Credit Card Quick

Why You Should Never Give up on Your Credit

Introduction

You’ve lost your job, you’ve missed months of credit card payments, and your credit is the last thing on you mind. It is best to just walk away from your debt obligations, right?

Wrong!

It may be quite tempting to just give up on your credit, especially if you feel your debts are simply too overwhelming to handle anymore. However, giving up on your credit is never the right decision to make, and here’s why:

• Judgments – Although creditors of unsecured loans such as credit cards and personal loans cannot take away your home, for example, they can take you to court where a judgment against you can be made by a judge. If a creditor wins a judgment against you in court, the court can begin to garnish your wages. Instead, it is best to call your creditor and set up a realistic repayment plan so you can stay on good terms with them. Ignoring the problem will not make it go away; it will simply delay the inevitable.
• Other credit – Your poor credit history can affect you years into the future. In other word, an abandoned credit card today can affect your ability to obtain a home or car loan years down the line. You may have forgotten about your past credit mistakes, but I guarantee you creditors and credit reporting agencies have not.
• Jobs – The job market is tight, and employers are increasingly looking further into their employees’ habits. As a result, it has become more common for employers to look at the credit scores and reports of potential employees. The reason is quite simple: some employers may find a direct correlation between a potential employee’s responsibility and their credit score. A low credit score may raise a red flag with an employer, thereby preventing you from getting that job of your dreams.

If you feel like your credit cards and other loans are simply too much to handle it is best to contact your creditors directly and talk to them about your financial struggles. Most creditors will be willing to work out a more affordable payment plan with you, so it always pays to ask.

How Credit Card Debt Affects Your FICO Score

Credit Score

The amount of money you owe on credit cards can go a long way when it comes to your FICO score. In other words, the amount of debt you owe makes up a significant portion of your FICO score, so it is best to always stay on top of your debt load.

Your FICO score is determined using a number of factors including: your payment history; the total amount of your debt; the length of your credit history; how much new credit you have; and what type of credit you carry. Although the importance of each of these factors varies a bit, it is known that the amount of debt you have makes up about 30 percent of your FICO score, thereby making it a very important factor to consider.

What to Consider

The amount you owe includes: the number of debts you have; the types of debt you have; and the amount of debt on those accounts. One of the main factors considered when determining this portion of your FICO score is your credit utilization ratio, also commonly referred to as the debt-to-income ratio.

The credit reporting bureaus will also consider the lack of a certain type of loan or the amount of credit you have with revolving lines of credit, such as credit cards. They will also pay close attention to installment loans, as well, such as car loans or mortgages.

Why Debts Matter

Your debt levels matter when it comes your FICO score because creditors will examine the amount of debt you have compared to your income. They will also compare the amount of available credit you have. In other words, if you have three credit cards with a total available credit of $30,000, and you only have $3,000 in debt, you will likely have a high FICO score to reflect this. However, if you have $30,000 and your debt totals $25,000, your available credit will be low, thereby lowering your FICO score.

If you want to maintain a strong FICO score, you will want to pay close attention to the amount of debt you carry at any given time. It is always best to have a variety of loans on your credit score, such as credit cards, home loans or car loans, but it is also best to keep your debts to a minimum.

How to Find a Qualified Credit Counselor

Credit Repair

If you have been struggling with your credit, you may have heard that a qualified credit counselor may be able to help you manage and overcome your credit woes. Although there are many credit counseling agencies out there that can help you navigate your credit problems and work with your creditors, there may be just as many companies that lack the reputation and the know how to get the job done.

If you are struggling to keep your head above water and your debts are overwhelming you, it may be time to call in the help of a qualified credit counselor. Here’s what to look for in a credit counselor:

• When searching for a credit counselor, look into national organizations, such as the National Federation for Credit Counseling or the Association of Independent Consumer Credit Counseling. Any company that is affiliated with a national organization such as these will have to adhere to strict guidelines and codes of ethics.
• Contact the Better Business Bureau and/or your state attorney general to see if there have been any claims or disputes against the credit counseling agency. Of course, if you find a long history of complaints against the company, it is probably best to steer clear.
• Learn about the company’s procedures regarding payments to your creditors. Most credit counseling companies will get you into a debt management plan, and they will ask you for payments that will be passed onto your creditors. However, they will also likely charge additional fees to do this. Make sure you fully understand how their system works and how they will pay your creditors.
• Beware of lofty promises. In short, beware of any company that promises to get you out of debt in a short period of time or fix your credit in a matter of months. The truth is that a credit counselor can simply negotiate better terms and lower payments with your creditors; not fix your credit. Timely payments over a period of time are the only thing that will fix your credit.
• Get everything in writing. Don’t take a credit counselor’s verbal promises and run with them. The only type of agreement you should consider is a written one.

Is a No-Debt Approach to Credit Cards the Best Approach?

Introduction

America loves it credit cards and, as a result, they have become a problem for millions of Americans. It may seem obvious that the answer to solving the credit card problem is to simply eliminate the use of credit cards. After all, they can’t cause us problems if we don’t use them, right?

Well, unfortunately, the answer is not that simple. For starters, credit card spending is a problem for just a small percentage of the population. If you have difficulty controlling reckless spending then a credit card probably isn’t right for you. However, for the rest of us, credit cards serve an important purpose and, let’s face it: they can provide us with an incredible amount of convenience and financial flexibility. Here’s why:

1. Credit cards make a bulk of our credit report – Credit cards are the easiest way to establish a long credit history. They are often the way to build our credit scores so we can be approved for cars, homes and other large items. If we eliminate credit cards from our lives, our credit scores may take a hit. Responsibly using and paying on a credit card throughout the year is one of the most effective ways to build an impressive credit score.
2. Credit cards provide us with convenience and practicality – Credit cards allow us to spend with a grace period. They allow us to spend now and pay later, making budgeting much easier. They allow us to cover emergency expenses and cover unexpected expenses. In short, a credit card, for many people, is like a financial security blanket.
3. Credit cards have an advantage over cash – Credit cards can do much more than cash. They can help us track our expenses; they can help us budget; they can help us run our business; they can provide us with protection against theft; and they can offer us many features, such as travel insurance and rental insurance. They eliminate the need to use cash when traveling, and they are accepted virtually anywhere. Renting a car, purchasing airline tickets and booking a hotel can be done quickly and easily with a credit card.

Serious About Paying Down Your Credit Card Debt? Tips for Reducing that Debt Today

Credit Card Debt

CreditCards.com spells out the grim truth: the average credit card debt of an American household is a whopping $14,743. This level of debt can be incredibly overwhelming for any family to tackle, and many families therefore do very little to attack the debt head-on and reduce it. After all, paying down that level of debt can take years to pay off.

However, if you are serious about paying down your credit card debt, there are a few major steps you can take to accomplish this. Here’s what you need to do to tackle that credit card debt today:

1. Gather your debts and total them up. Your total credit card debt may be quite a bit more than you previous thought, especially if it is spread out over a number of credit cards. Don’t round totals or ignore even the smallest debt; total it all up, down to the penny, so you can get an accurate picture of your current debt load.
2. Talk about the debt together as a family. One member of the family should not have to shoulder the reality of your family debt. Instead, call a family meeting and discuss the problem with all members of the family so everyone is aware that major changes will be taking place in your household to tackle the family debt, once and for all. In addition, talk to each other about how you got to where you are and the changes that the family will make to ensure this type of debt does not present itself again.
3. If the debt is too much to handle, consider calling in the professionals. Avoid debt-elimination companies or debt-consolidation companies, as it is often quite difficult to discern between the legitimate and not-so-legitimate companies. Instead, contact the Association of Independent Consumer Credit Counseling Agencies and ask about developing a debt management plan.
4. Get immediate cash in hand. If you need to put a serious dent in your debt, consider selling material things. Is your house too much to handle? Is your car note simply too steep? Can you sell electronic equipment, furniture and other material goods to get back on track? Although this is often difficult to stomach, getting rid of those things that put you in debt in the first place may be just the way to go.

How to get your Finances (once and for all) in Order

Credit Card Debt

Do you want to get your finances in order so you can spend your summer playing in the sun and relaxing in the shade instead of worrying over your bills and debts? Simply devote the next day or two to getting your finances in tip-top shape and you can start your summer off with a clean financial slate. Here’s what to do:

• Order a copy of your credit report – Everyone is entitled to a free copy of their credit report, every 12 months, from each of the three credit reporting agencies. Take some time and really study your credit report so you can be sure all information is accurate and recognizable. If anything looks out of the ordinary or if you notice errors or discrepancies, contact the appropriate credit reporting agency immediately to get the matter resolved.
• Look at your debts – Sure, you know you have debts, but have you ever laid them all out on the table and really took a good look at your balances and interest rates?  Simply by taking the time to review your debts you can change the way you look at your debts and how you can tackle them and pay them off. If you are paying too much in interest rates, consider your options. Can you contact the creditor to negotiate a reduction in your interest rate? Can you transfer your balances onto one credit card with a competitive interest rate? Do you need to seek the assistance of a credit counselor if your debts are too much to handle?
• Develop and implement a game plan – Once you have your debts in front of you, it’s time to come up with a realistic solution for paying them off. Don’t beat yourself up over the length of time it will take to pay them off; simply focus on developing and implementing a game plan. There’s nothing quite as empowering as taking control of your finances and not letting them take control of you.
• Make your life easier – If you need to get better control over your finances, consider the many ways in which you can make this process easier. Set up bill payments through your bank; consider setting up automatic bill payments; and go paperless by eliminating paper statements.

Three Reasons why a Balance Transfer is Right for You

Introduction

Balance transfers are a great financial tool for some consumers. However, like anything else, balance transfers may not be right for you and your particular financial situation. So, how do you decide if a balance transfer is right for you?

1. You are having difficulty keeping track of your credit card payments – If you have more than a couple monthly debt obligations, such as credit cards, car loans and personal loans, a balance transfer may be a great idea because it allows you to consolidate all of your higher-interest rate loans onto one, competitive-rate credit card. So instead of juggling a number of payments each month (and risking forgetting one), transferring your balances onto one credit card can save you time and money and eliminate much of the hassle associated with monthly bill payments.
2. You are paying high interest rates and have been unsuccessful at negotiating lower rates – If you have a credit card or two that has a high interest rate, and you have been unsuccessful negotiating lower rates, it may be time to break off your relationship with your credit card company and instead choose another credit card with an attractive balance transfer offer. Many people choose balance transfers to move their credit card balances from high-rate store cards onto one credit card with a lower interest rate, thereby making the process of paying off their debt a much easier one.
3. You have a payoff game plan – The only time it makes sense to take advantage of a balance transfer offer is if you have a realistic game plan for paying off that debt once the balances are transferred. It just doesn’t make good financial sense to shop for a new credit card with a new balance transfer offer every six to 12 months when your current credit card’s promotional rate has ended. Instead, find a good credit card with a great balance transfer offer and work to pay off that debt during the card’s promotional period. Make sure your repayment plan is realistic and make a commitment to sticking to your game plan so you can enjoy life without debt.

The Importance of Financial Communication for Newlyweds

Introduction

We plan for our wedding day for months – even years, but many of us never give finances more than a moment’s thought before we say “I do.” It isn’t any wonder, then, why so many marriages break over finances and money issues.

Before you walk down the aisle and exchange vows – heck, even before you pick your reception venue and choose your maid of honor and best man – sit down and have a frank discussion about money. Because, in the end, after the wedding hoopla has died down and you’re sharing expenses as husband and wife, finances will quickly go from being an afterthought to being front and center.

Here are some of the topics you may want to discuss:

• Your wedding – No, not what color tulips you want at the reception; talk about how much money you want to spend and establish a firm budget. Weddings are wonderful, don’t get me wrong, but they aren’t wonderful when you get in over your head with expenses and spend the first part of your marriage struggling to pay them off.
• Your debt – It is important to be completely open about the current debt both you and your future spouse are carrying, as your fiancés debt will soon become your debt, and vice versa. After you have laid all your debts on the table, so to speak, develop a game plan for paying them off.  And, by all means, consider postponing the wedding until you have gotten a better grasp on your debt load if you or your fiancé are in over your heads with debt.
• Your financial philosophy – Starting a marriage with two, completely separate philosophies about money will certainly create tension in your marriage. Talk openly about your views on spending, about credit card debt, and about saving for retirement. If your soon-to-be spouse doesn’t share your same views, it may be time to have a serious conversation about how you will handle these differences going into your marriage. Remember: it is always best to find out about each other’s personal views and opinions regarding money before the wedding and not after!

The Five U.S. Cities with the Highest Consumer Credit Card Debt

Credit Card Debt

It’s no secret that many U.S. families are knee-deep in credit card debt. Between poor spending habits and as a result of the poor economy and job losses, many Americans are struggling to handle the burden of credit card debt.

Equifax recently reported that, for some households, credit card debt burden equaled an astounding 17 percent of their income. What’s even more amazing is this total doesn’t include debt from store credit cards.

Experian has also analyzed consumer spending habits and found that the average consumer now holds an average of $4,200 in credit card debt. One bright light to this number is that it is four percent less than the year before. There are some cities, however, where credit card debt is far above the national average.

Here is a list of the top five U.S. cities with the highest consumer credit card debt:

1. San Antonio, Texas – Residents of San Antonio are now carrying, on average, $5,177 in credit card debt; that’s more than 20 percent above the national average. Jeanie Wyatt, CEO of the San Antonio-based firm of South Texas Money Management, explains that San Antonio’s debt problems are closely linked to the fact that this city is largely comprised of the working-class, and that wages earned in San Antonio are often less than other parts of the country.
2. Jacksonville, Florida – Residents of Jacksonville owe an average of $5,115 on credit cards. In addition, this city has a lower-than-average credit score. Jacksonville’s credit card debt problems come as no surprise, as this area of the country has been deeply affected by the real estate meltdown and mortgage problems.
3. Atlanta, Georgia – If you live in Atlanta, chances are your credit card debt is around $4,960. Atlanta has suffered from the housing market collapse, leading many to spend on credit cards out of “economic desperation.”
4. Honolulu, Hawaii – Honolulu’s debt average is about $4,939 per person, which is 15 percent higher than the national average.
5. Dallas, Texas – Dallas residents are now carrying an average of $4,936 in credit card debt, which is 15 percent higher than the national average. A bright spot in Dallas’ number, however, is that it is four and a half percent lower than last year’s numbers.

The Top 4 Clues that it’s Time to Re-evaluate your Finances

Credit Card Debt

The last few years have been financially difficult for many Americans. These hard times, however, have taught many of us to keep a closer eye on our finances. With this in mind, it is important to identify when our finances are on shaky ground so we can take the necessary steps to avoid a financial meltdown.

The following list of clues will help you identify if it’s time to re-evaluate your finances:

1. You immediately begin to feel stressed when you head to the mailbox – If you get heart palpitations every time you walk toward the mailbox, it may be time to re-evaluate your finances. If you delay opening your mail, or if you fail to even open your credit card statement because you can’t bear to look at the balance, it is definitely time to re-evaluate your finances. Putting your head in the sand, so to speak, accomplishes nothing when it comes to handling your finances; and in many cases, it simply makes matters worse. It’s time to face your financial demons head-on so you can begin heading down a better financial past.
2. You are having difficulty paying more than the minimum payment on your credit cards – Credit cards are a great financial tool if used correctly; if used incorrectly, they can wreak havoc in your life. If you are struggling to pay more than the minimum payment on your credit card, it’s time to either re-evaluate your spending, your budget, or both as to avoid a vicious cycle of hefty finance charges and low, monthly payments.
3. You find yourself using credit cards to handle monthly bills due to a lack of cash – A sure sign of a financial problem starts when you begin paying your monthly bills with your credit card because you have mismanaged your cash flow. Credit card use should be a convenience, not a necessity.
4. Your credit card is near its limit – If your credit card is nearing its credit limit, your spending may be out of control. Pay close attention to your credit card activity over the past six months so you can determine where you went wrong in terms of spending.