5 Hot Tips To Save Your Money On Credit Cards

Apr 02, 2007 @ 10:26 am by Bruce Liu

The following tips are basic principles about obtaining and using credit cards that can save you some serious cash and keep you out of debt.

6. Always Shop Around

Don’t apply for the first “pre-approved” offer you receive in the mail or any for that matter. Do the research for yourself. There are plenty of sites such as bankrate.com that allow you to compare hundreds of credit card offers with a simple search. You’ll get the best deal by shopping around.

5. Read the Fine Print

The terms and conditions are the equivalent of the disclaimer you hear on car lot commercials. It cuts through the hype and reveals the true terms of the credit card such as what happens when you miss a payment and what you’re really getting from the rewards. Most terms are not that long, usually around one full page, it’s worth your time to read them.

4. Ask for a Better Rate 

Once you have been a credit card customer for a few months call them and ask for a better rate. They won’t laugh at you, they get hundreds of these calls every day and if you’ve been a good customer it usually will work. Credit card companies work hard to obtain you as a customer and they will work hard to retain you.

3. Pay Off Full Balance Every Month 

All credit cards have high interest rates compared to other types of loans. You should never plan to carry a balance on a credit card. If you must make a large purchase that you do not have the money for at the time, obtain a loan or a revolving line of credit from your bank. You will save a bundle on interest rates.

2. Do not get a Cash Advance 

This is the second worse thing you can do with a credit card, short of missing a payment is getting a cash advance. The cash advances usually come with a very high interest rate.

What makes it worse is the fact that with most companies this higher rate credit will not get paid off first, or even in the order that you took it out. They will apply your payments towards all the lower rate purchases and will only begin paying off your high interest cash advance will all other items on that credit card have been paid off.

1. Never, EVER Miss a Payment 

This is the absolute worse thing you can do with a credit card. Not only will you incur a late fee, but your interest rate will also skyrocket. In addition it will be a negative blemish on your credit report which can cause the rate on any other loans or credit cards you have to increase as well as insurance rates. It also makes you less likely to get approved for future credit.

What You Can Do To Rebuild And Improve Your Credit Rating?

Apr 13, 2007 @ 12:57 pm by Bruce Liu

• Open a checking and savings account and begin making regular deposits even if they are small.

• Apply for a department store or gas credit card (easier to qualify for) and pay all your bills on time, including your utilities.

• If you feel you need a credit card for identification, for travel, or for emergencies, take out a secured credit card by depositing money with the issuing bank and make charges that you pay on time (interest is generally 7-23% and some cards have no annual fee).

• If you need to buy a car, put down a high down payment and select the most economical car that fits your needs (not your wants) at a low price.

• If you are married, it is a good idea for each spouses to establish their own, separate credit history. The Equal Credit Opportunity Act requires that if you have had a joint account, you can request a creditor to report your individual participation and performance on that account separately.

• In the future, do not go overboard with credit. You could be turned down for new credit if you already have too much revolving credit.

 

What makes your FICO credit score?

Apr 19, 2007 @ 03:53 pm by Bruce Liu

As a rule, credit score analyze the credit related information on your credit report.  How they do this varies.  Since FICO scores are frequently used, here’s how these scores assess what is on your credit report:

1.  Your payment history - about 35% of a FICO score

Have you paid your credit account on time?  Late payments, bankruptcies and other negative items can hurt your credit score.  But a solid record of on-time payments help your score.

2.  How much you owe - about 30% of a FICO score

FICO scores look at the amount you owe on all your accounts, the number of accounts with balance, and how much of your available credit you are using.  The more you owe compared to your credit limit, the lower your score will be.

3.  Lengthy of credit history - about 15% of a FICO score

A longer credit history will increase your credit score.  However, you can get higher score with a short credit history if the rest of credit report shows responsibility credit management.

4.  New credit - about 10% of a FICO score

If you recently applied for or opened new credit accounts, your credit score will weight this fact against the rest of your credit history. FICO score distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur. 

If you need a loan, do your rate shopping within a focused period time, such as 30 days, to avoid lowering your credit score.

5.  Other factors - about 10% of a FICO score

Several other minor factors also can influence your score.  For example,  having a mix of credit type on your credit report - credit cards, installment loans such as a mortgage or an auto loan, and personal lines of credit - is normally for people for with longer credit histories and can add slightly to the credit score.

How To Spot A Predatory Lender

Apr 27, 2007 @ 02:12 pm by Bruce Liu

Predatory lenders do not have horns and tails.  They seems like nice, friendly, helpful people.  They are trained to gain your trust. So how will you know one?

1.  None of your questions get answered, or the answers don’t really make sense.  A good lender can explain your loan in everyday language. 

2.  The lender pressures you to sign things before you’re ready or rush you through the paperwork.  A good lender won’t pressure you. 

3. The ledner doesn’t explain or tell you about all the costs for getting a loan. A good lender will explani the costs and the service you’re geting. 

4. Things change at the closing. You’re not getting the loan your were promised.  A good lender will honor their commitments. 

5. The ledner wants you to borrow more money than you need.  A good lender will let you decide how much money you borrow. 

6. The lender makes you feel like you don’t ave other choices, as if other lenders won’t give a loan.A good lender will let you know you have other options. 

7. The lender gives you a quick yes, but it may not be the best loan for you.  A good lender will take time to explore your options with you. 

8  You have a feeling somethings just not right.  Follow your instincts.  A good ledner makes you feel informed and confident.

Don’t let a predatory lener pressure you into a costly loan. The best advice is walking away from those lenders.   If you have questions about your loan, visit www.dontborrowtrouble.com for free advice.