Grace Period: These may vary by consumer and creditor, so while some people will have a little extra time to pay off their purchase, others may be slapped with the financial charge almost as soon as the first purchase is made. Luckily, credit card companies are now force to send out bills earlier so that you can avoid finance charges entirely, assume you have the funds to pay it off.

Weekend / Holiday Fees: If you ever paid your credit card bill over the weekend or had a bill due over the holiday such as Christmas, and paid it the following week, you’ll probably been hit with an extra processing fee. This can cause a lot of frustration especially during the holiday when money is scarce. With the Credit CARD Act of 2009, credit card companies are no longer able to charge you a late fee for payments after a holiday or weekend, but anything after that is fair game. Avoid this charge by paying a day or two in advance.

Charging overseas: Have you ever charged something overseas and were shocked to see on your statement how much more expensive the price was for that soda and sandwich. Some card companies won’t even wait for you to go overseas; if you purchase anything online from another country, like a sweet set of rims for your 2010 Nissan 350Z from Japan, and your payment is processed in yen, you’ll be hit just as hard as I was.  The way around the situation is to avoid online purchase from a foreign country if you don’t want to pay more than you already have.

Inactivity fees: Here are fee that we’ll be hit with at some point in time, assume you have a card that you haven’t used in an extended amount of time. Creditors don’t like being neglect and may generally charge you an inactivity fee as a wake-up call. Thankfully, these types of charges are now illegal. Companies have worked around the system by requiring you to make a minimum amount of purchases by year’s end. So either keep making those charges or close out the account to avoid the hassle.

It Can’t Hurt to Try:

Reducing your interest rate could take as little as one phone call and a few minutes of your time to save you hundreds, if not thousands of dollars across the life of your debt.  Credit card companies are often more willing to reduce the rates if you simply just ask. Though this process does not always work, it can’t hurt to try.

Before the Call:

Before you grab that phone and dial away, make sure you have all your statements and records on hand.  Though credit cards companies are sometimes reluctant in reducing your rates, having your records on hand will show them that you’ve been up-to-date on all of your accounts, which may play in your favor.

What Improves Your Chances:

• You haven’t asked to reduce your rates on this particular card before.
• Always pay more than the minimum payments each month.
• Your account is in good standing with a good track record.
• Your credit score is up to par.

What You Didn’t Want To Hear:

Don’t let “NO” discourage you from reducing your rates.  If they’re not willing at first, try back in a few days and you might get a different representative that is more willing to help you. Let them know that you have different options and that you’re willing to do a balance transfer to another card. Credit card companies will do whatever it takes to keep your business. Remember, PERSISTENCE will pay off.

Everybody enjoys buying new things.  While maybe some of us don’t enjoy the feeling of spending money we know we shouldn’t, we all love the feeling that a new toy can bring to us.  The toy varies with every individual, but the feeling is the same throughout.  For many people it’s clothes, for others it’s electronics, but for all it is a feeling that is seemingly indescribable, that new object that we cannot take our hands or eyes off of.

The problem arises when this feeling becomes an addiction, and this is where these money disorders begin to develop.  An addiction to spending is a serious thing that can develop into serious problems.  Just like a drug addiction, a money disorder can have physical and mental effects on a person.  Constant spending of money leads to high levels of debt at an alarming rate.  This can instantly result in high levels of stress, and everybody knows the negative effects stress has on the human body.

While many of you may remain skeptical about spending money as psychological disorder, consider this recent study done by the New York Times.  In the past few years the number of professionals sought for help in the areas of financial planning and so-called money disorders has multiplied tremendously.  This means that more and more people are recognizing their spending problem and are doing whatever it takes to fix this issue.  If so many people appear to be facing this dilemma it must be legitimate, right?

I have come to my own conclusion that this is a condition that is all too real for too many people in the world today.  Even if we cannot understand it, if the people who feel they are suffering from this conflict feel like professional help will get them back on the right financial track why shouldn’t we acknowledge this?  Getting out of debt and controlling one’s spending is different for almost every person.  Some people are fortunate enough to have the self control and discipline to control their spending while others are not.  This is a simple fact of life, so it is important that there are resources for everyone, regardless of their situation.
The current state of the economy makes this one of the most dangerous financial times we have faced so far in our lives.  This may seem scary to most people, but all it really means is that we must take more time to figure out what resources are best suited for helping us out.

In my role as the Debt Reduction Doctor I have seen many different forms of not enough money, and there is almost always a consistent approach to fixing this ailment.  It has always been my personal belief that nobody knows what is best for you better than you, so if you feel that you truly are facing a spending addiction then take the necessary means to fix the habit!

Now, obviously both of these forms of debt have their own specific specialties.  For instance, installment loans can be a much cheaper alternative to revolving credit loans because of the lower interest rates and the consistency of the repayment schedule.  The stark difference in interest itself is enough to have many people steer clear of revolving credit altogether.  Installment debt is ideal for those seeking loans for large, expensive items such as a car or home.  The comfort of knowing that you are locked into a flat rate without any sudden fees or drastic changes in the interest rate is enough to keep most people satisfied.

The alternative to installment debt is known as revolving credit, and it is your pretty standard credit card opportunities.  You will pay a fairly high interest rate on almost anything you buy, and you can put yourself in a might big hole if you’re not diligent and responsible with your spending.  Revolving credit is also referred to as open-ended credit, meaning there is nothing to stop you except your potential credit limit.  This can be dangerous and lead you down a path you don’t want to be on, especially if your card has a high limit.

Now, there are advantages and disadvantages to both forms of debt here, and like I have stated several times before it is almost entirely dependable on your specific financial situation.  If you are looking to buy a car or a home, obviously an open ended credit account is not going to suffice.  However, if you just want to buy a new pair of sneakers, nobody is going to give you an installment loan for such a product.  Both forms of debt serve great purposes in the financial universe, they just serve two very different purposes.

It is often very easy to determine which form of debt to use for a particular object, but when it comes to paying them off it is all very similar.  While the payment forms may be different in terms of interest rates and payment schedule, it is crucial that you pay them off on time or else you will be busted with huge late fees that are going to add extended periods of time onto your payment plan.  It is critical that no matter what form of debt you are currently facing, you face it head on and refuse to let it control you.  Once your debt takes over you instead of you controlling your debt you are in a dark place that is very tough to get out of.
Even if it seems like an impossible uphill battle, there are ways out of it every time.  So if you are trying to weigh the pros and cons of different forms of debt remember, always choose what makes the most sense.

Living in a recessionary period such as today, many people have less money than they need.  This means that people cannot afford to buy certain things without some financial help.  To put this into a clearer perspective, I am thinking about things such as houses or cars, the high end expenses that are going to leave your wallet reeling for years to come.  Now, without loans many of these items would be unobtainable for many of us, leaving us riding a bike home to our apartment. I would like to take this time to specify that I am not trying to say this is a bad lifestyle, just something not everybody would enjoy.  Anyways, borrowing large amounts of money to purchase these items is known as installment debt, and here is how it works.

Over an extended period of predetermined time, the individual in debt pays a portion of the total back to the loaner at regular intervals.  This usually is seen in the forms of monthly payments.  By the end of the predetermined time period, the debt and interest level are paid off, and the debtor is no longer the debtor.  Usually installment loans are going to give you fairly competitive interest rates and give the debtor the luxury of knowing how much money they will need to spend each month.  The rate remains constant until the debt is repaid at the end of the cycle.

Installment debt is one of the most casual forms of debt simply because of how easy it is to budget for.  The debtor knows each month exactly how much money they need to spend on this particular payment, so it is easy to plan around it in your monthly budget.
This form of debt is also convenient because the debtor knows exactly when it is going to be paid off.  If you face a thirty year home mortgage, you know the exact month and year when you will write that final check and be done with that payment altogether.  This is a very comforting feeling, for some, to have everything laid out in front of you so casually and in a perfectly straightforward manner.

The idea of installment debt may even be considered for somebody who might possibly have the necessary funds themselves to purchase a desired item.  While we have stressed over and over again that avoiding debt at all costs is crucial, this form of debt may be the exception.  Installment debt can make perfect financial sense if you are able to earn a higher, post-taxes return on your investment cash than you would be forced to pay on your installment debt.  This does not mean that this is the correct method for everybody, but it is certainly something else to consider.

If you have been following my articles recently, or any financial advice columns for that matter, you will notice that one of the top ways to get out of debt is to find ways to get more for your money.  These ideas of
“found money” result in more money for you to pay towards your credit card debts or other outstanding loans.  Ways of finding extra bits of cash here and there to be used towards reducing your debt level.  Well look where you stand now, about to receive a relatively (hopefully) large sum of cash that many consider an extra bonus.  What you do next with your tax refund could have a major impact on the next twelve months of your life.

People constantly overlook their tax refund as a potential tool for escaping debt.  Now, using your entire tax refund on your credit card debt may seem like a bit of a stretch, but that doesn’t mean you shouldn’t use any of it.  Many people take their refund into account when planning their budget for a new year, and expect it to play a major role in their finances.  If you can instead find other ways to make your current income work out you can put a major dent in your overall level of credit card debt with your tax refund.

This is certainly not the most popular way to get rid of one’s debt, but if you were to utilize this concept you would be showing amazing self control.  This would be a major mental step towards overcoming your debt as well, not just something that is going to reduce your next month’s statement.  One of the things I tell people who say they need to spend the extra money towards items to improve their morale or to boost their feelings, saying that it is something that helps reduce their stress level every year.  I quickly counter with this, how much of this financial stress is caused by debt? If you were able to knock off a bunch of debt with one swift punch wouldn’t that also make you feel better?  Wouldn’t it be nice to look at your statements over the next few months and see a significantly smaller number than you were looking at in January?

These are all questions that we must consider if we want to make the wisest possible decision with our money.  The way we spend our tax refund will have a large impact on the rest of our calendar year, wouldn’t you want to spend that year with a little less debt?

While different forms of debt take different methods of payment, the form I want to focus on today is strictly cash advances.  These loans can be used in multiple ways, but can result in trouble if you are unable to remain diligent in the process.  Many companies will charge a small fee for each cash advance, sometimes as little as a few dollars, but it adds up if you become addicted to the process.

Credit card debt is something that can become a very tangled web if not approached responsibly, so you must always remember to accept cash advances or credit card use in moderate doses.  Card issuers are going to view cash advances differently from somebody receiving the loan, so you must be sure you understand where they are coming from as well, and what they expect.  Always keep a calendar of your cash advances or credit card payments so you know exactly when and how much money you must pay off to avoid defaulting or going overdue on your payments.

One way to make sure that you are on top of the credit card companies is to compare bank fees and card fees before signing up for anything.  This keeps you in the loop and allows you to control more of your situation rather than having the credit card companies control you.  Once these companies feel like they have you by the throat, they will become increasingly ruthless and your interest rates will pile up until you feel you are in a completely hopeless situation.

Now, cash advances are incredibly helpful, if they weren’t then they would obviously not be so popular.  However, you must always be sure that you never go overboard on any of these loans because you must remember that it will have to be paid off in the long run.  People tend to get the mindset that credit card use or loans are cool because it’s not actually their money, when they should be thinking that down the line they will end up spending even more money for a product due to interest rates and other payment details they may have overlooked.

In the long run it is always a better idea financially to avoid cash advances and credit cards as much as possible.  There are going to be situations where they are unavoidable, and that is to be expected.  Just remember to keep your level of cash loans or credit in a reasonable ballpark that will allow you to pay off the debt in due time, and not force you into a long term payment plan that could cost you thousands.

One of the toughest parts of the cash only approach is the unexpected expenses that were previously given over to the credit card.  In order to be able to prepare for these unexpected items that are sure to come you must always have some sort of back-up plan.  The wisest and most convenient way to plan for these unexpected expenditures is to always have a reserve of cash on hand in case of an emergency.  Every individual or family who has gone credit card free knows the importance of keeping a cash reservoir in reserve, whether in a bank account or home safe.  Personally I would recommend some form of saving account so you can at least earn interest on your money.

Another of the most popular reasons for going credit free is the outrageous late fees they continuously bombard you with.  One missed payment can jack your debt level up to unbelievable numbers, and leave you paying much more than you originally borrowed.  That in combination with the interest you pay make a lethal combination that can cost tons of money down the road.

Going credit free can be something for anybody to consider.  You certainly do not need to be debt free to begin to enjoy life without the potential credit tidal wave.  If you have simply had enough of the headaches you can turn away from it and begin as soon as today, but you must continue to make a conscious effort to stay away from the credit temptation.

There are certainly a number of positive reasons for switching to a credit free lifestyle, but there are negative results as well.  Credit can be a wonderful safety net for those unexpected emergencies we mentioned earlier.  It allows you to be able to survive without the safety cash reservoir, freeing up more of your income immediately.

In my honest opinion credit cards are not necessarily a bad thing.  Sure they have a rotten reputation but that is more because of the human factor than what they provide.  The service they can give you is a peace of mind and level of stability that you may otherwise be unable to achieve.  The safety net of a credit card is a fabulous advantage that millions of people take for granted every single day.

Now, if you are able to live with a credit card and maintain a responsible financial budget then I would advise to continue living in this manner.  Just because you read somewhere that tearing up their credit cards helped some people out doesn’t mean it is the right choice for you.  Just like any other financial decision it comes down to your personality and the way you choose to spend your money.  Both these options are very livable ways of life, and both have upsides and downsides.  The trick is for you to determine which suits your way life the best.

Once you determine your investment strategy you must continue to stay diligent and on top of things.  Determine your goals, in this case debt relief, then search for the best possible investment opportunities.  It is critical that you do your homework here, because if you don’t choose wisely you will lose your investing money and be left with less than you originally had.  Will you invest in stocks or other forms of investments?  Will you pursue mutual funds?  These are all things that are going to vary by the individual, and only you are going to know what the best solution is for you.

Now, do not feel like you are all alone in this process either.  It is important to get some help when trying to determine which stocks or investments are the best.  Do plenty of research and study the trends of the particular investing opportunities you are pursuing.  A financial advisor may be able to help you determine whether or not this is a good idea for you, and much of that will depend on your budget.  However, if you are serious about escaping debt and feel confident in your ability to invest money wisely then you should definitely look into this form of money making.

There are many different ways to get out of debt, and this is just one example.  However, as the Debt Reduction Doctor it is my job to put forth all possible solutions to this problem.  Entering into an investment opportunity is certainly not the most secure way to escape debt, but the potential upside is immense.  With a successful investment you may be able to cut your debt reduction time in half, at least, just with a few good investments.

The problem that arises in this situation is that not every investment is a successful one, and that some people may end up losing the money they invest.  This will no doubt result in a longer period of time you are facing the uphill climb of debt reduction, especially since it may turn them off from investing in the future.  This is why it is so critical to do your homework and research all possible outlets before jumping into something.  If you are able to find a successful investment opportunity you will get out of debt much faster than simply saving pennies and making payments when you can afford it.

The first tip is universal.  This tip will be relevant for anybody, no matter how much money they make.  Whether you are the CEO of a major company or working the photo counter at your local Walgreens, always save at least a little bit.  Many people feel they are too broke to save money, and that simply is not the case.  Even if you are working a minimum wage job you must try your hardest to put some money on reserve.

Now, obviously the less money you make the harder this task will be.  However, if you can become diligent enough to begin to save a little bit of money you will begin to notice a drastic difference in your bottom line.  This technique is especially useful if you are looking to pay off a credit card or other type of debt, as the more money you are able to save is more money you can use to reduce your debt level.

In one of my earlier articles I discussed the ever changing world of needs versus wants.  This is an elemental process in the world of debt reduction.  Determining which items you must purchase to survive compared to those that are only going to slightly improve your quality of life is important when you look back at the money you’ve spent over the previous month.  Every coin you are able to save is one that can be used in the long run towards improving your life quality and reducing your debt level.

My third tip of the day is to consider the true cost of any purchase.  Now, the true cost is more than just the numbers on the price tag.  This is because every purchase extends beyond the immediate cost that allows you to own the product.  All you economics nerds out there you already know where I am going with this, and if you don’t then you will soon enough.  If you purchase a new purse for $200 not only are you losing that $200 for the purse, which is $200 you cannot spend on other things.  For instance, if your rent is $1,000 dollars you must now earn $1,200 dollars to pay off both your rent and the purse, instead of just $1,000.  It is a slightly confusing concept, but it certainly is relevant to spending money today.

Now, the final tip from your Debt Reduction Doctor today is one that seems relatively obvious, however thousands of people still face this issue every day.  Do not, under any circumstance, spend more than you make!  I told you it was obvious, but many times the news a doctor must give is.  Drink more water, exercise daily, don’t spend more money than you earn!  As obvious as it seems, tens of thousands of people still struggle with this very concept every single day.  If you can learn to directly correlate your spending with the amount of money you are earning and find a healthy medium you are already going to be miles head of many other people.

While many of these tips may seem obvious or simple, they rarely are.  Reading and agreeing with an article you found online about your finances is much easier than putting these plans into action.  If you are able to live by these rules, while still creating a few of your own, you will find yourself marching towards a clean bill of financial health.