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Avoid Racking Up Credit Card Bills this Summer

Summer is the time for travel, entertainment, and the kids are now out of school and freed up to participate in more activities.  All of this adds up to big spending, not to mention gas, airline, and lodging costs are increasing to peak levels.  While summer means fun, there needs to be discipline when it comes to opening up your wallet.  With a few spending methods it could add up to a lower credit card statement by the time the summer comes to an end.

Use Cash Instead of Plastic

Using your credit card seems like play money, can add up the charges and not notice until the statement comes in the mail and sends you into shock.  A great way to curb spending habits is to use cash instead of credit.  With a set amount of cash on hand, if you stick to spending what you have you will not go over, will start to think long and hard about purchases as you hand actual money over during a transaction.  Maybe the thought of handing money over will reduce unnecessary spending and leave a little left over for important purchases.

Plan a Staycation

Instead of plunking down thousands to send your family to Disney this summer during peak travel months, plan a stay-at-home-vacation.  There are plenty of activities to do that are within driving distances, such as a zoo, beach, amusement park, and are able to save on lodging and drive home after.  Entertainment expenses are the first to be cut when money is tight, so instead of putting the annual family vacation on the chopping block, plan shorter trips and stay local.  If you are lucky enough to have family on a lake or a pool, start sucking up now.

Check Garage Sales

Items do not have to be new to be in and around your home.  Garage sales will be on the rise during the summer months as the spring cleaning sessions are over and items are piled up to try and sell to clear space, so spend a Saturday afternoon seeing if there are any hidden gems.  Go through your own basement and attic and see if there are anything you can sell, and take the profits to treat your family to a night out.  If you are not interested in selling, then take a trip the thrift store and shelves will likely be stocked with the spring donations.

If, inevitably, you find yourself in a pinch and start seeing those credit card balances rise, then there are alternative options. Credit cards can be good for rewards points, but paying interest fees can eat away at any benefit from using them. Instead, if you own your car then consider title loans. These can be especially useful if you are unable to even meet your minimum card payment each month. You don’t want to ruin your credit over a few tight months. These title loans allow you to borrow against the balance of your car.

 

Why you should swear off debt, but not swear off credit cards

While getting out of debt is no doubt a good thing, many consumers are surprised to see their credit scores fall after finally paying off their debt. That’s led to a bit of a misconception about needing debt in order to have “good” credit but, while using credit is a good way to increase your credit score, there are certainly good and bad ways to do it.

For example, if you use credit cards and pay them off in full every month you won’t have debt and you’ll also be building good credit. The lesson? Avoid debt but don’t avoid credit cards.

Many people fall into the trap of paying off their credit cards and then promising themselves that they’ll “never go into debt again.” While staying out of debt is definitely an excellent plan, cutting up your credit cards and never using them again isn’t, and could leave you with either a low or no credit score.

While there are different credit scoring models and the way they figure out your score isn’t always the same, in order to have a credit score you need to have had at least some recent activity on your credit report. Not using your credit card after you pay off the outstanding balance will likely cause the card issuer to close your account due to inactivity and, once that’s done, they won’t report anything to the major credit bureaus. If that card happened to be your only type of active credit, you will lose your credit score altogether.

The easiest way to work around this is to use your credit card occasionally and, when the bill comes due, paid it off in full immediately. If you’ve just emerged from heavy debt and didn’t have a credit card, getting a secured card and using the same strategy is an excellent idea.

The fact is that, depending on what type of debt you have and what you did to pay it off, paying off your credit card debt in full can cause a number of different shifts in your credit score. If, for example, a high percentage of your credit limit was being used before, your credit score might actually improve because your “debt to credit ratio” will be lowered.

If you stop using the card completely however, as we mentioned above, the card issuer may close your account. What this does is reduce the available credit that you have, something that could hurt your “credit utilization ratio” and lower your credit score.

The type of accounts that you are using at the same time, or the “mix” of credit that you have, can also affect your credit score. If, for example, you had credit card debt and student loan debt and you’ve recently paid off your student loans, your credit score may go down because you don’t have any active installment loans on your credit report. On the other hand, paying your credit bills on time and keeping your credit utilization rate as low as possible is much more important to your credit score.

Having an understanding of how your various credit accounts affect your credit standing, as well as how credit scores work, is always a good idea. If your goal is to get out of debt without hurting your credit score, use the advice above and do your own research as well so that you’ll not only be debt-free but also keep your credit rating healthy.

Why Your Credit History is so Important

 

To the average person a ‘lender’ is a bank or other large institution that is faceless, nameless and all powerful.  While it may seem that banks and other lenders are heartless (and indeed some are) it helps if you know a little about credit institutions and how they work before you go off all half-cocked trying to figure out why you can’t get a car loan with a credit score of 163.

The simple fact is, lending money is a tricky business. Let’s look at in for a moment on a much smaller scale.  Say your friend Jim asks to borrow $100.00 and you say yes but as long as he pays you back by next week Friday.  Now let’s say that Jim never actually pays you back because, unknown to you, Jim borrows from friends all the time and has a nasty habit of never paying them back. If you would have known that simple fact you might not have lent him the money, am I right?

It’s exactly the same for a large bank or lender.  If you go to them asking for a loan they want to be sure that you’re going to pay them back.  It is, after all, only fair that you do.  If they were to not check your history they’d be pretty stupid, don’t you agree? If you have a clean bill of health (meaning your credit report is in good shape) they will certainly lend you some money, but if you don’t you can appreciate why if your credit history is riddled with more holes than a piece of Swiss cheese.

That’s why your credit history is so important. If you have ever owned a credit card or gotten a loan for anything (home, boat, motorcycle, lemonade stand) you have a credit history and the banks would be crazy not to use that history to see if you will pay back the money they are thinking about lending you.  It only makes good business sense, and that’s why you should protect your history by always making sure you pay bills on time.

Credit reporting agencies were formed for this very reason, to give lenders the knowledge that they need to make important business decisions like lending you money for a home or car. If they see that you credit report is strong they will lend to you.  If it’s not great (but not a complete mess) they may still lend to you but at higher interest rates.  Again it only makes good business sense for them to do this because there’s a risk that you might not pay them back.

So make sure to take care of you credit your entire life.  It can and will affect you in many ways even if you don’t like it. If you do take care of your credit history you’ll also find that banks are very happy to lend to you for whatever reason you give them

 

 

Personal Finance Advice That Takes Only Minutes To Read, But Will Help For Years To Come

Do you desire to make life-long financial changes for the better? This is something you can do, but you must invest some research time. There is thankfully a ton of advice to been had here in this article.

Paying off any credit cards that have high interest rates should be your priority as you seek to pay down your debt. While you may personally prefer to pay all your debts at the same rate, zeroing in on those with high interest rates benefits you in the end. This is very important, since credit rates are expected to rise soon.

From every check, take out savings first. Saving the money that is “leftover” will leave you with zero savings. Knowing this money is put aside for savings, it helps you to create a budget and avoids the temptation to spend it.

Young people wanting to build up their savings can go far by understanding and taking advantage of the magic of interest compounding. Get yourself a good savings account and set aside a portion of your earnings.

Being aware of the value of one’s possessions can help prevent financial loss. When you sell a vintage item, you may gain some personal wealth.

Plan for your taxes so you can get on a better track with personal finance. Think about the investments of pre-tax income you can make through your employer. Keep some money away for medical expenses. Sign up for any employer-matching 401K programs offered at work. Wisely using your earned money makes good financial sense.

Give yourself a monetary allowance so that you do not completely deprive yourself while building up your savings account. Use the budget to purchase things that you want. When you hit your budget limit for the month, you should understand that you are done with entertainment purchases until the next month’s budget begins. Your budget will remain in tact, and you’ll still be fairly happy.

You may not know it, but when you pay full price, you are paying too much. Don’t feel like you need to be loyal to specific brands, and concentrate on buying only when you have a coupon handy. As an example, if you usually purchase Tide laundry detergent, but presently have a money-saving coupon for Gain, purchase the Gain and save some money.

If you are barely surviving, it might be a good idea to get overdraft protection. Although you may have to pay a little extra each month, the fee for overdrafting could be as much as $20.

One way to save money is to cut off your cell phone. While this is not the most popular way to save money, cell phones are not a necessity. Actually, your smartphone and PDAs are a matter of convenience more than anything. Look at your plan and see if it is possible for you to cut some of the costs, at least.

In order to get the most out of the property that you own, take steps to control the cash flow in to and out of it. Keep track of your income and how much you spend so that you can see how your property is doing after every billing cycle. Be sure you have a firm property budget established to refer to as a guideline.

Set up a bank account that automatically takes a few dollars each month and saves it if you want to save quite a bit of money. This is an excellent strategy which helps you to manage your money much better each month. It is also helpful if you are saving for a big event in the future, such as a wedding or a special vacation. 

You should now have a clearer understanding about personal finance. With all the information provided by this article, you now have the necessary knowledge to manage your promising financial future. All that remains up to you is to be determined and strong willed to build a strong financial future for yourself

Five Simple Tips for Controlling Credit Related Debt

Definitely one of the most dreaded phone calls you can ever receive is the one from a credit collection company telling you one of your debts is very much past due and that you need to ‘make some arrangement to pay it as soon as possible’. Not good, to say the least. Whether it’s your overdue student loans, unpaid medical debt or a credit card that got away from you, it’s a phone call that leaves you feeling vulnerable and a bit like a loser.

So, before that phone rings, let’s take a look at some tips to avoid it from ever happening.

Tip 1 – Avoid the debt collection company completely by first trying to work out an arrangement with the original credit company. Many times they are quite reasonable, so give them a call before it goes to collections.

Tip 2 – Quit hiding from your debt. Ignoring those letters and phone calls will only lead to worse problems.  One of the first things you should always do is request a verification of the debt to make sure it’s actually yours.

Tip 3 – Do some research. If the collection companies are actually harassing you keep in mind that you do have rights, including the right to not be harassed. The Fair Debt Collection Practices Act was set up to help you, so get in touch with them and know your rights.

Tip 4 – Always keep copies of all your records, receipts and any other info like tax documents that could possibly help you in case the debt collector comes a calling. If you indeed did pay off that medical debt you and you have the documentation proving it you’ll be in a much better place.

Tip 4 – Keep your Social Security or disability money in a separate bank account, since debt collectors can’t touch that money even if you do owe them. 

Tip 5 – Never give your bank info to the collectors. Send payments with money orders and never allow direct withdrawals from any account.

If you can’t avoid debt collection problems you can, by using these tips, at least avoid having them take control of your money while you figure out a solution.

The Do’s and Don’ts of Personal Finance

You want to buy all the nice things in life, right? A nice home and car is within your grasp if you learn to handle your money. Below, you will find advice for making financial control easier.

Some choose to gamble by purchasing lottery tickets when they should be putting that money toward savings. This will give you a guaranteed gain, rather than losing to an overwhelmingly risky game.

If you can barely live check to check, you may need to get overdraft protection, which you may be able to get at your credit union or bank. Though it costs a few dollars, it may save you from 20 dollar fees here and there.

One way to save money is by trimming your family’s hair. Some hair cuts may look better with the skilled care of a stylist, but you can easily learn basic hair cuts and save yourself a ton of money. Cutting the hair yourself won’t cost your anything.

Don’t rely on credit cards. There are many ways you can learn about saving money on interest that applies to all sorts of loans like cars and mortgages. Paying interest is a huge waste of your hard-earned money, so work on eliminating it.

Talking to a family member who works in or once worked in a finance related profession can help one learn how to manage their own personal finances. If one doesn’t know anyone who has worked in the financial services industry, it may be helpful for them to speak with someone who is able to manage their finances successfully.

You can get some extra money from a yard or garage sale! Let your neighbors sell their things for a small fee! Get creative with your garage sale.

Don’t take a lot of student loans out if you’re not expecting to be able to pay them off in the near future. If you attend an expensive college before you have decided on a major, this may put you in debt that will be impossible to overcome.

If you would like to maintain a positive personal financial situation, you should strive to pay all your bills on time each month. Paying your bills early will help you keep track of expenses and keep your budget under control. You will also rest easy knowing that if unexpected expenses arise, you won’t need to worry about unpaid bills.

Avoiding alcohol can save you money and spare you from foolish purchases while under its influence. Instead, drink water to keep your mind sharp for important decisions.

Be sure to carry a small amount of cash or your debit card in the event of needing to make a small purchase. Recent laws allow the merchants to set a minimum purchase amount when credit cards are used.

Although you may not like your job at the moment, it is always best to have some money coming, than having none at all. In order to maintain your personal finances you must budget expenses that are less than your expected income.

Use the store brand instead of the national brand. The higher prices of name brands goes to paying for their expensive marketing costs. A more affordable option is to try products from a generic label. Most of the time there really is no difference between the two, so you won’t even notice.

Buying in bulk is only smart if you are using all of the product before it goes bad. You can save money by stocking up on things you know you use regularly and those you will eat before they go bad. So, make sure you use caution when you find a good deal on something to make sure it really does end up saving you money in the long run.

Learning to deal with your finances at an early age will allow you to make larger investments later in life. This article can help you be ready to make smart decisions with your money.

Secret to a Good Credit Score

 

Credit scores have emerged to be vital for a healthy financial condition. Almost everyone knows how important it is to maintain a good credit score to get loans or even secure a good job. But do you know how to build a good credit score? Let us discuss some secrets to a healthy credit score that will see you enjoy financial abundance.

The factors that determine the credit score

There are several factors that go into deciding your credit score. Your income, the loans you have taken, your payment history and credit age are some of the factors that determine your credit score.

Income level

Your income level has a direct bearing on your credit score. With higher income, you can enjoy more credits without affecting your credit score So, try to improve your income level to have a good credit score.

The right number of credit cards

What is the right number of credit cards that you should hold? Maintaining too many credit cards will only lower your credit score as you qualify for less credit. Ideally, you should have two or three credit cards. Moreover, you should avoid taking cards whose limits increase automatically. High limits have a negative effect on your score. So, go for cards with lower limits.

Good habit of paying bills on time

It goes without saying that by paying bills in time you will create a good credit score. This applies to not only debts and loans but also bills for electricity and gases. So, inculcate the habit of paying all bills on time and enjoy a healthy credit score.

Pay attention to your payment history

Do you often forget to pay bills on time? This habit may affect your credit score adversely. We all forget to pay bills within due dates sometimes, but a chronic offender will have it reflected in his credit report. So make sure that you remember your bill dates and pay accordingly. Generally, more than one and up to five consecutive late payments will land you in the late payer list.

Keep old credit cards open

Closing old credit cards affects your credit score because those records will be removed from your credit report. By removing the credit history, your credit age will be shortened and that will make your credit score fall.

Along with these tips, you also need to check your credit report thoroughly to identify any error that may lead to inaccurate credit score. You should report the mistakes to the credit agencies and get them rectified. Building a respectable credit score is not difficult if you are diligent.

Some Myths on Personal Finance

The best way to increase your financial stability is by doing a thorough evaluation of your savings and spending. This way you will be able to find out how you may save on your existing earning so that you may have better funding in your account. Here, are some of the common myths that you get to learn along with the rational basis or even lack of it in them.

Myth 1# Investing in stocks and mutual funds is truly necessary

Most people will inform you to invest in stocks and mutual funds. However, if you have to invest do so after appropriate assessment of your financial position. Every other person may feel a different way to invest, and there is no reason why one must only invest in mutual funds or stocks. One can make steady interests from saving accounts also by maintaining a stable balance.

Myth 2# Investing in property is better than taking on lees

Another popular myth that is passed on from one to another is that it is better buying a property instead of renting one. Often there are many cases where it is more advantageous to buy a house, but in case you are not particularly keen on your credit do not try to buy a house. The equated monthly instalments will be substantially higher than what you may actually spend on renting the same property. Again, you may obtain interests if you had invested the same amount in your account in some other place.

Myth 3# Closing credit card accounts will save money

Closing credit card accounts is yet another factor that you may do, but think about stuff like paying off the dues in regular intervals instead of in one shot. You can choose not to use your credit card instead of closing your credit card account. Moreover, you can use the card in emergency and this way you will learn to use the credit card judiciously.  

Myth 4# You cannot get a loan if you have poor credit or debit details

This is an absolute myth, and there is actually no rational reasoning in it. There are loans that are specifically made for people with poor scores. Many people take personal loans to reduce the burden of finance. This helps the person to remove personal debts and pay against only one loan.

Myth 5: I am too young or too old for retire plans

Most people ignore their retirement plans because they think they are too young, but youth is the best time to take a retirement policy.

This is the time to take action now, and if needed you can take the help of your financial adviser.

Know the Common Mistakes with your Personal Finances

Most of the times it is difficult to take care as well as keep track of the personal finances. No matter how difficult it might be; one has to stay still on their crest in order to save oneself from descending in any kind of nasty situation related with the finances. Obviously, with any rather issue that concerns the finances, one can certainly look for some or the other adviser of finance who might be honest as well to assist them. However, what would always be a better option is to manage one’s money themselves. Most of the people who have been successful in managing their own financial matters now have made some kind of error earlier while managing their personal-finance process. There are numerous errors, which happen to be so popular among people, who go through this process.

People mess their finances, let us see what the several mistakes they often make are.

By relying on the credit cards as their main source of income-

Credit cards happen to be the uncertain subjects in terms of finances, the reason being that they seem to be extremely helpful in the beginning, but they seem to be more dangerous at the end. Credit cards should not be considered as a main source of income to rely upon while paying things. As that might lead to, massive bills of the credit card, that one may not have the ability to pay back. Eventually it might cause in making one line in some or the other type of debt. The credit cards are a form of a loan. The procedure with the credit cards is like that the banks are there to lend some amount of money, it is as per the will of the person to use it provided the spent amount is returned back.

By spending the amount more than it is made –

It implies that people must try to make an effort to live their life that is within their means. As by not doing that one might anytime end up landing in debt. It is like if someone’s earning is merely $25,000 then in that case one must not try to buy a house else a car of an amount that is as large as million dollars. And not just that people must also try to keep their money. Saved money is that treasure which can always be looked back at when the hour of need arises.

Thus, one must keep in mind of not committing these mistakes while tackling your finances. Any kind of sloppy action might lead to your own financial loss!

How to Choose the Best Low Interest Credit Card

If you intend to make purchases and pay for the amount in longer terms, low interest credit cards are for you. The best credit card should help you get on top of credit card bills. You could still opt to pay balances in full every month, though most experts would advise you to get higher interest credit cards instead so you could get entitlement to airlines miles, rewards, and other incentives.
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