job
secure for the X amount of years that you will be paying on the mortgage?
These are questions you need to ask yourself before buying a home
or refinancing your mortgage for debt payoff, renovations, etc. Learn
how to reduce mortgage costs with these tips:
- Lower Rates - Like obtaining a credit card, it is obvious that
you need to be sure that you find the lowest rate available. The higher
the mortgage, the lower the rate, the fewer the number of years you
need to finance. Financing for the minimum length you can afford will
save you years of interest!
- Budget Spending - You need to be sure that you are budgeting your
spending so that you can double your mortgage payments or pay at least
one extra payment a year. The more you pay, the less interest you
have to pay. Make sure your mortgage has a No Prepayment Penalty clause
so you can take advantage of making extra payments on the principal
balance.
- You Can Always Refinance - If interest rates are currently lower
than your financed interest rate, you should see if you can refinance
at a lower rate. You want to be sure that you find the lowest rate
and the shortest payoff term you can afford. Just keep in mind, closing
costs play a factor in refinancing (and your initial mortgage financing)
and should be taken into account when you calculate the best payment
terms for your mortgage.
Loans
Loans in general are easy to obtain if you have excellent credit.
There are some that you want to steer away from, regardless of how
tempting they seem to be. A great example are payday loans. It is
not good to get a payday loan because you will actually be spending
anywhere from $25-100 on a two week loan of about $300. Bank loan
interest rates are a lot lower than payday loans, so keep that in
mind when you need to borrow for a short period of time. Being smart
when you research your loan options will help you find ways to cut
expenses and balance your budget.
- Avoid Payday Loans - These are enticing because sometimes we need
to make ends meet until payday. Without thinking about the amount
that we pay back, we go ahead and get the short term loan. We end
up spending more than what we want to just to find ourselves back
in the same position.
- Lowest Possible Rate - There are companies out there that offer
payday loan rates as low as $10 per $100 loaned, which is not that
bad. So if you must borrow money for short term usage, get a loan
that has the lower fees. You can find these on the Internet as well.
- Pay it Off - Make sure that you pay it off entirely and not drag
it out. Many 'pay-day' loan lenders allow you to extend your loan
to the next payday, then the next payday, then the... Well, you get
the picture. By the time you pay it off, you would have paid double
or more for the loan.
Play it smart when looking for ways to cut expenses
There are many ways to cut expenses when you are looking to borrow.
Many ads you see are just ways to entice you out of money over the long
term; money that you could have saved by disciplining yourself and researching
your options. Playing it smart can get you the most bang for your buck.
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