Children are such precious little beings. They add that special something to our lives. But when they start to complain about wanting everything under the sun, we can't imagine what that "something" is. Here are some tips for parents who are dealing with, or want to avoid, this classic syndrome that can affect children.

It works like this, for example you had to fuel up your car and you used your gas card so every time you use your gas card in fuelling you earn certain points. These points vary on how much you spend filling up your tank. To better understand how these gas credit card works, here are some examples on how gas credit card works according to the credit card company.

Sad as it is, there is the danger of being victimized by criminals everywhere these days. You may not even see them, but they are there waiting for an opportunity. One of the biggest threats to your security is identity theft over the internet. For tech-savvy criminals around the globe, stealing credit card information is rapidly becoming the most popular crime to commit.

'Credit card debt' is a much discussed topic in the commercial and social circles. A big section of the population has been bit by this bug called 'credit card debt'. Can't blame them much; as such, it's pretty easy to fall prey to this bug.

It comes as a surprise how credit cards have found their way into our lives (and out wallet). They have gradually turned into becoming a necessity (rather than luxury).

Though a lot of people are comfortable with going forward with credit card debt management all by themselves, not everyone is. There are people who don't really want to tread into the territory of financial issues (credit card debt management included).

Not everyone believes that credit card debt counseling is beneficial and there are various reasons for that. Some people just read articles in the newspapers or find advice on the internet and take that as the final thing.

Credit card debt relief is what every debt-struck credit card holder is looking for. Credit card debt relief is not just about reducing or eliminating credit card debt; credit card debt relief is also about getting de-stressed.

Credit card debt is really a menace and a lot of people are facing it around the globe. Credit card debt consolidation and bank loans are well known as ways of reducing and eliminating credit card debt.

Getting into debt is easy but getting out of it really a difficult task. This holds good for any kind of debt and includes credit card debt too.

More of Wayne's Story Wayne, who you met in Chapter 6, after reviewing all of the possible credit card types and options, has decided that he wants to get both a Visa and a Master Card. That's a good start. But now what? The terminology on the applications is very confusing. A call to his parents didn't help one bit. The extent of their "technical advice" is, "The cards we have work for us." Susan suggests they make a night of it-Chianti, candles, soft music, and a stack of credit card applications. Wayne arrives early, eager to begin. Factors to Consider There are three principal features to the card itself that determine whether or not you've found a good deal. These are the Interest Rate, Annual Fee, and Grace Period. By law, all three must be disclosed at the time you apply for the credit card. The United States Fair Credit and Charge Card Disclosure Act requires issuers of charge or credit cards (including retail stores) to reveal certain basic information in tabular form with the application or "pre-approved" solicitation. Disclosures also must be provided before annual renewal if the card issuer imposes an annual fee. Other things to consider are Rebates, Discounts, and Miscellaneous Fees. Also important is the pattern of your shopping-a card that your favorite merchants don't honor won't be of much use for you. Interest Rates The interest rate is the rate charged on purchases and cash advances (generally, two different rates). It can be "fixed" or "floating." Fixed rates are not truly fixed because the banks will change them every year or so. Floating rates typically are a bit lower than fixed rates, but fluctuate every month according to the latest T-bill sale, the phase of the moon, or some other index (just kidding about the phase of the moon-sort of). By law, banks must apply floating interest rates according to a regulated index. Still, if you buy something you're expecting to pay off over many months, a floating interest rate will make it hard to guess how much finance charge you'll be paying. Some credit cards may refer to a "variable rate," which is the same as a floating rate. ANNUAL PERCENTAGE RATE (APR) Years ago, credit card issuers would quote an interest rate that was not directly comparable with other lenders' rates because the method of computation was not standard. The law now requires lenders to quote an annual percentage rate so that you might compare cards-a rate that includes the interest and all fees for a year (i.e., the total cost of the "loan" for the course of a year). MAXIMUM INTEREST RATES Interest rates are all over the map. There are limits, however, in most states on the maximum interest rates allowed. The laws concerning maximum interest rates are called "usury laws." INTEREST RATE CALCULATIONS To calculate the interest on your card each month, the lender multiplies the card's interest rate (the APR) times your card balance. This will give the interest for the entire year. The lender then will divide the interest calculated by the number of months in the year (12). The sticky part is determining the credit card balance. This is why it's important to choose a card with a grace period (see below). If you do have a balance on your card, there are three methods of calculating it: 1. Average Daily Balance (the most common method): The issuer calculates the balance by taking the amount of debt you had in your account each day during the period covered by the billing statement and averaging it. 2. Previous Balance: The issuer uses the balance outstanding at the end of the previous period-that is, the period prior to the one covered by the current billing statement. 3. Adjusted Balance Method: The balance is derived by subtracting the payments you've made from the previous balance. Annual Fees The annual fee is, well, a fee that the card issuer bills to your account annually. Every year, on the anniversary of the date your account was opened, the fee for the upcoming year is billed to your account. Typical charges are $18 to $29 for regular bank cards (about $40 for gold bank cards) and anywhere from $35 on up for various flavors of T&E cards. House cards are typically free. Many lenders waive the fee the first year to get you to sign up, then depend on you to forget a year later that you'll be charged an annual renewal fee. There's nothing shady about this as long as it's disclosed up front. Some lenders often have "secret" programs in effect where, if you ask them, they will waive the annual fee. Some do it only if you charge a certain amount per year; others have other criteria. It certainly can't hurt to call just before renewal time and ask to have the fee waived. (If you wait until after the fee is already on your statement, your chances aren't so good for getting it waived.) Some banks will waive the annual fee if you tell them that you'll go elsewhere if you have to pay it. Others will not. You may want to ask (politely) to talk to a supervisor, since the front-line person may not care whether you cancel your card and may not have the authority to make concessions. Don't bluff on this unless you are confident you can get a card elsewhere. Grace Periods The grace period is the time after the billing date that you have to pay off the bill without paying a finance charge. Grace periods for cash advances are pretty rare, since the bank would lose money on them. T&E cards typically have generous grace periods; bank cards usually have 25 days, but a few have 30, and many have no grace period. In every case, the grace period runs from the date printed on the bill, not from the date you get the bill. For instance, suppose your bill is prepared on the 28th of every month and the grace period is 25 days. If you make a purchase on July 3, it will show up on the July 28 bill and you'll have until August 22 (July 28 plus 25 days) to pay it off without interest. If you don't pay the full balance, your August bill will show a finance charge, and so will every bill after that until you pay off your full balance. Some banks give you a grace period only during those months when your previous balance is zero. Others (fewer of them all the time) give the stated grace period on all new purchases even if you have a balance from last month. The second method can save you big bucks; be sure to find out how your bank does it when you apply for the card. Rebates, Discounts, and Other Kickbacks Some cards, such as Discover, pay "rebates." Rebates are a percentage refund on your purchases, either by check or by a credit to your account. Discounts, on the other hand, actually reduce the price on the bill before you pay it. Discover offers rebates on all purchases. The Ameritech Complete MasterCard gives 10% rebates on credit card calls at the end of the year. Some things to keep in mind when looking for cards with rebates are: 1. When will the rebate be issued? At the end of the month or at the end of the year? Typically, it's after the end of the year. 2. How is the rebate calculated? Be sure to read the fine print. For example, let's say that Discover advertises "up to 1% rebate." That's true, but the fine print reveals that you get back 1% for every dollar you charge after charging $3,000 in a single year. The first $3,000 is rebated at rates between one-quarter and three-quarters of a percent. Some cards offer other features like frequent-flyer miles and extended warranties on purchases. Is this a good thing? It may or may not be. Consider such questions as these to help you make this determination: 1. Does the airline fly to places you really want to go? 2. How many dollars must you charge to earn a free ticket? Is the airline likely to be around by then? 3. Are you likely to spend more than you otherwise would, just to accumulate the miles? Miscellaneous Fees You have the right by law to know about all possible fees before your credit card application is processed. APPLICATION FEES Application fees are extremely rare with unsecured cards, but with secured cards they are very common. Though such fees are legal, look long and hard at the terms before you agree to pay an application fee, even if you are "guaranteed" acceptance. For an unsecured card, you can almost certainly do better elsewhere. OVER-LIMIT FEES Many cards assess an over-limit fee if you charge something that takes you over your credit limit. The creditor may or may not allow the charge if it assesses this fee. Common over-limit fees range from $20 to $29. LATE PAYMENT FEES Some cards charge a late payment fee in addition to the finance charges. Again, a fee of $20 to $29 is common. CASH ADVANCE TRANSACTION FEE Some cards charge a transaction fee for cash advances. This may be a flat amount (around $2), a percentage of the transaction dollar amount (1% to 2% is common), or a combination. These fees are in addition to the stated interest rate, which usually starts accruing as soon as you get the money. Tips for Cutting Your Credit Card Expenses 1. PICK A CARD WITHOUT AN ANNUAL FEE Some credit card companies can charge you as much as $50 a year. With all the choices out there, don't fall into this trap. 2. NEVER MAKE ONLY THE MINIMUM PAYMENT Credit card companies make the majority of their money from you through interest on the unpaid balances on your credit cards. The minimum payment some credit cards ask you to make will not reduce the balance on your credit cards very quickly, if at all. For example, consider a $1,000 balance at 18% (a low rate by some cards issued today). If you make the minimum payment on the card (typically about 3% of the balance), it will take you six years and one month to pay off the balance, including an additional $559 in interest. That is, if you never purchase another thing with this credit card until after the balance is paid off. 3. PAY OFF THE FULL BALANCE If you must carry a balance, always pay as much as you can afford every month. 4. PAY ON TIME Mail your payment check early. Late credit card payments hurt you three ways: (1) Bad credit reports, which you already know about; (2) Late fees ranging from about $20 to $29; and (3) Bumped up interest rates-as few as one or two late payments during one year can put you into the penalty box (causing your interest rate to jump to a "penalty rate" of 24% or more). Make sure you send in your payment a little extra early - some companies are known to be "slow" about getting your payment from their mail room to the processing center, which can result in a late fee, even if the payment itself was received on time. Try to allow one week for your payment to arrive. 5. BEWARE OF CREDIT LINE INCREASES If you make timely payments, your bank will automatically raise your credit limit without asking you, and other banks will send you offers for more "pre-approved" cards. This could be good or bad. If you have a tendency to push the limits on your credit cards, they could entice you to go more into debt with this additional available credit. On the other hand, such credit line increases could give you a better debt-to-available-credit standing-but only if you keep the balances where they are -thus, actually increasing your credit score because you have all these high available credit amounts (which means you can be trusted) yet you keep low balances (which means you handle money well). 6. AVOID CASH ADVANCES Don't use your credit card like an ATM card for cash withdrawals. The interest rate on cash advances is at least 2% higher than on purchases and the interest begins to accrue immediately. Students Beware! College students are special to the credit card companies. Our friend Wayne, for example, could likely score plenty of credit cards (and potentially get himself into deep trouble) even if he has no income. Why? Because he has the potential of earning a good income once he graduates. Believe it or not, if you're in college, credit card companies want your business so badly they're offering much more than trinkets and soda. They'll let you apply for credit cards without a job or income! You can apply for credit cards with a blank credit report, even without getting a co-signer! No other consumers can get cards this way. They want to get you hooked early-like giving cigarettes to kids in junior high.

How serious are your debt problems? The spectrum of possibilities ranges from negligible to severe. The fact that you bought this book indicates that debt is something you are concerned about. As you read this chapter and review the most common signs of debt problems, consider that the more signs that apply to you, the more serious your situation is. Where Have All the Dollars Gone? The first sign that debt is becoming more of an issue in your life than it should be is the incredible shrinking bank balance. Although you make enough to pay your regular bills, more and more of your monthly income goes toward servicing your rising debt. It gets to a point where money is tight, and you feel like you are choking because there is never enough money. Unfortunately, this situation creates a negative domino effect upon the rest of your financial life. But I Still Have Room on My Card The first to fall is the credit card domino. Your lack of funds causes you to begin to take cash advances to pay your minimum balances or basic living expenses. You know that your gold card still has about $5,000 left on it, so you begin to use it to live on. Or, even worse, you begin to accept all of those credit card offers that come in the mail, and before you know it, you have 10 open credit cards. You take out $100 here and $500 there. "No big deal," you think. After all, you are used to paying off your cards, or at least paying enough that the debt has not, so far, seemed burdensome. You begin to rationalize. You tell yourself that you're just in a temporary cash crunch, that this is why credit cards were invented. Feeling better, you take out another $500. Money Talks When you use your credit cards to withdraw cash, extra fees kick in. Cash advances carry an upfront fee of up to 4 percent of the amount advanced. There is a higher interest charge for cash advances than regular card charges, and many issuers also require you to pay down the balances for purchases before you pay down the higher-interest cash advance balance. Finally, cash advances carry no grace period; interest charges begin to mount as soon as the ATM spits out the money. The Balance Transfer Shuffle "Not to worry," you tell your spouse or yourself. You have a plan. These stupid credit cards can't outfox you. You will just transfer your balances from the card with the high balance or the high interest rate to a different card. You are smarter than the credit card companies. Not only do you transfer balances, but you start to use those convenient checks the credit card companies are always sending you. You begin to pay one card with another card. In the meantime, not wanting to upset your precarious financial balance, you begin to use your cards more to pay for everyday things such as food. The bills grow. Whereas you used to be able to pay more than the minimum, now the minimum is more than you can pay. In an effort to conserve your rapidly dwindling cash reserves, you decide you have no choice but to save money-by using your credit cards more! Money Talks Debt got you down? Consider these rules penned by Thomas Jefferson: 1. Never put off till tomorrow what you can do today. 2. Never trouble another for what you can do yourself. 3. Never spend your money before you have it. 4. Never buy what you do not want because it is cheap; it will never be dear to you. 5. Pride costs us more than hunger, thirst, and cold. 6. Never repent of having eaten too little. 7. Nothing is troublesome that we do willingly. 8. Don't let the evils which have never happened cost you pain. 9. Always take things by their smooth handle. 10. When angry, count to 10 before you speak; if very angry, count to 100. Relief is in sight. Using your cards more and not spending your precious cash to pay off these credit card balances gives you a (false) sense of security. Your money situation is not that bad. For a few months, things seem back to normal. Anyway, those tiny classified ads you are going to start running all over the country are going to make you rich, and then you will pay off all of your cards, and this situation will be something to laugh about in five years. Then the card with the low interest rate jacks up your rate to 18.9 percent. You have a $10,000 balance on that card! It's OK. Stay cool. You still have two more cards with room on them. All the while, you are getting deeper and deeper in debt. What do you do? Eureka, you have a solution! You can apply for more cards, get some more low "teaser" rates, and transfer some more balances. So you do, and so it goes. Sound familiar? Dog Logic Soon, the mailman becomes your enemy; all he brings is bad news. Maybe you're not smarter than the credit card companies after all. Every bill you get from them now is shocking. You can't afford to pay them. So you start to only pay some of the bills on time. Paying some of the cards late frees up some cash, but now you are incurring late fees and extra finance charges because of your ever-increasing poor bill-paying habits. The problem is, you are so far in over your head that all of your bills begin to look like messages from the enemy. Soon, you start to create a pile of unopened bills. In order to make it through until payday (if only that little ad had generated some phone calls!), you start to pay your other bills late. Late fees pile up on late fees. You begin to get threatening letters from your creditors. Soon, you get letters from collection agencies. Finally, you become a juggler in a three-ring circus of your own making. The cable is about to get turned off, "I'll run down and pay it today!" "Yes, I know, I understand I am behind; I'll drop a check in the mail tomorrow." "Maybe," you think to yourself, "they won't get it until next week, and it won't hit my bank until next Friday." That's the ticket! The small brushfire that began back home is beginning to burn out of control. The next indication that things are getting out of hand financially relates to your bank accounts. Bye-Bye Savings You might have entered this period proud of the fact that you had some money in the bank. Maybe you were saving for a rainy day or maybe for a special trip that you wanted to take. Money Talks Fee-mania is all the rage at banks. According to Ed Mierzwinski, consumer director of the U.S. Public Interest Research Group, customers are charged a fee for almost everything now. There are fees for opening an account, moving cash from one account to another, for not using your account enough (inactive account fees), missing a signature, inquiring about your balance, and depositing a bad check. In a final attempt to gouge you, banks have now started to charge you for closing your accoun Sadly, by this point, your savings are probably long gone. Despite the penalties, your IRA or 401(k) have probably been raided, too. Equally bad, your previous valiant efforts to do the right thing and consistently save some money have probably gone by the wayside as well. With money as tight as it is, you don't see how you can afford to begin to save some money again. Your pride is hurt, and your ego is wounded. You might begin to feel depressed over the sad state of your financial affairs. That rainy day has come. What's My Balance? Your checking account is in even worse shape. Maybe you've gotten into the habit of bouncing a couple of checks here and there. More likely, you have figured out how to just skate by. It could be that you go to pay the phone bill at the last possible moment on Friday afternoon, knowing that the check won't get to your bank until probably Tuesday of the next week (but hopefully Wednesday!). That will work, because you get paid next Wednesday. Even if the check doesn't clear the first time, the phone company always puts a bounced check through a second time, so it will only cost you a $25 bounced check fee to keep your phone for another month. Maybe you do what Tom does. When things get really bad, he pays the bills on time, but "accidentally" puts the check for the phone company in the Visa envelope and vice versa. By the time the mix-up is fixed, two weeks have gone by, and he's gotten paid again. He fixes the problem and makes it through another month. Or, like Jessica, you just stop balancing your checkbook altogether. What's the point? After all, when you go to the ATM, you check your balance! Jessica can't bear to figure out how much she owes to whom and refuses to keep track of her ATM withdrawals, so she just continues to write checks and take out money, keeping a rough balance in her head and hoping that it will be all right. This is the next signpost on a debt-end road: evading, avoiding, and ignoring the truth of the situation. How to reduce your ATM charges: 1. Keep your checking account at a bank that doesn't charge you for using its ATM machines. 2. Don't use an ATM machine belonging to an institution where you don't bank. 3. Consider using a credit union. Its ATM fees are usually lower. 4. If you use an ATM regularly, withdraw larger amounts of money to reduce the number of times you are charged a fee. 5. Avoid ATMs that surcharge. 6. Use a teller instead of an ATM, especially when lines at the bank ATM are long. Be certain, however, that you won't be charged a teller fee! End of the Line Creditors are now starting to close your accounts. Credit card companies, once your good friends, want nothing to do with you. Your accounts have been assigned to collection agencies. Sadly, they do want to talk to you. You stop answering the phone. You get caller ID. Finally, you change your phone number, get an unlisted number, and give it out only to your friends. At this point, you have a chronic debt problem. You know it, too, but you would rather ignore the problem or explain it away: 1. You are concerned only about today. Although your debt problems are now constant, and every month is as bad as the month before, your only concern is this month. Getting the rent paid, paying back dad, and keeping the heat on are your concerns. The fact that you have the tax bill or insurance payment due next month is of no concern to you today. You will solve that crisis when you get to it. 2. You have lost track of how much you owe. You don't even bother to look at the balances on the statements you get; you can't pay them anyway. If you do have any credit cards left, you don't care what the interest rate is; all you know about your cards is how much room you have on any one of them with which to charge. 3. You have become the king or queen of rationalizations. You refuse to take a good hard look at your financial affairs and instead have reasons for why things are the way they are. "The divorce killed me." "I'm too busy with my novel to worry about something as mundane as my bills." "I'm no good with numbers." "I'll deal with it after the first of the year." 4. You are in a state of constant worry, but do nothing. You may be frozen with fear. The problem looms so large that you don't know where to start, so you start nowhere. Your Money or Your Life What began as an isolated skirmish in the outback of money country has now spilled over to the rest of your life. It could be affecting your health, your job, your relationship, and even your life. Marriage and Money Money troubles are the leading cause of divorce in this country, and now you know why. Your debt issues are now beginning to affect your relationship. Your mate is angry with you, scared about the well-being of the family, and concerned that your problems will affect his or her financial life as well. Here are some signs that you're in drastic debt: 1. Your mate is afraid to apply for credit with you for fear that your problems will spill over. 2. The constant phone calls from creditors cause pain and anger in your mate. 3. The constant worry about money takes its toll on your sex life. 4. Your mate is worried that the boss will find out. Money Talks Of all married couples, 66 percent have only one checking account, a joint account; 22 percent have a joint account and two separate checking accounts; 8 percent have two completely separate accounts; and 4 percent have no checking accounts at all. Finally, you resolve to do something and face your money demons. Congratulations, buying this book is an important first step. Test Yourself As we said at the beginning of this chapter, debt issues can range from mild to severe. Take the following quiz to see how serious your debt situation is: Are your debts making your home life unhappy? Do your debts make you careless with the welfare of your family? Are your debts a source of constant friction with your mate? Two Cents Before they walk down the aisle, couples should have a money session to avoid surprises down the road. From student loans to car payments to credit card bills, it's best to come clean on every "I owe" before saying "I do." Are your debts affecting how people view you? Do your debts affect how you view yourself? Do your debt problems distract you from your work? Do you fear that your employer, family, or friends will learn the extent of your total indebtedness? Have you ever lost a friend because of your money habits? Have you ever lied in order to obtain credit? Do you expect a negative response when you apply for credit? Have you ever borrowed money without considering how you will pay it back? Have you ever borrowed money without considering the interest rate? When faced with a difficult financial situation, is your first thought to go deeper into debt? Have you ever lied to your creditors regarding payment of a bill? Does the pressure of your debts cause you difficulty in sleeping, or cause you to overeat, undereat, or smoke, or otherwise affect your health negatively? Has the pressure of your debts ever caused you to drink more than you should? Do you think about your money problems a lot during the day? Do you justify your debts by telling yourself that you are superior to the "other" people, and when you get your "break," you'll be out of debt overnight? Have you ever developed a strict regimen for paying off your debts, only to break it under pressure? Have you seriously considered bankruptcy? Scoring: 1-5 yes answers: Your debt issues are not bad and are easily resolvable. 5-10 yes answers: Your debt issues are more serious, but not out of control. 10 or more yes answers: Your debt problems are very serious and deserve your immediate attention. You must begin to take corrective action now. You see that you need to take action to resolve your debt situation, which is good news. Consider these ideas: 1. Continuing to run from the problem will only get you in deeper trouble. 2.Respond to your creditors and show them that you have an interest in working thins out. 3. Acknowledge to yourself that you have made some irresponsible decisions. 4. Get professional counseling if it is warranted. 5. Share your problems with a close friend or your spouse. 6. Know that there is a way out and that this process and a debt-free destination are probably a better experience than the stress in your life today. Today is a turning point in your life. There is plenty you can do to turn this situation around, and it may not be nearly as difficult as you think. The remainder of this book helps guide your way. The Least You Need to Know 1. The first signpost on the road to indebtedness is a lack of money and an increase in money worries. 2. When you begin to have problems with your bank accounts, things are getting more serious. 3. Evading and avoiding the problem make the matter worse. 4. When your home life is affected by money troubles, it is time to take action.