credit
Pay Off your Credit Cards
If you owe money to one or more credit card companies, the first step is to get out of those debts
Sending only the minimum payment that is required from you will only keep you indebted for several more years, if not decades.
Furthermore, you will have reimbursed many times over the amount you actually owed.
Do you know of a guaranteed investment that will yield 18, or even 33 percent a year, year after year?
Once paid off, you get to keep and enjoy the amount you used to send to your creditors. That is the same as if you made 18 to 33% interest for yourself.
If you have more than one card maxed-out, send the highest amount possible to the one that has the highest interest rate. Also, make the minimum payment on all your other cards.
Where are you supposed to find the money to do that? By following the other money-saving tips posted on this website, you will have extra money that you should use to pay off your credit cards.
Run Away from Debt Settlement
Debt settlement may seem like a good short-term solution to eliminating credit card debt.
However, beware of these facts:
1. It will lower you credit score (possibly by a few hundred points) and it could take years to build your credit back.
2. The IRS (Internal Revenue Service) considers the amount you have settled as income, so you will have to pay income tax on that amount.
No Annual Fee Credit Card
Of all the credit cards available out there, the next time you apply for one, make sure it does not have any annual fees.
Income Tax Deduction: Earned Income Credit
According to the IRS, the earned income credit (EIC) is a tax credit for certain people who work and have earned income under $41,646. A tax credit usually means more money in your pocket. It
reduces the amount of tax you owe. The EIC may also give you a refund.
To find out more information about the earned income credit, go to: http://www.irs.gov/pub/irs-pdf/p596.pdf.
Pay your Credit Card Balance on Time
Always pay your credit card balance in full on time.
Otherwise, high-interest AND penalty fees will be added to your account.
Income Tax Deduction: Heloc Interest
Very similar to mortgage interest. Heloc (Home equity line of credit) interest is also to be included in “Itemized Deductions”.
Income Tax Deduction: Child Credit
If you have children, make sure to take advantage of the Child Credit established by the IRS.
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