Category: Credit card advice


The Credit Card Trap And College Student Credit Problems

Filed Under: Credit card advice by Don Weststein — Comments Off
August 24, 2011

The college experience is a time for getting an education, broadening mental horizons, meeting new people and creating some lifelong friendships. It is also a time when young people are out on their own for the first time are bombarded with tempting offers for free credit cards from many different companies. Without understanding how credit works and the pitfalls awaiting them, many students also acquire long-term debt along with their undergraduate degree.

Many students fall into the credit companies’ enticing trap of easily obtaining a seemingly easy-to-use credit card and running up charges to a such a large amount that they cannot make timely payments. The credit scoring software company of Fair Isaac and Company (FICO) realizes that many students accept too many credit cards and open too many accounts, quickly becoming overextended financially. College student credit problems have the future potential of low credit scores. These will affect their ability to obtain a mortgage or other loan after graduation.

The irony of the advantages taken by credit card companies against students is that they are creating unprecedented numbers of students who go out into the world with already risky credit who will have a hard time qualifying for future loans and mortgages. These companies know that they must get student addicted to the use of credit cards at a young age. The best solution for keeping students out of this debt trap is to destroy all credit card offers and use a debit card responsibly instead.

A better type of credit cards for college students are “smart” or “rechargeable” credit cards preloaded with a fixed amount of money available in credit. When depleted, parents decide whether to recharge the card or not. The student begins to build good credit through the college years while avoiding the credit card trap. Building this long-term payment and credit history will serve the student well when it comes time to apply for a mortgage.

Parents and teachers need to teach students the proper uses and pitfalls of credit before they leave for college. Explain hidden charges they know nothing about, such as late payment fees and the trap of making only minimum payments. Tell them that erasing credit card debt is really hard. Instruct them to use the card you provide for them only for true emergencies. (If you are not bleeding or starving, it is not an emergency.) Point out the specific consequences they must face if they charge more than they can pay.

Since these students are smart enough to attend college, they are aware enough to understand that some self-control over their spending now can mean success or failure obtaining their own home in the future.

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Learn More About Easy To Get Credit Cards

Filed Under: Credit card advice by Don Weststein — Comments Off
August 2, 2011

Consumers have many choices when it comes to securing a credit card. There was a time when banks only offered credit cards to consumers who were already customers with established accounts. Many people still go for the path of least resistance and apply for a card wherever they happen to have an account. There’s an easy to get credit card available and people are starting to explore all the options.

Consumers are urged to choose a card that matches their spending habits. Some people want a credit card for emergencies only. Others want to transfer debt from a bank charging a higher interest rate. Still others want the card for large purchases so they can defer payment.

A secured card or prepaid card is a good option for people who want to avoid paying interest. Deposits are made into the account and the card is secured by those payments. This is an effective way to control spending because it is impossible to spend more than the account contains. These cards are typically not accepted for monthly installments.

People who pay off the balance every month do not have to worry about interest rates. Their best option is to select a card that offers good rewards. There may be additional fees for transactions made overseas.

Anyone who anticipates paying only a portion of the balance every month are better off with a card that offers a low interest rate or a 0% introductory rate. At the end of the introductory period, the balance must be paid off or transferred to avoid paying any interest. Some cards offer the introductory interest rate for as long as 18 months.

Consumers with good credit history will be able to secure lower interest rate. Easiest credit cards to get are available for them. They should search online for sites that compare the rates, fees and rewards associated with various cards and choose the one that best suits their needs.

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Basic Steps to Help Eliminate Credit Card Debt

Filed Under: Credit card advice by Don Weststein — Comments Off
July 28, 2011

Debt in general is a challenging problem to get rid of, it becomes even more challenging if you have to get rid of credit card debts. There are now a lot of people who owns a credit card, some may even have more than one card in their wallets. The reason why it is very challenging to get started with eliminating your credit card debt is because it is very easy to fall for the temptation of charging a purchase to your card; more and more items and services these days can be charged to your cards thus making it pretty hard to resist to buy something even if we cannot afford it at the moment.

If you are one of these people who are stuck with piles and piles of credit card debts, then you may be able to follow the basic steps below on how you can get started with the process of eliminating all of your credit card debts.

  1. Sum up all of your credit card debts – The first step that one has to take when trying to eliminate credit card debt is to always sum up your existing debts first. You need to start taking stock first and go through all of your previous statements and make sure that you have listed down any penalty fees or added charges that you may have acquired. Doing this will help you not only organize your debts but ensure as well that all of your debts are taken into account and will be paid for accordingly.
  2. Create and follow a budget – It is very important that you create a budget in order to make sure that even if you are tight on budget, you will still have money to pay for your credit card debts. Take into consideration you r income and always prioritize debt repayments over your other wants in life. Aside from creating a budget, it is also equally important that you begin have enough discipline to follow all through with your budget plan.
  3. Analyze your expenses – Credit card debts carry high interest rates, which is why it is important that we get rid of it as soon as possible. The only way you can eliminate debt fast is by beginning to pay it back. This is why you need to learn how to save your money so that you have more budget going into paying back your debts. Analyze your expenses and begin cutting back on those that are not really necessary.
  4. Pay as much as you can in a month – Even if it can be tempting to just pay the minimum monthly requirement, make sure that you never just settle for that. Pay as much of your debt as you can in  month because that will help in reducing the principal amount of your debt faster thus cutting short the life of your debt as well. Also, when you pay back your debts faster and on time you are also helping in improving your credit.
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Effective Ways to Get Rid of Credit Card Debts

Filed Under: Credit card advice by Don Weststein — Comments Off
July 21, 2011

There are a lot of people who struggle with their credit card debts these days. Because it is very easy to charge purchases to your credit cards, more and more people lose their control over their spending and thus result to unmanageable credit card debt. These debts are those types that you should never leave neglected because even for just a short period of time, your credit card debts can easily blow out of proportion. So when you are dealing with even just a small amount of credit card debt, you should already begin looking for effective credit card debt reduction methods.

In order to be able to keep your control over your finances, there are certain ways that you can follow in order to ensure that you will be able to keep your credit card debts at a manageable level.

  1. Assess all of your credit card debts – If you own several credit cards, then you probably owe a certain amount on each card. Every credit card company will charge different interest rates and even fees, so you need to first analyze all of your debts and determine exactly how much debt you owe and how much interest rate they carry. By doing so, you are already organizing your debts and it will help you prioritize your debts better.
  2. Create a budget for your credit card debts – Most people who are dealing with credit card debts will usually rely on the minimum monthly requirement so they would never make it one of their priority to set aside budget to pay for their credit card debts. However one must know that the more you settle to pay just the minimum requirement, the more that it will take longer for you to get rid of all of your debts. So by setting a budget, you ensure that you will be able to pay more than the minimum requirement of your credit card debts.
  3. Cut back on your spending – Sometimes, even when we are already knee deep in debt we can’t resist the temptation of going crazy with our expenses. But if you’re serious about finally getting rid of all of your credit card debts, you need to learn to control your spending so that you can be able to direct more budget towards paying back your credit card debts.
  4. Keep your credit cards hidden – When you are trying to get rid of your present credit card debts, you need to make sure that you don’t acquire new debts. One way of ensuring this is by avoiding to use your credit cards; the more you use it the more your debts will grow and the longer it will take for you to completely get rid of them all.
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The essentiality of secured credit cards

Filed Under: Credit card advice by Don Weststein — Comments Off
July 18, 2011

It may sound funny to say when a fool is enlightened; then properly the worst can be seen or expected. This say can be directly applicable to credit cards. A person may indulge himself into malicious and unnecessary expenditure with the first got credit cards.

This act can be worse to a person who does not know how to make good choices especially if the amount is bulk. Examples of such act can be like taking debts that are hard to settle, failure to pay different bills such as rent, electricity and others.

They also include the charges of interest rates and even transaction fees. All these acts really lower down credibility of your card, low scores and shows lack of self control. In such conditions, best secured credit cards are the best to be posed by this individual. The secured card does not allow all these freedom of extravagant spending your deposit controls you.

This is not only the reason as to what best secured credit card is essential.

It is not possible for a person who has already have debts to add more debts, when using secured credit cards. These cards are truly different. The bearer is only allowed to use the amount limited to the deposited one in the bank. Once consumed all, there is no more buying you can transact with the credit. It is not possible because no money is in your possession. So even if you wished to have another debt you are 100% barred. Having debts is very dangerous to credit card holders. It can cause the user to suffer from pay off history. When your name bears this problem, then the individual become a figurative feature to most bankers.

The problem can be solved out by implying the services of secured credit cards. Since there is no any more debt that can be brought in, an individual in this case can pay off history of debt. This is possible because as you deposit the money gets accumulated in your account. This can be used to pay off. One thing to remember is that secured credit cards are totally different from other types of credit cards.

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Begin Repairing Your Credit With Bad Credit Remortgages

Filed Under: Credit card advice by Don Weststein — Comments Off
February 22, 2011

If you find yourself in financial woes, and your credit has dropped drastically, you may find solace in seeking bad credit remortgages. Remortgaging your home when you have equity can bring your credit back up where you want it to be. It can also help repair it as you repay your remortgage.

Home equity is the money that you have paid into the loan and what the home is worth in today’s market. By subtracting these two, that is what is called equity. For instance, your home is worth today $100,000. You have already paid into the home $50,000. The difference of $50,000 is the equity that you can borrow from. Usually the lender will only loan you about 80 percent of that amount. If you already have bad credit, however, you will need to find a lender who will take a risk with bad credit remortgages.

The best way to find this remortgage lender is to solicit the aid of a mortgage broker. A broker has access to several different lending institutions. You provide the information regarding credit history, verification of income, and your debt to the broker and he searches for the best match for a lender.

The interest rate for bad credit remortgages is higher than for those who have good credit. That is because there is more risk that they are taking in order to loan you the money. However, their risk is minimally reduced if you default on the loan because you have placed your home in their hands as collateral for the loan. It is imperative that you read and understand the contract before you sign it to comprehend your risk.

Have an open relationship with your mortgage lender. Bad credit remortgages are not for those who cannot repay the loan. There may be alternative means to get out of debt without using your home as collateral. If you are in a position to negotiate your present loan, you may find that a financial planner can assist you.

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Can I Keep My Credit Cards Even After Filing For Bankruptcy?

Filed Under: Credit card advice by Don Weststein — Comments Off
January 16, 2011

People end up applying for bankruptcy when they are not longer capable of paying their debts. Whenever a person does this, he endorses all his assets, businesses and the like to his creditors so that his debts will be paid. Usually, people feel that they will have a difficult time in getting new credit cards after bankruptcy but this is not entirely true. Some even say that you won’t be allowed to keep your credit cards once you declare yourself bankrupt.

The latter is partly true. The credit cards that you were able to use and still have balances would need to be declared as debt. This is the reason why you could not keep them in your possession.

On the other hand, if you have a credit card that has no existing balance, you are able to keep it. The rationale behind this is that because you don’t owe anything on that card, there is no need for it to be considered as debt, therefore maintaining your ability to keep them. However, the issuer of the cards that you don’t have balances on still maintain the right to whether take the card from you or change its terms like credit limits and interest rates. This is because they will see you as a risk thus they have to think twice about extending you credit.

You will be surprised with the number or credit cards that will be offered to you even after bankruptcy. You don’t even have to get secured credit cards for bad credit and can go straight to regular ones. However, you have to be weary of high interest rates and fees.

The important thing is you have to learn from the mistakes that you committed that lead you to bankruptcy. Either this or you have to contend with high interest personal loans all your life.

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Paying Off Credit Card Debt

Filed Under: Credit card advice by Don Weststein — Comments Off
July 28, 2010

A lot of people are facing problems related to their credit cards. Some are able to manage it but some are having a hard time as they see their woes grow every day. In their effort to erase credit card debt, they tend to follow some tips and guidelines. Some of them are as follows.

Stop Using Credit Cards
This logical and basic step is the first step to take in any effort to pay off credit card debt. The reason being is that if you continue to increase your debt, chances are you won’t be able to pay for it. You need to stop it from increasing and slowly catch up in your payments.

Pay as Much as You Can
The more money you allocate to paying your bill, the better. Of course, this does not mean that you have to put all your monthly income in this. Otherwise, you will increase the risk of borrowing money from other sources. Allocate enough money so you can slowly decrease you liabilities. You can start by paying twenty dollars and then gradually increase it every month. Credit card calculators may come in handy because these tools can give you some hints on how much you should be paying given the period of payment that you will provide.

Seek Professional Help
Help are always available online and in person. You may register in online forums or personal finance sites to seek more help in paying off your debt. You may also consult with a professional if needed. Other option would be to consult your bank or credit card company if they can offer you some options in paying your debt better. There are those that offer fixed rate for the whole year and there are also those that offer balance transfer credit card services.

These are just some of the tips that may help you pay off your credit card debt. Note however that these are useless if you don’t act at all.

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Start Repairing Your Credit Now!

Filed Under: Credit card advice, Credit Score by Don Weststein — Comments Off
July 10, 2010

Has your credit score recently taken a dive and you are finding yourself saying “I need to clean up my credit”?  If you are getting started with credit repair, you should understand that it really is nothing more than a systematic process.  Like most processes, credit repair works best if you follow the steps.  The best place to get started with credit repair is by getting legitimate errors in your credit file corrected.

An estimated 87% of credit reports have errors in them. Of course, most of these errors are not intentional but rather data entry errors.  This is especially common if there is someone with a name and social security number that is somewhat similar to yours.  Also, very often you have accounts that are so old that they should no longer be reporting to the credit bureaus that are still showing up.  Another common credit report issue that you can get corrected is when you have accounts that the creditors failed to substantiate upon request that are still showing up in your credit file.  In all of these cases, you should not expect the issues to correct themselves on their own.  It is up to you to contact the credit bureaus and work to get your credit report corrected.

You will need to contact each of the credit bureaus, because they are private companies that operate completely independently of each other.  This means that it is not enough to correct one of your credit reports, you will need to correct all three individually.  This is especially important because most creditors will request “tri-merge” credit reports which gives them all three of your credit scores.  This means that an issue with just one of the credit reporting agencies can seriously hurt your ability to get a loan. So, if you are trying to get a bad credit mortgage, repairing all three of your credit reports is critical.

While some credit repair companies suggest that you should challenge every negative account in your credit file, this is generally not a good idea.  In fact, you should never challenge more than three or four items at a time because doing so could cause your disputes to be disregarded as frivolous.

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No Cash No Problem

Filed Under: Credit card advice by Don Weststein — Comments Off
June 4, 2010

I’m a big proponent of prepaid debit cards. I use one and every member of my family uses one too. And one of the interesting by-products of using reloadable cards is how you begin to spend your cash.

Reloadable prepaid cards sort of transform the way you think about cash. For some reason, the cash in your pocket is much easier to part with than the cash you’ve loaded onto your card. I know it sounds weird, but I’ve found it to be true.

For instance, when I started a direct deposit from my paycheck to my prepaid card, I started carrying less cash around with me. I didn’t consciously think about it, it just happened. I didn’t need to go to the ATM for cash because I had my electronic cash with me. And I was able to use my card anywhere I wanted to.

Then I came to realize one day that I had gone for weeks without a single buck or bill in my wallet. That’s right, no cash whatsoever. That seemed remarkable to me. I didn’t even miss it. Then I began to take it apart in my head.

Somewhere in my brain I was keeping track of my spending. I knew I had a certain amount loaded onto my card every two weeks and I was guarding it each time I came across a spending decision. That led me to pack more lunches instead of buying them out. It led me to buying smaller cups of coffee than I had before. It led me to reading the Internet news rather than buying the usual morning newspaper. In short, it made me think about my money a lot more before I spent it than I ever had before – and as a result, I spent less.

I have to admit I’m getting off on this whole no cash deal. I feel a little bit more powerful and a little bit more in control. It kind of makes me wish I had a prepaid debit card years ago.

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Cutting Down Credit Card Use

Filed Under: Credit card advice by Don Weststein — Comments Off
May 3, 2010

Eliminating the burden of personal credit card debt is a challenge many of us face, and logically so. It’s as necessary sometimes as walking to the kitchen and cooking.

The best way to eliminate debt is to avoid it all together. If one stops using credit, their debt situation will greatly improve. A credit card is a pitfall of non-existent money that turns into real debt. The best way to stay within your budget is to stick to cash, or follow these tips for stopping use of credit cards. Many get stuck in debt when they attempt to buy online, but even online purchases can be made without credit cards. PayPal, checking accounts, and pre-paid debit cards are all ways to pay online with money one already has.

PayPal is one of the most widely accepted means of paying online. For instance, say you want to buy mens clothing online. You can use PayPal. Personal PayPal accounts are free; however, PayPal will garner a fee for certain transactions. One can submit their banking information to PayPal, transfer funds from their bank to their PayPal account, and then make an online purchase. This is a secure, safe way to buy without worrying about exposing account information. PayPal does also offer credit, so one must be disciplined enough to just use their bank funds.

Many websites offer the option to pay electronically from your checking account. In addition, one can pay with a physical check in many situations. The only downside to mailing in a check is the longer wait. Most places will not ship an item until they have received the check. The positive side is that since one is using a checking account, one is limited to the funds already on hand.

A simple way to pay online without going over one’s limit is a pre-paid debit card. These cards are pre-loaded with an amount the holder designates. Then, this card can be used just like other cards. When the card is empty, one can reload it when one is ready. This is not only a great choice for those trying to avoid credit, but also for teenagers’ first learning to manage money.

There are many alternative ways to pay online. PayPal, checking accounts, and pre-paid debit cards are just the beginning. These tips for stopping use of credit cards will help with debt management. These are definitely options to consider when shopping online.

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Ways to Restore Credit!

Filed Under: Credit card advice, Credit Score by Don Weststein — Comments Off
March 15, 2010

When you look at your credit score do you shudder in horror? There are a few credit repair secrets that you can use that will dramatically increase your credit score.  They are strategies that I use myself when trying to clean my credit up.

One of the easiest credit repair secrets is to correct your credit report. A study by the government has shown that almost 80% of all credit reports contain errors.

If you are trying to restore credit, the first step is to obtain a copy of your credit report from each of the three major credit reporting bureaus. You will need to review each of them carefully to see what is being reported. These errors can cause your credit score to fall. Dispute each and every error that you find on your report. The credit bureaus have 30 days to verify the information, report the accurate information or remove the entry completely.

Another little known credit repair secret is to put your bills on auto pay. When calculating your credit score 1/3 of the number is based on credit repayment history. Each month that all your bills are reported as paid on time, your credit score rises. By placing your bills on auto pay for two days prior to their due date, you will boost your score in as little as 30 days.

Don’t over apply for credit. Each time you apply for a credit line, your score is affected. If you apply more than 3 times within a 30 day period, your score will drop a considerable amount. Credit reporting agencies view excessive requests for credit as a sign of financial instability. One of the littlest used credit repair secrets is to stop requesting credit. By refraining from credit applications for more than 60 days you will raise your score.

Everyone can, in fact, boost their credit rating by using these simple credit repair tricks. They are easy to do, and better yet, free. Following these simple procedures will boost your score, improve your rating and enable you to get financing at a great rate when you really need it most.

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Bad Credit Refinance: My Story

Filed Under: Credit card advice by Don Weststein — Comments Off
March 13, 2010

Like many of you reading this, I was hit very hard by the recession/depression that started in late 2008. I would say I had a pretty good life. I lived in a nice area, had a nice car, and had more friends than I knew what to do with. However, as I have recently learned…money matters. When my financial freedom started to slip, so did the other things in my life. It could be because I was stressed an no fun to be around. Although, I firmly believe that my so called friends where just hanging around me because I was wealthy.

While I lost almost all of my possessions to re-possessors, I was able to keep my most prized possession. The only way I was able to keep my house was to refinance my loan. By refinancing I was able to save thousands of dollars a month. This process was far from easy because of the fact that I had bad credit. The good news is that I have a good head on my shoulders and I was able to wade through a lot of the scam artists right away.

After a bit more in depth investigation, I decided on my lender. I actually view this lender as a savior of sorts. He was able to help me save part of my former life. If I would have lost my house I would probably be on the streets right now…with no computer to even type this article.

If I learned anything from this whole experience it is this, nothing in this life is certain. What you have today can be gone tomorrow. The friends that you think will always be there can easily abandon you when your finances run dry. If you are going through a hard time in your life right now I urge you to keep pressing on. Do not give up. Look into getting a bad credit refinance to make it through to the finish line. Good luck getting a bad credit refinance!

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