A great number of people own credit cards today. Some are not contented with having just one card and so they try to get one or two more for their personal use.

There’s definitely nothing wrong with owning two or more credit cards as long as the owners are fully aware of their financial responsibilities. In short, they use the plastic only when needed and not use it in most of their major and minor purchases. The big mistake of some people is that they become too dependent on the credit card and only realized later the wrong actions they’ve made when they’re already faced with huge debt.

Just take the case of Australians. Many, or actually most, Aussies just love to use their plastic. The downside is that they often don’t make the right decisions when managing their finances and most especially their debts.

The latest data shows that in Australia, cash advances made on credit cards have amount to more than a whopping $1 billion. It’s no longer millions but it’s already the big B. Information from the Reserve Bank revealed that this 1 billion mark, or $1.04 billion to be exact, was reached in March this year. And just so you know, this is only the second time that cash advances through the cards have surpassed the $1 billion mark. The first one was in 2008.

Apart from the cash advances, there are other alarming statistics that showed up in the RBA report. For instance, the total amount owed by people on credit cards is more than $47 billion and of this amount, nearly $35 million is accumulating interest. If you are to compute this using the average card interest rate of 17 percent, the interest alone can reach almost $6 billion each year.

Financial experts again point out that many consumers particularly those who own credit cards lack the right knowledge on the costs of using their plastic. This has been a major problem but many people still don’t take action to educate themselves about the costs involved in using the plastic. In fact, more than 90 percent don’t even have an idea of the interest rate they’re paying on their credit card.

Financial counselors also continue to stress that making cash advances using a credit card is one of the most costly forms of credit. It is because withdrawing money via the plastic involves an interest rate which is about two percent higher than the interest applied on your credit card purchases. This means that every cash advance automatically earns an interest and involves other fees as well. Another thing you should know is that this kind of transaction is not covered by the 55-day interest free period when you charge your purchases on the credit card.

So perhaps instead of using the card to withdraw money, you may want to opt for taking out a short term personal loan instead. Whether it’s a payday or cash advance loan you’re considering, it’s a more affordable option and can be availed of in a fast and convenient way these days.

So many consumers today are relying on different forms of credit to help them in their financial needs. The credit cards and short term personal loans have been proven to be useful to people particularly to those who are not earning much on a month to month basis.

Credit cards are good when used in the proper way. They can help when no ready cash is available to pay important bills or purchase one’s basic needs. When bills are paid promptly, a credit card owner can sure to gain a positive rating on his or her credit record.

In the same way, short term unsecured loans have been taken advantage by many consumers to meet their financial requirements. Being short term, they have been considered an affordable financing option. In addition, they’re very convenient to avail of today what with many personal loan providers now operating on the internet and no longer requiring credit checks or collateral from borrowers. These personal loans when used properly and paid on time can help borrowers attain favorable credit ratings moving forward.

Experts in Australia, however, point out that people need to check their credit report at least once every year. A report from credit reporting agency Dun & Bradsheet revealed that more than 80 percent of Australians don’t have any knowledge about what this kind of report is all about or what their credit profile even looks like. For this reason, financial counselors advise borrowers to make sure that they do a yearly check of their credit report which does not cost at all. People should take it upon themselves to know what actions could possibly affect their record, they added.

In Australia, credit reports contain information on a person’s identification details, credit applications and negative incidents such as bankruptcy and default. By next year, though, it is expected that repayment history will be added to this credit report information.

According to the experts, an ideal attitude before any individual applies for credit is to check his or her credit report by getting a copy of this. In this way, they will be able to determine if there is a chance for them to avail of new credit. Through this particular report, a borrower will also see his activities for the past months or years letting them know how much debt they have accumulated and their late payments if any.

Establishing a good credit history is very important especially if you often take out short term personal loans and use credit cards. This record is normally used by banks and lenders in deciding whether to approve an application for loan or not. The National Bank of Australia has confirmed that it looks into an applicant’s credit history before they come up with an approval. The information contained in the report is what they assess first before giving a stamp of approval to any loan application.

So remember, it pays to be a responsible borrower and a prompt payor. Make sure then you know your financial obligations and check your credit history once each year.

Almost all people want to save money for their future. If it’s only possible, they would do it. Unfortunately, not every person’s wish can be granted more so, if he or she is not earning enough.

But financial advisors don’t believe that people can’t do anything about their goal of saving money moving forward. They know that if there’s a will, there’s definitely a way. There are simple steps that people can take to attain their goal and if only they do these on a consistent basis, they will be able to save little by little and in no time, enjoy the benefits of having extra money they can spend for quality things and holidays with their family members.

According to the experts, it’s the common expenses that take up much of a person’s finances. As such, people should focus on cutting down on these expenses in order to gain some savings. Here are some steps you can do then.

Refrain from dining out. It’s so easy for busy people whether professionals or those who own business to opt to eat out most of the time instead of eating at home. As they lack the time to buy the ingredients and cook their food, they would rather buy ready to eat ones at supermarkets or eat at a restaurant which is more convenient. What they don’t know is that they can save hundreds or even thousands of dollars each year if they just stay home and prepare their own food.

Stay away from car loans. It’s very common for people to take out loans to buy a new car. Sometimes, though, they can become so engrossed with driving their new car that they forget about the loan they have to repay. But experts point out that doing this is not a good idea and not even a good investment. In the first place, the value of vehicles depreciates over time. Add to this the gasoline you’ll have to spend while using the car.

A better option if you take out a short term personal loan is to use it wisely such as for an emergency or for buying a worthy investment. At least in case you get into debt, you still have something to gain from your investment. What’s important is to be responsible enough to pay back what you owe.

Be prompt in your repayments. Keep in mind that late fees are one of the common causes that people’s bills pile up. And did you know that one day late in paying your bill can already tarnish your credit record. But if you try to be organized when it comes to your finances, you can definitely avoid them. Write monthly reminders on your diary so you don’t forget your due dates.

Avoid credit cards. Financial advisors agree that the plastic is a major problem area as well for most people who own one or more of these cards. When used in the proper way, the credit card is a very useful tool but once abused, it can lead to debts especially if you don’t how to pay back your dues on time. Various finance charges are applied to the plastic so if you can, avoid using it often just for minor purchases.

In life, there are major decisions we need to make. They can be life changing decisions but we need to do it if it’s for the benefit of your family and yourself as well.

Making decisions is never an easy task especially if it’s about finances. Budgeting your funds alone is already a huge challenge for many people how much more if it concerns paying debts.

Debts are classified into the good and the bad. Many of you may not be aware of this but yes, there is such as a thing as good debt and bad debt.

Now what’s a bad debt? This is the money you owe in buying things that depreciate in value over time such as a car, clothes and shoes, home decors and even a holiday vacation. The debt incurred here normally results from the frequent use of credit cards. The use of the plastic has been proven by previous studies to be expensive because of the various finance charges involved. And these are not just small charges but high fees. The interest rates alone can go up to as much as 20 percent compared to using other forms of credit such as a personal loan.

On the other hand, a good debt is what you owe in more worthy loans. In other words, the money released to you such as in the form of a mortgage loan is used to purchase properties or used in worthy investments that appreciate in value going forward. Examples of these are buying a house or investing in a treasury bond and other forms of securities. The value of these assets increase as time goes by such that the owner can even gain much profit should he or she decide to eventually sell the property or investment product.

Between the two, financial experts stress that the bad debt should be first on the list. This means, they have to be paid first and at the soonest time possible so that they don’t accumulate to a higher amount. Today, many Australians are facing bad debts and are finding it difficult to repay them. This is because interest rates have gone up and some may have experienced job loss or lower salary due to the cutting down of their work hours. Those in business may not have been exempted as they experienced lower earnings especially during the global financial crisis last year.

In dealing with bad debt, the best solution is to face it with courage and find resources to repay them on time. There are various options available but first, keep in mind to stay away from using the credit card as it can only lead to more debt in the future.

The unsecured loans such as the payday and cash advance types are more ideal because of their affordability and convenience. The repayment schedule for these loans can be tailored to one’s financial situation and with many short lenders now doing business online with no credit check and collateral required, it’s very convenient to apply for a loan and be approved in just a few hours or within one day.

The credit card is a must have for most people. Many could not live without this. With the convenience it provides, who would not be tempted to get one of the plastic. Some even prefer to own more than one of this card.

For many card owners, the plastic is very helpful especially in times when they need something important to buy yet cash is not readily available. What’s most convenient is that one can use the card several times and then pay for the bill at a later time. And this is the kind of credit that many people want.

Unfortunately, not all card owners are responsible enough when it comes to using the plastic. Sadly, some abuse the privilege that goes with the card that when their monthly bill arrives, they delay in paying their dues or worse, take it for granted. And what happens next is they incur a large balance that they can no longer afford to pay.

Another feature of the credit card that’s most abused by users is the cash advance. By cash advance, this means being able to withdraw an amount against a person’s credit card limit. As an example, a person with a limit of $25,000 but who has outstanding purchases worth $15,000 can still withdraw $10,000 using his or her credit card.

But while this is a fast and easy feature for those in urgent need of cash, the costs involved are high. It’s important to note that cash advances using the card have higher interest rates compared to regular purchases. The interest applies immediately right after the transaction which means no grace period is given. In addition to the interest rate, the card owner may also be charged an ATM fee by using the machine of a specific bank. Cash advance fees today can range from $10-$20. These are normally calculated as a percentage of the amount withdrawn against the credit card.

In Australia, latest data shows that more than two million cash advances are made every month. Government statistics also confirm that credit card transactions as well as cash advances in the country have gone up in recent years.

So while some of you still see the cash advance feature of credit cards as helpful, you may want to consider a more affordable alternative such as the short term unsecured loans. Financial experts say these cash advance and payday loans have lower interest rates which would allow borrowers to enjoy more savings even in the thousands that they wouldn’t avail of if they make cash advances using their credit cards.

Those who have established good credit records won’t have a hard time obtaining these short term loans. What matters is that whenever you borrow money, you take the responsibility of repaying it on time so as to avoid other charges and debt.  Credit may be easily availed of but if you don’t know how to pay what you owe in a timely manner, you will likely to fall into debt going into the future. So remember to take care of your credit if you want to lead a debt free life.

Nobody wants to get into debt. It’s a stressful situation to be involved in any financial trouble as numerous people who’ve been there can confirm. But unfortunately, many people have accumulated debt all these years because of their love for the credit card.

There’s actually nothing wrong with owning credit cards so long as you know how to be a responsible user.  The downside is if one does not take the time to carefully read and understand the terms and conditions set by the credit card company. Lack of knowledge especially regarding the finance charges involved with using the card will most likely end up in accumulating high balances moving forward.

Additionally, other major issues that can lead a card owner to go into debt are when he or she relies on the plastic most of the time and pays only the minimum amount due each month. Still another problem seen with the plastic is sometimes, owners tend to use it frequently in an effort to obtain the needed points that will entitle them to avail of rewards. The result is they spend too much on things that are not even necessary.

The reality today is that one can easily get into debt in the same way that he or she can easily apply for a credit card. So what then is the proper way of using the plastic and what for those who don’t want to have anything to do with the card, how can they stay away from it?

For people still in the process of settling their credit card debts, an important step to take is to pay more than the minimum every month. If you can afford it, pay a bigger amount than what’s required. In this way, you can reduce your balance faster than when you just pay the minimum.

Those owning more than one credit card should also make a firm decision to just stick to a single card. It’s never ideal to have two or more plastic because the temptation to spend is greater in this case. But if you have only one, at least you are made aware that you should use it only for very important purchases and not for your regular purchases.

The next step is to consolidate your debt.  After freezing and throwing away your other cards, make sure to consolidate all your debt so that you pay only a single amount each month.  But then you will need to have funds for this. You can use your savings to pay for your credit card debt or you can take out a short term unsecured loan for this purpose if you don’t have sufficient funds available. Short term payday and cash advance loans are more affordable and allow borrowers to apply for even just a minimum loan which they can repay at a schedule that fits their financial situation. By going for this option, you can focus solely on repaying your loan amount and no other payables.

So remember that a credit card is not always helpful especially if you’re already abusing it. Think twice about adding more cards to what you already have. It’s better that you stick to one.

It’s a reality that when people have more money, they tend to freely spend on whatever interests them. Men are said to be the big spenders that sometimes, they can’t even keep track of where their money goes. Surely, many will agree to this.

This is a habit that people need to change. It may be hard to do at first but it’s possible to correct it if only one wills it. Latest reports actually showed Australians were able to change their spending habits in 2009 at the height of the global financial crisis. Economists said people stayed away from major vacations and entertained themselves instead at fitness centers, tennis courts, golf courses and ovals.

Rather than spend their money on hotels and expensive holidays, the others bought caravans, bikes and boats and engaged in nature trips such as fishing and camping. Other things that Aussies spent on last year were medicines to keep them healthy and beauty treatments to keep them looking good despite the bad economy. Figures from the Bureau of Statistics also showed that people in Australia took advantage of the low prices offered for televisions and stereos for home entertainment purposes.

It’s a positive sign that people are learning to control their spending during tough times. But it would be more beneficial moving forward if they are able to be consistent in this aspect of their lives. It’s okay to be spending big every now and then but not all the time. Because it’s still important to save for the future even though if one is earning a five to six-figure salary.

Men should try harder at controlling their spending urges. They can let their wives manage the family budget if they want to and if they trust their spouses or they can put their extra funds directly into a savings account. Married couples often fight over finances and this is particularly true among spouses where one spends on his own without consulting or informing the other partner. Sometimes, there’s also the feeling of insecurity evident in the spouse often times the husband who does not earn much compared to his wife.

New research has actually found that half of all couples fight over money and that women point to men as the one who wastes more money. The study that covered some 1,000 people showed that four in 10 women think their spouse spends so much money and one in five don’t fully trust their husbands with their finances.

For people who are frequent borrowers especially those who take out short term unsecured loans such as the cash advance and payday, they should also take it upon themselves to use the money released to them wisely. This means using the loan to pay only important bills and other debts. As much as possible, avoid using it just to buy expensive and unnecessary items.

These short term loans are easy to avail of and are very helpful during emergencies but should never be abused. Being a responsible borrower and wise money spender still counts a lot in life.

Can people have good and bad credit at the same time? What does it take to have a good credit status? And how does one stay away from bad credit? These are the questions that bog many people’s minds.

Let’s discuss each of them so you are clarified on this important part of our financial lives. Credit, as we all know, is what many of us avail of when we take out loans and own credit cards. It’s a form of debt that when not repaid on time will continue to accumulate.

Every time people avail of credit, this gets recorded by rating agencies. Depending on how you repay them can affect the status of your credit record. So in other words, your repayment history is also known by these agencies.

Yes, people can have both good and bad credit at the same time. Good credit can be achieved if you are prompt in repaying your monthly dues and you are able to pay off your balance.

A person, however, earns a bad credit rating if he or she misses on monthly payments for different types of loans and credit card bills or defaults on them. Bankruptcies and court decisions can also signify bad credit behavior.

You have to know that defaults often result in not being able to settle your dues after 60 days. This record stays for five years and could then mean difficulty in applying for a new loan or credit card as most lenders and companies get access to these records. But this can be a case-to-case basis as there are credit companies that may approve applicants with bad credit record.

Now to answer the question “How does one stay away from bad credit?,” there are many ways to do this if you only commit to it and be consistent. The first thing you can do is to be prompt in paying your monthly dues. You have to be responsible for your finances because it will still be you who will suffer the consequences in the end if you take this for granted. You have a choice between paying before the due date and paying exactly on the due date. Sometimes, people have the habit of paying only at the last minute. Even though money is already available, they will still wait for the due date. This behavior needs to be changed if possible because paying before the due date is a better option.

Did you know that paying your credit card bill even a few days late can already affect your credit record? Other than that, you incur additional charges which could mean a higher balance to pay. When this happens, you may even be refused a mortgage loan later on.

For loans including the short term payday and cash loans, it is also important that they be paid on time. They may be considered an affordable option but the responsibility still lies with you to repay them on time. If you are able to do this, you have a chance to easily avail of another loan later on without much difficulty.

By now, many of you may have heard of the good news that the economy has slightly recovered from the global financial crisis last year. However, the positive effects of this have not been felt by Australians as many are still facing financial hardships up until now.

A new survey by BankWest for its second yearly Financial Fitness Index report showed that 28 percent of Australians continue to experience financially instability. By this, it means people continue depend on their debt and have little or even no savings at all. Some don’t have an insurance coverage and are facing high housing costs.

Of the 833 people respondents that took part in the online survey conducted by BankWest, nearly one third or 34 percent of women in Australia and 25 percent of men belong to the financially unfit category. These figures are higher by six percent compared to last year’s 22 percent when the global crisis was greatly felt in most parts of the world.

What’s surprising in this research is the women being found to be more financially unstable than the men.  There are several reasons that can be attributed to this.

Firstly, women are often given the tasks by their husbands to manage the family’s budget. This is no easy work but sometimes, due to financial difficulties encountered by the family, there’s a possibility that women will become hard up as well. Those separated or divorced and without work are in a much difficult financial situation as they rely mostly on the support of their former spouse.

Secondly, not all women or specifically the wives are employed which makes them vulnerable to accumulate debts at some points in their lives. And if ever they have work, their income normally serves only to supplement that of their husband’s.

The BankWest survey further found that in 2009, majority of people across Australia regardless of age groups experienced financial difficulty in terms of finances. The findings also showed that only about half of the respondents were able to manage their budget well as proof of their moderate savings, average housing costs, some insurance and moderate levels of debt.

Most of the people found to be financially fit are in the western part of Australia. Some 36 percent of residents in this area belong to the financially fit category. Additionally, the seniors and retirees aged 64 and beyond are in the same category with 35 percent of them and only 15 percent in the negative.

Analyzing this situation, most people that fall in the unfit are those that frequently use their credit cards and have accumulated large debts through the years. Those with several outstanding loans are guilty as well. It has been reported several times recently that using the plastic entails a high cost because of the different and sometimes hidden charges involved.

Financial advisors often recommend to those who prefer a debt consolidation program to focus on utilizing a single loan in repaying their debts. Taking out a cash advance or payday loan is an affordable alternative and available to employed people over the age of 18 and with a current bank account.

Homeowners who are careful about handling their family’s finances often want to avoid paying their bills late. For them, paying promptly is the best way to cut down on debts and they’re absolutely right. Paying late means more charges which results in higher balances to pay. And if no immediate action is taken to settle this, it could end up in accumulation of debt.

Paying bills is a common predicament of many people especially those who frequently use their credit cards. Sometimes, they rely on this plastic card for most of their purchases not knowing the underlying charges involved. What happens then is that they get surprised with the huge balance they have accumulated when their bills finally arrive at home or in their office.

To give you a glimpse of what I’m telling you about, here’s the latest financial buzz. The Herald Sun reported that more than 1.5 million Australians have earned unfavorable credit standings all because of their debts and overdue bills. In the state of Victoria, for instance, some 350,000 households are not paying their telephone, electricity, water, gas and credit bills on time and are missing payments for their loans. Due to this situation, financial counselors are already expecting a deluge of people seeking their assistance notably those finding difficulty in paying their basic utility bills such as electricity and water.

Companies normally list as default bills amounting to $100 or more that are not paid after 90 days. This default record then remains on file for five years and this is being tracked by credit rating agencies. Consumers who fall under this category may it find it hard then to obtain a new loan or credit line. This is the case as financial institutions impose stringent rules for borrowers with not-so-good credit standing.

What this calls for then is to be a responsible consumer. Whether you have credit cards or you have availed of the short term unsecured payday and cash advance loans, what matters is you are able to pay your dues on time. It is never good to delay or worse, run away on your payments as this normally ends up in a bigger amount to pay or fines.

The benefits are yours to gain if you fulfill your financial responsibilities. First off, you earn a good credit rating. Secondly, it would be easy for you to get approved should you apply for loans including the unsecured payday and cash loans. Thirdly, you can ask for a lower interest rate which people with bad credit are not able to avail of.

The best attitude to carry going forward is to be prompt in paying your important bills. Keep a diary of your monthly payables and when your bills arrive, make it a point to pay before the due date if funds are already available.

Millions of people have already become victims of the credit card and if you don’t want to be one of them, then pay on time. You’re not only doing yourself good but you’re also avoiding debt.

Do you know why it is high time for you to save today? There’s a big reason to do so because banks are increasing the interest rates for their local deposits. The banks are doing this for the first time in 10 years in an effort to attract cheaper retail funds. What this means is when you put your money into a savings account, you will gain more money going forward.

Here’s more great information that you should know. According to a financial comparison group RateCity, the average interest rate for a one-year term deposit is even higher than the cash rate of the Reserve Bank. Specifically, a one-year deposit will enjoy a 6.3 percent rate while a 5.51 percent interest rate is being implemented for online savings accounts. For those putting in money for more than one year at major banks such as Westpac, for instance, an 8 percent interest rate in deposits can be enjoyed for a five-year term.

These high rates may not compare with those offered in the early part of 2008 but they should be high enough to encourage you to save. Just consider that when you have a savings account and you don’t touch them for the long term, you can definitely reap the rewards. The banks for their part will also benefit by earning profits especially from customers who decide to stay long with them or even for their lifetime.

While you’re proceeding with your saving efforts, it would be best as well to avoid using your credit cards. If you have one or more of these plastic cards, freeze it while you’re focusing on paying your balances. Or better yet, close all your accounts when you have paid off the balance.

You may be unaware but there’s a latest report that says the hidden details in the interest charges applied by credit card companies on your partial payment as well as on your overdue balances are what actually cause customers to go into huge debt. This was found out by a consumer advocate group called Choice.

The recent study also revealed what many credit card users may not know. It added that many credit card firms tend to move back the date of their interest to the date of purchase especially for late payments. So even if you’re late in paying your amount due for just one day, you can incur a high interest that can be backdated to more than 30 days.

This should be reason enough for you to stop using your plastic cards. What you can do then when you need fast cash at a time when your salary is not yet available is to take out a payday or cash advance loan for just a short term say, two weeks to a month at the most. This alternative can help you in your effort towards saving money as it’s affordable and does not require you to take out a huge amount of money. And as long as you are employed, you don’t have to worry about paying back your loan before its due date.

When it’s a new year, what usually comes to mind? Right, new year resolutions. What about you, have you made yours for 2010? What are your priorities for this year?

Hopefully, those who have outstanding debt should try their very best to settle it and take steps towards cutting down on debt. The Christmas holidays are over and much spending is over and done with as well so it’s time to start a brand new year. And what could be a more worthy move than to resolve to pay your dues and gradually eliminate debt in your life.

Who wouldn’t want to lead a life free from debt and worry? Most of us desire a peaceful life without the money troubles, it’s just that not all of us have sufficient financial resources to help us pay our obligations. Some may have jobs but their salaries are not enough to meet their family’s needs. The others may be earning much but they are big spenders which only lead them to have lesser savings. Still others are fond of using their favorite credit cards even for minor purchases not fully aware of the high cost it entails.

Here’s what you should know. Based on figures from the Reserve Bank at yearend 2009, Australia reached a record level of debt at a whopping $1.2 trillion. This figure, would you believe, surpassed that of America for the very first time. For households alone, the average debt of each adult was at $74,000.

Financial counselors in the country admitted that indeed thousands of people are suffering from financial trouble. There are those on the verge of bankruptcy, those losing their homes and those whose personal belongings are being repossessed due to their debt. Experts add that several records have been set such as those on bankruptcies, mortgages and waiting lists for people in need of financial counseling.

So ask yourself, would you like to contribute to this problem? If you’re a responsible individual and borrower, your answer should be a big NO.

What then is the solution to slowly eliminating debt in your life? Start within yourself. It’s just a matter of attitude. If you start making a positive change in your life and be consistent with it, everything will follow.

To start with, why not make a budget plan. Keeping track of your budget and your expenses is very ideal. It will guide you in managing your family’s finances and help you set aside savings for your future. Budgeting means knowing how much money is available each week or month and how much goes out to your bills, food and other needs.

Next step is to refrain from using your credit card for your regular purchases. It’s a fact that numerous people own one or more credit cards these days but just to remind you, this is a costly habit. A lot of charges are involved every time you use the card and additional fees are charged if you make late payments.

Finally, opt for short term loans such as the cash advance and payday types. They’re more affordable and easy to avail of. As most lenders operate online today, you can conveniently apply on the internet and get your cash in a very short time. By availing of these loans, you can then just focus on repaying the amount at your most preferred schedule.

Credit card debt is one of the most major financial problems working people face today. Many of those employed rely on their credit card to pay for their purchases from food to clothing and even for their travel. The unfortunate side, however, is the high cost of owning this plastic card. As using the card entails a lot of charges, people tend to realize only later how much debt they have incurred through continued use of this financial product.

But today, though, many people are staying away from the credit card as a step towards avoiding more debt. With the global recession still lurking around and numerous jobs are still being cut down in other parts of the world, this move is worth doing. Not using the credit card is one of the most effective options available for people notably those bent on saving money.

However, consumers having problems with their credit card debt can still find solutions to their financial issues by availing of a loan. A bank loan is not a good idea for those with poor credit rating because of the credit check and collateral required. What they can take advantage of are the short term loans such as the payday and cash advance. People who are currently employed but with unfavorable credit history can benefit from them.

Comparing these short term loans with the credit cards, they can be considered more affordable. For one thing, consumers can take out just a small amount depending on their needs and if allowed, they can even choose the repayment schedule that they find suitable to their funds or what they can afford to pay with their monthly salaries.

Unlike the credit cards, short term lending companies may or may not compound interest charges should borrowers miss on their repayments. With the plastic cards, missing several payments may already mean higher interest fees in addition to the late payment charges. This then translates to more financial burden to people finding it difficult to pay their credit card bills promptly.

Meanwhile, payday and cash advance loans may very well be used to pay credit card debt. They can be availed of if a borrower wishes to pay off his or her balance and is committed to reducing use of the card for the long term. A $3,000 credit card debt, for instance, can be paid off using a cash advance or payday loan. By choosing the right lender, a qualified borrower can easily take out a loan of this amount in just a few minutes to a few hours. Once the money is released, it can then be used to pay off the full balance on your credit card or even just half of the total amount due if your balance is say, $6,000.

What’s important is that you are determined to reduce your debt and avoid the other finance charges associated with credit card use. With a loan, you will then be able to focus on repaying just that amount and as long as you pay on or before the due date, you will not be bothered by other additional fees.

A major sign that people are opting for the more affordable short term loans is the reduction in the number of credit card holders. This is a positive indication that amid the global financial crisis that is still far from over, people are finding ways to avoid the use of credit cards as much as possible in meeting their family’s financial needs.

This finding is especially true in Australia. Latest reports have it that credit card spending has gone down in the country. A report from accounting firm PricewaterhourseCoopers (PwC) revealed that in 2009, the rate of borrowing via the credit card went down by three percent while the number of cards circulating also dropped by eight percent.

One of the causes of this reduction in credit card use, as suggested by the report, is the continued low unemployment rate in the country. This situation is also being blamed to the economic downturn around the globe which in turn has caused anxieties to people who fear about their losing jobs.

Owing to this situation, the PwC report projected an increase in credit card write-offs from 3.8 percent to nine percent in the year 2010. This means that financial experts are seeing a greater number of consumers having difficulty paying off their credit card debts. Some of the probable causes of this financial difficulty will be the limitation in the choice of products and a rise in charges resulting from higher interest rates and other related fees.

This reduction in credit card use is a common observation of many experts in the credit industry. The Credit Conditions report from the Bank of England showed the same finding stating that the situation will further tighten until the end of the year.

For people who regularly keep track of their credit card spending and their bills, they may have somehow found or rather they should have discovered by now the high cost involved in using these cards. The cost is even higher if the owner contents himself or herself with just paying the minimum amount due every month instead of paying off the balance in full. In this case, the finance charges normally keep rolling over while if one pays off the balance, no extra charges are usually applied to the total balance. The other good thing about paying the credit card balance in full before the due date is that you avoid incurring any charges which means it’s just like you borrowed money without any interest.

It is no surprise then if people will favor the short term loans such as the cash advance and payday loans today over the credit card. At least with this type of loan, the amount involved is smaller, the term is shorter and the borrower is more capable of repaying the amount using his or her next paycheck. These short term loans are also easier and convenient to obtain compared to the usual loans offered by banks. Many lending companies have put up their respective websites to make it convenient for people to apply and get loans in a matter of a few minutes to an hour.

I have recently decided to “throw away” my main credit card.  It was a major decision, you know.  More than having a high credit limit, that card was my first ever credit card.  It has some sort of sentimental value for me.  But it also led me down the path of unmanageable credit card debt.  Now I am NOT blaming the credit card for my situation.  I am taking full responsibility for my debt, but I would also like to share an alternative to credit cards for certain needs.

You see, more than using my credit card to make purchases, I also used it a lot for cash advances.  I am pretty sure that you know what I am talking about.  Being able to use a credit card to get cash is one of its most useful features.  This is especially good if your credit limit is high enough to accommodate regular purchases and cash advances.

Another advantage of getting a cash advance using your credit card is the speed and ease by which you can do this.  Different credit card companies may have varying policies but in many cases, all you need to do is go to a cash machine and get your money.  In order to be able to do this, you normally have to get a PIN and activate the cash advance feature.  After that step, you can get money from your credit card easily.

Of course, there is always a flipside.  While it is easy and convenient to get money from a credit card, the finance charges applied to cash advances are quite high.  They are in fact higher than the interest rate applied to regular purchases.  And of course, if you do not pay off the whole amount in one go, you will be charged additional interest for as long as the balance remains unpaid.  Things will get worse if you take out another cash advance without having paid the original amount that you took out.

Now how about a cash advance loan that you get from a lender?  The idea is basically the same, except that you do not use your credit card – you approach a cash advance loan provider and borrow money.  The advantage of taking this option is that you do not incur additional interest on your credit card.  You can keep that for your regular purchases, and acquire cash for your urgent needs from a cash advance loan lender.  Even better, you get to divide the whole loan amount into several payments.  This is decided by the cash advance loan lender at the outset.  As a result, you know exactly how much you will be paying when and for how long; the payments will be more manageable than if you took out a cash advance using your credit card.  Of course, you would have to consider the fact that with a cash advance loan, you would have to wait around 24 hours to get the money.  This is still pretty fast, especially if you compare it to other loan types out there.