Don’t Get Into A Debt Dilemma – Mistake no 3

June 13, 2008

Mistake 3: Consolidating Everything


Many decide to consolidate every single one of their debts into just one debt consolidation plan. Some even do this despite the fact that some of their debts are already on one consolidation plan or another, simply because the new scheme offers a longer term.


Consolidating everything rarely works especially if you have a very large amount to deal with or if you’ve already got some debts under another scheme. Other shorter-term schemes often offer lower interest rates in lieu of the longer time to pay.


 It’s recommended that you take the offer with the lower interest because you have to pay less in the long run and end up paying debts for less time, even if you have to pay more in the short term.


Debt consolidation isn’t just about lifting the pressure of your debt deadlines from your shoulders, though that’s an obvious aspect of it. Debt consolidation doesn’t keep your debts at bay forever and it doesn’t pay off your debts either. All a debt consolidation scheme gives you is time, which would just be wasted if you didn’t have a predefined plan on how to use it.


Zulika van Heerden provides valuable information on her site on how to live a debt free life.
To read more tips and techniques like the ones in this article go to:

Don’t Get Into A Debt Dilemma – Mistake 2 of 3

June 10, 2008

Mistake 2: Consolidate then Splurge


Mistake #2 is considerably worse than the one prior because you actively contribute (to the detriment) of your debts. Again, this stems from the idea that debt consolidation schemes magically hold off your debts for indeterminate amounts of time, or even eliminate them completely.


The leeway afforded to you by a debt consolidation plan should be used for working towards cutting down the debts, not adding to them.


You can hardly call a spending spree ‘cutting down,’ especially when you’re in so much debt already. This pattern of getting yourself into more debt right after promising to pay off your previous ones will, in the long and short run, work to the detriment of your budget, your finances and your credit rating.


Zulika van Heerden provides valuable information on her site on how to live a debt free life.
To read more tips and techniques like the ones in this article go to:

Don’t Get Into A Debt Dilemma – Mistake 1 of 3

June 9, 2008

Debt consolidation can seem like a breath of fresh air, especially if you’ve been dogged by your debt and credit problems for a long time. Your creditors are suddenly off your tail, you have a credit rating to speak of again and you can breathe a sigh of relief.


But this sense of security may very well be false, particularly if you commit three common mistakes made by many who choose to consolidate their debts. You’d best avoid those same mistakes else you’re likely to find yourself running through the whole cycle of indebtedness all over again.


Mistake 1: No Plan at All


It might sound ridiculous but many have participated into a debt consolidation scheme without any sort of idea for getting rid of that debt eventually. It’s very foolish to enter a debt consolidation scheme without a concrete action plan for reducing and gradually eliminating your debts.


Remember, debt consolidation schemes merely give you some leeway when it comes to deadlines for paying off your debts, but they don’t hold off debts indefinitely.


Consolidation schemes still have deadlines for paying your bills that you must eventually meet. To make matters worse, your consolidated debts accrue interest and other fees the longer they’re left stagnant, so you’d best not forget about them.


Zulika van Heerden provides valuable information on her site on how to live a debt free life.
To read more tips and techniques like the ones in this article go to:

The Basics of Responsible Credit Card Use

June 4, 2008

Credit cards can be beneficial for individuals who understand and practice the basics of responsible use of credit. However, people who don’t use this kind credit wisely can find themselves deeply in debt very quickly. Everyone who uses credit needs to understand how to use it in an intelligent manner.

Do Not Accept Every Offer That You Get

If you have good credit, you probably receive a number of offers in the mail every week encouraging you to incur more debt. The fact that a lender is offering you an opportunity to get another credit card does not mean that you actually need one. If you have too many credit cards, you may find yourself running up balances on multiple cards, which can be very dangerous to your financial well being.

Most people should not have more than two credit cards. Many people get one card for day-to-day purchases, and have a second card that they use strictly for emergencies. Individuals who own companies or who make up-front payments for job-related travel sometimes need a third card so they can easily keep track of which purchases are business and which are personal.

Do Not Purchase Things You Cannot Afford

If you are spending more money than you earn each month with the help of your credit cards, you are on your way to financial problems. It is okay to use credit for convenience, but you need to be certain that you can pay your balance in full each month, or within a reasonable period of time. If you are buying luxury items that you cannot pay off within a few months, you are not using your credit wisely.

Always pay more than the minimum payment on your credit accounts. If not, you will find that the quickly accruing interest on revolving credit accounts adds up very quickly, often putting you in serious financial jeopardy. Individuals who pay only the minimum payment each month quickly finds themselves much further in debt than they expected.

Be Diligent In Checking Your Credit Report

Part of being a responsible credit card user is checking your credit report at least once each year. There is, unfortunately, a very real risk of identity theft. If someone is using your identity to open credit accounts, you will find out when you look at your credit report. Many times people discover that incorrect information on their credit reports is pulling down their credit scores. Such problems can be appealed and corrected when you become aware of them.

Another reason that checking your credit report frequently is so important is that you are able to see how your current debt and payment habits are impacting your credit history. This can be a real eye-opener regarding the importance of paying all bills in a timely manner.

Recognize The Need For Help

Another aspect of responsibility is the maturity to recognize when help is needed. If your spending is out of control, ignoring the problem will not make it go away. Seek assistance from a trustworthy credit counsellor who can help you come up with workable solutions to your credit problems. If you are having credit troubles, the sooner you seek help, the faster you can be on the road to rebuilding your credit.

Zulika van Heerden provides valuable information on her site on how to live a debt free life. To read more tips and techniques like the ones in this article go to:

Which Bills To Pay First

May 27, 2008

When prioritizing post-consolidation payments, your debts and your taxes must be at the very top of the things that you have to pay.


In a situation where you are in debt both to creditors for their loans and to the government for your taxes, both of them have the priority and the power to foreclose on your properties or seize things that you own.


There are already laws and structures in place to make it easier and faster for the banks, the lending institutions and, of course, the government to seize assets. It’s basically for this reason that you should put payments to them at the top spots on your list.


If you skip out on payments to them for too long, you not only have to deal with the process of seizure or foreclosure. You also have to deal with recovering your solid assets – your house and your car, for example – which could have served as a backup plan in a financial emergency.


Make an Agreement


Of course, there are other debts that you’ll also have to pay.


Credit card debts and accounts with merchants are very common examples of these. In terms of payments, the very big difference between these kinds of debts and the debts that you owe to banks and the government is that the repayment schedule can be discussed.


Debt problems are very real and very widespread so it’s not uncommon for these creditors to hear about debtors who can’t pay due to other debt obligations. If you have debts to creditors like those, try calling or writing them and then asking for new payment terms. Make sure to explain your circumstances because they’ll need you to give a really good reason for not giving them their money on time.


These kinds of debts are low on priority not only because arrangements can be made regarding their repayment, but also because it will be very hard for credit cards and merchants to seize your home or your car.


After you’ve arranged your debts and consolidated some of them, it’s very important to know not only how to pay debts but how to pay them effectively. There are some debts that will take a higher priority because your creditors in those debts can take faster and more drastic measures to seize your assets as payment.


When planning a debt recovery scheme, identify the type of each debt clearly and list them in order of priority. That should help you stick to a good payment schedule and gradually whittle away at your problem of debt.


For more debt and mortgage related articles, go to :

What is the Key for Getting out of Debt?

May 23, 2008

Always make a monthly budget for yourself, if possible do it weekly or even daily; being financially organized is the key to success.

You must include details in your budget. Add foods, bills, entertainment, transportation, shopping, miscellaneous and other and this way you will see how much you really need to spend and which is higher in priority… If you can make changes to your way of life and save some money, do so. Use that money to pay back debts and in the meantime you should stop adding to your borrowing by surviving only on cash or debit cards.

Are you a student? An employee? Bring everything with you to school/university or to work. Have your lunch, snacks and even your drink. It is better then buying from machine.

You will save even with small amount but you are SAVING.

Instead of saying that something only costs R8 for example, say if I don’t buy it that is R8 that I can put away for a rainy day or put toward debt.


Look at your monthly income based on the net amount. Deduct taxes, medical, UIF etc… and you will have the net income.If you are in debt, it is a given that you are spending more money than you make. You are in the red. There is no way to play games about it.



Live within your means. If you can’t afford to pay cash, you can’t afford to have it.


For more information on Debt Consolidation and Mortgages, go to

Is a Low Interest Credit Card the Answer to Consolidating Debt?

May 21, 2008

Those credit card offers just keep coming.  Seems there’s hardly a day goes by that your mail box is not stuffed with some new bank offering you attractive low rates to consolidate your debt. 


But there’s a danger lurking for you also, one you may already be painfully aware of!


The low rate the bank is offering you is called an introductory rate. The introductory, a.k.a teaser rate credit card has created billions of rands for the financial industry.


The introductory interest rate is applicable only for a short period of time, usually only a few months.


Thereafter your rate will be adjusted and you will pay end up paying the standard interest rate.


If you do decide to consolidate your debt to a credit card that has a low introductory rate, you should not ignore the standard interest rate that you will be paying once the introductory period has lapsed.


If the standard interest rate  is too high and you know that you will not be able to settle the credit card balance during while you are still enjoying low rates, then the such a low interest card is probably not the best option available to you.


However, if you are confident that you will be able to settle your credit card debt during the introductory period you will be able to save money over that period.


Whatever your decision, just remember one thing…


Credit card companies do not make any money if they are financing your debt at below prime interest rates!


For more on debt consolidation, mortgages and other related articles, go to