It is the latest craze at the moment and everyone seems to be enjoying gambling at home with the increase of poker sites on the internet, but its not good news if you are running up debts on your credit card. I dont know about you but it seems that I have a misconceived perception of time when I am sitting at my computer; time just seems to fly by. The longer you are gambling on an internet poker site, the more money you are spending.
Online gambling is being seen as pushing up consumer debts and thats not good for the UK economy. Figures from the government have revealed that the amount of money spent on gambling last year was 42.8 million; in 2001 that figure was only 8.6 million. It is a perturbing sharp increase. Internet sites that have been registered outside the UK have not been included in the government figures of money spent.
The glamorization of gambling, especially poker, by celebrities at the moment is partly to blame for the rise in gambling. Sitting at home on your computer can undermine your ability to spend your money wisely. Internet poker sites or casino sites allow you to insert your credit card details; once your details have been entered you can continue gambling up to your credit limit. Some gamblers are maxing out numerous credit cards at a time to try and win back money they have lost with the Debt Advisor group seeing some individual debts as high as 100,000. Casinos have a strong cash culture unlike internet gambling where it is your credit card that does the spending. Using cash instead of your credit card makes you more aware of the amount you are spending.
The growth of gambling online in the next five years is predicted to be around 22% a year while playing poker online is said to rise by 44% a year. Gambling through your mobile phone is now also being offered by companies which could see even higher debts being accumulated.
Gambling has always seen its fair share of creating debt problems but with easier accessibility it may cause more households to suffer from unmanageable debt. Other household members are usually unaware that there is a debt problem looming not realizing how much is actually being gambled, the more desperate people become to win back their money the higher the stakes become seeing people usually losing more and more.
If you are suffering form credit card debt problems through internet gambling there are many organizations that can help you. Seeking help sooner rather than later will prevent even more debt.
These days credit card or plastic money is very popular and used extensively. It is indeed of great utility if used in a calculative manner, but it is also the main cause that leads many people trap into credit card debt. Let see how it happen to most of people.
Many of retailers are implementing easy payment scheme for their products or services, with some fraction amount of money for monthly installed, you can buy thousand of pounds of items or go for a luxury vacation which you can’t afford to buy if one lump sum of money is needed, these monthly installment are automatically charge to your credit card. Every month, you just pay the minimum amount of your credit card balance and you continue spend on your credit card. Let use a case study to review on how a person credit card debt can grow and how it will take to get rid of it.
Case Study
Scott earn 2,500 a month, he is holding a credit card with interest rates of 12%. All his credit cards allow him to pay a minimum of 3% or 10 which ever is higher. His credit card limit is 15,000.
Scott’s credit card balance at current month is 4,550 (3000 in principle and 1550 interest). He tends to pay the minimum of his credit card balance and each month he will averagely swipe about 500 on petrol and other utilities.
Let see how’s Scott’s credit card balance grow:
Month 1
Credit card balance = 4,550.00
Minimum Payment = 136.50
New Credit Card Spending = 500.00
New Balance = (4,550 – 136.50 + 500.00) = 4913.50
Month 10
Credit card balance = 7976.02
Minimum Payment = 239.28
New Credit Card Spending = 500.00
New Balance = (7976.02 – 239.28 + 500.00) = 8236.74
Month 20
Credit card balance = 11109.85
Minimum Payment = 333.29
New Credit Card Spending = 500.00
New Balance = 11109.85 – 333.29 + 500.00) = 11276.55
Month 30
Credit card balance = 13662.60
Minimum Payment = 409.88
New Credit Card Spending = 500.00
New Balance = 13662.60 – 409.88 + 500.00) = 13752.72
Month 36
Credit card balance = 14961.02
Minimum Payment = 448.83
New Credit Card Spending = 500.00
New Balance = 14961.02 – 448.83 + 500.00) = 15012.19
If Scott continues his practice, his will hit his credit card limit after 36 month compare to current month.
Let say Scott stop using his card with the balance at month 36 of 15012.19 and continue paying the monthly minimum. It will take him 228 months which equal to 19 years to just to pay off his 15012.19 debt.
The above example is just a simple case study to show you how your credit card debt may piles up so quickly without you even aware of it. You need a lot of time and spend a lot of money on interest in order to get rid of this debt. In real life, many people have more than one card and other loans to support; hence situation may even worse.
How to get rid of credit card faster & affordable?
If you are already at this situation, the first thing you need to do is to change your behavior of paying the minimum only. Paying more each month will definitely pay off your debt faster but the question is you may say that you can’t afford to pay more than the minimum. In actually fact, the easiest, faster and affordable way to get rid of your credit card debt is maintain your current minimum monthly payment.
For example, we use back Scott’s case. If he affords to pay the minimum payment of his 15012.19 debt, which is 448.83, this is his affordable payment. If he continues to pay 448.83 every month instead of the minimum of his credit card balance, he will need only 43 months to pay off his debt as compare to 228 months. This mean, Scott will have his debt free life in less than 4 years instead of 19 years.
In Summary
Credit card will remain important in many people life, use it intelligently for your convenient, but you much carefully manage your credit card balance, don’t let this plastic money drag you into financial crisis; the ideal way is pay the balance in full each month.
Each year more and more people find themselves drowning in a pool of credit card debt. While it is comforting to some degree to be able to take solace in the fact that youre not alone, most people would also prefer being able to eliminate the credit card debt all together. While it can seem almost impossible to pay down credit card debt once you have attained it, the good news is that there are in fact ways to make it quite possible to pay off your credit card debt and enjoy the freedom it affords you.
First, it is important to understand that you absolutely must have a plan for paying off your credit card debt. Worrying about it wont help you get out of debt any faster. You must put pen to paper and develop a plan for paying it off. The first step you must take in developing such a plan is by analyzing your existing budget to determine where you can use additional money to pay down the debt. Look at luxury cost areas that you can cut out and use those funds to pay on your credit card. Consider options like packing your lunch at home instead of eating out, cutting down on the number of coffees you purchase each week, etc. Once you start thinking about it, you may be surprised at the amount of money you can come up with to put toward your credit card debt.
Second, it is extremely important to understand that you will never get out of debt by paying only the monthly minimum. At that rate, youll be lucky if you have it paid off by the time you retire. You must take aggressive action and start at least doubling your payments in order to make a dent in your debt.
If you have more than one credit card, take a look at which cards have the highest interest rates. The card or cards with the highest interest rates should receive your first attention. In the event that you cant afford to pay more than the minimum amount on all of your cards, focus on the card(s) with the highest interest rate first. When those are paid off you can then take that money and apply it to the other cards. Slowly, but surely you will pay them off.
It can also be helpful to look at the ways in which you can reduce the interest rates on your cards. One way to do this would be to simply call up your credit card companies and request a lower rate. Of course, they dont have to grant the lower rate to you but if you point out that youll take your business elsewhere if they dont, they might quickly change their tune. Transferring balances to a lower interest rate card can also be helpful as long as you close the original account so you are not tempted to run it back up again.
By following these strategies and remaining dedicated to paying off your credit cards, youll have the debt eliminated before you know it. Just remember that while it may seem as though it is taking forever and you may be tempted to quit, following these strategies will help you eliminate your debt far sooner than just letting things go as they are.
Credit card debt consolidation allows you to pay your current debts in 3-6 years. Under a debt consolidation plan, terms and conditions change. The purpose of debt consolidation is to speed up your paying time and at the same time makes lower monthly bills.
Always make sure that the new cost of the consolidated loan is truly less than what you are currently paying for to the various creditors. Not getting the lowest available interest rate has always been a problem faced by consolidation loan applicants. Be sure that there is something to secure the loan like your house for example.
Calculate the interest and the fees of all your existing accounts to see the total payments youre making at present. After computing this, compare the figure with the consolidation loan amount. This will determine if youre making a better choice or not.
If youre already under a consolidation loan, be sure to make your deposits on time. This will assure your creditors that you really intend to pay for your debts. Having delayed payments might cause the creditors to resume the normal collection activities and whats worse, they might turn it back to the regular interest rates and fees.
Be sure to keep in touch with your consolidation representative. There may be instances that your account will be turned over to a collection agency. Keeping your agent updated on the changes will help you solve your problems.
Pay your credit to your consolidation company. They are the ones that divide how much goes to each creditor.
Always check on your creditors statements. It is your duty to monitor the monthly statements sent to you by your creditors. Check if your creditor has reduced the rates. They should also have the late fees stopped. Also check if your debt consolidation company is paying your creditor the right amount.
There are many types of debt consolidation loans available. There could be a loan that would take you a longer time paying but has a higher interest rate. There are also loans that offer short payment duration and a lower rate of interest. If you could not pay for a larger amount every month, you could choose consolidation loans that offer a longer plan.
Rates of the consolidation loan also vary. There is the variable rate debt consolidation loan that allows you to make extra repayments anytime with no extra cost. However a fixed rate debt consolidation loan will only accept fixed repayments for the duration of the loan.