Credit Card Quick

The Top Three Things you can do Today to Increase your Credit Score

Credit Score

The process of increasing your credit score may seem like a daunting task, but in reality it just takes time and a good, solid game plan.

If you want an action plan for building or rebuilding your credit, here’s what you need to do:

1. Pay all of your bills on time. OK, so this may sound quite explanatory, but in reality late bill payments are the number-one cause of poor credit scores. Many individuals only view payments such as car payments and credit card payments as important in terms of their credit score, but in reality every type of bill payment is important when it comes to your credit score. In addition to the obvious, installment type of loans, don’t neglect student loan payments and utility payments. Remember: every debt and every bill matters in the eyes of your FICO score!
2. Get the maxed out credit cards paid down first. Although debt may be the same in the eyes of creditors, your debt-to-income ratio plays a big part in your credit score. In other words, if you have a credit card with a credit limit of $10,000 and you have $10,000 charged on that card, your credit score will take a hit. As a general rule, always try to keep your credit card balances to no more than 50 percent of your credit limit. Your first order of business, therefore, should be to pay down the debt on those cards that are either maxed or near their limit.
3. Don’t cancel credit cards along the way. You may be tempted to cancel credit cards as you pay them off, but this may do more harm than good. If you are really tempted to begin spending on your credit cards again, then it may be in your best interest to cancel them. Otherwise, pay them off but keep the accounts active. This open credit available on those paid-off credit cards will boost your debt-to-income ratio, which will in turn boost your credit score.

Credit Card Delinquencies Continue to Fall as Creditors take Measures to Protect Themselves

News

Credit card delinquencies fell to their lowest level in eight years in the first quarter of 2010, according to the American Bankers Association. In addition, nearly all major credit card companies experienced nearly five months of improvements during that same time period.

These excellent numbers are likely a result of two factors:  consumers are becoming better equipped to handle their debt; and creditors are taking measures to protect their financial interests.

Some of the changes creditors have made as a direct result of the national recession and credit crisis include the following:

• Creditors have lowered credit limits across the board, thereby preventing consumers from overcharging on their credit cards. You may have received a letter from your credit card company regarding this change. You may be able to contact your credit card company and dispute this change, particularly if you have a strong history with them.
• Creditors have begun closing accounts due to inactivity. Many creditors have cut the fat, so to speak, by simply closing accounts that are not being used anymore. If you have a credit card that doesn’t get used anymore, you may have received a letter from your creditor announcing that they will close your account. You may also have received a letter from your creditor stating that “inactivity fees” will soon apply if you don’t use your credit card.

The best rule of thumb is either to cancel the card you no longer use, or to make a purchase on it at least once or twice a year to avoid the dreaded inactivity fee.

• Creditors have written off many of their uncollectible accounts. For many creditors, the process of tracking down severely delinquent customers is simply not worth it, financially speaking.
• Creditors have begun approving credit applications for individuals with the best of credit. Risky credit card applicants need not apply under the eyes of many creditors. The risk of approving an individual with iffy credit simply isn’t worth it anymore to creditors. In other words, don’t expect an approval letter unless your credit score is clean.

How to Best Deal with Credit Card Debt Collectors

Credit Repair

Unfortunately, credit card delinquencies are the sign of the times in which we live. With high unemployment rates and homes in foreclosure, many individuals have found themselves in the unfortunate position of being late on their credit card payments.

And with late payments, as we all know, comes credit card debt collectors. If you are in over your head with credit card bills and credit card debt collectors have begun calling you, here’s what you need to know:

• Ask the debt collector to validate the debt. Under law, credit card debt collectors must send you your debts in writing if you request it. Wait until you have received the debt validation and you have reviewed it before you begin to make payment arrangements.
• Understand that, under the Fair Debt Collection Practices Act, debt collectors are not allowed to contact you before 8AM or after 9PM. In addition, they are not permitted to use any profanity or make any threats against you. If anything like this has been happening, immediately contact the FTC to file a grievance.
• You have the right to request that all future correspondence between you and the creditor be done in writing.  Under law, the creditor must abide by your request. This can put an end to those phone calls every day.
• Ever time you have contact with the debt collector, take down notes. Keep any voicemails or letters from the debt collector, and write down the times, dates and the name of the person you talked to.
• Once you have established a set of guidelines with the debt collector, begin working with them to arrange a payment plan. You may also be able to negotiate a lower payoff amount than you currently owe. Regardless of whether you pay off your debt in full or settle the debt for less you will experience a good hit on your credit score; therefore, it is often in your best interest to negotiate a lower amount. Most importantly, don’t agree to a payment plan that you cannot realistically afford to pay each month; instead, start the negotiations low so that you can be better equipped to pay off the debt in a reasonable amount of time.

Signs that your Credit Card Debt may be out of Control

Credit Card Debt

Has your credit card spending spiraled out of control? Are you struggling to make the minimum payments on your credit cards?

If so, then your credit card debt may be more than you can handle. Here are some signs that your credit card may be out of control:

1. You are near the limit (or maxed) out on your credit cards. If you have charged you credit cards to their limit then you could be putting yourself in danger of not being able to handle your monthly credit card payments.
2. You have a large stack of credit cards in your possession. Too many credit cards with too many balances are a recipe for disaster. Often times, multiple credit cards with multiple balances can create confusion –and in return missed payments. Remember: it is much harder to keep track of your spending if it is spread out over many credit cards.
3. You have a lot of debt, but you prefer to play ignorant. If you refuse to recognize the extent of your credit card debt or if you have no idea how much you have in credit card debt, you could be in for a rude awakening when it comes time to pay your bills each month. Remember: hiding your head in the sand accomplishes little more than the downward spiral of your credit card score.
4. You are skipping one or more credit card bills each month. Picking and choosing which credit card bills get paid each month is a sure sign that your debt has become overwhelming for you.
5. You are only able to pay the minimum payments on your credit cards each month. Paying just the minimum payments can result in big trouble and year’s worth of debt and finance charges. If you are only able to pay just the minimum payment or if you are not even able to manage the minimum payments any longer then you are likely in deep in credit card debt.

The best thing you can do if you find yourself in over your head in credit card debt is to take immediate action. Contact your creditor and arrange a payment plan; contact a non-profit debt counseling company; or seek the advice and guidance of a qualified financial expert.

Have you put your Balance Transfer Checks to Good Use?

Introduction

If you have a strong credit score you have likely received balance transfer checks with your monthly credit card statement. If you’ve never put these checks to use, you could be missing out on some great opportunities.

The best balance transfer checks from your credit card come in the form of 0% APR. You may also receive balance transfer checks with three or six percent APRs, which are also nothing to sneeze at. The great things about balance transfer checks are that you have the luxury of lower APRs, even if your credit card APR is considerably higher. Another great benefit to balance transfer checks is that you are often awarded the lower interest rate until that purchase is paid off.

Paying off High-Interest-Rate Loans

Credit card balance transfer checks are therefore great for paying off other higher-interest rate loans. From car loans to other credit cards and personal loans, balance transfer checks can be used for nearly any other type of loan, provided you have the credit limit to accommodate the transfer.

Many people also use balance transfer checks to pay for large things, such as home improvement projects, college tuition or vacations. Still, others simply write the balance transfer check to themselves, deposit the money into their bank account and use the cash for a wide variety of things.

Your Alternative to Personal Loans

One of the advantages of balance transfer checks over personal loans is that they usually come with much lower interest rates and they can be used on virtually anything you want or need. In addition, because you are already a credit card customer, you need not go through any type of loan application or approval process.

Balance Transfer Fees

One of the downsides of balance transfer checks is that you may have to pay a balance transfer fee or other type of fee. Keep an eye out for these fees, as they can often be steep. However, also consider the money you will save if you transfer your higher-rate balances to one with a 0% APR.

In conclusion, it is always best to weigh your options when it comes to balance transfer checks, as they may be able to provide with a low-interest loan to do any number of things.

Your Guide to Securing a Business Credit Card with a Low Interest Rate

Choosing Credit Card

If you own a small business then you are certainly aware of the advantages of having a small business credit card. In particular, you enjoy the low interest rates and the high credit limits that usually go along with owning a small business credit card.

However, there are certain steps you can take to ensure that you’re receiving the best, possible terms for your business credit card. How can you make sure you are getting the best interest rate with your business credit card?

• Get quotes from several different credit card companies. Don’t assume that all business credit cards carry the same APRs and fees; in fact, there are a wide range of fees that come with business credit cards, so begin your search for a business credit card by getting quotes from several different companies.
• Use the power of negotiation. If you find a business credit card that suits your business needs, but it doesn’t have the lowest APR when compared to other credit cards, you can always contact the credit card company and ask them to lower the APR; often times, credit card companies will comply with your request because they want your business. Make sure to come to the negotiation table with several other quotes from other credit card companies so you have some ammunition when negotiating.
• Consider a secured business credit card. Many times, businesses only look to unsecured credit cards; however, many secured credit cards can offer lower interest rates. If you have collateral, you may want to consider having a secured credit card. However, keep in mind that you will ultimately be responsible for your credit card bills with a secured credit card.
• Establish credit with one company and then ask for a decrease in your APR once you have a proven credit history with them. More often that not, credit card companies will want to keep your business if you have proven yourself to be a good customer, so use this to your advantage and ask for a lower APR.

The Link between your Credit Score and Closing a Credit Card Account

Credit Score

Have you heard the rumor about your credit card score being lowered if you close your credit card account? Are you now nervous about closing any type of account?

If so, then you must take into account several factors.

Annual Fees

First of all, many credit card companies are now imposing very steep annual fees on their credit cards. For example, Citi is now starting to impose a $60 annual fee on some of their credit cards. The fact of the matter is that most credit cards will not impose an annual fee, so in my opinion it only makes sense to close an account that is going to charge you an unnecessary fee. Will it lower your credit score a few points? Sure. Will saving the $60 every year be worth it? You bet.

Inactive Account Fees

In addition, many credit card companies are now charging fees for inactive accounts. In other words, if you have an open credit card account that you no longer use, you could very well be charged an “inactivity” fee by your credit card company. Again, in this instance, I would say that it is best to save yourself the aggravation and the unnecessary fee and close the account.

If you are unsure about closing your credit card accounts, but you want to avoid the fees, there are steps you can take. For example, simply charging one or two purchases a year on a credit card will stop the inactivity fee. You can also call your credit card company and dispute the annual fee; many credit card companies will comply if you are a good customer.

In the end, closing your credit card account will probably not lower your credit score substantially. Many times, a closed credit account lowers your FICO score because it shortens your length of credit history. Although this is usually true, the fact of the matter is that if you have a good credit score closing one account won’t affect your FICO score for very long.

You may, however, want to avoid closing an account before making any large purchases, such as a home or a car, as you will want your credit score to be as high as possible as to secure the best interest rate.

How to Introduce your Teen to Responsible Credit Card Management

Introduction

Don’t expect your teenager to automatically understand credit and the ramifications of irresponsible spending and credit card management. Instead, begin teaching him or her about finances as soon as she or he is able to understand, and keep the dialogue going until your teen leaves the house.

While you have your teenager at home you can begin to teach him or her about the importance of responsible credit card use and the benefits of maintain a strong credit score:

• Use online calculators to give them examples. Begin by teaching your teen about credit cards, interest rates and monthly payments. Once your teen has a clear understanding of how credit cards work, use an online debt calculator to show him or her how long it will take them to pay off a debt if they pay only the minimum amount. In addition, show them the ramifications of not paying off a debt in a short period of time and the finance charges they will incur as a result.
• Consider teaching your teen the rules of credit using a prepaid debit card. Prepaid debit cards are a great way to teach your teen about finances, and about the importance of budgeting. You can purchase a prepaid debit Master Card or Visa that will work just like a credit card; however, your teen will need to budget him or herself so that they don’t overspend.
• Once your teen begins working, encourage him or her to open a checking account. Balancing a checking account and understanding the importance of not overspending will become very clear when it comes to managing his or her money. Once your teen has proven his or her trustworthiness with a checking account, you can give your teen permission to get a debit card that is linked to his or her account.
• Once your teen has a firm grasp of credit cards and the responsibility that comes along with them, you may want to consider co-signing for a credit card, particularly if he or she plans on going away to college. A card that is in both your name and your teen’s name will allow your teen to enjoy the benefits of a credit card, but will also allow you to oversee his or her spending.

International Credit Card Scam Busted by the Federal Trade Commission

Card Security

The Federal Trade Commission has once again thwarted a multi-million-dollar, international credit card scam.

This long-running international credit card scam was estimated to have net more than $10 million; but the interesting part is that credit card customers were charged no more than $10 in fake credit card charges, thereby allowing the thieves to get away with the scam for such a long period of time.

For four years the perpetrators charged unsuspecting credit card customers small amounts on their credit card and debit cards. It is still unclear how the thieves got the credit card customers, but the FTC thinks that they may have even gone as far as done credit checks on their victims to make sure the credit cards were legitimate.

This scam, along with the countless scams being busted nearly every day by the FTC, is a clear example of the extent to which credit card thieves will go to steal money. It is also a good time to alert credit card customers to these credit card scams so that we can all be more aware of our credit cards and how we can protect ourselves:

• Check your statement carefully, each and every month. Many of us get into the habit of paying our credit card bills each month and we don’t even take the time to really examine our statement. However, this case is a perfect example of ripping credit card customers off because they simply didn’t take the time to carefully read the charges on their statement.
• Understand credit card scams so that you can be better equipped to fight them. Credit card thieves, unfortunately, are staying one step ahead of the FTC and other cyber-crime-fighting organizations, so it is best to understand the lengths at which thieves will go to bilk people out of millions of dollars.
• Keep your receipts so you can compare them with your credit card statement each month. You may be charged a few dollars extra by a company and not even be aware of it unless you check the amount carefully against your receipt.

Canceling Credit Cards – What to Consider Before Taking this Approach

Introduction

A credit card can be a terrific asset to have. However, you can easily find yourself dissatisfied with your credit card company for many reasons. When this occurs, it is often an enticing approach to close the account and move on to a better offer. Is this the best approach to take? Here are some things to consider:

Canceling

A lot of people cancel their credit cards and do so for various reasons. A smart person who knows they can not afford more debt but can not trust themselves not to get in over their heads might cancel and pay off the remaining debt to preserve their credit as is until their financial situation is improved. others may not like the sudden changes in terms and conditions, such as higher rates, lower credit limits and an added annual fee. Some just might not like the service or the perks they are getting and decide to look for something else that better meets their needs.

Another good reason to cancel an account is that you have far to many credit cards or have opened another account and want to reduce your debt as much as possible.

However, cancellation may not always be the best route to take.

Reasons Not to Cancel

If you have a large purchase looming in your future, you might want to hang onto those cards, keeping their balances low. Lenders like to see plenty of available credit in your name. This could improve your chances of getting a great rate on financing for a home, car or other major purchase.

An older line of credit is going to look much better than a newly opened one. As long as the line of credit has been established for a length of time and has no negative marks, you really should consider keeping that credit card.

How to Cancel

If you do decide you need to cancel a credit card, don’t be hasty about it. Make a plan and do it in steps in order to maintain your credit rating.

First, put that card aside and stop using it. Pay off all the debt owed on it, even if it takes you a bit of time. By not using it, you are not incurring any new debt. Try to pay it off as quickly as possible, especially if your card carries an annual fee. You want the debt paid and the card canceled before you have to pay that fee again.

Once your debt is paid in full, call the company about your wish to close the account and cancel the card. However, do not leave it at that! Send the company a certified letter as to this intent as well, and be sure to keep a copy for your own records. Request confirmation from your credit card company and check your credit report. Make sure the account is marked as closed within 30 days. If not, call the company and insist that his be done.

There are many good reasons to cancel and many good reasons not to cancel. If you feel you must cancel an account, for whatever reason, be sure to do it the right way and keep an eye on things to protect your good name.