Suze Orman's tips to beat credit card debt | finder.com

Suze Orman’s credit card tips

Suze Orman is a genius when it comes to tips that may help you get out of credit card debt once and for all.

Suze Orman

Suze Orman

  • Suze Orman is an author, financial adviser and motivational speaker
  • Suze has a B.A. in social work
  • Hosted the “The Suze Orman Show”

Some people use their credit card to help pay bills and buy necessities. But, if you are broke because you just enjoy spending money on credit, you need to be ready for a change.

The same strategies can be used to help get you out of debt whether you are in this situation due to necessity or indulgences. The idea is to pay the lowest interest rate possible, as quickly as possible, without falling into all of the credit card traps the companies have in fine print.

Lower the interest rate

  • Negotiate. If you have a good credit history and have been making the minimum payment on your card on time every month, you may be able to negotiate a lower rate with your credit card company.
  • Balance transfer. Transfer your debt to a card with a lower interest rate and save on interest. Let your current card provider know that you will have to do a balance transfer if your rate is not lowered and they may give you a better deal because they do not want to lose your business. It is important to not make any purchases on the new card as this will completely cancel out any benefits of switching cards.
Did you know?

If you have a good credit card history and have been making at least the minimum payments per month, then you should not cancel your old cards. They hold a history of your payments that influence your credit rating. All you really need to do is cut them up so that you cannot use them, without canceling your cards completely.

Be sure to make payments

Per the fine print in most terms of conditions, any time you make a late payment, your 0% deal is terminated. Even if you are making regular payments on your new 0% interest rate card, credit issuers will be watching your credit reports to see if you have been late with payments on any of your other cards, not just theirs. This can cancel out the zero deal in some cases as well.

What are credit card companies getting from offering a 0% interest rate?

They want you to make a mistake using the card so they can stop the 0% interest rate and start charging you a 20% or higher rate of interest. Always pay your credit card bills before the due date. If you are mailing in the payment, mail it out five days before it is due.

If you do not qualify for a 0% deal Suze Orman says…

It’s time to start working on changing your credit history so that you can qualify later.

  • Credit score. You can boost this by paying at least the minimum on your monthly payment every month on time. After you have done this for a while your score should start to rise.
  • Debit to credit limit ratio. It is never wise to exhaust your entire credit limit. By keeping a low balance that is a fraction of your available credit limit, your ratio will decline and your credit score should go up. If you do not see it rising you can call up your credit card company and ask them to boost your credit limit — only if you’re sure you can control your spending. By raising this limit your ratio is going to fall because your balances will stay the same.

Working with high interest rates

List your credit cards in order of high interest rate first and low interest rate last. Ignore the balances on all of the cards while you are doing this. Once you have gathered these cards, make sure you make all of your minimum monthly payments on time, but add a little extra to the payment for the card with the highest interest rate.

You can save thousands of dollars in interest charges by pushing hard and making your extra payments as big as you can. Continue this way until the first card, the one with the highest interest rate, is totally paid off. Then start doing the same with the second card in line. Any extra payments that you were able to pay on the first card should be applied to the second one now.

Always keep track of your credit rating until you find that you are able to qualify for a 0% or low rate balance transfer. This is one of the credit card tips you must keep in mind and not forget.

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Pay off your credit card wisely

A credit card debt is unsecured, so if you cannot repay the debt, they cannot come after your assets to repay the money.

  • Home equity line of credit. A home equity line of credit is secured, so if you miss your payments your bank can use your collateral, which is your home, as a payment. You can be forced to sell your home in order to pay off the balance — you should never offer your home as collateral to get out of a credit card situation.
  • Retirement funds. You should also never borrow money using any of your retirement savings either. Some of these loans will be subject to double taxing once you have reached the age of retirement and have different requirements that must be fulfilled where you could possibly lose all of your savings. You may also have penalties and fees to pay as well.

Credit counseling

A good credit counselor will go over your entire financial situation before anything is proposed. You’ll typically be required to go to some classes to get help with money management techniques and to learn better spending habits.

Suze Orman also goes on to say that a debt management plan may be the right thing if you have stopped making payments altogether. A payment schedule will be set up with the credit card companies that is mutually agreed on by both of you. You may not be able to qualify for this plan if your counselor doesn’t think that your credit card debt can be handled within a few years time.

Don’t get ripped off

With the amount of debt problems on the rise it is not surprising that some credit counseling companies are taking advantage of the situation by charging extremely high rates for advice. Be careful when choosing a credit counseling company and make sure that they are fair and honest. You can ask for references if you need any help picking one out.

Also make sure that you only have to pay one fee monthly and not one for each separate credit card. Understand all of the terms of repayment and get everything explained in writing before you go ahead and sign anything at all.Back to top

Compare credit cards

Rates last updated February 25th, 2018
Name Product APR for Purchases ( Purchase Rate ) Intro APR for Balance Transfer Annual fee Product Description
Barclaycard Arrival Plus® World Elite Mastercard®
17.24%, 21.24% or 24.24% variable
0% Intro APR for 12 months (with whichever is greater: $5 or 3% balance transfer fee)
$0 annual fee for the first year ($89 thereafter)
Enjoy 40000
bonus miles after you spend on purchases in the first 90 days — that's enough to redeem for a $400 travel statement credit toward an eligible travel purchase.
Luxury Card Mastercard® Titanium Card™
16.24% variable
0% Intro APR for for the first 15 billing cycles (with whichever is greater: $5 or 3% balance transfer fee)
$195 ($95 for each Authorized User added to the account)
Enjoy unique excursions, privileged access to exclusive events and insider opportunities.
HSBC Gold Mastercard®
12.24%, 16.24% or 20.24% variable
0% Intro APR for first 18 months from account opening (with whichever is greater: $10 or 4% balance transfer fee)
$0
An 18-month 0% Intro APR period on both purchases and balance transfers, plus zero foreign transaction fees, makes this is a strong well-rounded card.
Indigo® Platinum Mastercard® Credit Card
23.9% variable
$75 annual fee for the first year ($0 to $99 thereafter)
With this card you get a 23.9% variable APR.
Barclaycard Ring™ Mastercard®
10.24% variable
$0
A low, variable APR on purchases, balance transfers and cash advances.
Credit One Bank® Visa® with Free Credit Score Tracking
17.24% to 25.24% variable
$0 to $75 first year annual fee for the first year ($0 to $99 thereafter)
Get 1% cash back rewards on eligible purchases including gas, groceries, and services such as mobile phone, internet, cable and satellite TV, terms apply.
Credit One Bank® Unsecured Platinum Visa®
19.15% - 25.24% variable
$0 to $75 first year annual fee for the first year ($0 to $99 thereafter)
Give your credit a boost with credit line increase opportunities, a fee may apply.
The First Access VISA® Credit Card
29.99% variable
$75.00 for first year. After that, $48.00 annually.
Access credit even if you have poor or limited credit history.
Simmons Bank Visa® Platinum
9.25% variable
$0
The Simmons Bank Visa® Platinum Card offers multiple perks, including one of the lowest available APRs on the market.
Credit One Bank® Unsecured Visa® with Free Credit Score Tracking
19.15% - 25.24% variable
$0 to $75 first year annual fee for the first year ($0 to $99 thereafter)
Get 1% cash back rewards on eligible purchase, terms apply.
Simmons Bank Visa® Platinum Rewards
11.25% variable
$0
Excellent Credit Required - Applicants that do not have excellent credit will not be approved

Compare up to 4 providers

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Kyle Morgan

Kyle is an editor/writer who lives in Asbury Park, New Jersey. Exploring new places and hoppy beer are two of his favorite things. He doesn't discriminate against buffalo wings — grilled or fried are just fine.

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US Credit Card Offers

Important Information*
Luxury Card Mastercard® Gold Card™
Luxury Card Mastercard® Gold Card™

APR

16.24
variable

Annual fee

0 For the first year
More info
The First Access VISA® Credit Card
The First Access VISA® Credit Card

APR

29.99
variable

Annual fee

75 For the first year
More info
Indigo® Platinum Mastercard® Credit Card
Indigo® Platinum Mastercard® Credit Card

APR

23.9
variable

Annual fee

75 For the first year
More info
Barclaycard Arrival Plus® World Elite Mastercard®
Barclaycard Arrival Plus® World Elite Mastercard®

APR

17.24
TO
24.24

Annual fee

0 For the first year
More info
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