For compulsive buyers, the overwhelming need to buy is an obsession that can ruin finances, marriages, careers and even lives.
An overwhelming majority of compulsive buyers, or shopping addicts, use their credit cards to feed their addictions, experts say that 60 percent to 75 percent of the compulsive shoppers have credit card debt as a result of their shopping addictions.
A credit card addict is somebody who uses their credit card, maybe for every purchase they make. I've seen people use their credit cards for a pack of gum at the drugstore. There are some people who absolutely don't want to pay anything in cash. The reason is simple, cash is real money. Credit card is plastic and for some people, it doesn't feel like real money.
These people are living in a fantasy world and if one is a compulsive credit card buyer, they do not need to have any credit cards. Sounds kind of harsh but it is the truth. Such person will need to seek help, it would be a great idea to take a credit card management class. The problem though is that compulsive spenders usually will need someone else to point the problem out to them.
Credit Check for Employment
We all want our credit history and credit score to be as good as possible. Usually so we can get the best possible rates when we make purchases. The better our scores, the better deal on that new car or that house we are going to buy but there is also another reason we should want our credit profile to be squeaky clean; employment.
Some employers believe a potential employee's credit standing is a vital piece of information.
If the job involves handling money in any capacity, employers want to know their workers are responsible with their own finances. Bosses have concerns that a worker who is in financial trouble could be tempted to tap the till, or embezzle, company funds.
Before a potential employer looks into your credit, you have to give written permission. Then, the employer can check your standing as long as they comply with the Fair Credit Reporting Act. The company would request a consumer report, such as a credit report, from a consumer reporting agency.
The act mandates that if you're turned down for a job because of your credit, the employer must give you a copy of your consumer report and a Federal Trade Commission information sheet that describes your rights. You can then dispute the report if it's not accurate.
But before you get there, you can take these steps to improve your credit, and also improve your chances of getting the job:
* Know what's in your credit report. Even if the truth is ugly, the first step to repairing credit is to know exactly what you're up against. Federal law requires the three major credit bureaus to give you access to your credit reports once a year.
* Start paying. If you have debts you've been ignoring, call your credit card companies and establish a payment plan. Even if you can't afford much, lenders want to start getting back the money you've borrowed, so they'll probably make a deal. Don't agree to pay more per month than you can afford, or you'll be likely to start the missed payment cycle all over again. Also see if you can negotiate for a better term, such a frozen or lower interest rate.
* Get a secured card. Secured credit cards are a terrific way to rebuild your credit. You deposit a certain amount with the lender, and the lender will give you a card with a spending limit equal to your deposit. Use this card wisely and make regular payments to show you're now being responsible with your money.
* Be straight during your interview. It's possible the potential employer won't ask to check your credit report, so stay mum on the topic unless they bring it up. If they do ask for access to your information, tell them what they can expect to see in your report. If you're upfront about your negative history and show that you're taking steps to improve it, most employers will appreciate your honesty. It will give you the opportunity to state your case rather than let your credit mistakes speak for you.
Of course, you could always say "no" when the employer asks to see your credit report, but that's probably not a good move. Employers will wonder what you're hiding, and they may imagine your situation to be far worse than it actually is.
Some employers believe a potential employee's credit standing is a vital piece of information.
If the job involves handling money in any capacity, employers want to know their workers are responsible with their own finances. Bosses have concerns that a worker who is in financial trouble could be tempted to tap the till, or embezzle, company funds.
Before a potential employer looks into your credit, you have to give written permission. Then, the employer can check your standing as long as they comply with the Fair Credit Reporting Act. The company would request a consumer report, such as a credit report, from a consumer reporting agency.
The act mandates that if you're turned down for a job because of your credit, the employer must give you a copy of your consumer report and a Federal Trade Commission information sheet that describes your rights. You can then dispute the report if it's not accurate.
But before you get there, you can take these steps to improve your credit, and also improve your chances of getting the job:
* Know what's in your credit report. Even if the truth is ugly, the first step to repairing credit is to know exactly what you're up against. Federal law requires the three major credit bureaus to give you access to your credit reports once a year.
* Start paying. If you have debts you've been ignoring, call your credit card companies and establish a payment plan. Even if you can't afford much, lenders want to start getting back the money you've borrowed, so they'll probably make a deal. Don't agree to pay more per month than you can afford, or you'll be likely to start the missed payment cycle all over again. Also see if you can negotiate for a better term, such a frozen or lower interest rate.
* Get a secured card. Secured credit cards are a terrific way to rebuild your credit. You deposit a certain amount with the lender, and the lender will give you a card with a spending limit equal to your deposit. Use this card wisely and make regular payments to show you're now being responsible with your money.
* Be straight during your interview. It's possible the potential employer won't ask to check your credit report, so stay mum on the topic unless they bring it up. If they do ask for access to your information, tell them what they can expect to see in your report. If you're upfront about your negative history and show that you're taking steps to improve it, most employers will appreciate your honesty. It will give you the opportunity to state your case rather than let your credit mistakes speak for you.
Of course, you could always say "no" when the employer asks to see your credit report, but that's probably not a good move. Employers will wonder what you're hiding, and they may imagine your situation to be far worse than it actually is.
Do you need credit card insurance?
Nearly all credit cards offer some sort of credit card insurance. Usually when talking to a represenative on the telephone he will read you the script he has in front of him and try to sell it to you. If you accept it, you just gave him a good sale. If you tell him that you'll pass, then he will try to convince you some more. Decline his offer again and he will try again. Eventually they will give up. The insurance will usually cost you pennies for every $100 on your balance.
Though programs and coverage will vary, there are four basic types of credit insurance:
* Credit life insurance pays off the credit card balance owed at the time of the cardholder's death.
* Credit disability insurance will make the minimum payment due for a specified period after a medical disability. Purchases made after the disability are generally excluded.
* Credit involuntary unemployment insurance will cover the minimum payment if a cardholder is laid off for a specific period of time. Charges incurred after the layoff are excluded, and if you're fired, you're not covered.
* Credit property insurance pays for credit card purchases if the items are damaged or, in some cases, stolen.
Unlike other kinds of insurance, credit insurance doesn't require a signature to purchase a policy. In many cases, all you have to do is verbally agree over the phone. With one popular offer, the first 30 days are free, and you'll only be billed after that period. What they don't mention is that it's often difficult to cancel, and it's not unheard of for an unscrupulous representative to sign you up without your consent.
Financial experts agree that most people don't need credit card insurance for several reasons.
Though programs and coverage will vary, there are four basic types of credit insurance:
* Credit life insurance pays off the credit card balance owed at the time of the cardholder's death.
* Credit disability insurance will make the minimum payment due for a specified period after a medical disability. Purchases made after the disability are generally excluded.
* Credit involuntary unemployment insurance will cover the minimum payment if a cardholder is laid off for a specific period of time. Charges incurred after the layoff are excluded, and if you're fired, you're not covered.
* Credit property insurance pays for credit card purchases if the items are damaged or, in some cases, stolen.
Unlike other kinds of insurance, credit insurance doesn't require a signature to purchase a policy. In many cases, all you have to do is verbally agree over the phone. With one popular offer, the first 30 days are free, and you'll only be billed after that period. What they don't mention is that it's often difficult to cancel, and it's not unheard of for an unscrupulous representative to sign you up without your consent.
Financial experts agree that most people don't need credit card insurance for several reasons.
First, there's a very good chance you're already covered by another insurance policy. If your employer offers a standard $50,000 life insurance or short-term disability policy, you're covered. In addition, homeowners' insurance typically will pay for damaged property.
Also, other insurance policies are generally cheaper. "For example, term life insurance costs less and provides better coverage than a credit card policy and if you have three credit cards, you'll need three separate credit card insurance policies to be sure you're totally covered. There's another problem, collecting on a claim can be difficult, and the burden of proof is on the policyholder.
I know I may sound like I'm totally against this insurance but for a few out there it may be best to get it. The people who need it the most are those folks who simply cannot get insurance elsewhere. The chief virtue of credit insurance is that it's easy to get. If you have a pre-existing condition that prevents you from getting life or disability insurance, then credit insurance might be worth considering but experts agree that it's a better idea to self-insure by making a small deposit each month into a savings account to draw on for the minimum payment. After all, it's better than opting for a plan that may not deliver if you find yourself facing financial challenges in case of disability or unemployment.
Credit Card Mail Offers Down Due to 2008 Economic Crisis
As people are cutting back on their spending, a study shows that credit card companies are making it easier for consumers to not spend as the number of credit card mail offers dropped to its lowest point in three years. In 2006 and 2007 an average of 2.07 billion credit card offers were mailed quarterly. But last quarter, only 1.34 billion were mailed, illustrating a 28 percent drop from a year earlier.
The massive scale back is due to the economic crisis, but that offers declined long before the economy was on all our minds.
Credit card companies have been cutting back direct mail dollars for years, as they realize that blanketing Americans with credit card offers doesn't translate to increased sign up or card usage.Credit card companies are now facing a twofold problem that is much worse. Not only are consumers tapped out financially, but issuers are also facing record losses.
As the holiday season approaches, expect to see less credit card offers in your mail. Card issuers will focus on a narrower target audience, using refined marketing and more precise mailings to tap into people's true needs and desires.
The massive scale back is due to the economic crisis, but that offers declined long before the economy was on all our minds.
Credit card companies have been cutting back direct mail dollars for years, as they realize that blanketing Americans with credit card offers doesn't translate to increased sign up or card usage.Credit card companies are now facing a twofold problem that is much worse. Not only are consumers tapped out financially, but issuers are also facing record losses.
As the holiday season approaches, expect to see less credit card offers in your mail. Card issuers will focus on a narrower target audience, using refined marketing and more precise mailings to tap into people's true needs and desires.
Cash Back Credit Cards Pay You Back!
Want to receive cash every time you swipe your credit card? That's exactly what you'll get with a cash back credit card. This type of credit card is designed to give you rewards in the form of dollars. All you need to do is use the card. Sound like a good deal? It is. Here's what you need to know about cash back credit cards.
The Cash Back Process In basic terms, these cards give you a certain percentage of cash back when you make a purchase. So what does that mean for you? It means that when you use the card, a certain amount of the total will be credited to your account. Say you buy an item for $500 and your card offers 5% cash back. You can expect to have $25 come your way, just for using the card.
As you search online, you'll find card issuers are now offering many different types of cash back cards. Some simply offer a full 1% cash back on all purchases made. Others give higher rewards, like 3% cash back, for purchases of certain goods. Still others come with a chance to earn up to 5% back when you use the card. Many include initial offers that give you even more cash back for the first few months.
Before you apply, make sure you understand what you are signing up for. Some cash back credit cards operate on what's called a tiered, or layered, system. This system will give you higher rewards as you spend more with the card. A common setup is to offer less than 1% cash back
until you have spent $1500. Then from $1500 to $3000, you might receive a higher percentage. Anything above that will bring you an even greater percent of cash back.
Before applying for a cash back credit card, you'll want to make sure you choose the right card. When you find a card that interests you, check its interest rate. Many types of rewards cards, including cash back offers, often come with a high interest rate. If you plan to pay off the balance each month, this won't be a problem. If you do regularly carry a balance, you might want to consider a different option, such as a low interest credit card.
Another thing to consider before you apply online is the annual fee. Many credit cards charge an annual fee in order to access the rewards program. Unless the card comes with enough benefits to make up for the annual fee, try to find one without a yearly charge.
Certain credit cards will send you cash rebates in the mail. Others will credit the money to your account. With some card companies, you can request your cash reward whenever you want. However your cash back program works, the bottom line is that you will be rewarded for using the card.
Most companies now offer cash back credit cards that give you good rewards without any hassle. Start looking today and apply online for a card. When you start using the card, set aside the cash you earn for a special cause. You may be able to plan your next trip based on the cash you earn from your card.
Centrro may have the rewards card that is right for you. They have many choices to choose from. See what they have for you by clicking on the link below.
Centrro - find the perfect credit card that suits your needs.
The Cash Back Process In basic terms, these cards give you a certain percentage of cash back when you make a purchase. So what does that mean for you? It means that when you use the card, a certain amount of the total will be credited to your account. Say you buy an item for $500 and your card offers 5% cash back. You can expect to have $25 come your way, just for using the card.
As you search online, you'll find card issuers are now offering many different types of cash back cards. Some simply offer a full 1% cash back on all purchases made. Others give higher rewards, like 3% cash back, for purchases of certain goods. Still others come with a chance to earn up to 5% back when you use the card. Many include initial offers that give you even more cash back for the first few months.
Before you apply, make sure you understand what you are signing up for. Some cash back credit cards operate on what's called a tiered, or layered, system. This system will give you higher rewards as you spend more with the card. A common setup is to offer less than 1% cash back
until you have spent $1500. Then from $1500 to $3000, you might receive a higher percentage. Anything above that will bring you an even greater percent of cash back.
Before applying for a cash back credit card, you'll want to make sure you choose the right card. When you find a card that interests you, check its interest rate. Many types of rewards cards, including cash back offers, often come with a high interest rate. If you plan to pay off the balance each month, this won't be a problem. If you do regularly carry a balance, you might want to consider a different option, such as a low interest credit card.
Another thing to consider before you apply online is the annual fee. Many credit cards charge an annual fee in order to access the rewards program. Unless the card comes with enough benefits to make up for the annual fee, try to find one without a yearly charge.
Certain credit cards will send you cash rebates in the mail. Others will credit the money to your account. With some card companies, you can request your cash reward whenever you want. However your cash back program works, the bottom line is that you will be rewarded for using the card.
Most companies now offer cash back credit cards that give you good rewards without any hassle. Start looking today and apply online for a card. When you start using the card, set aside the cash you earn for a special cause. You may be able to plan your next trip based on the cash you earn from your card.
Centrro may have the rewards card that is right for you. They have many choices to choose from. See what they have for you by clicking on the link below.
Centrro - find the perfect credit card that suits your needs.
How to build a credit history
In the past, someone who wanted to build their credit history would have a friend or relative simply add them as an authorized user on their credit card account and it would improved the authorized user’s credit score, allowing them to apply for their own cards or loans in the near future. But this tactic, called “credit piggy-backing”, is now obsolete. Authorized users no longer get a credit boost. In order to help someone pump up their credit, it’s now necessary to risk your own through co-signing which many people are not so brave to do.
The way I built my credit history was with a secured Visa card. It's been a while and I don't have that credit card anymore or even remember what company it was but I do remember that I had placed $300 into their savings account and they gave me a credit card with a $300 limit. It didn't feel so good having to give all that money just to get a credit card in that amount but I didn't know any alternatives since I had no one to credit piggy-back with. It worked and years later I had built my credit score enough to get some of the better unsecured credit cards out there. By the way, I remember with that secured Visa you had to keep your $300 in their bank for two years. After that I requested my money back and they returned it to me plus a couple bucks extra interest.
If you don't want to go the secured credit card route then there are credit card companies that offer credit cards that are aimed for people to build a credit history. If you have not ever had any credit many see your credit the same as someone with bad credit so you are in the same boat. Do you have No Credit or Poor Credit? Find the right Credit Card for your situation! here. Another place you can check out is at Credit-Land.com - Find the best credit cards for your needs.
The way I built my credit history was with a secured Visa card. It's been a while and I don't have that credit card anymore or even remember what company it was but I do remember that I had placed $300 into their savings account and they gave me a credit card with a $300 limit. It didn't feel so good having to give all that money just to get a credit card in that amount but I didn't know any alternatives since I had no one to credit piggy-back with. It worked and years later I had built my credit score enough to get some of the better unsecured credit cards out there. By the way, I remember with that secured Visa you had to keep your $300 in their bank for two years. After that I requested my money back and they returned it to me plus a couple bucks extra interest.
If you don't want to go the secured credit card route then there are credit card companies that offer credit cards that are aimed for people to build a credit history. If you have not ever had any credit many see your credit the same as someone with bad credit so you are in the same boat. Do you have No Credit or Poor Credit? Find the right Credit Card for your situation! here. Another place you can check out is at Credit-Land.com - Find the best credit cards for your needs.
Co-Signing for family or a friend
What do you do when a relative or good friend comes up to you ask you if you can co-sign for them on a credit card or a new car or... This can be an awkward situation. Of course you would like to help them out by co-signing for them but you also know that if they miss a payment that the negative mark will also go in your name too and affect your credit score. If the balance became due in full it would not just be on them but also on you. Keeping your credit good is hard enough but if anyone were going to mess it up you would want it to be you, not someone else.
If you are going to co-sign for someone do it with the mind set that you will soon have to take over these payments. If your mind set is that they will take care of their business the way they should and then they don't you don't want to be surprised with a payment that you can not afford.
Also, make it clear to your relative or friend that if they can not make a payment to be sure to let you know about it so you can make that payment.Nothing worse than them not telling you and just not paying.
It is really risky to co-sign for someone. Personally, the only people I would ever co-sign for would be my own kids but that's just me.
If you are going to co-sign for someone do it with the mind set that you will soon have to take over these payments. If your mind set is that they will take care of their business the way they should and then they don't you don't want to be surprised with a payment that you can not afford.
Also, make it clear to your relative or friend that if they can not make a payment to be sure to let you know about it so you can make that payment.Nothing worse than them not telling you and just not paying.
It is really risky to co-sign for someone. Personally, the only people I would ever co-sign for would be my own kids but that's just me.
Understanding your credit card statement
Whether you are new to the world of credit cards, or a seasoned veteran, understanding the information in your credit card statement can be confusing. There is a lot of information packed onto a single page, and if you’ve never taken the time to review your statement in detail, it may be a good idea for you to do so. That way you are more likely to notice if there are any abnormalities with a statement that might indicate identity theft or merchant errors.
The statement should display your account number prominently. This is the number that uniquely identifies you to the credit card company. When purchases are made using your credit card, they are all attached to this account number and charged to you. If you need to call customer service for any reason, you will be asked to provide the account number.
If you’ve ever used one of your credit cards and had difficulty making an online purchase or a purchase over the phone because the merchant says your name doesn’t match, it’s probably because you have used a middle initial on your card but not in the checkout process, or vice versa. On your statement you can view your name as it is saved in relation to your credit card account. Jane L. Doe is different from Jane Doe or Jane Lee Doe, so it’s important to note how your account is set up.
The statement date displayed on the credit card statement shows you all transactions that took place between the last statement date and the current one. The payment due date is the date which your credit card company should receive payment in order to avoid late fees and additional finance charges. While some companies allow you to postmark your payment on the due date, most want to receive it by the due date, so plan accordingly.
The credit line shows you how much money the credit card company will allow you to charge on their card at one time. You can charge multiple transactions, but the total amount owed must not go over this amount. If you do manage to spend more than your credit line, you will pay over-the-limit fees. The credit available displays how much of your credit line you still have available to spend.
The new balance information displays how much you have charged and have not yet paid back. If you pay the entire amount in this column, you will not be charged interest. The minimum amount due is the amount of money that you are required to send by the due date.
The transaction list is a detailed listing of everything that has occurred with your account since the last statement. It will detail purchases, returns and refunds, and interest charged to the account. If there is anything you don’t remember buying, contact the company listed in the transaction listing or call your credit card account immediately.
There is also a section that shows how your current balance was calculated. It shows purchases, finance charges, interest, your last payment information, and then the total balance of the card is shown again in this section as well as the minimum amount you must pay that month to stay current with your payments. You should always try to send more than the minimum, if not the entire balance, each month to avoid finance charges, and interest. The finance charge summary section will show you how interest and finance charges are applied to any balance that remains on your card from one month to the next.
The statement should display your account number prominently. This is the number that uniquely identifies you to the credit card company. When purchases are made using your credit card, they are all attached to this account number and charged to you. If you need to call customer service for any reason, you will be asked to provide the account number.
If you’ve ever used one of your credit cards and had difficulty making an online purchase or a purchase over the phone because the merchant says your name doesn’t match, it’s probably because you have used a middle initial on your card but not in the checkout process, or vice versa. On your statement you can view your name as it is saved in relation to your credit card account. Jane L. Doe is different from Jane Doe or Jane Lee Doe, so it’s important to note how your account is set up.
The statement date displayed on the credit card statement shows you all transactions that took place between the last statement date and the current one. The payment due date is the date which your credit card company should receive payment in order to avoid late fees and additional finance charges. While some companies allow you to postmark your payment on the due date, most want to receive it by the due date, so plan accordingly.
The credit line shows you how much money the credit card company will allow you to charge on their card at one time. You can charge multiple transactions, but the total amount owed must not go over this amount. If you do manage to spend more than your credit line, you will pay over-the-limit fees. The credit available displays how much of your credit line you still have available to spend.
The new balance information displays how much you have charged and have not yet paid back. If you pay the entire amount in this column, you will not be charged interest. The minimum amount due is the amount of money that you are required to send by the due date.
The transaction list is a detailed listing of everything that has occurred with your account since the last statement. It will detail purchases, returns and refunds, and interest charged to the account. If there is anything you don’t remember buying, contact the company listed in the transaction listing or call your credit card account immediately.
There is also a section that shows how your current balance was calculated. It shows purchases, finance charges, interest, your last payment information, and then the total balance of the card is shown again in this section as well as the minimum amount you must pay that month to stay current with your payments. You should always try to send more than the minimum, if not the entire balance, each month to avoid finance charges, and interest. The finance charge summary section will show you how interest and finance charges are applied to any balance that remains on your card from one month to the next.
Teaching your children about savings and interest
Many children see their parents everyday in life going to ATM machines, sticking a car in it and having money come out. How magical! The child does not realize many times that it is hard earned money that you had to work for.
Giving your child a small allowance is a great tool to teach your children about saving and banking. Let me share my experience of how I do it with my kids.
I give my three kids $5 per week. I tell them that they can spend the money if they want to or they can save it. We have saving boxes for all three of them at our home. Each week I will see how much they have in their savings box and I will pay them 50% interest on their savings, this is my way of showing them how interest works. If they have $20 in their savings box when Monday comes around they will get $10 interest and the new $5 allowance for the week. It's a great way to show them how to save.
I have been doing this for years with them but the only problem now is that my oldest child is now 12 and she's really getting good at saving and I will probably have to lower her interest rate because poor old dad here will not be able to afford to pay her 50% interest. Geez! I hope she realizes that in real life the banks are not so generous. Imagine the disappointment when she grows up and a bank wants to pay her only 1% interest!
Giving your child a small allowance is a great tool to teach your children about saving and banking. Let me share my experience of how I do it with my kids.
I give my three kids $5 per week. I tell them that they can spend the money if they want to or they can save it. We have saving boxes for all three of them at our home. Each week I will see how much they have in their savings box and I will pay them 50% interest on their savings, this is my way of showing them how interest works. If they have $20 in their savings box when Monday comes around they will get $10 interest and the new $5 allowance for the week. It's a great way to show them how to save.
I have been doing this for years with them but the only problem now is that my oldest child is now 12 and she's really getting good at saving and I will probably have to lower her interest rate because poor old dad here will not be able to afford to pay her 50% interest. Geez! I hope she realizes that in real life the banks are not so generous. Imagine the disappointment when she grows up and a bank wants to pay her only 1% interest!
Beware of Two-Cycle Billing
The amount of interest you pay is based on your average daily balance. Many card companies have come up with a new method of calculating your average daily balance by considering not only this month’s average balance but also the previous months. The problem with this is that amount is usually higher when you’re in the process of paying off your debt making it even harder to do so.
Lowering your credit card interest rate
So you have a 19.99% interest rate that you pay with your credit card. Will you always pay this interest rate? Maybe some day your credit card company will drop your interest rate because you are such a good customer, fat chance. You can give yourself a chance though if you call them and ask them to lower your interest rate. Most of the time they will, especially if you are a long time customer. These credit card companies want to keep you as a customer and know that you might have better options than them.
If you pay an annual fee for your credit card you can get that waived also. If you pay a monthly participation fee you can get that waived too. Remember everything is negotiable! You are the customer and deserve to be treated right.
Did you get hit with a late fee of $25 or $30. Give them a call right away when you get your bill and ask them if it can be waived. You might want to tell them that you have multiple cards and are looking to see which ones you want to close. This puts you in the drivers seat as mentioned earlier, they want to keep you as a customer.
If you pay an annual fee for your credit card you can get that waived also. If you pay a monthly participation fee you can get that waived too. Remember everything is negotiable! You are the customer and deserve to be treated right.
Did you get hit with a late fee of $25 or $30. Give them a call right away when you get your bill and ask them if it can be waived. You might want to tell them that you have multiple cards and are looking to see which ones you want to close. This puts you in the drivers seat as mentioned earlier, they want to keep you as a customer.
How to pay off your credit card debt
So you have five different credit cards with high balances and you want to pay off all of your debt are start clean. Which credit card do I pay off first?
Many will want to pay off the one with the smallest balance first, then the second lowest balance next and so on saving the highest balance credit card for last. While this does give our human minds a great sense of accomplishment it is not the way to save money.
The best way is to pay off the highest interest rate credit cards first. You will save a ton of money in the long run. If one of your credit cards has a 9.9% interest rate and you owe $600 on it but you have another credit card that charges you 24.99% interest and you owe $2000 on it you got to tackle that 24.99% interest credit card first. Many credit cards have high interest rates like this and if you are not paying them off quickly it will cost you a ton of money. So remember, the best technique is to pay off debt with the highest interest rate first
Many will want to pay off the one with the smallest balance first, then the second lowest balance next and so on saving the highest balance credit card for last. While this does give our human minds a great sense of accomplishment it is not the way to save money.
The best way is to pay off the highest interest rate credit cards first. You will save a ton of money in the long run. If one of your credit cards has a 9.9% interest rate and you owe $600 on it but you have another credit card that charges you 24.99% interest and you owe $2000 on it you got to tackle that 24.99% interest credit card first. Many credit cards have high interest rates like this and if you are not paying them off quickly it will cost you a ton of money. So remember, the best technique is to pay off debt with the highest interest rate first
Closing your credit card accounts
Sometimes people will rip up their credit card to battle their temptation of using it. They have a plan, they will then pay off the credit card balance in full only to close their credit card account.
Is this a smart move?
It all depends. If you are working at raising your credit score this is definitely not a good move because when you close that account you end up raising the ratio of your used vs available credit which can often hurt your credit score. If you have an excessive amount of cards that you want to close out, that’s fine, but think twice if your reasoning for doing it is to improve your credit score. If you are going to be buying a new car or a home in the not so distant future it would not be wise to close the account. If no major purchases will be going on in your life in the near future and you can afford for your credit score take take a small dip then by all means go ahead and close that account, you can build your credit score back to where it was.
Is this a smart move?
It all depends. If you are working at raising your credit score this is definitely not a good move because when you close that account you end up raising the ratio of your used vs available credit which can often hurt your credit score. If you have an excessive amount of cards that you want to close out, that’s fine, but think twice if your reasoning for doing it is to improve your credit score. If you are going to be buying a new car or a home in the not so distant future it would not be wise to close the account. If no major purchases will be going on in your life in the near future and you can afford for your credit score take take a small dip then by all means go ahead and close that account, you can build your credit score back to where it was.
Using the four payment rule to not carry a balance on your credit cards
As a young twenty something person I got introduced to credit cards and being naive figured that if I could afford the minimum payment on my credit cards then I could afford it. Boy was I wrong! I ended up running balances of $1000, $1,500 and $2000 on my three different credit cards. All I could afford to pay was the minimum payments of around $15 per month on each card and when the interest was added my balance would go down around $5 or so. I paid these cards for a couple of years until I finally landed a job were I made enough to make bigger payments and finally paid them off.
My point here is don't ever carry balances on your credit cards for years. I have a new method I use when I make a purchase with one of my credit cards that I call the 4 payment plan. If I can not afford to pay the purchase off in four payments then I can not afford it. If that new plasma television set I want is $2000 and I can not afford to pay $500 per month for it then I can not afford it. If I want that $500 digital camera then I must be able to afford $125 per month for it. This is my method of using credit cards and I will tell you that it has certainly worked for me and I would recommend it to anyone.
My point here is don't ever carry balances on your credit cards for years. I have a new method I use when I make a purchase with one of my credit cards that I call the 4 payment plan. If I can not afford to pay the purchase off in four payments then I can not afford it. If that new plasma television set I want is $2000 and I can not afford to pay $500 per month for it then I can not afford it. If I want that $500 digital camera then I must be able to afford $125 per month for it. This is my method of using credit cards and I will tell you that it has certainly worked for me and I would recommend it to anyone.
Are balance transfers worth it?
Transferring your balance can save you lots of money. You can transfer that high interest credit card you hold a balance on to a low interest credit card that may offer you 0.00% interest for up to one year. In many cases this will work for many people and is certainly worth it to save from paying all those high interest charges.
If you are going to pay off your balance in a few months or so though it would not be worth it to pay the balance transfer fee. You almost always are charged a balance transfer fee when transferring your balance. Do the math and see if it is worth it for you to transfer your balance.
If you are going to pay off your balance in a few months or so though it would not be worth it to pay the balance transfer fee. You almost always are charged a balance transfer fee when transferring your balance. Do the math and see if it is worth it for you to transfer your balance.
Credit Card Price Protection
What is credit card price protection? Let's say you go and purchase a new television set for $1000.00 and then a couple months later you see that same store selling that same television for $800.00. You might feel like you got duffed but there are things that can be done if you have the know how.
Many credit cards offer a price protection program which will refund you the difference when you purchase an item with the card and you find a better price within 30-90 days. Many people don't know about 'Price Protection' but if used right it can save you thousands and thousands of dollars in ones lifetime.
Many credit cards offer a price protection program which will refund you the difference when you purchase an item with the card and you find a better price within 30-90 days. Many people don't know about 'Price Protection' but if used right it can save you thousands and thousands of dollars in ones lifetime.
Understanding Your Credit Card Applications
When you apply for a credit card it is important to understand the deal your getting with that new card. As your credit improves over time you will usually get the better deals but lets go over a few things you should understand.
Annual fee
This is a flat yearly charge similar to a membership fee. The fee could be $40, $50 or even more. Many credit cards that are offered to those with bad credit or no credit will have this annual fee. Of course no one really likes paying this annual fee but it should not be a big problem if you are just starting out and trying to establish your credit. Soon enough you will be able to get the credit cards with no annual fees! A tip you might want to remember is that after being a customer for a while you can call the credit card company and ask them to waive this fee. Some will since they would rather keep you as a customer than lose you as a customer.
Monthly Participation Fee
This fee is usually a $5 or so fee that is charged to you every month. Again, this is usually offered to those with a shady past credit history. It is another method to rebuild your credit history.
Finance charge
The dollar amount you pay to use credit
Besides interest costs, this may include other charges such as cash-advance fees, which are charged against your card when you borrow cash from the lender. (You generally pay higher interest on cash advances than on purchases -- check your latest bill to find out what you're paying for this service!)
Grace period
A time period, usually about 25 days, during which you can pay your credit-card bill without paying a finance charge
Under almost all credit-card plans, the grace period only applies if you pay your balance in full each month. It does not apply if you carry a balance forward. Also, the grace period does not apply to cash advances.
Annual percentage rate (APR)
The yearly percentage rate of the finance charge
Interest rates on credit-card plans change over time. Some of these adjustments are tied to changes in other interest rates, such as the prime rate or the Treasury Bill rate, and are called variable-rate plans. Others are not explicitly tied to changes in other interest rates and are called fixed-rate plans.
Fixed rate
A fixed annual percentage rate of the finance charge
Variable rate
Prime rate (which varies) plus an added percentage (For example, your rate may be PR + 3.9 percent.)
Introductory rate
A temporary, lower APR that usually lasts for about six months before converting to the normal fixed or variable rate (This is a hot topic -- more about it later.)
Experts say that if you're smart, you'll do the same kind of comparison shopping for a credit card that you do when you're looking for a mortgage or a car loan. This is a good idea because the choices you make can save you money. It is true that you will not get the best deals when starting out but as your credit gets more better and better look for those better deals out there.
Annual fee
This is a flat yearly charge similar to a membership fee. The fee could be $40, $50 or even more. Many credit cards that are offered to those with bad credit or no credit will have this annual fee. Of course no one really likes paying this annual fee but it should not be a big problem if you are just starting out and trying to establish your credit. Soon enough you will be able to get the credit cards with no annual fees! A tip you might want to remember is that after being a customer for a while you can call the credit card company and ask them to waive this fee. Some will since they would rather keep you as a customer than lose you as a customer.
Monthly Participation Fee
This fee is usually a $5 or so fee that is charged to you every month. Again, this is usually offered to those with a shady past credit history. It is another method to rebuild your credit history.
Finance charge
The dollar amount you pay to use credit
Besides interest costs, this may include other charges such as cash-advance fees, which are charged against your card when you borrow cash from the lender. (You generally pay higher interest on cash advances than on purchases -- check your latest bill to find out what you're paying for this service!)
Grace period
A time period, usually about 25 days, during which you can pay your credit-card bill without paying a finance charge
Under almost all credit-card plans, the grace period only applies if you pay your balance in full each month. It does not apply if you carry a balance forward. Also, the grace period does not apply to cash advances.
Annual percentage rate (APR)
The yearly percentage rate of the finance charge
Interest rates on credit-card plans change over time. Some of these adjustments are tied to changes in other interest rates, such as the prime rate or the Treasury Bill rate, and are called variable-rate plans. Others are not explicitly tied to changes in other interest rates and are called fixed-rate plans.
Fixed rate
A fixed annual percentage rate of the finance charge
Variable rate
Prime rate (which varies) plus an added percentage (For example, your rate may be PR + 3.9 percent.)
Introductory rate
A temporary, lower APR that usually lasts for about six months before converting to the normal fixed or variable rate (This is a hot topic -- more about it later.)
Experts say that if you're smart, you'll do the same kind of comparison shopping for a credit card that you do when you're looking for a mortgage or a car loan. This is a good idea because the choices you make can save you money. It is true that you will not get the best deals when starting out but as your credit gets more better and better look for those better deals out there.
Transfering your credit card debt
Would you like to know how a credit card balance transfer can save you hundreds of dollars from your credit card bills? Do you currently have trouble keeping up with your credit card balances? If yes, then a balance transfer may just be what you need.
Getting a Balance Transfer Credit Card
What is a Balance Transfer credit card and how is it different from standard credit cards in the market? If you try to shop around for credit cards, you’ll notice that some credit cards offer 0% APR as part of their introductory offer. The 0% interest rate will usually apply on purchases but if you take a look closely at your choices, you’ll find credit cards that offer 0% rate on balance transfers. If you’re lucky, you can even find a credit card that offers 0% APR for both purchases and balance transfers.
Why should you take advantage of 0% balance transfer credit cards? Carrying over your balances with each billing cycle increases your debt due to additional interest fees. With balance transfer credit card, you can focus on paying your original charges without the interest. Do the math, and you’ll realize how much you can save from the interest rates alone on your existing balances.
Finding the Right Balance Transfer Credit Card
Does this mean that all balance transfer credit cards are right for you? Take note that different credit card issuers also provide a variety of terms and conditions. Naturally, you’ll want to go with a company that will give you the best deals.
For instance, how long will the 0% introductory period last? Never forget that the zero interest offer is just a temporary option. Some companies offer as little as three months while others offer up to a year or more. Ideally, enjoying at least 12 months of 0% interest offer should give you enough time to repay your balances completely.
How much is the interest rate after the introductory period? Will the interest rate still be reasonable when the introductory offer ends or will it soar high? It’s best to choose a card that will still give you a reasonably low interest even after the 0% APR expires.
How much is the interest on purchases? If the 0% APR is limited to balance transfers alone, how much will the interest be on your charges? If the interest on purchases will be expensive, you may want to consider using this particular card for balance transfers only.
Another thing to keep in mind is how much are the annual fee? Some balance transfer credit cards may have very expensive annual fees. If you have to pay such a large amount each year, will it still enable you to save your money? There are balance transfer cards that have no annual fee so you’ll want to take your time looking for the right card to fit your needs.
Getting a Balance Transfer Credit Card
What is a Balance Transfer credit card and how is it different from standard credit cards in the market? If you try to shop around for credit cards, you’ll notice that some credit cards offer 0% APR as part of their introductory offer. The 0% interest rate will usually apply on purchases but if you take a look closely at your choices, you’ll find credit cards that offer 0% rate on balance transfers. If you’re lucky, you can even find a credit card that offers 0% APR for both purchases and balance transfers.
Why should you take advantage of 0% balance transfer credit cards? Carrying over your balances with each billing cycle increases your debt due to additional interest fees. With balance transfer credit card, you can focus on paying your original charges without the interest. Do the math, and you’ll realize how much you can save from the interest rates alone on your existing balances.
Finding the Right Balance Transfer Credit Card
Does this mean that all balance transfer credit cards are right for you? Take note that different credit card issuers also provide a variety of terms and conditions. Naturally, you’ll want to go with a company that will give you the best deals.
For instance, how long will the 0% introductory period last? Never forget that the zero interest offer is just a temporary option. Some companies offer as little as three months while others offer up to a year or more. Ideally, enjoying at least 12 months of 0% interest offer should give you enough time to repay your balances completely.
How much is the interest rate after the introductory period? Will the interest rate still be reasonable when the introductory offer ends or will it soar high? It’s best to choose a card that will still give you a reasonably low interest even after the 0% APR expires.
How much is the interest on purchases? If the 0% APR is limited to balance transfers alone, how much will the interest be on your charges? If the interest on purchases will be expensive, you may want to consider using this particular card for balance transfers only.
Another thing to keep in mind is how much are the annual fee? Some balance transfer credit cards may have very expensive annual fees. If you have to pay such a large amount each year, will it still enable you to save your money? There are balance transfer cards that have no annual fee so you’ll want to take your time looking for the right card to fit your needs.
What Credit Card Numbers Mean
Have you ever wondered what all those numbers on your credit card mean? Although phone companies, gas companies and department stores have their own numbering systems, ANSI Standard X4.13-1983 is the system used by most national credit-card systems.
The front of your credit card has a lot of numbers -- here's an example of what they might mean.
Here are what some of the numbers stand for:
* The first digit in your credit-card number signifies the system:
o 3 - travel/entertainment cards (such as American Express and Diners Club)
o 4 - Visa
o 5 - MasterCard
o 6 - Discover Card
The structure of the card number varies by system. For example, American Express card numbers start with 37; Carte Blanche and Diners Club with 38.
American Express - Digits three and four are type and currency, digits five through 11 are the account number, digits 12 through 14 are the card number within the account and digit 15 is a check digit.
Visa - Digits two through six are the bank number, digits seven through 12 or seven through 15 are the account number and digit 13 or 16 is a check digit.
MasterCard - Digits two and three, two through four, two through five or two through six are the bank number (depending on whether digit two is a 1, 2, 3 or other). The digits after the bank number up through digit 15 are the account number, and digit 16 is a check digit.
The front of your credit card has a lot of numbers -- here's an example of what they might mean.
Here are what some of the numbers stand for:
* The first digit in your credit-card number signifies the system:
o 3 - travel/entertainment cards (such as American Express and Diners Club)
o 4 - Visa
o 5 - MasterCard
o 6 - Discover Card
The structure of the card number varies by system. For example, American Express card numbers start with 37; Carte Blanche and Diners Club with 38.
American Express - Digits three and four are type and currency, digits five through 11 are the account number, digits 12 through 14 are the card number within the account and digit 15 is a check digit.
Visa - Digits two through six are the bank number, digits seven through 12 or seven through 15 are the account number and digit 13 or 16 is a check digit.
MasterCard - Digits two and three, two through four, two through five or two through six are the bank number (depending on whether digit two is a 1, 2, 3 or other). The digits after the bank number up through digit 15 are the account number, and digit 16 is a check digit.
Don't max out your credit cards
There was a time when I had a handful of credit cards and would make my payments every single month on time but it seemed as if my credit score was not going up much. I wondered why and what more could I do to make my credit score go up faster. Then I discovered that maxing out your credit cards is not the way to do it. You see, I had 5 credit cards with my combined credit limit at about $4000.00. My combined balance on all of these stood at $3,500 to $3,900.00 for about 5 years, I never paid it down. Once I discovered this I started paying my debt off and would knock off about $400.00 per month and after a years time I still had some balances but only owed $770.00 out of my $5000.00 combined limit. My credit score drastically shot up over 100 points in that year and I also got automatic credit card limit increases from 3 of the companies.
Take it from me - Don't max out your credit cards! Try to keep your combined balance to about 30% of your total combined credit limits.
Take it from me - Don't max out your credit cards! Try to keep your combined balance to about 30% of your total combined credit limits.
Pay more than the minimum payment on your credit cards
The worst thing you could do with your credit cards is to pay the minimum payment every month. OK, we all know times are hard sometimes and if you have to pay the minimum payment one month then go on right ahead but to make the minimum payment every single month will really cost you big time in the long run. Some credit card companies even report if you paid the minimum payment or more. Take a look at the sample below to see how much paying these minimum payments can cost you.
A handful of credit card issuers have raised minimum payments from 2% to 4% of the balance due. If you can afford these higher payments each month, you'll benefit over the long haul. If you can't afford this increase, chances are you're in over your head. Ask someone at your credit union for help in straightening out your finances.
Consider the example of a $2,000 balance at 18% interest. If your minimum payment is 2% of the balance due each month, it will take you about 19 years to pay it off and you'll pay $3,862 in interest. (A 2% minimum payment would start at $40 and taper to $20. Maintain the $40 and you'll pay off the debt faster. That's what our calculator assumes.)
If you're paying 4% of the balance due, you'll pay off the balance in seven years and four months and cut your interest costs to $1,031. (A 4% minimum payment starts at $80 and tapers to $20.)
By paying 8% of the balance due, much more than the minimum, it will take you three years and nine months to pay off, and you'll pay about $433 in interest. (An 8% minimum payment starts at $160 and tapers to $20.) Remember, these calculations assume you add no more charges to the card.
Always pay the minimum amount due so you don't incur a late fee, and if possible, pay more than the minimum.
A handful of credit card issuers have raised minimum payments from 2% to 4% of the balance due. If you can afford these higher payments each month, you'll benefit over the long haul. If you can't afford this increase, chances are you're in over your head. Ask someone at your credit union for help in straightening out your finances.
Consider the example of a $2,000 balance at 18% interest. If your minimum payment is 2% of the balance due each month, it will take you about 19 years to pay it off and you'll pay $3,862 in interest. (A 2% minimum payment would start at $40 and taper to $20. Maintain the $40 and you'll pay off the debt faster. That's what our calculator assumes.)
If you're paying 4% of the balance due, you'll pay off the balance in seven years and four months and cut your interest costs to $1,031. (A 4% minimum payment starts at $80 and tapers to $20.)
By paying 8% of the balance due, much more than the minimum, it will take you three years and nine months to pay off, and you'll pay about $433 in interest. (An 8% minimum payment starts at $160 and tapers to $20.) Remember, these calculations assume you add no more charges to the card.
Always pay the minimum amount due so you don't incur a late fee, and if possible, pay more than the minimum.
Someone steal your identity? Protect yourself!
Identity theft is a major problem. Can you imagine someone stealing your identity and buying themselves new cars, taking vacations, going shopping at the mall or even buying a home in your name? It would be devastating wouldn't it! There are many ways that someone can steal your identity. We can prevent it somewhat by shredding up all of our personal papers before we toss them in the garbage but I want to show you how by even you taking all of the precautions possible your personal information can get into the wrong hands. This is my story:
About ten years ago I had a job as a security guard. A bank trustee hired my company to escort him into a company that owed the bank millions of dollars - the bank trustee was going over there to kick them out and needed us there in case their was any trouble. There was a little trouble but when all was done we had kicked out around 300 employees and gave them only 10 minutes to grab their personal belongings. Locks were changed and boards went up so they needed some private security guards to watch the place for a couple of months. I ended up working there 70 hours per week bored out of my head. One day I strolled into a room, didn't know what the room was but it must have been the human resource room because guess what I had in my hands. A folder with 300 employees names, addresses, salary, their spouses name and all kinds of other information about them. Imagine that, me with all of this info! I could have turned into any one of those people I wanted to. I bet those employees of that company would have never thought in a million years that some guy working as a security guard would have this easy access to their information. Luckily for all of them I am a good guy :) I did not do anything with it especially being a victim of identity theft myself. Someone actually had a couple credit cards in my name, got a job in my name and then went to prison with my name. That's when I found out while looking for employment that I was supposedly in prison at the time. Crazy huh, I then found out that the DMV records showed tickets on my record that this person had gotten. It all got resolved but when someone steals your identity it will make your life a living hell.
Do you know that the experts say that someones identity is stolen every two seconds? I personally never have to worry about anything like that happening to me anymore since I now have LifeLock. LifeLock is the only Identity Theft Prevention Solution backed by a one-million dollar guarantee! Click here to get a 10% discount.
I now never have to worry about anyone stealing my identity. Whether you enroll with LifeLock or another similar company - YOU NEED TO PROTECT YOURSELF!
About ten years ago I had a job as a security guard. A bank trustee hired my company to escort him into a company that owed the bank millions of dollars - the bank trustee was going over there to kick them out and needed us there in case their was any trouble. There was a little trouble but when all was done we had kicked out around 300 employees and gave them only 10 minutes to grab their personal belongings. Locks were changed and boards went up so they needed some private security guards to watch the place for a couple of months. I ended up working there 70 hours per week bored out of my head. One day I strolled into a room, didn't know what the room was but it must have been the human resource room because guess what I had in my hands. A folder with 300 employees names, addresses, salary, their spouses name and all kinds of other information about them. Imagine that, me with all of this info! I could have turned into any one of those people I wanted to. I bet those employees of that company would have never thought in a million years that some guy working as a security guard would have this easy access to their information. Luckily for all of them I am a good guy :) I did not do anything with it especially being a victim of identity theft myself. Someone actually had a couple credit cards in my name, got a job in my name and then went to prison with my name. That's when I found out while looking for employment that I was supposedly in prison at the time. Crazy huh, I then found out that the DMV records showed tickets on my record that this person had gotten. It all got resolved but when someone steals your identity it will make your life a living hell.
Do you know that the experts say that someones identity is stolen every two seconds? I personally never have to worry about anything like that happening to me anymore since I now have LifeLock. LifeLock is the only Identity Theft Prevention Solution backed by a one-million dollar guarantee! Click here to get a 10% discount.
I now never have to worry about anyone stealing my identity. Whether you enroll with LifeLock or another similar company - YOU NEED TO PROTECT YOURSELF!
Don't let divorce mess up your credit
Divorce screws up a lot of people's credit and to be honest sometimes the husband and wife just can not see eye to eye on anything and will just about anything to make the others life as hard as possible. Sometimes though when a couple can work things out together they can make each others new lives as easy as possible. We all know life sucks with bad credit!
Divorce can be one of the hardest things you can go through but when finances and credit card debt are brought into the mix it can make it even ten times harder. Instead of thinking for one household, you have to plan for two. Of course if two spouses can work through this transition together it can be much easier than two spouses who are just fighting for every penny that they can get from the other.
Going through a divorce can be an emotionally traumatic time. Creating a plan to split assets and credit card debt will help tremendously to ease that trauma. Financial companies will consider that any debts that one person in a marriage incurs belongs to both. It will take time to notify everyone about the changes that will occur.
The plan that is put in place to handle credit card debt must allow for an equitable division of those debts. If a couple lets the courts make a decision on what belongs to who usually both parties will not be happy with the decisions that are made, if child support is also an issue it will make the courts decisions even worse. So, it is best to have a plan in place before divorce proceedings begin. It is not necessarily best to have a 50-50 split. A lot will depend upon the income of each party and how much of the debt was incurred by each. If there is only one breadwinner in the family, it will be more difficult to split the debt fairly. Usually the worker will feel that he deserves more since he/she was the one actually going out and making the money but that is why spouses need to compromise.
In cases where there is massive debt, there are even more problems. Debt such as this will probably necessitate the sale of the family home. The proceeds from the sale would go to pay off all debt. Any remaining funds is usually divided between the couple. If there is no family home that can be sold, a plan will need to be put into place for either a loan or a bankruptcy action. There may also be retirement accounts that can be liquidated and other household furnishings that can be sold to reduce the debt.
Sometimes it might be a good idea to contact the credit card companies and let them know about the divorce. They are only interested on how you plan to pay them back and may even be willing to split the debt 50/50 by creating a new account for one of the parties. It is best to negotiate with the credit card company before divorce proceedings have been started.
Another option may be for both people to open brand-new credit card accounts and pay their fair share to the original balance. This is usually done as a balance transfer, however, usually a credit company will provide checks so that you can write one to the original company.
If there is more than one credit card to be dealt with, each spouse could take on the ones that would add up to their agreed-upon balance.
When both people in the marriage have a plan in place before the dissolution of that marriage, a lot of the problems that come from it can be reduced. Even though there can be a lot of recriminations and arguing between the couple, a solution can usually be worked out. Some sort of plan can be helpful even if you can't come up with the total solution. Attorney fees can be cut drastically when a plan to set up beforehand.
Divorce can be one of the hardest things you can go through but when finances and credit card debt are brought into the mix it can make it even ten times harder. Instead of thinking for one household, you have to plan for two. Of course if two spouses can work through this transition together it can be much easier than two spouses who are just fighting for every penny that they can get from the other.
Going through a divorce can be an emotionally traumatic time. Creating a plan to split assets and credit card debt will help tremendously to ease that trauma. Financial companies will consider that any debts that one person in a marriage incurs belongs to both. It will take time to notify everyone about the changes that will occur.
The plan that is put in place to handle credit card debt must allow for an equitable division of those debts. If a couple lets the courts make a decision on what belongs to who usually both parties will not be happy with the decisions that are made, if child support is also an issue it will make the courts decisions even worse. So, it is best to have a plan in place before divorce proceedings begin. It is not necessarily best to have a 50-50 split. A lot will depend upon the income of each party and how much of the debt was incurred by each. If there is only one breadwinner in the family, it will be more difficult to split the debt fairly. Usually the worker will feel that he deserves more since he/she was the one actually going out and making the money but that is why spouses need to compromise.
In cases where there is massive debt, there are even more problems. Debt such as this will probably necessitate the sale of the family home. The proceeds from the sale would go to pay off all debt. Any remaining funds is usually divided between the couple. If there is no family home that can be sold, a plan will need to be put into place for either a loan or a bankruptcy action. There may also be retirement accounts that can be liquidated and other household furnishings that can be sold to reduce the debt.
Sometimes it might be a good idea to contact the credit card companies and let them know about the divorce. They are only interested on how you plan to pay them back and may even be willing to split the debt 50/50 by creating a new account for one of the parties. It is best to negotiate with the credit card company before divorce proceedings have been started.
Another option may be for both people to open brand-new credit card accounts and pay their fair share to the original balance. This is usually done as a balance transfer, however, usually a credit company will provide checks so that you can write one to the original company.
If there is more than one credit card to be dealt with, each spouse could take on the ones that would add up to their agreed-upon balance.
When both people in the marriage have a plan in place before the dissolution of that marriage, a lot of the problems that come from it can be reduced. Even though there can be a lot of recriminations and arguing between the couple, a solution can usually be worked out. Some sort of plan can be helpful even if you can't come up with the total solution. Attorney fees can be cut drastically when a plan to set up beforehand.
Beating Mr. Visa: How A Little Compound Interest Can Save A Lot Of Money
A question that vexes math students and teachers alike - "How does this apply to the rest of my life?" - turns out to have some surprising answers. Geometry in the living room? Statistics in your ledger? Yes, and yes.
Credit cards are ubiquitous in American life; there are probably 2 or 3 in your pocket right now. As of 2004, Americans were toting 1.3 billion total credit cards, and most of those cards' users were feeling the pinch - by the early part of this decade, average credit card debt for individuals had soared to over $11,000. During the same period, credit card companies lowered minimum payments so far that, for example, it may take a cardholder 32 years to pay off a simple $5000 balance at 15% interest. That's a scary figure.
In these times, it's absolutely critical to understand how compound interest works if you don't want to be stuck with out-of-control debt. However, many of us were absent that day in ninth-grade math class, so here's a refresher.
"Interest" is, in effect, money that you pay - or someone pays you - for the privilege of borrowing money. When you put money in a savings account, the bank pays you a small amount of interest for the privilege of borrowing your money, and it works the same way when you "borrow" $50 from your credit-card company to buy, say, that new season of Battlestar:Galactica on DVD. (Hey, I can relate.)
So let's say you put $100 in a savings account at a bank that offers an interest rate of 1%. Interest is calculated and added, generally, at certain time intervals - monthly, six-monthly, annually. Let's say your interest is calculated annually - this means that at the end of the year your $100 in savings will contain your original $100, plus an amount of money equal to the principal ($100) multiplied by that interest rate of 1%. Percentages can also be expressed as decimals: 1% interest, for example, would be .001. 100 times .001 is 1, and that's the amount of "interest" you've gained: $1. Add that to your original balance: you now have a whopping $101. If you'd given your money to a bank that offered a slightly higher interest rate - say, 3 - you'd be doing a bit better: 100 times .003 is $3, which added to that original $100 is $103.
That's simple interest. Compound interest is a little more, well, interesting - it can make you a lot more money if you're the one receiving the interest, and it can hurt you a lot more if you're the one paying out. With compound interest, the money you earn in interest is added to the principal, so it's also gaining interest. Let's say you spend $100 on a credit card that charges monthly 20% compound interest. (What a wonderful world that would be!) If interest is figured monthly, then at the end of the first month you just owe $120.
At the end of the second month that $120 is the principal from which interest is calculated - so now the amount of interest you owe isn't $20 as before, but 120 times .2, i.e. $124. At the end of the third month, interest is calculated again on that $124 - you owe $24.8 in interest, but the credit card company rounds up, so $25 in interest is added, and next month you'll be paying interest on a whopping $149 debt.
This is why even a small credit card balance tends to spiral out of control. And since companies have used low monthly payments to lure in new customers' who don't understand how compound interest works - it becomes easier and easier for a small debt of $2000-5000 to become an onerous twenty- or thirty-year burden. (Many consumers don't realize that this is how the system is designed to work - the longer you're paying off that little balance, the more interest the company makes.
Indeed, in the industry, the responsible card users who keep balances small and pay them off quickly are sometimes derogatorily referred to as "deadbeats.")
But with a little understanding of compound interest - and a little discipline, and, yes, a little luck (no sudden financial emergencies of the kind no one can plan for) you, too, can join the ranks of these "deadbeats" who refuse to be victims of the law of compound interest.
Math Made Easy provides Math help for Algebra help, Geometry help, math homework help using math online tutorial services and math tutorial cd so you can watch your math scores soar.
Credit cards are ubiquitous in American life; there are probably 2 or 3 in your pocket right now. As of 2004, Americans were toting 1.3 billion total credit cards, and most of those cards' users were feeling the pinch - by the early part of this decade, average credit card debt for individuals had soared to over $11,000. During the same period, credit card companies lowered minimum payments so far that, for example, it may take a cardholder 32 years to pay off a simple $5000 balance at 15% interest. That's a scary figure.
In these times, it's absolutely critical to understand how compound interest works if you don't want to be stuck with out-of-control debt. However, many of us were absent that day in ninth-grade math class, so here's a refresher.
"Interest" is, in effect, money that you pay - or someone pays you - for the privilege of borrowing money. When you put money in a savings account, the bank pays you a small amount of interest for the privilege of borrowing your money, and it works the same way when you "borrow" $50 from your credit-card company to buy, say, that new season of Battlestar:Galactica on DVD. (Hey, I can relate.)
So let's say you put $100 in a savings account at a bank that offers an interest rate of 1%. Interest is calculated and added, generally, at certain time intervals - monthly, six-monthly, annually. Let's say your interest is calculated annually - this means that at the end of the year your $100 in savings will contain your original $100, plus an amount of money equal to the principal ($100) multiplied by that interest rate of 1%. Percentages can also be expressed as decimals: 1% interest, for example, would be .001. 100 times .001 is 1, and that's the amount of "interest" you've gained: $1. Add that to your original balance: you now have a whopping $101. If you'd given your money to a bank that offered a slightly higher interest rate - say, 3 - you'd be doing a bit better: 100 times .003 is $3, which added to that original $100 is $103.
That's simple interest. Compound interest is a little more, well, interesting - it can make you a lot more money if you're the one receiving the interest, and it can hurt you a lot more if you're the one paying out. With compound interest, the money you earn in interest is added to the principal, so it's also gaining interest. Let's say you spend $100 on a credit card that charges monthly 20% compound interest. (What a wonderful world that would be!) If interest is figured monthly, then at the end of the first month you just owe $120.
At the end of the second month that $120 is the principal from which interest is calculated - so now the amount of interest you owe isn't $20 as before, but 120 times .2, i.e. $124. At the end of the third month, interest is calculated again on that $124 - you owe $24.8 in interest, but the credit card company rounds up, so $25 in interest is added, and next month you'll be paying interest on a whopping $149 debt.
This is why even a small credit card balance tends to spiral out of control. And since companies have used low monthly payments to lure in new customers' who don't understand how compound interest works - it becomes easier and easier for a small debt of $2000-5000 to become an onerous twenty- or thirty-year burden. (Many consumers don't realize that this is how the system is designed to work - the longer you're paying off that little balance, the more interest the company makes.
Indeed, in the industry, the responsible card users who keep balances small and pay them off quickly are sometimes derogatorily referred to as "deadbeats.")
But with a little understanding of compound interest - and a little discipline, and, yes, a little luck (no sudden financial emergencies of the kind no one can plan for) you, too, can join the ranks of these "deadbeats" who refuse to be victims of the law of compound interest.
Math Made Easy provides Math help for Algebra help, Geometry help, math homework help using math online tutorial services and math tutorial cd so you can watch your math scores soar.
A brief history on credit cards
Love them or hate them, credit cards are a part of everyday life in the twenty-first century. But where did they come from? Who thought up the idea behind a little piece of plastic that could be used to make purchases?
I remember as a kid going with my mom to the corner meat market. The owner there would grant my mom and other customers who had been going to the store for years credit. He would pull out his messy records and see how much my mom already owed and if wasn't that much he would let her get more goods on credit. This was my first experience with the credit game.
Credit has been with us since time immemorial. In the old days, stores would keep open accounts, or “tabs”, for their customers. The customers would take the merchandise they needed, the store owner would mark their purchases in a ledger, and the tab would be paid at a later date.
Credit in card form was first mentioned in literature in the 1887 novel, Looking Backward, by Edward Bellamy. The author theorized that, in the future, all customers would need to make purchases was a little card that represented their available credit. Now that was a good guess, and timely: Western Union issued purchase cards to its best customers as early as 1914.
Gas cards came before most other types of credit cards. In the 1920’s, more and more people purchased automobiles. Those automobiles needed fuel, so many gas stations began to issue cards which could be used to make fuel purchases. In an innovative networking move, various gas stations even accepted their competitor’s cards as a form of payment.
Next came store credit cards. Originally devised as a marketing ploy, these cards helped increase the customer base of many retailers. Customers liked the fact that they buy now and pay later, and retailers liked the fact that the period of repayment had a definite limit. That is, the customer had a specific amount of time in which to pay off their debt. Good customers gained a good reputation among merchants – the credit history of yesterday.
Revolving credit came onto the scene in the 1930’s and 40’s. The stores started off by allowing customers to pay off their debt over a series of months, requiring the debt to be paid in full before further purchases could be made. Then they did away with the repayment limits. This allowed customers to carry a balance on their credit cards that did not have to be repaid in a specified time period. Instead, the customer had to repay a certain amount of debt each month – the minimum monthly payment. This provided even more convenience for the customers, though many didn’t quite know what they were getting into. Credit card companies made revenue from fees and interest, just like they do today.
In the 1950’s, Ralph Schneider introduced the concept of an all-purpose credit card which could be used in lieu of multiple charge cards. Enter the cards we know today: Visa, American Express, Diner’s Club, and others. These major companies soared in popularity in the 1970’s and 80’s.
Today, credit cards have become a big business. It seems that every provider is eager to place a card in the hands of a customer, regardless of that customer’s credit score or demonstrated level of financial responsibility. This is good news for consumers who want to build up their credit, but can also mean big losses for an industry that was founded on the strength of a promise.
I remember as a kid going with my mom to the corner meat market. The owner there would grant my mom and other customers who had been going to the store for years credit. He would pull out his messy records and see how much my mom already owed and if wasn't that much he would let her get more goods on credit. This was my first experience with the credit game.
Credit has been with us since time immemorial. In the old days, stores would keep open accounts, or “tabs”, for their customers. The customers would take the merchandise they needed, the store owner would mark their purchases in a ledger, and the tab would be paid at a later date.
Credit in card form was first mentioned in literature in the 1887 novel, Looking Backward, by Edward Bellamy. The author theorized that, in the future, all customers would need to make purchases was a little card that represented their available credit. Now that was a good guess, and timely: Western Union issued purchase cards to its best customers as early as 1914.
Gas cards came before most other types of credit cards. In the 1920’s, more and more people purchased automobiles. Those automobiles needed fuel, so many gas stations began to issue cards which could be used to make fuel purchases. In an innovative networking move, various gas stations even accepted their competitor’s cards as a form of payment.
Next came store credit cards. Originally devised as a marketing ploy, these cards helped increase the customer base of many retailers. Customers liked the fact that they buy now and pay later, and retailers liked the fact that the period of repayment had a definite limit. That is, the customer had a specific amount of time in which to pay off their debt. Good customers gained a good reputation among merchants – the credit history of yesterday.
Revolving credit came onto the scene in the 1930’s and 40’s. The stores started off by allowing customers to pay off their debt over a series of months, requiring the debt to be paid in full before further purchases could be made. Then they did away with the repayment limits. This allowed customers to carry a balance on their credit cards that did not have to be repaid in a specified time period. Instead, the customer had to repay a certain amount of debt each month – the minimum monthly payment. This provided even more convenience for the customers, though many didn’t quite know what they were getting into. Credit card companies made revenue from fees and interest, just like they do today.
In the 1950’s, Ralph Schneider introduced the concept of an all-purpose credit card which could be used in lieu of multiple charge cards. Enter the cards we know today: Visa, American Express, Diner’s Club, and others. These major companies soared in popularity in the 1970’s and 80’s.
Today, credit cards have become a big business. It seems that every provider is eager to place a card in the hands of a customer, regardless of that customer’s credit score or demonstrated level of financial responsibility. This is good news for consumers who want to build up their credit, but can also mean big losses for an industry that was founded on the strength of a promise.
How to dispute bad marks on your credit report
OK, we all know how important your credit report is in today's world. But what happens if there is something on your credit report that you would like to dispute? First off you should have a copy of your credit report already, if not then you need to get one right away. You can easily get a free copy of your credit report online.
Do you see something on that credit report that should not be there? You must dispute it! Any information on your credit report can be disputed! Personal information, accounts, inquiries - ANYTHING! If you have many, many accounts that you want to dispute it is probably best to just start by disputing three or four of them. If you just go and try to dispute all ten accounts on your credit report the credit bureau or credit reporting agency may not take your request to serious.
When you write your dispute letter do not get into laws, procedures or any court rulings. Make it as simple as you can. If your letter gets really confusing there is a good chance that it could possibly get tossed! Concentrate on those three or four accounts and do not mention others that you may want to later dispute and have removed. Fix these problems first then you can think about the other ones.
Once all that is done it will be time for the 'procedural request' - asking for the method of verification. If you get some accounts deleted that's good. But for those that came back "verified" you can ask for a 'procedural request.' The credit reporting agencies and credit bureaus are obligated by law to provide you with the exact method your creditors used to verify the information that they are reporting to the agency on your credit report. Requesting this information, forces the credit bureau to provide you with the information they received from your creditor as valid proof.
The creditor needs to have proof of why if they replied to your dispute stating that your account should remain on your credit report. The creditor rarely ever provides the credit reporting agency or credit bureau with this information. So, by doing this you're putting pressure on them to prove it. Otherwise they will have to remove it.
Make sure to keep records of everything the bureaus and your creditors send to you in case you find some day that you have to sue them for violating your federal rights. If you follow these credit repair tips you should be well on your way to fixing your credit for good!
Do you see something on that credit report that should not be there? You must dispute it! Any information on your credit report can be disputed! Personal information, accounts, inquiries - ANYTHING! If you have many, many accounts that you want to dispute it is probably best to just start by disputing three or four of them. If you just go and try to dispute all ten accounts on your credit report the credit bureau or credit reporting agency may not take your request to serious.
When you write your dispute letter do not get into laws, procedures or any court rulings. Make it as simple as you can. If your letter gets really confusing there is a good chance that it could possibly get tossed! Concentrate on those three or four accounts and do not mention others that you may want to later dispute and have removed. Fix these problems first then you can think about the other ones.
Once all that is done it will be time for the 'procedural request' - asking for the method of verification. If you get some accounts deleted that's good. But for those that came back "verified" you can ask for a 'procedural request.' The credit reporting agencies and credit bureaus are obligated by law to provide you with the exact method your creditors used to verify the information that they are reporting to the agency on your credit report. Requesting this information, forces the credit bureau to provide you with the information they received from your creditor as valid proof.
The creditor needs to have proof of why if they replied to your dispute stating that your account should remain on your credit report. The creditor rarely ever provides the credit reporting agency or credit bureau with this information. So, by doing this you're putting pressure on them to prove it. Otherwise they will have to remove it.
Make sure to keep records of everything the bureaus and your creditors send to you in case you find some day that you have to sue them for violating your federal rights. If you follow these credit repair tips you should be well on your way to fixing your credit for good!
Do I really need a credit card?
The quick answer to that question is a big NO! You will not drop dead because you don't have a credit card. I know a man who is in his mid fifties who absolutely refuses to get a credit card. The problem is that this man complains and fits when he is having a hard time trying to rent a home or get a vehicle. This man lived in a time when credit cards were not a necessity in life and they still are not but if you want to make life simpler and be able to buy a home one day then you must have some sort of credit. You can not establish any credit without having any credit! So, "should I get a credit card?"
If one day you would like to:
Buy a home
Start a business
Buy a new car
Buy a home
Start a business
Buy a new car
Then you best establish some credit for when you need to do these things in the future.
Here are some other things that you would have a hard time doing without a credit card:
Renting a car - Yep, you need to put a deposit down and that deposit comes from your credit card. They car rental company will usually want you to have a major credit card if they are going to let you use their vehicles.
Renting a hotel - Well this only makes sense don't it. If I live in Los Angeles and need a hotel room in New York for next weekend then I will need to pay for it over the telephone so I will need a major credit card for this task.
Employment - This one is really important don't you think. Many employers now do a credit check before they hire you as an employee. Sometimes your bad credit can keep you from that great job you could have otherwise had.
Renting a home - Remember when you only needed good credit to buy a home. Well as most know now you better have some decent credit if you are going to rent a house or apartment. Wouldn't it really suck if you make some great money but could not get into a home because of your crappy credit.
Cell Phones - Oh sure, you don't need great credit for this one but sometimes the worst your credit is the higher deposit you will have to make.
Turning on the lights! - This is one that I personally recently experienced. I had to call Edison to have the lights turned on in my home. They asked me if it was OK to check my credit and I said OK. The woman said that there would be no deposit since I have great credit. Wonder what the deposit would have been when my credit score was 530 years ago?
These are just a few examples but just know that not having any credit or credit cards can make someones life really miserable. It seems that many who don't want credit cards may have made mistakes with them in the past and went into some serious debt and screwed up their credit. But they need to learn from their mistakes, no one is perfect.
If you have bad credit or no credit you may want to check out Centrro - find the perfect credit card that suits your needs and make a new start.
Should I use a debt consolidation program?
If you are just overwhelmed with debt such as credit cards, medical bills or any other payments you have to make every month then you may want to try using a debt consolidation program. These programs can really help someone out a lot as you can get your monthly payments reduced and roll your debt into one easy monthly payment. Now, wouldn't this make life a little simpler! This helps you avoid having a ton of bills scattered all through the month without the ability to pay them. It also helps you avoid bankruptcy and can rebuild your credit within a couple of years.
When you choose a debt consolidation program, you are avoiding the damage that bankruptcy can do to your credit. When you file bankruptcy, your debts may be wiped out, but you also have the bankruptcy recorded on your credit report which is never ever a good thing. This means that for several years you will have significant difficulty with getting any new loans, buying a house, or starting to rebuild your credit in any way. Banks will consider you a risk and will treat you as such for 7-10 years, which is how long a bankruptcy will stay on your credit report. Your life is in a standstill, all because you chose to file bankruptcy. This should always be a last resort.
Now, on the other hand let us look at a debt consolidation program. Let's say that you have several different credit cards, with different limits, interest rates, minimum payments and due dates. With a debt consolidation program, all of this will be eliminated. You meet with a counselor either in person or on the phone, and you give them all your account information. The counselor then contacts each credit card company and works out new terms for you. Many times they work directly for the credit card companies themselves, and will be able to get the credit cards to reduce or freeze all interest, as well lower the principal amount that you owe. Sometimes they can even arrange to get late fees reduced or waived.
Once the counselor works out a deal with each individual company, they will set up a payment plan for you. You will have to pay them a percentage, which is usually calculated in your monthly payment. You now will be paying the debt consolidation program one large payment every month, which will take care of all your debt. The credit card companies receive your payments from them.
When you use a debt consolidation program, you are no longer in danger of bankruptcy. The process is not immediate, and it will usually take a minimum of two years to get your debt paid off. This saves you thousands of dollars in interest over the entire period. Even though you are paying the program for their help, it is still much less than what you would pay in interest and fees if you tried to do this yourself. You can usually negotiate how the credit card companies will report this to the credit agencies as well. While many times they may report the balance as settled instead of paid as agreed, it still looks much better than a default or charge off on your report.
When you choose a debt consolidation program, you are avoiding the damage that bankruptcy can do to your credit. When you file bankruptcy, your debts may be wiped out, but you also have the bankruptcy recorded on your credit report which is never ever a good thing. This means that for several years you will have significant difficulty with getting any new loans, buying a house, or starting to rebuild your credit in any way. Banks will consider you a risk and will treat you as such for 7-10 years, which is how long a bankruptcy will stay on your credit report. Your life is in a standstill, all because you chose to file bankruptcy. This should always be a last resort.
Now, on the other hand let us look at a debt consolidation program. Let's say that you have several different credit cards, with different limits, interest rates, minimum payments and due dates. With a debt consolidation program, all of this will be eliminated. You meet with a counselor either in person or on the phone, and you give them all your account information. The counselor then contacts each credit card company and works out new terms for you. Many times they work directly for the credit card companies themselves, and will be able to get the credit cards to reduce or freeze all interest, as well lower the principal amount that you owe. Sometimes they can even arrange to get late fees reduced or waived.
Once the counselor works out a deal with each individual company, they will set up a payment plan for you. You will have to pay them a percentage, which is usually calculated in your monthly payment. You now will be paying the debt consolidation program one large payment every month, which will take care of all your debt. The credit card companies receive your payments from them.
When you use a debt consolidation program, you are no longer in danger of bankruptcy. The process is not immediate, and it will usually take a minimum of two years to get your debt paid off. This saves you thousands of dollars in interest over the entire period. Even though you are paying the program for their help, it is still much less than what you would pay in interest and fees if you tried to do this yourself. You can usually negotiate how the credit card companies will report this to the credit agencies as well. While many times they may report the balance as settled instead of paid as agreed, it still looks much better than a default or charge off on your report.
What is a Good Credit Score?
This is a fair question and one that everyone would like to know. Unfortunately there is no single answer to that question. Of course the higher your score is the better but you have to realize that each lender makes their own cut off point depending on how much of a risk they are willing to take. Many lenders have a cut off point of a FICO score of 720 to give the consumer their best rates. Many have a cut off point of 620 for giving any loan. Usually anything under 620 can use some improvement, 650 can be seen as decent, once you hit 700 you can say you have *good* credit, 720 would be excellent and anything over that is even more excellent. Having a credit score of 700 will usually qualify you for most things you apply for, having a credit score of 720 will almost guarantee you to get what you want. Many people thing that that a credit score can be raised overnight but as with anything else it takes time. Just make your payments on time and your score will rise slowly but surely. Making more than your minimum payment will help it to grow faster. Another thing that will make it grow faster is not maxing out your accounts. Try to keep your balance on your credit card accounts at about 30% of your credit limit, going over this can stall your credit score from growing at the pace you may want it to grow. So if your credit score is 650 be happy, work your way from there and improve it, time is your best friend to make your score grow, of course and making timely payments.
What Are Credit Card Fees?
Credit card companies are in the business of making money. It really is that simple. They earn their money through two principle methods. One is through the finance charges that they levy when you make purchases on the card, and the
other method is through the use of credit card fees. It should be understood that these are not one in the same. They are different, and knowing more about the fees that a company charges (or does not charge) its customers can help you save money.
Credit card fees can (and do) vary from one company to the next. There is no set schedule for credit card fees. This makes it very important for consumers to read carefully the literature that is supplied by the company in order to know
exactly what you will be billed for during the course of your association with the company.
Some of the more common types of fees include:
Annual Fees: Many credit card companies are moving away from this particular fee, but there are still some that use it. The annual fee is generally just a yearly fee, billed monthly, for having the card. Whenever possible, you should
avoid credit card companies that charge an annual fee. You get nothing but the card in return for this payment.
Set Up Fee: This, too, is becoming less popular with most companies, meaning they do not charge it any longer. Again, however, there may be some companies that do charge a fee for setting up your account. Read carefully exactly what the
fee is and the explanation that the company offers for charging this fee. You may find that working with another company that does not charge this initial fee is a good idea.
Cash Advance Fee: This is one fee that you will find with many credit card companies. This fee is applied to your account if you take a cash advance from the card. It can be a flat fee or it can be a percentage of the cash amount. Keep
in mind that this is in addition to any finance charge the company will levy as well.
Late Payment Fee: This fee is assessed when you make a late payment. The trigger date for this fee is the "due date" as it is stated on the bill.
Transfer Balance Fee: Not all companies will charge this fee, but some will. This fee is levied when you transfer a balance from one credit card to another one.
Exceeding the Limit Fee: This fee may be assessed should you exceed your credit limit. Modern technology has made it harder to exceed your limit in that online approval or disapproval from the company is immediate.
Increase Limit Fee: Some companies will charge a small fee when you want to increase your credit limit. Not all do, but some will want to charge this fee.
Bad Check Fee: As with most companies, if you send a bad check the credit card company will usually want to charge for this.
These are just some of the possible fees that a credit card company may charge to your account. It is important to read their literature carefully in order to know what they will charge for and what they do not charge for.
other method is through the use of credit card fees. It should be understood that these are not one in the same. They are different, and knowing more about the fees that a company charges (or does not charge) its customers can help you save money.
Credit card fees can (and do) vary from one company to the next. There is no set schedule for credit card fees. This makes it very important for consumers to read carefully the literature that is supplied by the company in order to know
exactly what you will be billed for during the course of your association with the company.
Some of the more common types of fees include:
Annual Fees: Many credit card companies are moving away from this particular fee, but there are still some that use it. The annual fee is generally just a yearly fee, billed monthly, for having the card. Whenever possible, you should
avoid credit card companies that charge an annual fee. You get nothing but the card in return for this payment.
Set Up Fee: This, too, is becoming less popular with most companies, meaning they do not charge it any longer. Again, however, there may be some companies that do charge a fee for setting up your account. Read carefully exactly what the
fee is and the explanation that the company offers for charging this fee. You may find that working with another company that does not charge this initial fee is a good idea.
Cash Advance Fee: This is one fee that you will find with many credit card companies. This fee is applied to your account if you take a cash advance from the card. It can be a flat fee or it can be a percentage of the cash amount. Keep
in mind that this is in addition to any finance charge the company will levy as well.
Late Payment Fee: This fee is assessed when you make a late payment. The trigger date for this fee is the "due date" as it is stated on the bill.
Transfer Balance Fee: Not all companies will charge this fee, but some will. This fee is levied when you transfer a balance from one credit card to another one.
Exceeding the Limit Fee: This fee may be assessed should you exceed your credit limit. Modern technology has made it harder to exceed your limit in that online approval or disapproval from the company is immediate.
Increase Limit Fee: Some companies will charge a small fee when you want to increase your credit limit. Not all do, but some will want to charge this fee.
Bad Check Fee: As with most companies, if you send a bad check the credit card company will usually want to charge for this.
These are just some of the possible fees that a credit card company may charge to your account. It is important to read their literature carefully in order to know what they will charge for and what they do not charge for.
Visa VS Mastercard - Which is Better?
The two leading credit card companies in the world today are the competitors Visa and MasterCard. They both operate along very similar lines. While Visa can claim to have almost a billion cards issued, MasterCard has over twenty five thousand banks issuing its cards and it is difficult to find any difference in the number of locations worldwide that accept the cards, which is now estimated at over twenty million.
In fact, as far as most consumers are concerned, there is no real difference between the two. They are both very widely accepted in over one hundred and fifty countries and it is very rare to find a location that will accept one but not the other.
However, neither Visa nor MasterCard actually issue any credit cards themselves. They are both simply methods of payment. They rely on banks in various countries to issue credit cards that utilise these payment methods. Therefore, the interest rates, rewards, annual fees, and all other charges are issued by your bank and when you pay your bill you are paying it to the bank or institution that issued your card and not Visa or MasterCard.
How Visa and MasterCard make their money is by charging the retailer for using their payment method. So the truth of the matter is that a Visa issued by say the Bank of Scotland will have very little to do with a Visa issued by other banks and may in fact by more similar to the Bank of Scotland’s MasterCard.
What this means for the vast majority of customers is that you do not have to overly concern yourself with whether a credit card is MasterCard or Visa. You would be better off concentrating on the interest and other charges on the card, the balance transfer possibilities or their reward scheme. You are very unlikely to ever be effected by the fact that it is one and not the other.
If you prefer, if you are going to have two credit cards, you may decide that you want one of them to be Visa and the other MasterCard, this means that if something drastic were to happen to one company, or if you were in the unlikely position of finding a location that accepts one but not the other, then you would have the option of paying with either.
At the end of the day however, much more depends on the bank that gave you the card, than on the type of card it is.
In fact, as far as most consumers are concerned, there is no real difference between the two. They are both very widely accepted in over one hundred and fifty countries and it is very rare to find a location that will accept one but not the other.
However, neither Visa nor MasterCard actually issue any credit cards themselves. They are both simply methods of payment. They rely on banks in various countries to issue credit cards that utilise these payment methods. Therefore, the interest rates, rewards, annual fees, and all other charges are issued by your bank and when you pay your bill you are paying it to the bank or institution that issued your card and not Visa or MasterCard.
How Visa and MasterCard make their money is by charging the retailer for using their payment method. So the truth of the matter is that a Visa issued by say the Bank of Scotland will have very little to do with a Visa issued by other banks and may in fact by more similar to the Bank of Scotland’s MasterCard.
What this means for the vast majority of customers is that you do not have to overly concern yourself with whether a credit card is MasterCard or Visa. You would be better off concentrating on the interest and other charges on the card, the balance transfer possibilities or their reward scheme. You are very unlikely to ever be effected by the fact that it is one and not the other.
If you prefer, if you are going to have two credit cards, you may decide that you want one of them to be Visa and the other MasterCard, this means that if something drastic were to happen to one company, or if you were in the unlikely position of finding a location that accepts one but not the other, then you would have the option of paying with either.
At the end of the day however, much more depends on the bank that gave you the card, than on the type of card it is.
Should I use a credit repair service?
There are some benefits to using a credit repair company and there are some real disadvantages too. The first thing to think about is why you want to use a credit repair service? Is it because you have bad credit that you want to fix but simply don't know how? If this is true then try reading a bit of information about how to fix bad credit to see if you think this is something you can do.
If you don't have time to sit down, write letters and go through the credit reports to see what you can dispute, then a credit repair company is probably for you. A credit repair company will take care of all the tedious tasks that are involved in disputing bad credit marks on your credit report. You should however make sure that you use a company that knows the law so that they can properly understand your needs.
To fix bad credit yourself, all you have to do is request your credit report, read what's on it when it arrives, and write a letter to dispute the bad credit that you believe is unfair or untrue. At this point you can also write to your creditors to try and negotiate a reasonable pay off plan in return for removing the debt from your credit history. When you pay a credit repair service, this is practically all they do. Firstly they request your credit report or reports, if they are requesting more than one report from the three big credit bureaus.
When not to use a credit repair company
A good credit repair service will be upfront and honest about what they can and can't do. They will be clear about how much they charge and clear about what you will get from the service.
A bad credit repair service will probably do some the following:
* Try to confuse you with financial jargon so you don't understand what they are doing
* Don't tell you what your legal rights are
* Tell you not to contact one of the credit bureaus directly yourself
* Suggest that you try to invent a new credit identity and then apply for a new credit report. This can be done by applying for an Employer Identification Number (EIN) to use instead of your Social Security number.
* Tell you to try and remove all your bad credit regardless of whether it is true or not. If you do this and are found to be committing fraud, you may be held responsible yourself.
So if you are thinking about using a credit repair company you should remember three things:
* Only inaccurate information on your credit report can be removed. So if a credit repair service says they can repair you credit 'guaranteed', this simply isn't true. Credit repair companies have actually been successfully sued for claiming they can remove bad credit when in fact they can't.
* Credit repair companies can charge high prices for doing something that is pretty routine, so don't pay big prices because it probably isn't worth it.
* When a credit repair organization requests your credit report, the credit companies won't accept any disputes unless it is accompanied by a notarized power of attorney that authorizes a licensed attorney or if the power of attorney is unlimited and irrevocable. Alternatively you or a family member can do it on your behalf.
Using a credit repair service can greatly help you to start to repair your credit score quickly as they can quickly identify where the problems lie in your credit report and highlight any errors that may have been made.
If you don't have time to sit down, write letters and go through the credit reports to see what you can dispute, then a credit repair company is probably for you. A credit repair company will take care of all the tedious tasks that are involved in disputing bad credit marks on your credit report. You should however make sure that you use a company that knows the law so that they can properly understand your needs.
To fix bad credit yourself, all you have to do is request your credit report, read what's on it when it arrives, and write a letter to dispute the bad credit that you believe is unfair or untrue. At this point you can also write to your creditors to try and negotiate a reasonable pay off plan in return for removing the debt from your credit history. When you pay a credit repair service, this is practically all they do. Firstly they request your credit report or reports, if they are requesting more than one report from the three big credit bureaus.
When not to use a credit repair company
A good credit repair service will be upfront and honest about what they can and can't do. They will be clear about how much they charge and clear about what you will get from the service.
A bad credit repair service will probably do some the following:
* Try to confuse you with financial jargon so you don't understand what they are doing
* Don't tell you what your legal rights are
* Tell you not to contact one of the credit bureaus directly yourself
* Suggest that you try to invent a new credit identity and then apply for a new credit report. This can be done by applying for an Employer Identification Number (EIN) to use instead of your Social Security number.
* Tell you to try and remove all your bad credit regardless of whether it is true or not. If you do this and are found to be committing fraud, you may be held responsible yourself.
So if you are thinking about using a credit repair company you should remember three things:
* Only inaccurate information on your credit report can be removed. So if a credit repair service says they can repair you credit 'guaranteed', this simply isn't true. Credit repair companies have actually been successfully sued for claiming they can remove bad credit when in fact they can't.
* Credit repair companies can charge high prices for doing something that is pretty routine, so don't pay big prices because it probably isn't worth it.
* When a credit repair organization requests your credit report, the credit companies won't accept any disputes unless it is accompanied by a notarized power of attorney that authorizes a licensed attorney or if the power of attorney is unlimited and irrevocable. Alternatively you or a family member can do it on your behalf.
Using a credit repair service can greatly help you to start to repair your credit score quickly as they can quickly identify where the problems lie in your credit report and highlight any errors that may have been made.
Is It Safer To Complete A Visa Credit Card Application Online?
Visa credit card companies send thousands of offers through the mail everyday. Dozens, if not hundreds, of websites are set up to help you compare and apply for Visa credit cards online. For years, many people were hesitant to fill out visa credit card applications online fearing identity theft from computer hackers. With the prevalence in website security now and the increase in identity theft from stolen mail, it has become safer to send your information online than through the postal service. Follows is a discussion of the ways websites have increased security as well as what to do with those application in the mail.
Website Security Better Than Ever
Surf the web and on the majority of e-merchant sites you will see the little closed lock that indicates the security over information on that page. The URL of the pages that start with https:// are also boasting a higher security than the common http:// addresses. Companies go to great lengths to insure the safety of your personal information through Secure Sockets Layer, commonly dubbed SSL, which blocked unauthorized users from seeing sensitive information. Encoding is done to social security numbers, and other personal information to keep it safe from hackers and prying eyes. Everyday, companies come out with new ways to secure the information on your visa credit card application online.
Mail Identity Theft At An All Time High
While websites are doing everything they can to keep you safe, credit card offers through the mail continue to be a major risk to consumer identities. Identity thieves sneak up to your mailbox and take your mail in hopes of obtaining your personal information. Many of these credit card offers are ripe for the picking. All the thief needs to do is call a number or go online and accept the pre-approved card. Occasionally you can even find sensitive information printed in tiny characters on the applications. Although the government and consumer advocate groups are working to pass laws to prevent information from being included with these offers, it's likely to be a long time coming.
The best thing you can do with an application you get in the mail is put it through your shredder. Then go to your computer and fill out a safe and secure visa credit card application online. You get the credit you deserve with the security you need.
Website Security Better Than Ever
Surf the web and on the majority of e-merchant sites you will see the little closed lock that indicates the security over information on that page. The URL of the pages that start with https:// are also boasting a higher security than the common http:// addresses. Companies go to great lengths to insure the safety of your personal information through Secure Sockets Layer, commonly dubbed SSL, which blocked unauthorized users from seeing sensitive information. Encoding is done to social security numbers, and other personal information to keep it safe from hackers and prying eyes. Everyday, companies come out with new ways to secure the information on your visa credit card application online.
Mail Identity Theft At An All Time High
While websites are doing everything they can to keep you safe, credit card offers through the mail continue to be a major risk to consumer identities. Identity thieves sneak up to your mailbox and take your mail in hopes of obtaining your personal information. Many of these credit card offers are ripe for the picking. All the thief needs to do is call a number or go online and accept the pre-approved card. Occasionally you can even find sensitive information printed in tiny characters on the applications. Although the government and consumer advocate groups are working to pass laws to prevent information from being included with these offers, it's likely to be a long time coming.
The best thing you can do with an application you get in the mail is put it through your shredder. Then go to your computer and fill out a safe and secure visa credit card application online. You get the credit you deserve with the security you need.
If I Close Some Credit Card Accounts Will it Hurt my Credit Score?
Many people with high credit scores lots of times find that one of the few marks against them is that they have too many open accounts. So what's one to do to make their credit score even higher? Maybe close some accounts? I could see how this makes sense since they said you have to many open accounts but one must realize that the damage (if you want to call it that) has already been done when you opened all of those accounts. But you can actually hurt your credit score if you close some accounts. Why? Closing credit card accounts can make your credit history look younger than what it is. Your credit score factors in the age of your oldest credit card and the average age of all your credit cards so closing them can lower your credit score, especially your older ones. Also, closing accounts reduces the total available credit to you, making your debt utilization ratio soar. Remember that the FICO formula measures the gap between the credit you use and your total credit limit. The wider the gap, the better. If you all of a sudden lower the gap by closing a few accounts, the gap narrows and that's a bad thing. In reality, closing revolving credit accounts can never help your score, and it might just hurt a little bit.
How Your Credit Score Affects You
If your credit score is high enough you will qualify for a lenders best rates and terms. You will also receive in the mail the best low-rate offers from credit card companies and mortgage lenders who will fight for your business. You also will have great negotiating power if you have a high credit score. Besides getting the best credit cards you'll also get great deals on auto financing, home loans and small business loans. Having a bad credit score of course will get you no where and if you do get someone to offer you credit you can be sure that you will be paying high interest rates and big fees just for the privilege. Having a good credit score not only helps you with loans but it can also determine if you have a roof over your head now and days as landlords now check your credit before renting to you. Sometimes people with great credit scores settle for lousy deals not realizing that they can negotiate better deals so it is very important to know your credit score. Having a great credit score can save you possibly millions in a lifetime. You will pay way less interest, have lower payments on auto loans and home loans and will have more extra money per month to put to other use; entertainment, investments, shopping, etc. You ever wonder why when you have two people in the same financial bracket one seems to be doing fine while the other seems to barely be making it. It all lies in the deals they got, which goes by their credit score.
How To Avoid Credit Card Late Fees
Everyone hates late fees and being late will cost you dearly these days. For some credit cards today, if you are late, you will have to shell out as much as $40 each time. This can put a nice sized hole in your pocket really quick.
Below, I will provide you with some tips and strategies on how to steer clear of those monstrous late fees. This will not only save you a lot of money in the long run, but it will also keep those money-hungry credit card companies, I won’t mention any names, from getting your hard earned money.
Just pay your bill. One of the easiest ways of avoiding a late fee is to just pay your bill each and every month by sending in a check, money order, or other type of payment to your respective credit card issuer. Just make sure you follow the numerous guidelines, which are usually outlined on the back of each credit card bill, on how to send in your payment. These guidelines must be followed precisely if you want to guarantee that your payment will go through on time.
Payment guidelines may include everything from a specific payment address to the time of day by which the payment must be received to be credited that day. Many issuers also stipulate that payments must arrive in the preprinted envelope sent to the customer.
While the Fair Credit Billing Act requires issuers to credit payments the day they are received, each issuer is allowed to set specific payment guidelines. If any of the guidelines are not met, the issuer can take as many as five days to credit the payment.
An on-time payment could easily become late during that five-day period, so follow those payment guidelines carefully.
Just skip the payment. One of the more rare types of methods you hear of are Skip-A-Payment services. You can use these services to skip mortgage, credit card, or loan payments. Usually you would need to get in contact with your bank just to see if you even qualify or not. There are also independent companies out there that will allow you to do the same thing, no matter what bank you are a member of. Depending on whose service you use, the fee’s associated with it vary. When you use these types of services make sure you know how much you will be charged then decide if it’s worth it or not.
Pay minimum due immediately. One of the best ways to prevent a late fee from being charged to your account is to pay the minimum due immediately. As soon as you receive your bill, send in the minimum due. This will always insure that your credit card issuer received payment. You can always send in more money later if you decide otherwise. This is a great way to avoid missing a payment because if you forget to send extra money you can guarantee that you won’t be charged a late fee because the minimum due has been already been paid.
Move your due date. Are your credit card bills due at a time of the month when you're running low on cash? Many people have trouble saving money, so when it comes time to paying their credit card bills, they don’t have any cash to do so. One particular solution is to move your due date. Many credit card issuers will allow you to set your own due date to meet your specific needs. If you have trouble saving money, move your due date to a time when you do have money, like as soon as you get your paycheck. If you time your credit card bill to come the same day you get paid, you will always have cash to pay the bill.
Pay by phone. If you are one of those people that wait to the last minute to do everything or if you just forgot to send in your credit card payment early enough, you could always pay by phone. This guarantees that your payment will be on time. Just supply the representative on the other line with your checking account number and your bank routing number, which is printed at the bottom of each check. Usually the routing number is first and the account number is second. A lot of issuers allow you to pay by phone and some will charge you a pretty penny for doing so. Fee’s can range from $5 to $20.
Use other express methods. If your bank does not offer a “pay by phone” service and you need to get your payment to your credit card issuer as soon as possible, I recommend either sending your payment in by express mail or by Western Union. Either one of these services can get your payment to your credit card issuer immediately. These express methods are costly, but it will always most likely be cheaper than any fees associated with being late. Make sure you send your express payment to the proper address. Many issuers have separate payment addresses for express payments. The last thing you want to do is slow the processing of an express payment by sending it to the wrong address.
Below, I will provide you with some tips and strategies on how to steer clear of those monstrous late fees. This will not only save you a lot of money in the long run, but it will also keep those money-hungry credit card companies, I won’t mention any names, from getting your hard earned money.
Just pay your bill. One of the easiest ways of avoiding a late fee is to just pay your bill each and every month by sending in a check, money order, or other type of payment to your respective credit card issuer. Just make sure you follow the numerous guidelines, which are usually outlined on the back of each credit card bill, on how to send in your payment. These guidelines must be followed precisely if you want to guarantee that your payment will go through on time.
Payment guidelines may include everything from a specific payment address to the time of day by which the payment must be received to be credited that day. Many issuers also stipulate that payments must arrive in the preprinted envelope sent to the customer.
While the Fair Credit Billing Act requires issuers to credit payments the day they are received, each issuer is allowed to set specific payment guidelines. If any of the guidelines are not met, the issuer can take as many as five days to credit the payment.
An on-time payment could easily become late during that five-day period, so follow those payment guidelines carefully.
Just skip the payment. One of the more rare types of methods you hear of are Skip-A-Payment services. You can use these services to skip mortgage, credit card, or loan payments. Usually you would need to get in contact with your bank just to see if you even qualify or not. There are also independent companies out there that will allow you to do the same thing, no matter what bank you are a member of. Depending on whose service you use, the fee’s associated with it vary. When you use these types of services make sure you know how much you will be charged then decide if it’s worth it or not.
Pay minimum due immediately. One of the best ways to prevent a late fee from being charged to your account is to pay the minimum due immediately. As soon as you receive your bill, send in the minimum due. This will always insure that your credit card issuer received payment. You can always send in more money later if you decide otherwise. This is a great way to avoid missing a payment because if you forget to send extra money you can guarantee that you won’t be charged a late fee because the minimum due has been already been paid.
Move your due date. Are your credit card bills due at a time of the month when you're running low on cash? Many people have trouble saving money, so when it comes time to paying their credit card bills, they don’t have any cash to do so. One particular solution is to move your due date. Many credit card issuers will allow you to set your own due date to meet your specific needs. If you have trouble saving money, move your due date to a time when you do have money, like as soon as you get your paycheck. If you time your credit card bill to come the same day you get paid, you will always have cash to pay the bill.
Pay by phone. If you are one of those people that wait to the last minute to do everything or if you just forgot to send in your credit card payment early enough, you could always pay by phone. This guarantees that your payment will be on time. Just supply the representative on the other line with your checking account number and your bank routing number, which is printed at the bottom of each check. Usually the routing number is first and the account number is second. A lot of issuers allow you to pay by phone and some will charge you a pretty penny for doing so. Fee’s can range from $5 to $20.
Use other express methods. If your bank does not offer a “pay by phone” service and you need to get your payment to your credit card issuer as soon as possible, I recommend either sending your payment in by express mail or by Western Union. Either one of these services can get your payment to your credit card issuer immediately. These express methods are costly, but it will always most likely be cheaper than any fees associated with being late. Make sure you send your express payment to the proper address. Many issuers have separate payment addresses for express payments. The last thing you want to do is slow the processing of an express payment by sending it to the wrong address.
History of Credit Scoring
The popularity of credit scoring probably began in the late 1970's as most major lenders were using some kind of credit scoring formula. The idea of this credit scoring thing came from an engineer named Bill Flair and a mathematician named Earl Isaac. These two ended up convincing lenders that mathematical formulas could do a better job for them to predict if someone would default or not. With the help of computers, decisions could be made on the spot with this new formula also. This new formula took into account your income, occupation, length at your job, length at your address and what was the longest time that a payment was over due. All these calculations were pretty much invisible to the consumer though and were hardly even understood by most experts in the field. Fair Isaac ended up developing the first major credit bureau based scoring system in the mid 1980's which eventually led to the biggest lending databases - those that are held at the major credit bureaus - Equifax, Experian and Transunion. Instead of basing calculations on any single lenders experience, this type of scoring factored in on the behavior of millions of different borrowers. The system looked for patterns that could indicate if a borrower would default. This system checked the consumers history of paying their bills, how many credit accounts they had open and how much of the available credit they were using. Besides using this system to simply accept or reject an applicant this system even had more advantages. The lenders could accept a high risk applicant if they wanted to and charge them a higher interest rate, which of course is more money for them to make and also they could get peoples scores who met their criteria and send them pre-approved offers, it was a win-win situation for lenders. In the 1990's lenders felt real comfortable about making loans with this credit system and this is the reason that consumer credit absolutely exploded in the 90's.
Between 1990 and 2002 the amount of credit card debt rose from $173 million to $661 billion.
The 90's was also a time when consumers learned that the reason that they may have been rejected a loan was because of a three digit number. When consumers asked for more details about how this scoring system worked they got no answers as Fair Isaac, the leader in the credit scoring world wanted to keep it a secret and said that the consumer would not understand their formula anyways. Fair Isaac actually thought that if their formulas were made public that people would start changing their habits so they can boost their credit scores. We now move ahead to the year 2000, that's when internet lender E-Loan let consumers view their FICO credit scores online. This lated about a month and 25,000 people took advantage of this and also gained lots of knowledge about how the credit scoring system formula worked before E-Loans credit score source was cut off. A few months later Fair Isaac felt the pressure from advocates and gave in. It posted the 22 factors that affect a credit score on its website. After that they partnered with Equifax to provide consumers with their credit scores and reports for a fee. In 2003 congress made a law that gave people the right to see their scores, even though at the time having access to your credit score was a norm.
Between 1990 and 2002 the amount of credit card debt rose from $173 million to $661 billion.
The 90's was also a time when consumers learned that the reason that they may have been rejected a loan was because of a three digit number. When consumers asked for more details about how this scoring system worked they got no answers as Fair Isaac, the leader in the credit scoring world wanted to keep it a secret and said that the consumer would not understand their formula anyways. Fair Isaac actually thought that if their formulas were made public that people would start changing their habits so they can boost their credit scores. We now move ahead to the year 2000, that's when internet lender E-Loan let consumers view their FICO credit scores online. This lated about a month and 25,000 people took advantage of this and also gained lots of knowledge about how the credit scoring system formula worked before E-Loans credit score source was cut off. A few months later Fair Isaac felt the pressure from advocates and gave in. It posted the 22 factors that affect a credit score on its website. After that they partnered with Equifax to provide consumers with their credit scores and reports for a fee. In 2003 congress made a law that gave people the right to see their scores, even though at the time having access to your credit score was a norm.
Get Control of Your Credit Card Debt
Have you found yourself falling into a slump with credit card debt that you are unsure of how to manage it? If so,then you should know that you are really not alone in this feeling. Many people, both young adults and the older generation will fall into credit card debt that they are not quite sure how to deal with.
What you need to know is that even though your credit card debt can be a bit scary, there are usually ways that you can fix it and get yourself going on the right track to pay off your credit card debt as well as work on lifting your credit score. If you have credit card debt that is quite a bit higher than you feel you can manage on your own, there are several credit counseling agencies that may be able to help you out a bit. There is not necessarily a need to enroll in their services, but you may just want to get some sort of counseling advice and possibly put yourself on a budget so that you can begin to manage your bills.
To get organized with your credit card bills and to begin digging your way out of debt, the first step would have to be laying out all of your credit card bills. Take note of how many accounts you have, what the amount of credit used on each account is, plus the minimum payment that you owe for each card every month. It is very important that you always make at least your minimum payment every single
month for every single account that you have. One missed payment can do quite a bit of damage to your credit report.
After you have gone through and taken notes of all of your amounts and so on, you can then go through and take a look at all of your incoming funds that you can spend on your credit card payments. You are sort of working out a budget for paying on your cards by doing this. Figure out the total amount of all of your minimum payments and see what is left over after that. Whatever the extra month amount it, you are best off to apply it every single month to one specific account.
By taking this step and sending more money to one of your accounts, you will be able to possibly pay off that one card much faster. If you pay off the card in a decent amount of time, you can then use those funds that would have been applied to that credit card to another and so on. You would be amazed at just how well this method can work to manage credit card debt.
What you need to know is that even though your credit card debt can be a bit scary, there are usually ways that you can fix it and get yourself going on the right track to pay off your credit card debt as well as work on lifting your credit score. If you have credit card debt that is quite a bit higher than you feel you can manage on your own, there are several credit counseling agencies that may be able to help you out a bit. There is not necessarily a need to enroll in their services, but you may just want to get some sort of counseling advice and possibly put yourself on a budget so that you can begin to manage your bills.
To get organized with your credit card bills and to begin digging your way out of debt, the first step would have to be laying out all of your credit card bills. Take note of how many accounts you have, what the amount of credit used on each account is, plus the minimum payment that you owe for each card every month. It is very important that you always make at least your minimum payment every single
month for every single account that you have. One missed payment can do quite a bit of damage to your credit report.
After you have gone through and taken notes of all of your amounts and so on, you can then go through and take a look at all of your incoming funds that you can spend on your credit card payments. You are sort of working out a budget for paying on your cards by doing this. Figure out the total amount of all of your minimum payments and see what is left over after that. Whatever the extra month amount it, you are best off to apply it every single month to one specific account.
By taking this step and sending more money to one of your accounts, you will be able to possibly pay off that one card much faster. If you pay off the card in a decent amount of time, you can then use those funds that would have been applied to that credit card to another and so on. You would be amazed at just how well this method can work to manage credit card debt.
Fundamentals of a low APR credit card
If a credit card is used in the right way it is a most useful financial tool. The problem is that many don't have the income to be able to afford the burden of high interest rates that come with most offers.
A good solution for those with less disposable income is the low APR credit card. They also work well for anyone who plans on carrying a balance every month.
For those who are not familiar with the term APR means annual percentage rate. It is the percentage you pay yearly on your card. It is converted to a monthly percentage to figure the amount of interest you pay on your balances every month.
An easy way to figure your monthly rate is to take the annual percentage rate and divide it by twelve. Each credit card company must give the customer the APR they will be paying. Each credit card company will have its own terms and conditions.
Because of this it is important for consumers to shop around for the best offer. A consideration one must take into consideration when choosing and offer is some have fixed interest rates while others have variable ones.
Why should you use a credit card with a low APR? The answer to that is that it helps those with a smaller budget. In addition it frees up cash that can be used to pay bills or other needs.
Anyone interested in getting a card is faced with a large number of options to choose from. Most all of these can be found online with each of their benefits listed for the consumer.
Here are some questions one should ask when they are looking for a low interest credit card.
1. It it a variable or fixed rate offer? If it is variable you can expect your monthly payments to fluctuate.
2. What if any other charges or fees does it come with?
3. What are the terms and conditions of the issuing company?
Some companies will also have offers where there is 0 percent interest for a certain period of time. After that time has expired the consumer then has an increased rate. Other offers will have no annual fees.
Those with high balances on their other cards can take advantage of the low APR credit card offers and save money by transferring their balances from their high interest accounts.
Finally these kinds of credit cards can be used to build up your credit score which will help with funding college, purchasing a home and even finding good employment.
Two things you should do before applying though is to assess whether your finances will be able to handle the payments and also find the best deal for your needs.
A good solution for those with less disposable income is the low APR credit card. They also work well for anyone who plans on carrying a balance every month.
For those who are not familiar with the term APR means annual percentage rate. It is the percentage you pay yearly on your card. It is converted to a monthly percentage to figure the amount of interest you pay on your balances every month.
An easy way to figure your monthly rate is to take the annual percentage rate and divide it by twelve. Each credit card company must give the customer the APR they will be paying. Each credit card company will have its own terms and conditions.
Because of this it is important for consumers to shop around for the best offer. A consideration one must take into consideration when choosing and offer is some have fixed interest rates while others have variable ones.
Why should you use a credit card with a low APR? The answer to that is that it helps those with a smaller budget. In addition it frees up cash that can be used to pay bills or other needs.
Anyone interested in getting a card is faced with a large number of options to choose from. Most all of these can be found online with each of their benefits listed for the consumer.
Here are some questions one should ask when they are looking for a low interest credit card.
1. It it a variable or fixed rate offer? If it is variable you can expect your monthly payments to fluctuate.
2. What if any other charges or fees does it come with?
3. What are the terms and conditions of the issuing company?
Some companies will also have offers where there is 0 percent interest for a certain period of time. After that time has expired the consumer then has an increased rate. Other offers will have no annual fees.
Those with high balances on their other cards can take advantage of the low APR credit card offers and save money by transferring their balances from their high interest accounts.
Finally these kinds of credit cards can be used to build up your credit score which will help with funding college, purchasing a home and even finding good employment.
Two things you should do before applying though is to assess whether your finances will be able to handle the payments and also find the best deal for your needs.
What you Should Know About your Free Credit Report
In 2003 Congress passed legislation that allows for every American to get a free look at their credit report once a year. You will run across many Web sites out there that will talk about "free reports."
You will not need to know scores at this point. Here is some basic information about what will negatively put low scores on your record, collections, 30 day late payments, skipping out on rent payments, co-signing for a car loan that goes bad, late payments on student loans, etc.
A young college age person can damage their credit and not even realize it. One 30 day late payment, will give you a derogatory report. If you don't have any credit cards, installment loans for cars, etc., or any creditor that doesn't report to any of the three main credit agencies, it is not likely that you will even have any scores.
Be wary of the "free reports" as the chances are they'll offer you about every type of service under the sun and it will carry a price tag! You could end up with a credit monitoring service that might prove costly and maybe even some other services as well, that may have nothing to do with your credit at all, but there will be a cost.
For my money, if you absolutely think you must have your credit scores, you can get them at www.AnnualCreditReport.com for a charge of under $10.00 but your report will actually be free!
You should know there is only one site authorized by Congress to give you that annual "free report " and it is http://www.AnnualCreditReport.com the toll free number is 1-877-322-8228. You will get a report but there will not be any scores on your report.
Arthur is a Real Estate Broker, Mortgage Broker, with over 28 years of experience in the trenches of the housing industry. He has been helping people buy, sell, and finance homes on the "street" for all of that time. At the end of the day, you meet your past customer in the grocery store, and know they are going to a home you've helped put them in, you know it's been a good day!
You will not need to know scores at this point. Here is some basic information about what will negatively put low scores on your record, collections, 30 day late payments, skipping out on rent payments, co-signing for a car loan that goes bad, late payments on student loans, etc.
A young college age person can damage their credit and not even realize it. One 30 day late payment, will give you a derogatory report. If you don't have any credit cards, installment loans for cars, etc., or any creditor that doesn't report to any of the three main credit agencies, it is not likely that you will even have any scores.
Be wary of the "free reports" as the chances are they'll offer you about every type of service under the sun and it will carry a price tag! You could end up with a credit monitoring service that might prove costly and maybe even some other services as well, that may have nothing to do with your credit at all, but there will be a cost.
For my money, if you absolutely think you must have your credit scores, you can get them at www.AnnualCreditReport.com for a charge of under $10.00 but your report will actually be free!
You should know there is only one site authorized by Congress to give you that annual "free report " and it is http://www.AnnualCreditReport.com the toll free number is 1-877-322-8228. You will get a report but there will not be any scores on your report.
Arthur is a Real Estate Broker, Mortgage Broker, with over 28 years of experience in the trenches of the housing industry. He has been helping people buy, sell, and finance homes on the "street" for all of that time. At the end of the day, you meet your past customer in the grocery store, and know they are going to a home you've helped put them in, you know it's been a good day!
Should I use a Credit Repair Service?
There are some benefits to using a credit repair company and there are some real disadvantages too. The first thing to think about is why you want to use a credit repair service? Is it because you have bad credit that you want to fix but simply don't know how? If this is true then try reading a bit of information about how to fix bad credit to see if you think this is something you can do.
If you don't have time to sit down, write letters and go through the credit reports to see what you can dispute, then a credit repair company is probably for you. A credit repair company will take care of all the tedious tasks that are involved in disputing bad credit marks on your credit report. You should however make sure that you use a company that knows the law so that they can properly understand your needs.
To fix bad credit yourself, all you have to do is request your credit report, read what's on it when it arrives, and write a letter to dispute the bad credit that you believe is unfair or untrue. At this point you can also write to your creditors to try and negotiate a reasonable pay off plan in return for removing the debt from your credit history. When you pay a credit repair service, this is practically all they do. Firstly they request your credit report or reports, if they are requesting more than one report from the three big credit bureaus.
When not to use a credit repair company
A good credit repair service will be upfront and honest about what they can and can't do. They will be clear about how much they charge and clear about what you will get from the service.
A bad credit repair service will probably do some the following:
* Try to confuse you with financial jargon so you don't understand what they are doing
* Don't tell you what your legal rights are
* Tell you not to contact one of the credit bureaus directly yourself
* Suggest that you try to invent a new credit identity and then apply for a new credit report. This can be done by applying for an Employer Identification Number (EIN) to use instead of your Social Security number.
* Tell you to try and remove all your bad credit regardless of whether it is true or not. If you do this and are found to be committing fraud, you may be held responsible yourself.
So if you are thinking about using a credit repair company you should remember three things:
* Only inaccurate information on your credit report can be removed. So if a credit repair service says they can repair you credit 'guaranteed', this simply isn't true. Credit repair companies have actually been successfully sued for claiming they can remove bad credit when in fact they can't.
* Credit repair companies can charge high prices for doing something that is pretty routine, so don't pay big prices because it probably isn't worth it.
* When a credit repair organization requests your credit report, the credit companies won't accept any disputes unless it is accompanied by a notarized power of attorney that authorizes a licensed attorney or if the power of attorney is unlimited and irrevocable. Alternatively you or a family member can do it on your behalf.
Using a credit repair service can greatly help you to start to repair your credit score quickly as they can quickly identify where the problems lie in your credit report and highlight any errors that may have been made.
If you don't have time to sit down, write letters and go through the credit reports to see what you can dispute, then a credit repair company is probably for you. A credit repair company will take care of all the tedious tasks that are involved in disputing bad credit marks on your credit report. You should however make sure that you use a company that knows the law so that they can properly understand your needs.
To fix bad credit yourself, all you have to do is request your credit report, read what's on it when it arrives, and write a letter to dispute the bad credit that you believe is unfair or untrue. At this point you can also write to your creditors to try and negotiate a reasonable pay off plan in return for removing the debt from your credit history. When you pay a credit repair service, this is practically all they do. Firstly they request your credit report or reports, if they are requesting more than one report from the three big credit bureaus.
When not to use a credit repair company
A good credit repair service will be upfront and honest about what they can and can't do. They will be clear about how much they charge and clear about what you will get from the service.
A bad credit repair service will probably do some the following:
* Try to confuse you with financial jargon so you don't understand what they are doing
* Don't tell you what your legal rights are
* Tell you not to contact one of the credit bureaus directly yourself
* Suggest that you try to invent a new credit identity and then apply for a new credit report. This can be done by applying for an Employer Identification Number (EIN) to use instead of your Social Security number.
* Tell you to try and remove all your bad credit regardless of whether it is true or not. If you do this and are found to be committing fraud, you may be held responsible yourself.
So if you are thinking about using a credit repair company you should remember three things:
* Only inaccurate information on your credit report can be removed. So if a credit repair service says they can repair you credit 'guaranteed', this simply isn't true. Credit repair companies have actually been successfully sued for claiming they can remove bad credit when in fact they can't.
* Credit repair companies can charge high prices for doing something that is pretty routine, so don't pay big prices because it probably isn't worth it.
* When a credit repair organization requests your credit report, the credit companies won't accept any disputes unless it is accompanied by a notarized power of attorney that authorizes a licensed attorney or if the power of attorney is unlimited and irrevocable. Alternatively you or a family member can do it on your behalf.
Using a credit repair service can greatly help you to start to repair your credit score quickly as they can quickly identify where the problems lie in your credit report and highlight any errors that may have been made.
Easily Raise Your Credit Score 100 Points
Your credit report contains information about where you work, live and how you pay your bills (On time or not). It also may show whether you've been sued, arrested or have filed for bankruptcy with in the last 10 years. Companies called consumer reporting agencies (cra) or credit bureaus compile and sell your credit report to businesses all over the world.
Many financial advisors suggest that you periodically review your credit report for inaccuracies or omissions. This could be especially important if you're considering making a major purchase, such as buying a home. Checking in advance on the accuracy of information in your credit file could speed the credit-granting process, clean credit is a must.
Because businesses use this information to evaluate your applications for credit, insurance, employment, and other purposes allowed by the Fair Credit Reporting Act (FCRA), it's important that the information in your report is complete and accurate.
Whenever you apply for any type of credit or financing, a credit report is pulled from at least one of the three major credit bureaus. You want a clean credit report to be pulled. While there are hundreds of smaller credit bureaus around the country, virtually every credit bureau is affiliated with either Experian, Trans Union, or Equifax.
Getting Your Clean Credit Report
If you've been denied credit, insurance, or employment because of information supplied by a credit reporting agency, the FCRA says the company you applied to must give you the agency`s name, address, and telephone number. If you contact the agency for a copy of your report within 60 days of receiving a denial notice, the report is free. In addition, you're entitled to one free copy of your report a year.
If you simply want a copy of your report, call each credit bureau listed since more than one agency may have a file on you, some with different information.
The three major national credit bureaus are:
Equifax, P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111.
Experian (formerly TRW), P.O. Box 2002, Allen, TX 75013; (888) EXPERIAN (397-3742).
Trans Union, P.O. Box 1000, Chester, PA 19022; (800) 916-8800.
Correcting Errors For Clean Credit.
To protect all your rights under the law and to keep your credit clean contact both the CRA and the information provider.
First to get clean credit reports, tell the credit reporting agency in writing what information you believe is inaccurate. Include copies (please keep your originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request deletion or correction. Always keep copies of your dispute letter.
They must reinvestigate the items in question, usually within 30 days, unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, it must investigate, review all relevant information provided by the CRA, and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so they can correct this information in your file. Disputed information that cannot be verified must be deleted from your file, then you will recieve a clean credit report, with that item removed.
If your report contains erroneous information, the CRA must correct it(clean credit).
If an item is incomplete, the CRA must complete it. For example, if your file showed that you were late making payments ( 30 days or more), but failed to show that you were no longer delinquent, the CRA must show that you're current.
If your file shows an account that belongs only to another person, the CRA must delete it.
When the reinvestigation is complete, they must give you the written results and a free copy of your clean credit report, if the dispute results in a change. If an item is changed or removed, they cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness.
Also, if you request, they must send notices of clean credit report corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their clean credit report sent to anyone who received a copy during the past two years for employment purposes. If a reinvestigation does not resolve your dispute, ask the CRA to include your statement of the dispute in your file and in future reports.
Second, in addition to writing to the credit agency, tell the creditor or other information provider in writing that you dispute an item. Again, include copies (please not originals) of documents that support your position. Many providers specify an address for disputes. If the provider then reports the item to any credit reporting angency, it must include a notice of your dispute. In addition, if you are correct that is, if the disputed information is not accurate the information provider may not use it again, thus you will have a clean credit report.
When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can generally stay on your report for 7 years.
Clean Credit: There are certain exceptions:
Bankruptcy information may be reported for 10 years.
Information about criminal convictions may be reported without any time limitation.
Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit.
Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Criminal convictions can be reported without any time limit.
Many financial advisors suggest that you periodically review your credit report for inaccuracies or omissions. This could be especially important if you're considering making a major purchase, such as buying a home. Checking in advance on the accuracy of information in your credit file could speed the credit-granting process, clean credit is a must.
Because businesses use this information to evaluate your applications for credit, insurance, employment, and other purposes allowed by the Fair Credit Reporting Act (FCRA), it's important that the information in your report is complete and accurate.
Whenever you apply for any type of credit or financing, a credit report is pulled from at least one of the three major credit bureaus. You want a clean credit report to be pulled. While there are hundreds of smaller credit bureaus around the country, virtually every credit bureau is affiliated with either Experian, Trans Union, or Equifax.
Getting Your Clean Credit Report
If you've been denied credit, insurance, or employment because of information supplied by a credit reporting agency, the FCRA says the company you applied to must give you the agency`s name, address, and telephone number. If you contact the agency for a copy of your report within 60 days of receiving a denial notice, the report is free. In addition, you're entitled to one free copy of your report a year.
If you simply want a copy of your report, call each credit bureau listed since more than one agency may have a file on you, some with different information.
The three major national credit bureaus are:
Equifax, P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111.
Experian (formerly TRW), P.O. Box 2002, Allen, TX 75013; (888) EXPERIAN (397-3742).
Trans Union, P.O. Box 1000, Chester, PA 19022; (800) 916-8800.
Correcting Errors For Clean Credit.
To protect all your rights under the law and to keep your credit clean contact both the CRA and the information provider.
First to get clean credit reports, tell the credit reporting agency in writing what information you believe is inaccurate. Include copies (please keep your originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request deletion or correction. Always keep copies of your dispute letter.
They must reinvestigate the items in question, usually within 30 days, unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, it must investigate, review all relevant information provided by the CRA, and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so they can correct this information in your file. Disputed information that cannot be verified must be deleted from your file, then you will recieve a clean credit report, with that item removed.
If your report contains erroneous information, the CRA must correct it(clean credit).
If an item is incomplete, the CRA must complete it. For example, if your file showed that you were late making payments ( 30 days or more), but failed to show that you were no longer delinquent, the CRA must show that you're current.
If your file shows an account that belongs only to another person, the CRA must delete it.
When the reinvestigation is complete, they must give you the written results and a free copy of your clean credit report, if the dispute results in a change. If an item is changed or removed, they cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness.
Also, if you request, they must send notices of clean credit report corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their clean credit report sent to anyone who received a copy during the past two years for employment purposes. If a reinvestigation does not resolve your dispute, ask the CRA to include your statement of the dispute in your file and in future reports.
Second, in addition to writing to the credit agency, tell the creditor or other information provider in writing that you dispute an item. Again, include copies (please not originals) of documents that support your position. Many providers specify an address for disputes. If the provider then reports the item to any credit reporting angency, it must include a notice of your dispute. In addition, if you are correct that is, if the disputed information is not accurate the information provider may not use it again, thus you will have a clean credit report.
When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can generally stay on your report for 7 years.
Clean Credit: There are certain exceptions:
Bankruptcy information may be reported for 10 years.
Information about criminal convictions may be reported without any time limitation.
Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit.
Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Criminal convictions can be reported without any time limit.
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