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Credit cards today have become a double-edged sword, on the on hand allowing you the convenience to for example shop online and on the other hand providing you with the opportunity to run up so much debt that you are struggling simply to meet your interest payments each month. Like everything else however a low interest credit card is merely a tool and the secret lies in how you use that tool.

Most people today have a credit card and indeed many people have several credit cards and have also accumulated more debt on their cards than they would like to admit. Knowing this the fiercely competitive credit card companies now offer a range of low interest credit cards to tempt us further and many people are enticed by the multi-million dollar advertising which accompanies these card offers. But should you be tempted?

The first thing you will find is that low interest credit cards are not being made available to everyone and generally speaking will only be issued to people with a reasonable good credit history and credit score. Whether or not you will qualify depends on your own personal circumstances and the particular lender whose card you are considering and the only real way to know is to actually apply for a card and see what happens. However, even if you are accepted there are a number of things you need to watch out for.

Although your new card may offer you a lower rate of interest on any balance transferred to the card it is very rare for a lender to actually offer to reduce the principle sum which is transferred and so your new card will still leave you with the same amount of debt that you had on the day you acquired it.

So, now you have your original debt but, instead of paying it off at 12% you are paying it off at only 9%. Sounds great doesn’t it? Well, if you are struggling to meet your payments today it can certainly be helpful in the short term but in the longer term it could well cost you a lot more. The problem here is simply that when you swap your card for a lower interest card you also tend to extend your repayment horizon and a debt which you were originally on target to pay off at 12% over two years now becomes a debt that you will pay off at 9% over three years. When you compound up your interest payments on a monthly basis you will invariably find that by the time you have finished you will actually end up paying back more rather than less money to the lender.

If you are struggling to meet your monthly payments on your credit cards then it can certainly be a good idea to transfer your balance onto a card with a lower interest rate. However, the secret is to remember that your monthly repayments represent both interest on your borrowings and repayment of the principle borrowed. Reducing your monthly payments is fine but, if you are going to do this, then you also need to make sure that part of the money you are saving each month is not simply spent but used to pay down the principle on your card so that you are not simply extending the life of your debt.

Credit card debt is a complex subject and one which runs a lot of people into trouble these days. Remember that a low interest credit card is not in itself the answer to the problem of settling credit card debt but is just one of the many tools available to you.

Most people today run their lives to a certain extent on credit and there can be very few of us who do not have debts of one sort or another. Unfortunately, there are also an increasing number of people who have taken on more debt than they can handle and know that they are in trouble.

Despite this fact however all too often these people find it difficult to face up to their debt problem and simply bury their head in the sand and hope that the problem will go away. It doesn’t of course and, in most cases, it simply gets worse. So, how should you deal with what you know is a growing debt problem?

The first thing that you have to do is to assess just how big the problem is. For example, if you are paying $300 every month simply in interest charges to service your debt and have a monthly net income of $3,000 then you are paying out 10% of your income and getting nothing in return for it. True, you were able to buy some things earlier than would have been possible if you had not bought them on credit but nonetheless the price which you are now paying for that privilege is 10% of your monthly income. So, is it worth it?

The problem here is that the $300 you are paying every month is simply the cost of interest on your loans and does not represent the repayment of the loans themselves. In other words, if you can afford to pay back say $400 each month then at least a quarter of this payment is going to repay the loans but, if $300 is as much as you can afford then you can go on paying this forever and your loans will never be cleared.

At this point you need a plan which is going to allow you to use whatever money you have available each month to not simply meet the interest payments required on your loans but to start bringing down the actual loans themselves as quickly as possible. Two common approaches here are either to start with your smallest debt and work your way up to your largest debt or start with your largest debt and work your way down to your smallest debt. There are advantages and disadvantages to both methods but, whichever, you choose the secret is to concentrate on one debt at a time and work your way steadily through the list until they are all paid off.

While you are clearing your debt of course the other thing which you need to do, and something which most people find to be very difficult, is to stop borrowing. If you are struggling now then there is little point in putting together a plan to clear your debts and then simply going on adding to the problem. Of course you do not need to clear your debt completely before you start taking on further credit, but you do need to get it down to a level which you can manage comfortably and with money to spare each month before adding to your financial commitments.

Facing up to a problem of debt is not always easy but you will find that life becomes far more difficult if wait until the debt collection letters start arriving in your mailbox. Many millions of people today are in a similar situation and help is available if you need it. All you need to do is take the first step and ask for it.

Almost all of us have debt of one sort or another today and borrowing money to support our lifestyle has become a normal way of life. But how do you decide just how much debt is acceptable and whether or not you have reached the limit as far as your borrowing is concerned? This is not an easy question to answer and will vary from one individual to the next. However, there are some basic guidelines which you can follow.

Credit card companies and other lenders know only too well from their extensive lending history just when it is safe to lend money and when it is not and they have a very strict set of rules which they have devised and refined over the years. It is not a bad thing therefore when looking at your own debt to try to think a little bit like a credit card company or other lender.

A good place to start is by looking at your own credit history and the amount of money you have borrowed over recent years and the ease with which you have coped with that debt. If you have had no problems meeting your repayments on time and have not had to penny pinch in order to support this level of debt then you might well feel that you could take on additional debt. However, if you have struggled to keep on top of your debt and have run into problems making repayments, perhaps making some payments late or having to re-schedule some of your credit agreements, then the chances are that you have already taken on more debt than you can handle and should be looking to reduce your debt rather than to increase it.

As well as looking backwards however you also need to look forward because circumstances will change in all our lives and even if you could not afford to borrow money last year that does not mean that you cannot afford to borrow this year. However, your forward predications need to be based on more than just wishful thinking.

For example, expecting a promotion or a pay rise is not the same thing as knowing that you are getting a promotion or pay rise because you have received written notice of your good fortune. Similarly, money expected from the sale of stock which you are currently holding in six months time cannot be relied upon until the sale is actually made.

One very important and often difficult aspect to borrowing is trying to predict just what is going to happen to interest rates in the future. A 3 year variable rate loan today at 5% might look great but could prove to be disastrous if in 12 months time interest rates have doubled to 10%. And if you think that this would never happen then just take a look at history and the millions of people who have been caught out by just this situation in the past.

When it comes to figuring interest rates into the equation there must inevitably be some guesswork but look to the professionals and see what they feel about the market. Look for example at things like the bonds and futures markets. If you see that 5% bond option prices are falling then the professionals are signaling that they believe that interest rates are on the way up.

At the end of the day only you can decide whether or not you can afford to take on more debt, have it about right now or should be looking to reduce your level of debt, but putting yourself in the position of a lender when assessing your current position is often a good way to make that determination. In simple terms ask yourself whether, if you were a lender, you would loan yourself $15,000 at 6% over the next 3 years.

Remember too that it is very easy to get yourself into too much debt but far harder to get yourself out of debt. A growing number of people today are finding themselves in the position of having to ask for debt assistance and you do not want to find yourself in that position.