Avoid Financial Disaster with Good Planning

It’s tough to get by financially in today’s fast-paced life. With mortgages, car notes and massive amounts of credit card debt, most people struggle to get by from month to month. With most people doing what they can just to pay their bills, few people are prepared for the unlikely event of a financial disaster. They come in many forms; a storm like Hurricane Katrina, a loss of job, or a sudden illness can break anyone who isn’t prepared for an unexpected interruption in their financial life. But it isn’t all that difficult to make preparations that will help you in times of a money crisis. All it takes is a bit of planning ahead of time.

Here are a few things that will help you be prepared for the unexpected:

Get an ATM/Debit card – You may not regularly use cash or have a need for a debit card, but there are some circumstances where it may be necessary. People from New Orleans who were temporarily displaced by Hurricane Katrina would have benefited from having access to cash even while away from home. If you don’t use one regularly, get one anyway and keep it in a safe place.

Sign up for direct deposit – With direct deposit, you will know that your paycheck will be in your bank account even if you cannot, for whatever reason, physically get to your bank. This will help you in the event of illness or natural disaster that may have your local bank temporarily closed.

Sign up for online bill paying – You can pay bills even if you aren’t at home via the Internet. You don’t have to use the service, but it may come in handy at a time when you least expect it.

Save some emergency cash – Financial experts recommend that you save at least three months’ worth of financial expenses. That’s difficult, but every little bit can help. Try to cut back on a few unnecessary items, such as that tall latte you buy every day. It adds up, and you never know when you may need to access that emergency cash.

Set up a home equity line of credit – Unlike a home equity loan, which provides you with a lump sum of cash right away, a home equity line of credit provides you with cash that you can use a little at a time, and only when you need it. If you don’t actually take any money out, you don’t have monthly payments. But if an emergency strikes, you’ll have cash available. This can be particularly helpful if you find yourself out of work for a short period of time. Your bank won’t lend you money when you are out of work, so plan ahead of time and the money will be ready when you are.

A little bit of planning can go a long way when a financial emergency strikes. If you plan for it now, you will have fewer worries later.

Balance Transfer – This card is not like the other

As another way to get your business, many card issuers offer balance transfers. This can give you some leverage as a consumer and a opportunity to save some interest. Most credit cards offer a 0% APR for 6 to 12 months with no transfer fees. This is sometimes referred to as the teaser rate.

A balance transfer can be a good way for a you to consolidate debt. You can take your outstanding balance on one or two or more cards and transfer it to a card with a lower rate. Once approved, you would have all your payables on one credit card and essentially had taken two or more interest rates and transformed them into one lower rate.

If you want to carry on a balance, look for the credit card that offers the best interest rate or the annual fee offer. However, if you intend to pay for the credit every month, then look on the one that offers the lowest interest rate. Take note of the new rate after the introductory offer is over. Is it going to higher than what your have now? Are there any other fees involved? Make sure. Also does the introductory offer apply to balance transfers and purchases?

You can choose the credit card that offers the lowest annual percentage rate (APR). APR’s could either be a “fixed” or a “variable” rate. Fixed rates do not change as the name implies but is higher. Variable rates changes depending on the economic trends. I usually avoid anything that’s variable but you should explore your own options carefully. This is to be taken into consideration if you’re deciding on carrying a balance and for how long.

Other factors involved in your decision for a balance transfer might be the rewards (reward points)or cash back a card offers. You may want to look into something you purchase often, like airline miles or gas rebates if you drive more than usual. Other cards even offer cash back for paying home utilities and mortgage, like the Citi® Home Rebate Platinum Select® MasterCard®. There is much competition for your money and if you take time to explore your options, you can turn some disadvantages on your present credit card balance back your way.