Credit Card Quick

Teaching Your Kids About Credit Cards: The Earlier The Better Part Two

Introduction

As soon as your kids are old enough to understand the concept of money and spending, they are probably old enough for lessons in savings, paying bills and using credit. The preteen years is probably the prime time to start teaching these things. By now, the kids probably have an understanding of some aspects of finances, but this is a time when they start to grow and mature in their understanding, and will soon be using these lessons on their own. If you want you children to understand the use of credit, start early. Don’t skip this life lesson, as they may find themselves in over their heads without it.

A Good Method

After teaching your kids the basics of credit scores and credit use, you might consider a little “credit training.” This works best if you already have your children on some kind of monetary allowance schedule. Purchase a prepaid credit card, that way, it is realistic, since it will have the credit card company symbol on it. Load it with cash and allow your child to use it for purchases. Teach him or her to consider their purchases wisely. Give them their allowance as usual, with the understanding that they have to pay all of it or a minimum balance you have set each month. Give them a bill, just as you would receive, charging a symbolic interest rate (not necessarily the real rates, but something reasonable that shows how it works). As they pay their bill, reapply the money to the card. Track what they owe and charge a late fee if they do not pay. $1.50 is a pretty good late fee for this. It’s a lot of money to your child and will help him or her to develop financial ethics when it comes to credit. learn how credit scores work and periodically print a mock up credit report for your child to see how he or she is doing.

Next Steps

After they grasp the basic concept of credit use and have done quite well, you might want to consider adding features, especially in the teen years. Teens are famous for asking their parents for money. Teach them about loans and interest rates by adding a cash advance clause to their card. So they probably won’t hit the ATM, but when you give them the money, charge their card just like the credit card company would, with a fee and interest.

Of course, you won’t be charging the same rates as the credit card companies. These are kids, so be reasonable. You want the symbolism to be present and the lessons to be learned, so explain the symbolic nature of the fees and what they would be charged with an actual credit card. Hopefully, using this method will set your children up for a responsible future when it comes to credit.

Teaching Your Kids About Credit Cards: The Basics Part One

Introduction

You want to teach your kids everything they need to know to get started on their own, right? Of course, you can’t literally teach them everything. There are those things that can only be learned through the school of hard knocks. However, you can prepare you kids for the real world by giving them great financial tips, including lessons in credit and credit card usage.

Credit Scores

Sadly, many young adults venture into the world of reality with nary a clue as to what a credit score means, let alone what one is. Parents can give valuable financial lessons by teaching these young ones all about credit scores. Sit them down and explain all about the three credit bureaus, how scores work and how they can be somewhat different from agency to agency, depending on the reporting practices of the creditors themselves. Explain to them what those numbers mean, what affects those numbers, the importance of maintaining a good score and what affects it could have in the future as far as their ability to obtain credit, loans, get a home or even a job.

Credit Cards

Credit cards have their benefits and downfalls. In this day and age, though, it is definitely a valuable tool to have, even for the young adult. Parents can prepare their kids by teaching them how to use credit cards responsibly. In part 2 of this series, we will discuss ways to start teaching credit card use early on. For now, we will address the basics that your kids need to know before they ever think of even obtaining a credit card.

First, be sure to explain to them that some cards do have annual fees, and that the balance due is not simply their purchase amounts, but also includes fees, finance charges and interest rates. Explaining interest rates is a smart idea as well. Teach them about responsible use of a card and paying the balance, including the pros and cons of minimum balances. Some of the other things to tell them? Make sure they can afford to pay back what they charge plus fees and interest. caution them against impulse purchases and cash advances, as well as purchasing a few dollar item on credit.

Teaching your kids to be disciplined with a credit card can set them up for a reasonably financially responsible future, so long as they adhere to these lessons. Adding in lessons about budgeting, investing, and saving wouldn’t hurt either.

Methods for Filing Chapter 7 Bankruptcy

Bankruptcy

When it comes to out of control finances, sometimes bankruptcy is the only answer. Personal bankruptcy is quite common, with most filers choosing Chapter 7. Chapter 7 is one of the simpler forms of  personal bankruptcy, which is why it is so popular. Filing bankruptcy can ease the pain of financial burdens. However, before you file, you need to know what methods you can use and which one is right for you.

Consider DIY Bankruptcy

Yes, you can file for bankruptcy on your own. A do-it-yourself bankruptcy is not a bad idea, if you are willing to put in the time and effort to educate yourself and to do it right. In the end, it will cost you less money, as all you will have to pay out will be the cost of the filing fee and any other expenses related to your preparation and bankruptcy requirements.

Educate yourself thoroughly on both federal and state bankruptcy laws, including anything required of you during the bankruptcy process. Read a detailed book about it. As for forms, you can download them off the internet, get a DIY bankruptcy book, or a bankruptcy kit. However, do not utilize a fill in the blanks process as some courts will not accept those. Be sure to type everything in a professionally formatted manner. Make several copies for yourself and for the court. You will need to have these notarized at the time you sign them. Take them to the court with a money order for the fees in hand. Some courts still accept cash, but not all, so find out in advance.

Whatever you do, do not ask for help from the court clerks. They are not legally licensed to practice law and will not offer any advice. If you do need help, call on a paralegal, but know that you won’t get the service for free.

Assisted Bankruptcy

This is the bankruptcy method where you hire an attorney or paralegal or even a professional legal document service to prepare your case and your paperwork. You pay them a flat fee for doing so, and once the papers are finished, you are on your own. You file the papers with the fee and go through the rest of your case on your own. With this method, it is always good to find some way to become more knowledgeable about the whole bankruptcy process, so you’re not in the dark or caught off guard when you go to court.

Full Representation

Hire an attorney to oversee your entire bankruptcy case from start to finish. They take care of all the headaches. All you have to do is listen, take their advice, be honest and offer the information needed for your case and show up in court. You will be well-advised and everything will be in order. However, full representation is going to cost you, and it certainly won’t come cheap. For those brave souls who don’t mind a bit of extra effort, especially that of learning the legal system, the other two methods are probably just fine. However, if your debts amount to mountains more than molehills and you are either afraid of the system, unsure of things or just do not want to go it alone, hiring an attorney to see your case through might be the option for you.

Whatever method you choose, each one is tried and true. As long as you are honest and do your part to meet the requirements, filing Chapter 7 bankruptcy, no matter what the method, can result in your favor, relieving your financial burdens and debt-laden stress.

Avoiding Credit Repair Scams

Credit Repair

A good credit history is an important and valuable element to maintain. Bad credit can impact your life, preventing you from obtaining loans, housing and these days, even a job. You want to fix that bad credit, and though it is possible to do it yourself, some people would prefer to have a professional leading the way. Call it peace of mind or having a hand to hold, it often helps to have someone who knows the industry and knows how to explain things to you, offer advice and make things happen.

Ideally, a credit repair agent only has your best interest in mind. Unfortunately, that is not always the case. In a world where it is all to common for profits to take precedence over ethics, there are many credit repair scams appearing on the scene. These companies offer promises in pretty little packages. Unfortunately, they can’t and don’t deliver.

That’s not to say that all credit repair offers are not legit. In fact, there are many out there who are reputable and don’t make empty promises. However, the scammers are the ones who want a fortune up front and leave you hanging in the end. Face it, if you had the kind of money that they want up front, wouldn’t you just start paying the debts on your own?

An informed consumer is a smart consumer. Here are a few tips to help you avoid the pitfalls of credit repair scams.

Promise #1: Erasing Information From Your Credit Report.

No wonder so many people fall for this one. The image of some guy standing over your credit report with a big pink eraser, just scrubbing away the mistakes, does have its appeal. Unfortunately, this is one of those promises that they not only can’t keep. Information on your credit report can not simply be erased. Inaccurate information can be disputed and removed if and when found to be inaccurate, however, accurate information will remain on your credit report for 7 years and as long as 10 years, if you file bankruptcy. Accurate information can not be removed just to make your credit report look better.

Promise #2: Pay Us Large Sums of Money Up Front & We’ll Work Our Credit Magic

Nope. Not even close. Not only will this not happen, should you fall for it, it’s illegal. These companies can not ask you to pay before they deliver on their promises. They must provide you with a contract, inform you of your rights in writing and offer you a minimum of three days to change your mind and back out.

Promise #3: We Can Create a Second Credit File for You.

The idea behind this is that you can have another file to use for credit purposes, obscuring the information in the original file, allowing you to obtain credit more easily. First of all, this is what they call fraud. You can not legally obtain credit by obscuring or omitting the truth. Companies promising to create another file or “file segregation” are offering you an empty promise. It’s not only wrong;it really does not work.

Remember, you can dispute and correct mistakes on your credit report yourself by contacting the three reporting bureaus. You may also add an explanation and can easily work to improve your score on your own. However, the help of a professional is often a good idea, so look for a credit repair company that does not sound to good to be true and follows the guidelines as set above. A consumer credit counselor might also be a great choice to help you get your credit back on track.

Gas Rebate Credit Cards: Pay Less at the Pump

Credit Card Rewards

It never fails. As the public settles into gas prices that are still to high but steady, a wave of rising prices hits hard, leaving consumers feeling the pain of the pinch at the pump. It’s been like this for decades. The only difference being the actual price per gallon. Consumers dream of the days when we might see gas prices once again drop to a little over a buck a gallon, but it’s doubtful that is going to happen anytime soon, if it ever does at all. However,, for those consumers carrying a gas rebate credit card, you might very well be able to use that card to maximize your dollars while spending less on fuel in the long run.

Pump Savings

No. You are not going  to save the money right then and there at the pump. In fact, you will still have to pay full price for the gasoline. However, with a gas rebate card, you will see the savings returned to you in the form of rewards. With cash back rewards, you will get a percentage back with every gas purchase and sometimes on other purchases as well. This can help offset the cost of your fill-ups over time. You will either receive the cash rebate from the credit card company as credit on your card, a gift certificate or even a check in the mail. Cha-ching!

Maximizing the Benefits

If you want the cash back option, as opposed to rewards and points that are only redeemable in forms other than cash, you will need to find yourself a credit card that specifically offers the cash back option for gas purchases. Of course, to make the most of it, find a card that does not limit your reward to the purchase of gasoline alone. If you are loyal to one oil company, such as BP or Citgo, going with a card specific to one retailer for rewards might be practical. However, if you travel much and don’t always fill the car up at the same place, you might want to find a gas rebate credit card that does not have merchant limitations.

You will want to be sure and pay off your card balance each and every month. If you’re accruing interest and carrying a balance from month to month, the rewards tend to negate themselves because of the extra money you’re spending in interest. To save even more on gasoline purchases, follow maintenance tips such as keeping your tires properly inflated, rid your vehicle of excess weight, don’t speed, and combine errands into one trip to save time and money, as well as wear and tear on your car.

The Importance of Building Credit and How to Get Started

Credit Score

Credit is one of life’s little enigmas. If you don’t have a credit history, you’re going to need it at some point. If you already have it, it may not be as good as it could be or you might not really be using it. Either way, credit can be difficult to obtain if you don’t have it or are not keeping up with it. If you are not flat out denied, odds are you will wind up paying a lot more than the guy with the five-star credit rating. Without credit history, a lender has no idea what kind  of customer you are. With a limited or flawed credit history, you will seem like a risk to the company. If you want the best deals and offers, the ultimate rates and yeses rather than nos, you need to build up your credit and maintain a good credit score.

You will thank yourself later in life when you try to get a loan, mortgage that dream house, buy a new car or even go for some big career change. Here’s a few great ways to get started on building up your credit:

Pay Your Bills On Time

Keep all of your bills current. Not all of them will appear on your credit report, however, some will and the ones that don’t (such as renting from a private landlord) might still reward you with an impeccable credit reference later on.

Establish Bank Accounts

Get yourself a checking and savings account. Make regular deposits, maintain a balance and keep these accounts in good standing. As an added perk, grab yourself a high yield account and you can earn excellent interest on your money as well.

Secured Credit Cards

You make a deposit and have a credit limit typically equal to the amount of the deposit. You use it, pay it off and use it again. This builds your credit by showing consistency in your payments and use and your financial responsibility.

Any Reputable Credit Card

If you can obtain any type of credit card from a reputable issuer, get one, use it and keep it paid up. This will go on your credit report and will build your credit worthiness in the eyes of those who might be looking.

Store Cards, Store Financing, Rent-To-Own and Gas Cards

Sometimes, these types of credit cards are easier to obtain than a standard credit card. As long as the company reports your activity to a credit bureau and you keep the account current, you will be building good credit that will benefit you in the future.

Co-signers

As you start to build credit, you might want to use a cosigner for some transactions. You need to choose someone you trust that also trusts you and has their own good credit score and is financially responsible with all their own debts. Of course, don’t take this lightly. If you default, your cosigner is the one in hot water, since they vouched for you. Be responsible when using co-signers so as not to impact their credit rating, cost them money or ruin the relationship you have with them.

Always make sure that any option you choose for building credit comes from a place that will be reporting your financial dealings with them to a credit reporting agency. If they don’t do this, your actions are having no impact on your credit score, defeating your purpose. Building credit is a smart thing to do, but use it wisely. Never take having great credit for advantage. It could come back to bite you someday. One moment of irresponsibility is all it takes for your credit score to quickly decline.

ATM Safety – What You Need to Know

ATM

Using an  ATM card might cost you a few dollars per transaction, but it is certainly convenient. 24-hour access all year round without having to go into the bank itself. These days, most ATM cards are actually debit cards and can e used to make purchases as well, adding to the convenience and ease of use. Unfortunately, this convenience does come with some risks. ATM users need to pay attention and take precautions to protect themselves from robbery. You also need to take steps to protect yourself should your card be stolen.

ATM Machines

Never use ATMs in dark and secluded locations. Be sure the area is well-lit and try not to go alone. Most ATM machines have security cameras with audio recording, but these do not always deter criminals and often, they disguise themselves well enough to avoid capture. e aware of your surroundings and any lurkers near the machine. Remember, criminals often operate in pairs or teams. Go with your gut. If you don’t feel safe, find another ATM. Stand very close to the machine and shield it as you enter your PIN.

Never be afraid to boldly ask someone to step away if you feel they are too close to the ATM. If you’re having trouble with the ATM, head to the bank instead of accepting help from a stranger. Hey, they might be well-intentioned, but how are you supposed to know that?

Never insert your card into a machine with a blank screen. Want for the prompt to insert it and if the card is swallowed and not returned, contact your bank ASAP.

There is a new type of technology available, but it is not in general use yet. It sounds like a good idea, but also has its downfalls. This technology allows you to immediately alert police of an ATM robbery-in-progress by enter your PIN in reverse. Unfortunately, one has to question how quickly the police would get there or if you might be injured or shot while the police were on their way for not delivering the money as demanded. Time will tell if this technology ever really takes off and if it is effective or not.

Your ATM Card

While you certainly need to protect yourself while using the ATM, you also want to guard your card by following these steps:

• Don’t loan out your ATM.
• Don’t share the PIN or write it on your card or on anything kept with your card.
• Be certain that the card is back in your purse or wallet before leaving the ATM or store where you have used it.
• Always know where it is and keep your purse or wallet out of sight at home so that no one is tempted to borrow it against your will.
• Watch your bank statements and report all suspicious activity immediately.
• Sign up for test and e-mail alerts on account activity, and should you discover that your card has indeed flown the coop, don’t wait. Report it right then and there (or as soon as possible, given banking hours).

Following these tips can and will increase the safety and security of your owning and utilizing an ATM card.

Is Gold Card Status a Worthy Ambition?

Introduction

Many strive to one day possess the Gold Card status.  However, is this a worthy ambition? Does this mean something special or is it just a prettier card for your wallet?

Having a gold card (or silver or platinum or titanium for that matter) represents a certain status as a credit card holder. Your credit score is probably excellent. Maybe your time with your credit card company has proven you a valued and worthy customer. Your gold card is the reward. Essentially, it says you pay your bills. Still, is a gold credit card better than other credit cards?

Almost every credit card company offers credit cards tagged as gold or one of the other metallic words that make them sound extra special. The truth is, other than a happy store who will think your tops because you have a gold card (they see it as a status symbol), these kinds of credit cards are no better than the many other credit cards on the planet. You can find plenty of cards offering the same perks to you as a customer without the added label of “gold.”

The Benefits and Considerations of Gold Credit Cards

The one benefit of a gold card may be a higher credit limit on the card. After all, it is said to signify that you are more than creditworthy. However, this has not always been the case. Some people do find themselves paying less in annual fees and interest with these cards, but again, that’s not always going to be the case.

Some gold cards may come with lower interest rates or the same average rates of any other card. While some cards may carry lower interest, odds are, they have a whopping annual fee that will offset the loss in interest fees.

Gold or Not?

Are we saying that Gold cards should not be obtained? No, that is not specifically true. Some gold cards do have their perks, like the ones mentioned above, and they may even offer some outstanding rewards programs. Gold cards are not a ad thing to have. They do have the appearance of a higher credit status after all. The important thing is that you find a card that offers you the credit limit, benefits and terms that suit you, whether the label is gold or not.

Making Your APR Work for You

Introduction

There is no doubt that one of the most complicated and frustrating aspects of having a credit card is the annual percentage rate (APR). Some people don’t quite understand that the APR is simply the calculation of the interest on your credit card at a yearly rate. Once you know that, it makes things a little easier to understand. However, don’t be fooled. It is so easy to get in over your head! Interest rates can add up quickly, so spending wisely is always advised.

Interest Rates

Depending on your credit score, your interest rate can range anywhere from 11.99% to just above 23%. There is a big difference there, and the higher the interest, the more it’s going to cost you. Interest does add up, so spending frivolously can easily wind up costing you way more in the long run. In a nutshell, you don’t want to still be paying for something you bought a year from now because of interest rates.

Some credit cards can be so alluring, offering an introductory APR 0%. However, this rate will change within 6-12 months, so if you are unprepared, the hike in your credit card bill might catch you of guard. Interest rates can be either fixed or flexible. If you’re on a budget or don’t particularly care for surprises in your credit card bill, it might be wise for you to choose a card with a fixed-rate APR. However, whether your interest rate is fixed or flexible, you still need to be in the know about what you are being charged. Check the terms and conditions on your card. You might have an interest rate that is set on standard  purchases, however, if you get a cash advance or use another feature of your card, the interest rate is most likely to vary per feature.

How to Make Your APR Work to Benefit You

Having a credit card can be very beneficial, and in an ideal world, we would be able to find the perfect card; one that let’s us set our own limits, choose our own APR, etc. However, we live in the real world, knowing this is not likely to happen.

While it would be nice to have a low APR, few of us will get a rate that is truly minimal. Even the slightest blemish on your credit report can affect your interest rate when getting approved for a credit card. Still, even if you can’t have the perfect APR, you can still make it work for you.

Key Factors

One of the most important keys with credit card interest can not be emphasized enough. Spending. Watch your spending closely. That interest can add up quickly and you’re the one who is going to have to pay the bill.

Another important factor is how much you pay on your bill every month. If you can, it is always best to pay off the balance with each billing cycle. Unfortunately, this won’t always be possible for everyone. Still, don’t just pay the minimum balance. Sure, it is an option, and an enticing one at that, especially when your cash is tight. Nevertheless, if you only pay the minimum balance every month, you’re really getting nowhere, and the bill will just keep adding up. The more you can pay on it every month, the less interest you will pay in the long run. So, pay the maximum you can afford, as opposed to the minimum balance due. You’ll thank yourself later on.

If you are forced to only pay the minimum once in a while, curb that spending until you are back on track. If you pay the minimum, but keep spending as usual, your debt is only going to increase.

If you follow these guidelines and pay close attention to your credit card use, you’ll see that credit card Credit card APR does not have to be intimidating, and your debt can be minimized by making your APR work to befit you.

My Child Used My Credit Card! What Now?

Introduction

You may have a smart kid who figured out how Mom and Dad can get things using that little plastic card? To most kids, no matter what their parents really make, they see them as having the big bucks. They truly don’t get how it all works until they are much older. Hiding your credit card and laying down the law to the kids about never ever using it is all fine and dandy – in theory.

It’s a great idea to do this. However, it does not mean your mischievous little prince or princess will necessarily follow the rules. To a child, rules were made to be broken and even if they hear that there are consequences for such actions beforehand, they don’t always understand just how serious the ramifications of their actions might be. Then, there are some kids, who no matter what you tell them, are going to challenge the rules, just to see what they can get away with. Either way, their actions are rarely thought out or well-planned.

Kids and Plastic

Plastic makes great toys for kids, but not when it comes to credit cards! If Billy or Susie have found your credit card and have figured out how to use it, they have most likely made some wild and frivolous purchase. It’s probably something expensive, after all, the true value of a dollar probably has not struck them yet, and maybe even something you had never or would never have considered buying. Still, the damage is done. The situation does call for discipline, however, don’t be too harsh, no matter how upset you may be. The child will feel bad enough as it is, and this is a financial lesson best learned sooner rather than later.

No Need to Panic. The Law is on Your Side (and your child’s too!).

Here’s another reason not to be so harsh when you find out about the kiddo’s faux pas. Sure, he or she will need to learn the consequences of their actions, so return the item they bought, take away their allowance and make them think they are paying you back in installments, or have them take out the trash and do a lot of chores to “work it off.” However, you don’t really have any cause for panic. Children often misbehave and make mistakes. It’s part of growing up. In this case, however, the law is on your side and will protect both you and your minor child.

For one, you nor your child can be held financially responsible for this transaction. They’re underage and do not fully understand the cause and effect of their actions. You as the parent and credit card holder should not and will not be held responsible. Both the law and the credit card company will work with you to see that this is the case. Just be sure to report the transaction as fraud to your credit card company or issuer as soon as you can and explain the situation in all honesty.

Your Rights

While the company who sold the item to your minor child might be understanding about the return, you could  encounter one who is less than accommodating. Your credit card company will have issued a charge back. so of course, the merchant might very well dispute it, angry at having lost that profit. Also, they might be feeling pretty foolish at this point for selling such a big ticket item to a mere child. They shoulder some of the blame and should have been much more responsible.

If the company disputes the chargeback, you have the right to request that they observe your lawful rights and either make arrangement to pick up the item or allow you to return it to them yourself, in new and clean condition, of course. If they still refuse, send them a legal notice as to your intent to liquidate the item in question if it is not allowed to be returned or picked up by the company by a specified date. The law says that within thirty days, the property can be considered abandoned, and you, as the new “owner” now have the right to liquidate it. With the law on your side, odds are,  you will also be allowed to keep the proceeds from said liquidation.

Hopefully, Billy or Sally (or both if they were in cahoots) have learned a valuable financial lesson from this. Hide your credit cards and reemphasize the rules and consequences of this kind of unacceptable action. While the damage could have been much worse, you can breathe a sigh of relief. You child’s use of your credit card can not and will not led to financial ruin.