This is just a personal opinion, but...
I am so glad that I have a blog to get my frustrastions out on. I have been trying to follow all of the updates in our "Credit Crisis". It has me banging my head, cussing, and wanting to get people together to march on the White House. I am finding that for no reason at all a person that pays their credit card bills every month on time, can loose their accounts, What! That's right, have them taken away, just because.
Imagine that you have had a credit card from ________ and you have paid them every time on time and always paid at least the minimum amount. Then you have an emergency one day and you go to use that card, the clerk tells you that the card was declined. You just about crawl out of the store with embarrassment. You make it home, the whole time thinking the worst, then you call the 800 number on the back of the useless card. After putting in several numbers several times a customer service representative comes on the line and tells you that "We are very sorry, but...". No they are not, in fact, they don't even care.
The reason why they don't care is because they raised the interest rates for the rest that they didn't throw away. They figure that they will make up for the loss from you on some other poor person. Maybe they will get lucky and find someone that hasn't lost their job.
Why do Americans keep letting these things happen? Didn't we just a year ago pay $5 a gallon for gasoline? I would have thought that there would have been cars and semi trucks parked all along our major highways, blocking them. No, instead we made more billionaires. We kept driving, I think we actually drove more.
Now they are raising the price of food, clothes, cigarettes, and utilities. Where is all of the extra suppose to come from. People are loosing their jobs, their homes and their cars at alarming rates.
We are right now sending $100,000,000, that's right 100 million to Haiti. Do you know who's money that is. Well, it's mine and yours. We just shot our $13 trillion budget on the banks and auto makers. What about the people in this country, look at the people of New Orleans. Do we have those people back in their homes, jobs, and schools? I am starting to think that everytime a crisis accurs, our government is trying to take the focus off of what is really going on with them.
I personally think that the next time someone asks for my credit, my job, my tax, my home, my car, I am just going to give it to them gracefully. Because, when all is said and done, the fat cats are going to have it all anyways, why fight? I guess, because of our stupidity, we deserve a spanking anyway. That's right, we should have joined together as a proud nation to stop this cancer before it grew. What is wrong with us, are we going to allow our government to take over our private industry? So far they have taken over General Motors. If anyone is paying attention they would have known that this one was coming. General Motors put OnStar in their vehicles first. For those that don't know, OnStar is a tracking device. Now that the government owns them, I wonder who will get the proceeds (profits) from sales? So does this mean that the 4 million unemployed americans looking for work, would have to go to Washington to fill out an application for General Motors?
What about health care? Do we really want all of our medical history available on the internet? We have had a system in place for years. The only reason that it stopped working is because we allowed the drug companies to line our politicians pockets, GREED. This new health care bill allows doctors' to decide who will get treatment or medicines. I have seen first hand what they do to a person, they put them in a room with no water, no food. They keep them in there, giving them drops of morphine for about 8-13 days until they die. Not my family!
I know that I should be talking about Credit, since this is a blog about Credit. But I just can't hold all of this inside of me anymore. The Credit mess that we are in is a disaster, but not nearly as bad as the economy, housing, employment, health care, and government policies. Don't get me wrong, we need credit in todays world. It still determines class, employment, housing, and everyday needs. If it keeps going the way it is going, nobody will have credit or high credit scores. What would happen then? Well, it is pretty simple, we go back in time before credit was established. We stayed within our community, grew our food, loved thy neighbor no matter what his credit score was. If you needed something for your children, the community made sure that you had it, and you could pay it back later. Just like credit, without the plastic. When it came time to pay back the 5 pounds of potatoes, you just paid with whatever you had, not a full truck load of potatoes. The interest that was charged was friendship, nobody trying to get rich on someones misery. I don't know about you, but I can hardly wait for those days to get here!
Sunday, January 24, 2010
Saturday, January 17, 2009
Simple ways to "Achieve Better Credit"
Establishing a good credit history has never been as important as it is today.
It's not just that you'll need good credit to get decent rates when you're ready to buy a home or a car. Your credit history can determine whether you get a good job, a decent apartment, a deal on your cell phone and reasonable rates on insurance. One seemingly minor misstep -- a late payment, maxing out your credit cards -- can haunt you for years.
If you're just starting out, you have a once-in-a-lifetime opportunity to build a credit history the right way. Here's what to do to Achieve Better Credit, and what to avoid.
Check your credit report
You'll first want to see what, if anything, lenders are saying about you. That kind of information is contained in your credit report at each of the three major bureaus: Equifax, Experian and Trans Union. You're entitled to a free annual look at your reports from AnnualCreditReport.com.
Credit reports are used to create your credit scores, the three-digit numbers that lenders typically use to gauge your creditworthiness. Lenders also may look at the reports themselves, as may the landlords, employers, insurers and utility companies who use credit to evaluate applicants.
Can you have a credit report if you've never had credit? Maybe.
Somebody else's information could be mixed in with your report, either through a credit bureau mistake or because of identity theft; i.e. someone using your personal information to open bogus accounts.
If that's happened to you, you'll need to clean up your credit report before trying to apply for new accounts. The Federal Trade Commission's identity-theft site has information that can help
Establish checking and savings accounts
Here's a basic step that's sometimes overlooked by people seeking credit. Lenders see bank accounts as signs of stability.
Opening checking and savings accounts is also one of the few things you can do as a minor to start building a financial history. While you can't get a credit card in your own name until you're 18 and can be legally held to a contract, many banks have no problem letting you open an account.
If your bank balks, look around for another bank or consider opening a joint account with an adult.
Understand the basics of credit scoring
You need to know that the two most important factors in your scores are:
**Whether you pay your bills on time.
**How much of your available credit you actually use.
It's essential that you pay all your bills on time, all the time. Set up automatic payments or reminder systems so that you're never, ever late. All it takes is a single missed payment to trash your credit scores -- and it can take seven years for the effects to completely disappear.
You also don't want to max out any of your credit cards, or even get close. Keeping your credit use to less than 30% of your credit limits (10% is better) will help you get the best possible credit scores -- and should help keep you from getting over your head in debt, as well.
Finally, you don't need to carry a balance on a credit card to have good credit scores. Paying your bill in full each month is the best way to keep your finances in shape and Achieve Better Credit at the same time.
Piggyback on someone else's good credit
The fastest way to establish a credit history can be to "borrow" another's record, either by being added to a credit card as a joint account holder or by getting someone to co-sign a loan for you.
Having a co-signer can allow you to qualify for loans you might not otherwise get. The loan will show up on your credit report and, if you pay it off responsibly, will help boost your credit scores.
If you default, however, you won't be the only one who suffers. The co-signer has basically promised to make good on this account, so any delinquencies will show up on her credit report as well.
Being added as a joint account holder also has its risks, for you as well as the person giving you access to the card.
If your father adds you to his credit card, for example, his history with that account can be imported to your credit bureau file, giving you an instant credit record. If he has handled the account well, that reflects well on you. But if he hasn't, his mistakes would also become yours. You become responsible for any debt on the card, and it's difficult to get your name removed. Any late payments or other problems could make it harder for you to get future credit than if you'd established your history without help.
Being added as an authorized user to a credit card will no longer help you achieve better credit history. After credit-repair companies took advantage of the system and lenders protested, score-keeping companies are ignoring authorized-user information
Apply for credit while you're a college student
Credit experts used to warn college students away from those booths set up on campus by credit card lenders -- the ones that promise free stuff for signing up. It turns out, however, that there's no easier time to get a card than while you're a college student, said Gerri Detweiler, author of "The Ultimate Credit Handbook."
Lenders are willing to take risks with you that they won't once you graduate, probably because they know that your parents' willingness to bail you out will end once you get your sheepskin.
If you can't get a regular card
You still have to exercise some caution, though. Look for a card with a low or nonexistent annual fee and low interest rates. For now, just get one: Opening a slew of credit accounts in a short period of time can make you look like a risky customer. Later, You'll want more cards.
Apply for a secured credit card
If you can't get a regular credit card, apply for the secured version. These require you to deposit money with a lender; your credit limit is usually equal to the deposit.
Screen your card issuer carefully. To be frank, there are a lot of bad guys in this particular niche of the credit world. Some charge outrageous application or annual fees and punitively high interest rates.
Your credit union, if you have one, is a good place to look for a secured card. You can also check Better Credit Network.com or Bankrate.com'slist of secured credit card issuers.
Ideally, the card you pick would:
Have no application fee and a low annual fee
Convert to a regular, unsecured credit card after 12 to 18 months of on-time payments
Be reported to all three credit bureaus.
If the issuer doesn't report to the credit bureaus, the card won't help build your credit history
Get a store card
Gas companies and department stores that issue charge cards typically use finance companies, rather than major banks, to handle the transactions. These cards don't do as much for your credit scores as a bank card (Visa, MasterCard, Discover, etc.), but they're usually easier to get.
Again, don't go overboard. One or two of these cards is enough.
Get an installment loan
To get the best credit scores, you need a mix of different credit types, including revolving accounts (credit cards, lines of credit) and installment accounts (auto loans, personal loans, mortgages).
Once you've had and used plastic responsibly for a year or so, consider applying for a small installment loan from your credit union or bank. Keeping the duration short -- no more than a year or two -- will help you build credit while limiting the amount of interest you pay.
Use revolving accounts lightly but regularly
For credit scores to be generated, you have to have had credit for at least six months, with at least one of your accounts updated in the past six months.
Using your cards regularly should ensure that your report is updated regularly. It also will keep the lender interested in you as a customer. If you get a credit card and never use it, the issuer could cancel the account
Just remember the credit tips I mentioned earlier:
**Don't charge more than 30% of the card's limit.
**Don't charge more than you can pay off in a month. You don't have to pay interest on a credit card to get good credit scores. It's much smarter to pay off your credit cards in full each month.
Make sure you pay the bill, and all your other bills, on time, everytime!
It's not just that you'll need good credit to get decent rates when you're ready to buy a home or a car. Your credit history can determine whether you get a good job, a decent apartment, a deal on your cell phone and reasonable rates on insurance. One seemingly minor misstep -- a late payment, maxing out your credit cards -- can haunt you for years.
If you're just starting out, you have a once-in-a-lifetime opportunity to build a credit history the right way. Here's what to do to Achieve Better Credit, and what to avoid.
Check your credit report
You'll first want to see what, if anything, lenders are saying about you. That kind of information is contained in your credit report at each of the three major bureaus: Equifax, Experian and Trans Union. You're entitled to a free annual look at your reports from AnnualCreditReport.com.
Credit reports are used to create your credit scores, the three-digit numbers that lenders typically use to gauge your creditworthiness. Lenders also may look at the reports themselves, as may the landlords, employers, insurers and utility companies who use credit to evaluate applicants.
Can you have a credit report if you've never had credit? Maybe.
Somebody else's information could be mixed in with your report, either through a credit bureau mistake or because of identity theft; i.e. someone using your personal information to open bogus accounts.
If that's happened to you, you'll need to clean up your credit report before trying to apply for new accounts. The Federal Trade Commission's identity-theft site has information that can help
Establish checking and savings accounts
Here's a basic step that's sometimes overlooked by people seeking credit. Lenders see bank accounts as signs of stability.
Opening checking and savings accounts is also one of the few things you can do as a minor to start building a financial history. While you can't get a credit card in your own name until you're 18 and can be legally held to a contract, many banks have no problem letting you open an account.
If your bank balks, look around for another bank or consider opening a joint account with an adult.
Understand the basics of credit scoring
You need to know that the two most important factors in your scores are:
**Whether you pay your bills on time.
**How much of your available credit you actually use.
It's essential that you pay all your bills on time, all the time. Set up automatic payments or reminder systems so that you're never, ever late. All it takes is a single missed payment to trash your credit scores -- and it can take seven years for the effects to completely disappear.
You also don't want to max out any of your credit cards, or even get close. Keeping your credit use to less than 30% of your credit limits (10% is better) will help you get the best possible credit scores -- and should help keep you from getting over your head in debt, as well.
Finally, you don't need to carry a balance on a credit card to have good credit scores. Paying your bill in full each month is the best way to keep your finances in shape and Achieve Better Credit at the same time.
Piggyback on someone else's good credit
The fastest way to establish a credit history can be to "borrow" another's record, either by being added to a credit card as a joint account holder or by getting someone to co-sign a loan for you.
Having a co-signer can allow you to qualify for loans you might not otherwise get. The loan will show up on your credit report and, if you pay it off responsibly, will help boost your credit scores.
If you default, however, you won't be the only one who suffers. The co-signer has basically promised to make good on this account, so any delinquencies will show up on her credit report as well.
Being added as a joint account holder also has its risks, for you as well as the person giving you access to the card.
If your father adds you to his credit card, for example, his history with that account can be imported to your credit bureau file, giving you an instant credit record. If he has handled the account well, that reflects well on you. But if he hasn't, his mistakes would also become yours. You become responsible for any debt on the card, and it's difficult to get your name removed. Any late payments or other problems could make it harder for you to get future credit than if you'd established your history without help.
Being added as an authorized user to a credit card will no longer help you achieve better credit history. After credit-repair companies took advantage of the system and lenders protested, score-keeping companies are ignoring authorized-user information
Apply for credit while you're a college student
Credit experts used to warn college students away from those booths set up on campus by credit card lenders -- the ones that promise free stuff for signing up. It turns out, however, that there's no easier time to get a card than while you're a college student, said Gerri Detweiler, author of "The Ultimate Credit Handbook."
Lenders are willing to take risks with you that they won't once you graduate, probably because they know that your parents' willingness to bail you out will end once you get your sheepskin.
If you can't get a regular card
You still have to exercise some caution, though. Look for a card with a low or nonexistent annual fee and low interest rates. For now, just get one: Opening a slew of credit accounts in a short period of time can make you look like a risky customer. Later, You'll want more cards.
Apply for a secured credit card
If you can't get a regular credit card, apply for the secured version. These require you to deposit money with a lender; your credit limit is usually equal to the deposit.
Screen your card issuer carefully. To be frank, there are a lot of bad guys in this particular niche of the credit world. Some charge outrageous application or annual fees and punitively high interest rates.
Your credit union, if you have one, is a good place to look for a secured card. You can also check Better Credit Network.com or Bankrate.com'slist of secured credit card issuers.
Ideally, the card you pick would:
Have no application fee and a low annual fee
Convert to a regular, unsecured credit card after 12 to 18 months of on-time payments
Be reported to all three credit bureaus.
If the issuer doesn't report to the credit bureaus, the card won't help build your credit history
Get a store card
Gas companies and department stores that issue charge cards typically use finance companies, rather than major banks, to handle the transactions. These cards don't do as much for your credit scores as a bank card (Visa, MasterCard, Discover, etc.), but they're usually easier to get.
Again, don't go overboard. One or two of these cards is enough.
Get an installment loan
To get the best credit scores, you need a mix of different credit types, including revolving accounts (credit cards, lines of credit) and installment accounts (auto loans, personal loans, mortgages).
Once you've had and used plastic responsibly for a year or so, consider applying for a small installment loan from your credit union or bank. Keeping the duration short -- no more than a year or two -- will help you build credit while limiting the amount of interest you pay.
Use revolving accounts lightly but regularly
For credit scores to be generated, you have to have had credit for at least six months, with at least one of your accounts updated in the past six months.
Using your cards regularly should ensure that your report is updated regularly. It also will keep the lender interested in you as a customer. If you get a credit card and never use it, the issuer could cancel the account
Just remember the credit tips I mentioned earlier:
**Don't charge more than 30% of the card's limit.
**Don't charge more than you can pay off in a month. You don't have to pay interest on a credit card to get good credit scores. It's much smarter to pay off your credit cards in full each month.
Make sure you pay the bill, and all your other bills, on time, everytime!
Tuesday, October 21, 2008
Credit Card Companies Clamping Down
My friend Arthena of Flat Lick Kentucky sent this article to me. I thought that everyone should have a chance to read it. I normally don't use other peoples' material, but this is just full of useful information.
The credit crisis seems so theoretical and far away -- until the bank starts messing with your credit card. Many consumers are finding the first place they’re seeing tangible evidence of the crisis is when credit card issuers cancel their accounts or lower their limits -- sometimes even below their current balance. Here are some tips from the experts on what’s ahead and what strategy you may want to play during this credit card crackdown.
Use It or Lose It
One of the quickest ways banks can shed risk on their books is to eliminate all the dead wood customers –- the ones that haven't charged anything in years. If you want to keep the line of credit open, use the card periodically."What were seeing happening in some cases is that people have a credit card that has a $10,000 credit line and hasn't been used for several years. They kept it just for emergencies," says Carol Kaplan, spokeswoman for the American Bankers Association. "Those people just may get a letter in the mail saying their account is closed for inactivity," she says. "Banks want to limit their risk."Keep in mind that closing cards could hurt your credit score. That’s because credit reporting agencies put a lot of emphasis on what is called your "utilization ratio." It is essentially your total debt as a percentage of all your available credit. If you lower your available credit by closing cards, your utilization rate can actually look higher, hurting your credit score
Watch for Lower Credit Limits
Another way Kaplan says banks are limiting risk is by lowering customers’ credit limits. If you've kept a high balance but left a little cushion under your limit, that cushion may have vanished. You don’t want to get hit with fees for going over your limit. And experts say a credit limit reduction can lower your credit score by 30 to 40 pointsThe banks will tell you about lowering your available credit, but they just might send the news in one of those envelopes marked, "Important Information About Your Account.” If you aren’t going to actually read those letters, you have to keep track of your credit ceiling either by checking online or by reading your credit card statement carefully.
Watch for Limit Lowered Below Your Current Balance
Issuers may lower the limit below your current balance, which means you’ll have to pay up. Scary, but true. Banks can and do cut customer's credit limits below the current balance, says Kaplan. If it happens, you'll have to pay off your balance above the limit or face late fees, she says. "If you've got a $10,000 limit and a line of $9,000, you could get a lower limit of $7,000."Keep in mind that a lower limit could hurt your credit score since, just like when cards are canceled, the lower amount of available credit can make your “utilization ratio,” which is tracked by credit reporting agencies, look higher (that’s bad if you want more credit).
Rates Could Go Down If You Have Good Credit
Even though there's all this talk about tighter credit, interest rates have actually come down. The average variable rate is now 11.4%, down from 14% a year ago, says Greg McBride, senior financial analyst at Bankrate.com. "If you see your card issuer has been dragging their feet on reducing your rate over the last year, it's time to shop around," he says
More on Shopping Around
It may be harder to qualify for the very best rates. "Those low rate offers are out there, but issuers are much pickier about who gets them," McBride says.Adds the Banker's Association's Kaplan, "You might see less offers.” And, even when you do get them, "Just because you got the offer doesn't mean you'll get the card,” she says.McBride recommends comparing offers online. Banks are looking for customers online because postal rates have gotten more expensive. "Reaching prospective customers online is where the growth is," he says.
The Market for Reward Cards Is Still Strong
People who pay off their credit cards every month can still get ridiculous rewards. You might think those no-balance folks would be less attractive to issuers, because they're not paying the high interest rates everyone else is. But, you're forgetting that credit card companies also make money off an interchange fee -- typically between 1% and 3% of a purchase -- that the store has to kick back to them.The latest trend in reward cards are those that give out special points for everyday kind of purchases, says Bankrate.com's McBride. Those cards incentivize consumers to use their cards for every little purchase.
If You Want More Credit ...
If you want more credit, act like you don't need it. Banks consider someone who carries a balance to be a higher risk than someone who pays it off each month. So if you want the bank to trust you more, give them back their money. Don't carry a balance -- which, of course, you shouldn't do anyway because it'll cost you a fortune in interest payments."Somebody who is carrying a credit card balance is buying something they couldn't afford to pay cash for," says McBride at Bankrate.com. "Revolving a $5,000 balance is a lot different from someone who pays $5,000 off month after month." People who pay off their credit cards every month are using them as a convenience -- or as way to soak the banks for some kind of reward.
Get Another Card for Emergencies?
Should you get another credit line for emergencies? No financial expert is going to tell you that the smart thing to do is to go get another credit card. They're worried you'll be tempted to use it. But it's a reasonable impulse to want to have more credit available in case of an emergency. Just be aware that even if you get a new credit line, the bank could always pull it back. Whatever you do, don't think that because credit is going to be drying up that you should actually spend all your available credit. "Do you need to go and grab borrowed money before gates shut? No, that's not smart financial planning," says fee-only financial planner Al Zdenek. He also urges investors to calm down. The bailout package has not yet begun to work through the system, but eventually it will and credit will loosen again."The banks will be turning the taps back on," Zdenek says. "For as bad as the credit freeze situation is now, it's not a permanent situation."
Store Credit Cards Will Be Harder to Get
The reason banks have been getting jittery -- aside from the fact they're having a hard time borrowing money -- is that their customers are having a hard time paying their bills because of rising unemployment and the slowing economy.The American Bankers Association reported in October that for the second quarter personal loan delinquencies rose from 2.55 percent to 2.67 percent. According to the New York Post, store credit cards are facing delinquency rates rumored to be as high as 10 percent. The Post says Target expects to write off 9.86 percent of store credit card sales in August. When delinquencies go up, that means either lending standards or rates are likely to rise soon. Store credit cards could soon be tougher to obtain in the future than bank credit cards
Check Credit Report for Errors
If you think you may need more credit in the next few months, check your credit report for errors. Even if you don’t need more credit now, it is smart to check your credit report to make sure it is accurate every six months. There may be an error in the report (for example if credit reporting agencies mistakenly merge someone else’s file with yours), or you could be a victim of identity theft and not even know it.
Don't Get Another Card If ...Don’t get another credit card if you plan to buy a house or car in the next year; it may lower your credit score. Applications for additional credit cards will be included on your credit report and such inquiries can hurt your credit score, making it harder to get a mortgage or car loan. To improve your credit score, "Make sure you're not late on any payments. Reduce your total debt load," says Kaplan."The best thing you can do is pay down the credit you do have,” she says. “That will make you look like a stronger candidate to a bank in the event you do need a loan.
Be sure to Visit:
http://www.bettercreditnetwork.com/
The credit crisis seems so theoretical and far away -- until the bank starts messing with your credit card. Many consumers are finding the first place they’re seeing tangible evidence of the crisis is when credit card issuers cancel their accounts or lower their limits -- sometimes even below their current balance. Here are some tips from the experts on what’s ahead and what strategy you may want to play during this credit card crackdown.
Use It or Lose It
One of the quickest ways banks can shed risk on their books is to eliminate all the dead wood customers –- the ones that haven't charged anything in years. If you want to keep the line of credit open, use the card periodically."What were seeing happening in some cases is that people have a credit card that has a $10,000 credit line and hasn't been used for several years. They kept it just for emergencies," says Carol Kaplan, spokeswoman for the American Bankers Association. "Those people just may get a letter in the mail saying their account is closed for inactivity," she says. "Banks want to limit their risk."Keep in mind that closing cards could hurt your credit score. That’s because credit reporting agencies put a lot of emphasis on what is called your "utilization ratio." It is essentially your total debt as a percentage of all your available credit. If you lower your available credit by closing cards, your utilization rate can actually look higher, hurting your credit score
Watch for Lower Credit Limits
Another way Kaplan says banks are limiting risk is by lowering customers’ credit limits. If you've kept a high balance but left a little cushion under your limit, that cushion may have vanished. You don’t want to get hit with fees for going over your limit. And experts say a credit limit reduction can lower your credit score by 30 to 40 pointsThe banks will tell you about lowering your available credit, but they just might send the news in one of those envelopes marked, "Important Information About Your Account.” If you aren’t going to actually read those letters, you have to keep track of your credit ceiling either by checking online or by reading your credit card statement carefully.
Watch for Limit Lowered Below Your Current Balance
Issuers may lower the limit below your current balance, which means you’ll have to pay up. Scary, but true. Banks can and do cut customer's credit limits below the current balance, says Kaplan. If it happens, you'll have to pay off your balance above the limit or face late fees, she says. "If you've got a $10,000 limit and a line of $9,000, you could get a lower limit of $7,000."Keep in mind that a lower limit could hurt your credit score since, just like when cards are canceled, the lower amount of available credit can make your “utilization ratio,” which is tracked by credit reporting agencies, look higher (that’s bad if you want more credit).
Rates Could Go Down If You Have Good Credit
Even though there's all this talk about tighter credit, interest rates have actually come down. The average variable rate is now 11.4%, down from 14% a year ago, says Greg McBride, senior financial analyst at Bankrate.com. "If you see your card issuer has been dragging their feet on reducing your rate over the last year, it's time to shop around," he says
More on Shopping Around
It may be harder to qualify for the very best rates. "Those low rate offers are out there, but issuers are much pickier about who gets them," McBride says.Adds the Banker's Association's Kaplan, "You might see less offers.” And, even when you do get them, "Just because you got the offer doesn't mean you'll get the card,” she says.McBride recommends comparing offers online. Banks are looking for customers online because postal rates have gotten more expensive. "Reaching prospective customers online is where the growth is," he says.
The Market for Reward Cards Is Still Strong
People who pay off their credit cards every month can still get ridiculous rewards. You might think those no-balance folks would be less attractive to issuers, because they're not paying the high interest rates everyone else is. But, you're forgetting that credit card companies also make money off an interchange fee -- typically between 1% and 3% of a purchase -- that the store has to kick back to them.The latest trend in reward cards are those that give out special points for everyday kind of purchases, says Bankrate.com's McBride. Those cards incentivize consumers to use their cards for every little purchase.
If You Want More Credit ...
If you want more credit, act like you don't need it. Banks consider someone who carries a balance to be a higher risk than someone who pays it off each month. So if you want the bank to trust you more, give them back their money. Don't carry a balance -- which, of course, you shouldn't do anyway because it'll cost you a fortune in interest payments."Somebody who is carrying a credit card balance is buying something they couldn't afford to pay cash for," says McBride at Bankrate.com. "Revolving a $5,000 balance is a lot different from someone who pays $5,000 off month after month." People who pay off their credit cards every month are using them as a convenience -- or as way to soak the banks for some kind of reward.
Get Another Card for Emergencies?
Should you get another credit line for emergencies? No financial expert is going to tell you that the smart thing to do is to go get another credit card. They're worried you'll be tempted to use it. But it's a reasonable impulse to want to have more credit available in case of an emergency. Just be aware that even if you get a new credit line, the bank could always pull it back. Whatever you do, don't think that because credit is going to be drying up that you should actually spend all your available credit. "Do you need to go and grab borrowed money before gates shut? No, that's not smart financial planning," says fee-only financial planner Al Zdenek. He also urges investors to calm down. The bailout package has not yet begun to work through the system, but eventually it will and credit will loosen again."The banks will be turning the taps back on," Zdenek says. "For as bad as the credit freeze situation is now, it's not a permanent situation."
Store Credit Cards Will Be Harder to Get
The reason banks have been getting jittery -- aside from the fact they're having a hard time borrowing money -- is that their customers are having a hard time paying their bills because of rising unemployment and the slowing economy.The American Bankers Association reported in October that for the second quarter personal loan delinquencies rose from 2.55 percent to 2.67 percent. According to the New York Post, store credit cards are facing delinquency rates rumored to be as high as 10 percent. The Post says Target expects to write off 9.86 percent of store credit card sales in August. When delinquencies go up, that means either lending standards or rates are likely to rise soon. Store credit cards could soon be tougher to obtain in the future than bank credit cards
Check Credit Report for Errors
If you think you may need more credit in the next few months, check your credit report for errors. Even if you don’t need more credit now, it is smart to check your credit report to make sure it is accurate every six months. There may be an error in the report (for example if credit reporting agencies mistakenly merge someone else’s file with yours), or you could be a victim of identity theft and not even know it.
Don't Get Another Card If ...Don’t get another credit card if you plan to buy a house or car in the next year; it may lower your credit score. Applications for additional credit cards will be included on your credit report and such inquiries can hurt your credit score, making it harder to get a mortgage or car loan. To improve your credit score, "Make sure you're not late on any payments. Reduce your total debt load," says Kaplan."The best thing you can do is pay down the credit you do have,” she says. “That will make you look like a stronger candidate to a bank in the event you do need a loan.
Be sure to Visit:
http://www.bettercreditnetwork.com/
Monday, October 13, 2008
So Much to Say
There is so much to be said about Credit...
I am going to spend time explaining all about Debt, Credit and Money (or lack of it). I am hoping that it will help someone along the way, because there is so much confusing information out there and so many mean people that just don't care. I feel strongly that this is what has caused alot of the economic problems in this country. I really don't know much about blogs, but I'm going to learn so that I can finally voice my opinion to anyone who will listen.
First of All
Let me tell you a little bit about my life and what has happened to me in the past that has led me to this point. I have worked since I was 13 years old, and I'm almost 50 now. I have had several unfortunate mishaps that I will explain that has led me to the world of Credit and Debt. I bought my first house at the age of 17 then on to my second one at the age of 28. I bought that house on land contract, with 2 attorneys, and a clear title. Well, let me tell you what a nightmare that was: I made $1200 a month payments through a real estate company for 2 years and I had done several thousand dollars in repairs and updates on the home. After all of my efforts I received a letter from the county court system asking me to vacate the property. I made several calls, the first one to the bank that held the original mortgage, only to find out that the people that I bought the house from went through a divorce and stopped making the payments to the bank, keeping the money that I had paid them. The bank foreclosed on them, leaving me homeless with 3 children and alot less money. So I learned the housing do's and don'ts the hard way. Not to mention that they put this on my credit report as an foreclosure. I ended up researching all of this and found out that they were including me because I had an interest in this home. I quickly learned how to deal with Credit Reporting Agencies.
Then I was at work doing my job as a 21 year truck driver(18 wheeler) a few years later, when the next tragedy fell on me. I was permanatly injured in an accident involving another truck. This accident caused me to loose my 21 year career that I loved so much. You can only imagine the amount of debt that I was in at that time. Without going into alot of personal details, I'll tell you that my doctor bills were very high with no insurance of my own, I had to sue Workers' Comp for them. But I had debt like charge cards, payments, and the real American Dream. Man, was I screwed. I truly thought that all was lost for me until one day I got up and dusted myself off and starting working with my head and not my hands.
I want anyone reading this to understand that they can fix their credit and fix their debt. I plan on making this my mission; helping others to learn from my mistakes and my reasearch.
There are so many rules and so much information out there but I am going to try to put as much out on this blog as I can, or anyone can contact me and I'll try to help them or I'll find someone who can if I can't. I am not an attorney, therefore I cannot give legal advice, but I can give legal information.
Second of All
Dedication and Discipline are the key to surviving debt. Time and Persistance is the key to Credit. Once you find out the rules, you'll learn how to play the game. The Federal Trade Commission has all of the rules that govern and dictate standards. Once you have gotten familar with the rules then you can play their game against them. Before you set out to make changes you should know what is on your credit report. There are many ways to get one for free, but, anyone trying to repair their credit, should join a credit monitoring place. This allows you to have access 24/7/365 to your information. You can view Credit Monitoring at my website: BetterCreditNetwork.com. This is probably the most important aspect of Credit Repair. Once you enroll, you need to check for errors: Name, Address, SS#, Date of Birth, Employer, and Creditors. If you have a printer, print a copy that you can write on and make changes and notes. Then you'll have to call them to make changes to your name or personal information. Then you proceed to the Creditors: Remember the old saying "Deny Deny Deny" well the same applies here "Dispute, Dispute, Dispute" Whenever you dispute something on your report they have to send it to the creditor for verification, then the creditor has 45 days to verify it and return it to the reporting agency. If for any reason they miss the deadline or they can't find your file, they have to delete it from your report. Just imagine that you owe Sears about $7000 and they call you through a collection agency all the time. One day after years of this torment you decide to dispute it, and they don't respond within 45 days, the reporting agency will take it off instantly, Whala! You just saved $7000. Now don't get confused, legally you still owe this money, and they have 7 years to try to collect it. There are limitations to that law as well, depending on what state you live in. Any time that you get confused, such as when they file a judgement against you for the money plus fees, it is a good idea to seek legal counsel. The worst thing you can do is nothing! Depending on the amount of debt, sometimes it is a good idea to get debt counseling from an expert. Remember those creditors can be ruthless, they don't care about you or your present condition. Once you get your creditors and your credit report cleaned up, it is time to start rebuilding a new credit history. Which leads to :
Third
I have always said that companies target the unfortunate. And just to prove my point: If you are just starting out or starting over, you will pay more. If you go to the store in town that is the least expensive you'll see that the prices may be cheaper but the package sizes are smaller or they are a generic brand and usually doesn't taste as good. Once you figure this out you start shopping at a different store and spending a little more but getting better quality. Same rule apply here. It is a simple process to get your credit back, but it takes time sometimes. First, there are credit card companies that realize that there are people starting out or starting over. Anyone can get Credit, it may not be the perfect card or exactly what you want, but it will get you started. Sometimes you'll have to pay a fee or higher APR's. For example: You may get approved for a $300 limit and before you ever use the card you owe $180-200. If you make your payments on time every time, they will recognize this and raise your limit. If you continue to maintain your standings they may lower your APR.
Another way to start out is to get a secured credit card that reports your data to the credit reporting agencies. In time, other creditors see this and start offering you credit without being secured. If you only use your new credit for needed items instead of wanted items you'll notice a difference in the way you pay it back. So use self discipline and before you know it, you'll have a higher credit score and more credit.
Last but not Least
I sure hope that I helped someone! But like everyting else in life, there is more... I will update and put more information on this blog periodocally. In the meantime, I have 2 websites available for more information and products:
http://www.bettercreditnetwork.com/
http://www.thecreditcardmarket.com/
I am going to spend time explaining all about Debt, Credit and Money (or lack of it). I am hoping that it will help someone along the way, because there is so much confusing information out there and so many mean people that just don't care. I feel strongly that this is what has caused alot of the economic problems in this country. I really don't know much about blogs, but I'm going to learn so that I can finally voice my opinion to anyone who will listen.
First of All
Let me tell you a little bit about my life and what has happened to me in the past that has led me to this point. I have worked since I was 13 years old, and I'm almost 50 now. I have had several unfortunate mishaps that I will explain that has led me to the world of Credit and Debt. I bought my first house at the age of 17 then on to my second one at the age of 28. I bought that house on land contract, with 2 attorneys, and a clear title. Well, let me tell you what a nightmare that was: I made $1200 a month payments through a real estate company for 2 years and I had done several thousand dollars in repairs and updates on the home. After all of my efforts I received a letter from the county court system asking me to vacate the property. I made several calls, the first one to the bank that held the original mortgage, only to find out that the people that I bought the house from went through a divorce and stopped making the payments to the bank, keeping the money that I had paid them. The bank foreclosed on them, leaving me homeless with 3 children and alot less money. So I learned the housing do's and don'ts the hard way. Not to mention that they put this on my credit report as an foreclosure. I ended up researching all of this and found out that they were including me because I had an interest in this home. I quickly learned how to deal with Credit Reporting Agencies.
Then I was at work doing my job as a 21 year truck driver(18 wheeler) a few years later, when the next tragedy fell on me. I was permanatly injured in an accident involving another truck. This accident caused me to loose my 21 year career that I loved so much. You can only imagine the amount of debt that I was in at that time. Without going into alot of personal details, I'll tell you that my doctor bills were very high with no insurance of my own, I had to sue Workers' Comp for them. But I had debt like charge cards, payments, and the real American Dream. Man, was I screwed. I truly thought that all was lost for me until one day I got up and dusted myself off and starting working with my head and not my hands.
I want anyone reading this to understand that they can fix their credit and fix their debt. I plan on making this my mission; helping others to learn from my mistakes and my reasearch.
There are so many rules and so much information out there but I am going to try to put as much out on this blog as I can, or anyone can contact me and I'll try to help them or I'll find someone who can if I can't. I am not an attorney, therefore I cannot give legal advice, but I can give legal information.
Second of All
Dedication and Discipline are the key to surviving debt. Time and Persistance is the key to Credit. Once you find out the rules, you'll learn how to play the game. The Federal Trade Commission has all of the rules that govern and dictate standards. Once you have gotten familar with the rules then you can play their game against them. Before you set out to make changes you should know what is on your credit report. There are many ways to get one for free, but, anyone trying to repair their credit, should join a credit monitoring place. This allows you to have access 24/7/365 to your information. You can view Credit Monitoring at my website: BetterCreditNetwork.com. This is probably the most important aspect of Credit Repair. Once you enroll, you need to check for errors: Name, Address, SS#, Date of Birth, Employer, and Creditors. If you have a printer, print a copy that you can write on and make changes and notes. Then you'll have to call them to make changes to your name or personal information. Then you proceed to the Creditors: Remember the old saying "Deny Deny Deny" well the same applies here "Dispute, Dispute, Dispute" Whenever you dispute something on your report they have to send it to the creditor for verification, then the creditor has 45 days to verify it and return it to the reporting agency. If for any reason they miss the deadline or they can't find your file, they have to delete it from your report. Just imagine that you owe Sears about $7000 and they call you through a collection agency all the time. One day after years of this torment you decide to dispute it, and they don't respond within 45 days, the reporting agency will take it off instantly, Whala! You just saved $7000. Now don't get confused, legally you still owe this money, and they have 7 years to try to collect it. There are limitations to that law as well, depending on what state you live in. Any time that you get confused, such as when they file a judgement against you for the money plus fees, it is a good idea to seek legal counsel. The worst thing you can do is nothing! Depending on the amount of debt, sometimes it is a good idea to get debt counseling from an expert. Remember those creditors can be ruthless, they don't care about you or your present condition. Once you get your creditors and your credit report cleaned up, it is time to start rebuilding a new credit history. Which leads to :
Third
I have always said that companies target the unfortunate. And just to prove my point: If you are just starting out or starting over, you will pay more. If you go to the store in town that is the least expensive you'll see that the prices may be cheaper but the package sizes are smaller or they are a generic brand and usually doesn't taste as good. Once you figure this out you start shopping at a different store and spending a little more but getting better quality. Same rule apply here. It is a simple process to get your credit back, but it takes time sometimes. First, there are credit card companies that realize that there are people starting out or starting over. Anyone can get Credit, it may not be the perfect card or exactly what you want, but it will get you started. Sometimes you'll have to pay a fee or higher APR's. For example: You may get approved for a $300 limit and before you ever use the card you owe $180-200. If you make your payments on time every time, they will recognize this and raise your limit. If you continue to maintain your standings they may lower your APR.
Another way to start out is to get a secured credit card that reports your data to the credit reporting agencies. In time, other creditors see this and start offering you credit without being secured. If you only use your new credit for needed items instead of wanted items you'll notice a difference in the way you pay it back. So use self discipline and before you know it, you'll have a higher credit score and more credit.
Last but not Least
I sure hope that I helped someone! But like everyting else in life, there is more... I will update and put more information on this blog periodocally. In the meantime, I have 2 websites available for more information and products:
http://www.bettercreditnetwork.com/
http://www.thecreditcardmarket.com/
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