It starts simply enough.

You fall a little behind on a bill or two, but you don't consider it to be a big deal. Then, a few more pile up that you can't completely pay-off each month. You think to yourself that you'll just take a cash advance and get everything caught up, but that advance has to be paid off now too.

Suddenly, it seems as if bills are piling up and up and creditors are calling on the phone at all hours demanding money.

Things are looking pretty bleak for your financial future. You've become buried under your credit card debt and have no idea how you're ever going to dig yourself out.

DON'T PANIC!! Here are some tips on when and how to use your credit cards to keep yourself out of financial trouble--now and in the future.

Just in case you're still not convinced you need to careful with your credit, here are a few things that can go wrong if you use it unwisely.

1. SHELTER--At some point in your life you'll probably want to buy a house or rent an apartment. Everyone has to have somewhere to hang their hat and you'll be no exception. But banks and landlords check credit histories. If yours is bad because of past credit card problems, you'll probably be turned down.

2. TRANSPORTATION--Unless you have the cash to purchase a car, you'll have to get a loan. Your credit . not only affects whether or not you qualify for a loan, but also the amount and interest rate of the loan. Generally, loan applicants with good credit qualify for larger loan amounts with lower interest rates.

3. EMPLOYMENT--Many employers conduct credit checks as a part of the hiring process. If you haven't demonstrated financial responsibility, a prospective employer might hesitate to hire you. For example, the employer might believe your level of debt is too high for the salary offered or, if it happens to be a job handling money, you may be under to much of a temptation to help yourself to a bill now and then.

4. UTILITY SERVICES--Yes, as odd as it sounds, it can be a shock to learn that your credit is needed to establish utility service. Your electric, water, cable and even cell phone companies contend that when you sign up for their services, you're borrowing one month of service in advance. So, before turning on your electricity, the company will require a deposit and check your credit. Bad credit can mean either no service or a very large deposit that you may or may not get back.

5. INSURANCE--When you call your friendly insurance agent for coverage on your car, house, possessions, life or medical needs, he will check your credit history to determine the cost of your premiums OR if the company will even offer you a policy. Insurance companies say that if you have a bad credit history you are more likely to make a claim, so they charge you substantially more up front.

The mistakes you make now will bring you all kinds of trouble that can cost you both your money and your credit rating. Trouble that will last for years and can follow you for a lifetime.

Get all the information you need to keep from making those mistakes.

INFORMATION + KNOWLEDGE + MISTAKES NOT MADE =

MONEY IN YOUR POCKET

One of the best ways to owe less money and save money overall is to NEGOTIATE DOWN your interest rate. Here are some specific strategies for doing so:

1. Call your credit card company. Simply ask them to lower the rate. Most companies have multiple rates that range from 3.9% (a teaser rate or a special customer rate) to 27.9%. Your credit card values your business and will do a lot of things to keep you their customer.



2. Shop for a better rate. Look around for offers that are really aggressive. Going from a 17% rate to a 13% rate saves you quite a lot of money in interest over a short period of time.



3. Make your credit report look stronger. This will reward you in the long run. Credit Card companies use what they call a scorecard. When you make a conscious decision to improve your score, that will make you more qualified for better offers in the future. People with good credit are inundated with low interest rate offers.

AN EXAMPLE OF A NEGOTIATING STRATEGY FOR REAL LIFE--

Let's say you owe about $1200. Your current card charges you 16.95%. Here's exactly what you attempt to do.

Call your credit card's customer service department and have them tell you what your current interest rate is. Then, tell them that you are considering a much lower rate offer. An offer you recently received in the mail that is much cheaper, 5.9%. Listen to what they have to say. It will probably go something like this, "Oh, that's just a teaser rate to get you to switch... " and then they'll say, "We provide outstanding service and we're #1".

Your reply should be, "Can you, as my current credit card, match this new card's offer?" Say nothing and wait for their response. Be ready to walk away from your card. If they say "yes" you're happy as a clam, on the other hand, if you meet up with some resistance you need to proceed to the next step.

Ask to cancel the account and go through the retention department (do this with confidence if you have good credit and know it). The conversation with the retention department should go along the lines of, "Hello, my name's John Q. and I can handle the details of closing your account. I am sorry that you are closing your account... we very much value your business. Before I start the process of closing your account, can I ask you why...Is it something that we did?... " This "John Q." will be super smooth but you'll be ready now that you know some of the rules of the game!

Tell him, "Look, it's not that I don't like the wonderful service your card provides because it's terrific. I might even miss you guys (try not to laugh here)...but what it comes down to is money. It's very important to me in today's economic situation to save as much as I can, where I can. I want a lower interest rate."

Be very nice but also very firm. Either he lowers your rate or you're taking your business elsewhere. This "John Q." has the authority to review your account and will most likely help you out. If he doesn't, move on to a new and better card. Remember, they are out there!

Something I want to make very clear before you attempt any of these negotiating strategies--you MUST have a good credit history! There is no clearer example of the benefits of good credit than when your credit card values your account to the point that they feel they can't afford to lose you.

That is the position that you want to be in.

I LIZNS AND LIZNS EBREY DAY TO MR. DAVE RAMSEY.

SOONS I HAV A MILON MOUSIES SAVED!

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