Credit Card Payment Holidays - Good or Bad

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Student Loan Consolidation Benefits
Are you tired of paying interest on student loans every month? Do you have increasing anxiety about your looming deadline to pay back your loans? There is an easier way that will ease your worries. Get your student loan(s) consolidated. One simple operation turns many headaches into one manageable situation.

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Consolidating Student Loans
From saving money to improving your credit score, there are many benefits to consolidating student loans. Here are the top ten reasons why you should streamline these debts.

1. Peace of mind
Have you had sleepless nights? Do you find yourself awake at 3 am tossing and turning wondering how you are going to meet all your student loan payments this month? Worrying about whether or no... Read debt consolidation article



Credit Card Payment Holidays - Good or Bad
If you have a credit card (most Americans have over 10) then you've probably received an offer called a "payment holiday". You'll receive a letter that says something to the effect, "That because XYZ Credit Card Company understands how difficult it is for some families around this time of year to make ends meet (or whatever other excuse they can come up with) that you are being given the opportunity to take a month off from making your monthly payment as a 'special gift' and thank you for being such a valuable customer."

Sounds Good on the Surface but Why Are They Doing It?

Typically, payment holiday offers have a high acceptance rate. A high percentage of individuals feel it's a wonderful thing to be able to take a month off from the stress of having to make another payment. However, what they don't usually realize is that these so-called "holidays" really aren't a gift at all. They are simply are way to increase profits for the credit card companies.

It's a Win-Win For the Credit Card Companies

Hmm... So how can letting me skip a payment earn them more money? Well, here's where the slight of hand comes in. If you read the small print in any credit card agreement you'll quickly realize that the payment holiday isn't interest free. You are still being charged interest and because you're not paying anything back for a particular month that interest will be there next month for you to pay compounded interest on or interest upon interest.

Here's an example that hopefully with help clarify the principal I'm trying to convey. Let's say you were paying back $1000 of debt at 1.5% per month (or about 19.5% per year) with a minimum payment each month of 2% (or about 26.82% per year).

If you made the minimum payment for all 12 months, you would have paid back $233.51 and you would still owe $941.62 at the end of the year. Your debt has been reduced by $58.38 and you've lost $175.13 in interest.

However, if you were to take a payment holiday you would pay 2% per month for only 11 months or (24.3% on your debt) or $217.80 and you would still owe $960.55 at the end of the year. You end up paying about $38 for the privilege of not making a single payment of about $20 (2% of $1,000). In other words, your month off cost you almost two months of payments.

Don't worry if you don't understand all the math - it's suppose to be confusing. In fact, it was specially designed by mathematicians and marketers to be as confusing as possible to keep you from being able to figure out what a bad deal you're getting. Case in point, if you hadn't read this article would you have thought twice about turning down the next "payment holiday" offer you receive? And remember... don't fall for it because the more you owe, the more that "holiday" will cost you. Instead, you should consider doing everything you can to pay off all your debt as quickly as possible.

If It Sounds Too Good

The old saying, "if it sounds to good to be true then it probably is" certainly applies here and remember that no-one ever gives away anything of value for free, that is with no strings attached - especially the credit card companies. Anytime they offer you anything, it's because they are going to make a profit and if you can't see how they benefit, be suspicious because it's probably just the next slight of hand trick to come down the pipe that is being used to quietly milk you out of a little more interest.

This article may be reproduced only in its entirety.

Kevin Erickson is a contributing writer to: Debt Management | Credit Card Debt | Consolidate Debt

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Consolidate Student Loans Now

Now Is the Right Time to Consolidate Student Loans

Students graduate from college with that prize possession: the much-anticipated college degree. Then there are those students who graduate college with that added bonus: a stack of student loans. While searching for the ultimate job, the last thing a student needs is worrying about how to pay off a ton of student loans.

Student Loan Consolidation in One Simple Payment

It would make life so much easier to pay one student loan bill instead of five, six, seven or even eight - sometimes more! After graduation there's so much to think about: finding the ultimate job, finding a place to live, and figuring out how to pay for everything.

Thinking about paying monthly student loan bills certainly will not make life easy or happy. No one enjoys paying bills. The task becomes even worse and more stressful when there are piles of bills to pay. By consolidating student loans life will get easier and payments might be lower.

Fast Track to Student Loan Consolidation

Consolidation isn't a foreign word and it's not too big of a word to understand. Consolidation is easy. It combines all of a student's loans into one payment. It's that simple. It's easy as pie and will let you breathe easier too. Student loan consolidation is convenient and allows you to combine all your loans. In addition, consolidation is no longer only geared toward federal loans. Now students also can consolidate their private loans.

The Time is Now for Student Loan Consolidation

There's no time like the present to consolidate outstanding student loans. Even though interest rates on federal student loans were at their lowest from July 1, 2004 to July 1, 2005, it's still a great time to combine student loans. The rates most likely will increase in July 2006, so consolidating now is a bright idea. Federal student loan consolidation can be as low as 4.75 percent. Private student loan consolidation depends on the lender, and the borrower's credit.

Students who have multiple student loans oftentimes are inundated with varying interest rates and repayment terms. Getting it all in order every month can prove to be a literal nightmare.

Student Loan Consolidation Incentives

With federal student loan consolidation, rates are fixed. Students also can take advantage of deferment, forbearance and cancellation options.

Another highlight of student loan consolidation is the extension of payments. Many students find they can extend a 10-year repayment plan to as long as 30 years. This depends on a borrower's balance, so it's important to check out the options. Student loan consolidation offers students the same interest rate on the same amount, but for a longer term, hence better affordability.

There are so many good reasons to get on the road to student loan consolidation. By taking a stack of student loan bills and combining them into one, it's like a magic trick. However, it's a trick that will help ease life for many students who are inundated with multiple loan bills, not to mention all of the other daily stresses of life for graduating students.

This article is distributed by NextStudent. At NextStudent, we believe that getting an education is the best investment you can make, and we're dedicated to helping you pursue your education dreams by making college funding as easy as possible. We invite you to learn more about student loan consolidation at http://www.NextStudent.com.


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Credit Card Payment Holidays - Good or Bad
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