Credit Card Quick

Your Holiday Shopping Plan of Action

Introduction

Every year you swear you won’t go over budget, and every year you inevitably do.

Make this year your year for taking control of your holiday budget and implementing a plan of action that can be achieved.

Here’s what you need to know before heading diving into the retail madness this holiday season.

• Budget for absolutely everything. Sure, you’ve included the gifts, but did you also account for all those little “extras” that can add up to more than you bargained for? Include everything in your budget, from Christmas cards and postage to holiday cookie ingredients and charitable contributions. And don’t forget to factor in the cost of travel if you plan on visiting out-of-town family and friends over the holiday season.
• Don’t forget all the holiday goodies you deliver to everyone, from your hair stylist to your mail carrier. These small holiday gifts and monetary gifts are often unplanned, but can prove to be quite expensive.
• Make a realistic budget for everyone on your list – You may set a budget of $50 for each family member, but how realistic is that budget? If you know you will inevitably spend more, set a more realistic budget so you can be sure you stick to it.
• Bring your credit cards, but think twice about retail cards – Retail credit cards may seem tempting to use, especially during the holiday season, but they can spell big trouble afterward due to their steep interest rates. Instead, stick to your major credit card with the low, competitive interest rate.
• Don’t wait until the last minute to begin spending – One of the best ways to ensure your credit card spending gets out of control is to wait until the last minute when panic spending kicks in. Instead, do yourself a favor and begin purchasing holiday items now so that you won’t find yourself rushing about in a last-minute buying frenzy. Plus, you can be sure to snag a few deals this year, as retailers are offering earlier deals to customers in anticipation of early holiday shopping!

How to Responsibly Handle Store Credit Cards

Choosing Credit Card

We’ve all heard the warning about store credit cards, but they sure are tempting, aren’t they? You shop at your favorite store and they reward you with a line of credit and lots of goodies, such as coupons and special discounts. Sounds great, right?

Well, unfortunately, along with the goodies come high interest rates – often, astronomically high interest rates. So, the question is: can we enjoy store credit cards without getting burned by their high interest rates and fees?

Here are our tips and tricks to making store credit cards your friend, and not your enemy!

• Resist impulsively opening a store credit card on the spot – If you didn’t leave the house with the intention of opening a store credit card then it is best to avoid doing so once you hit the store. Instead, consider whether the store credit card is right for you and take the terms and conditions of the card home with you to study before making your decision.
• Consider the benefits of the card – not just now, but in the future, as well. The best store credit cards are those that will offer you continuing benefits for being a card holder. In other words, if the only discount they are willing to throw your way is the moment your open the credit card, you are probably better off passing on the card.
• Make it your priority to pay off your card, in full, each and every month as to avoid interest charges – We have yet to find a store credit card with a competitive interest rate, so the best way to handle any store credit card, regardless of where it is from, is to pay if off when the bill arrives. If you can’t afford to pay off the card in one month’s time, don’t use it and opt instead for using your competitive major credit card instead.
• Use your credit card for an interest-free, short-term loan – Many store credit cards, particularly for places where you make large purchases, such as electronics stores and home improvement centers, often offer interest-free periods for large purchases. Take advantage of these offers, just make sure you pay them off during the interest-free period; otherwise, you could end up paying all of the deferred interest charges, which could be significant.

Your Guide to Playing the Credit Card Game

Introduction

Did you ever hear the saying, “If you can’t beat them, join them?” We like to think our relationship with credit cards is much like this old saying because although many of us rely on them and enjoy their convenience and practicality, they often come back to bite us financially.

So, is there a way to be able to enjoy the best of both worlds? Can you really enjoy the many benefits credit cards offer without falling victim to fees and steep interest rates? You bet! Here’s how:

• Read, read and read again – Simply put, an informed consumer is a smart consumer. Because of the CARD legislation, creditors must now be quite transparent regarding terms and conditions of the credit card. Therefore, all of the credit card’s rules and regulations must be clearly spelled out. If you thoroughly read this information, and contact the credit card company to explain anything you don’t understand, you will be ahead of the game because you will know exactly what to expect from the card.
• Pay your card off each month – Regardless of what fees and rates the creditor is charging, you can avoid them altogether by simply paying the card off, in full, each month. Remember: you will always be in control if you pay off your card each month!
• Pay on time, without any exceptions – Unless you are enjoying a promotional credit card rate, your creditor cannot raise your interest rate unless you fail to pay on your balance by the due date. If you are bad with due dates, set up automatic payments, either through your bank or creditor, to ensure that you never miss a payment.
• Avoid cash advances like the plague – If there is one feature of a credit card that should never, ever be used unless you are in a true, financial emergency, it is the cash advance feature. The bottom line is that all bets are off when it comes to cash advances, so you can expect outrageous fees and equally outrageous interest rates that will certainly leave you with a swiftly mounting credit card balance that you will struggle to pay off.

How to Regain Control of your Finances

Credit Card Debt

Perhaps the best time to discuss getting a grip on your finances is before the holiday madness begins. And, often, the best way to really examine your spending is by looking at your credit card spending.

Many consumers overspend on credit cards because, well, it’s easy to do. Armed with just a card, you can step into a store and purchase things you normally would not purchase if you had to give up the cash in your pocket to do so. Credit card spending often makes us more careless and irresponsible when it comes to shopping, and therefore puts many of us in a precarious situation of too much debt and not enough income.

You can control your spending, though, even if you are currently spending more than you are making each month. However, in order to regain control, you must be able to identify- and rectify – the source of the problem.

Here’s what you need to do before you make another credit card purchase:

• Contact your creditors and ask for a copy of your credit card statements from the last six months. Once you have the statements in front of you, take the time to really examine them. What are your weaknesses? Do you spend more at a certain retailer? Can you pinpoint what you seem to be spending the most on each month?
• Stop spending until you have recognized the problem. Unless you fully understand why you are spending and what you are spending on, you cannot begin to fix the problem and gain control of your finances. Make a pact with yourself to cease spending on anything but the necessities until you have pinpointed the problem.
• If you feel like you may have a spending problem, get help immediately. Contact a non-profit credit counseling service and seek help for your spending problems. Remember: ignoring the problem won’t make it go away.
• Eliminate the source of the problem. If you overspend each time you shop at a certain retailer, promise yourself that you will not take a credit card with you the next time you visit that particular retailer. Then, reflect on your purchases at that retailer once you no longer use a credit card. Are your purchases different? Are they any less? Are you more inclined to think twice before making a purchase?

The Good and Bad Aspects of Prepaid Debt Cards

ATM

There are many reasons to like prepaid debit cards, and it is evident that many Americans feel the same way. Prepaid debit cards do have many perks, but there may also be several disadvantages of using a prepaid debit card over a credit card. In other words, prepaid debit cards may be great in certain instances, and not so great in other instances.

Here’s the skinny on prepaid debit cards:

Advantages

• You can’t spend over the card’s value. Unlike credit cards, you are forced to spend within your means, thereby eliminating the possibility of overspending yourself into credit card debt. Many parents of teenagers give their children prepaid debit cards for this reason. If you have issues with spending, prepaid debit cards may be your answer when you hit the mall this holiday season.
• Your college aged child will appreciate its convenience, and so will you. If you have a child off at college, you can supply him or her with a prepaid debit card and add funds to the card whenever necessary. This will provide your child with the money necessary for college expenses, but will allow you to keep a tighter rein on his or her spending habits.
• No credit checks mean even individuals with the poorest credit can get a prepaid debit card. Because you are loading your own money onto the card, prepaid debit cards do not require credit checks.

Disadvantages

• The use of prepaid debit card will not have a positive effect on your credit score. If you want to build up your credit score, you will need to use a credit card, not a prepaid debit card, as these types of cards have no effect on your credit score.
• Prepaid debit cards come with fees, some of which can be quite steep. Although many individuals avoid paying with credit cards because they don’t want to deal with interest rates, they must also be aware of the fees that accompany many prepaid debit cards. Some of the fees you may find on prepaid debit cards include: activation fees, ATM withdrawal fees and balance inquiry fees, just to name a few.
• Prepaid debit cards usually have weaker protection against fraud. Unlike credit cards, prepaid debit cards don’t have the same automatic federal statutes that you would enjoy with the use of a credit card.

The Effects of the New Credit Card Legislation

News

If you are sick and tired of the confusion with credit cards and the vague language that comes along with credit card statements, you will no doubt welcome the new credit card legislation recently enacted by Congress.

In addition to enjoying easier-to-read credit card statements, the credit card legislation may mean other positive changes for consumers like you.

Clearer Communication between Creditors and Consumers

Creditors must be more communicative when it comes to your credit card account. Any changes in your account must be addressed in writing, and you must be given ample time to either accept or reject these changes. For example, if your creditor raises your interest rate, you must be informed, in writing, at least 45 days in advance of the increase in interest. In addition, if you choose to reject the interest rate increase, you can cancel the card and pay off your remaining balance with your current interest rate.

Budgeting Made Easy

Another change the credit card legislation has brought about shows up on your credit card bill. Creditors are now required to show, in clear language, the amount of time it will take to pay off your credit card if you pay only the minimum payment and the amount of time it will take to pay off your credit card if you send in more money. This change will provide an easy-to-understand explanation of the effects of just paying the minimum balance on a card.

Other perks of the new credit card legislation include:

• Any payment you send in goes toward the balance with the highest interest rate. This is particularly helpful if you have purchases from different promotional periods.
• Creditors cannot raise your interest rate during the first year of having an account (unless you default on the credit card’s terms and conditions).
• Double cycle billing will be eliminated, preventing creditors from calculating finance charges from the previous, as well as current, billing cycles.
• Creditors are under strict rules regarding granting credit cards to consumers under the age of 21, thereby protecting many college-age students from obtaining credit and possibly destroying their credit score at a young age.

The Secrets to Making the Most out of your Credit Card

Introduction

In addition to being super-convenient, credit cards offer many benefits to consumers. But in order to take advantage of all that credit cards have to offer, you must know about them! There are a number of ways to make your credit card work for you, while at the same time enjoying the benefits of using your credit card.

Here are the best tricks of the trade to make the most out of your credit card:

• Instead of spending your bonus points or rewards points on luxuries, use them to buy necessities, like groceries. Sure, we all want the finer things in life, but being able to save on everyday purchases and necessary items will allow you to take a large chunk out of your monthly budget.
• Remember that the grace period on your credit card is typically between 50 to 55 days. From the time of purchase until the credit card payment is due is a period of no interest. Many individuals think that their grace period begins at the date of purchase, but it is really from the date of billing. Plan ahead and enjoy your free interest period each month so that you can save on interest and enjoy the perks of using a credit card!
• Consider the many perks of rewards cards. If you enjoy using your credit card frequently throughout the month, then by all means take advantage of one of the many rewards credit cards. But, remember to pay off the card in full each month; otherwise, the amount of interest you will pay on your purchases will trump any benefits you would receive from the card’s rewards.
• If you plan and budget accordingly, you can keep your hard-earned cash in your bank account and use your credit card to make purchases instead. If you figure out your interest-free grace period on your credit card and pay for these purchases just before this period ends, you will be able to earn interest on the money in your bank account. How’s that for making your money work for you!

Golden Rules for Debt Management

Credit Card Debt

Debt management shouldn’t be a confusing subject yet, for many of us, we make it more complicated than it has to be. The goal is quite simple, actually: don’t spend more than you make.

Sure, this sounds like a no-brainer. And, if this were the only thing we had to worry about, there would be very few problems. Unfortunately, however, debt management is not that simple.

With that said, there are a few, golden rules of debt management that we could all benefit from sticking to:

• Many of us don’t want to face the mounting credit card bills in the corner, so we do our best to ignore them. This, however, is only a temporary fix, at best. The best solution is to take a deep breath and assess your debt situation. The basic fact is that ignoring them won’t make them go away. Realization and acknowledgment of our debts is, by far, the best way to get a handle on our debts.
• The next golden rule of debt management is to simply stop spending so much. Sure, this is easier said than done, but the fact of the matter is that most of simply don’t pay attention to our spending habits. This act, of course, is easy to do, considering that many of our purchases end up on credit cards, where we often forget about them. Pay close attention to your spending habits and gather all receipts together so that you can review your purchases on a weekly basis.
• If spending has become a problem for you, don’t wait to get help and change things. Your debt problems don’t have to be your problems alone. There are many resources available that can help you understand why your spending is out of control and can help you make the necessary changes so that you won’t be burdened by debt. A good source for debt management assistance is non-profit credit counseling agencies. Before choosing a credit counseling agency, however, check their credentials and background to make sure they are reputable and trustworthy.

Credit vs. Debit: Which One Should you Use?

Introduction

The big debate continues: credit or debit?

Debit card advocates say that debit cards are the way to go because you can never spend more than you have, while credit card advocates tout the many safety benefits of using a credit card. So, which one is right?

To further confuse you, the truth is that both sides are right on the debit card vs. credit card debate. In other words, what may work well for one individual may not be such a great deal for another individual.

So, you’re at the checkout line at the grocery store, which one should you swipe? Here are some factors you may want to consider before deciding whether using a debit card or a credit card (or a combination of the two) is right for you:

• Credit cards allow you to pay for multiple purchases and then pay them off at once when the bill arrives, or in several increments, depending on your budget and financial situation.
• Because a debit card is tied to your bank account, you will not be approved for the purchase if you don’t have enough in your bank account to cover it. For some individuals, this is a good thing, while for other individuals this can prove to be quite embarrassing or inconvenient.
• If you’re not careful, credit card debt can wreck your finances and your credit score. On the other hand, the proper and responsible use of a credit card can boost your credit score and afford you lower interest rates on many types of loans and lines of credit.
• Large purchases are typically protected if you pay for them with a credit card. Some of the benefits of using a credit card for large purchases include warranty protection, theft protection and return protection.
• If you make travel reservations, hotel reservations or rental care reservations, you can expect the company to put a large hold on your account. This may not be a good time to use a debit card, as this could freeze a good deal of your money for a short period of time.
• For online purchases, credit cards are probably your best bet, as there are great protection laws placed on credit cards. In fact, according to the National Consumers League, credit cards offer stronger fraud protection and better security than debit cards.

Need a Credit Score Boost? Here’s What You can Do

Credit Score

If you are lamenting over your low credit score and you plan on making a large purchase in the near future, you may be wondering what, if anything, you can do to boost your credit score so that you can either get approved for a loan or line of credit or receive a more competitive interest rate.

Although raising your credit score can’t happen overnight, there are a number of things you can do bump up your credit score in the next few months:

• Pay down any credit cards that are near their credit limit. Paying down credit cards is an important step for raising your credit score, particularly if you’ve either maxed out of the card or have a balance of more than 50 percent of the credit card limit. This is because the credit reporting bureaus, in addition to considering your credit history and spending habits look at the amount of available credit. Your best bet is to raise your debt-to-available-credit ratio as much as possible before making a large purchase or taking out a line of credit.
• Don’t underestimate the power of paying your bills on time. Many consumers think that missing a bill or two won’t make much of a difference on their credit score, but that is simply not the case. According to FICO, you can actually lose as much as 110 points off your credit score simply by missing a payment by 30 days.
• Don’t apply for any credit cards in the months preceding a large purchase. Any time a creditor runs a credit check your credit score takes a hit.
• Don’t close any credit card accounts in the months preceding a large purchase. Cancelling any credit cards automatically lowers your debt-to-available-credit ratio, thereby decreasing your credit score.
• Check your credit score. The three, major credit reporting agencies, TransUnion, Experian and Equifax, provide a free copy of your credit score each year, so take advantage of this and check out your credit report so that you can remedy any mistakes or inaccuracies.