Credit Secrets & Tips

You maybe carry at least 3 or more credit cards. Do you know what these digits in your credit card number mean?

Well, I can give you an idea. Although phone, gas and department stores have their own numbering systems, “ANSI Standard X4.13-1983″ is the system used by most national credit-card systems.

Here are what some of the numbers stand for:

The first digit identifies the type of card. For example,

- 3 is T&E cards
- 4 is Visa Card
- 5 is MasterCard
- 6 is Discover Card.

The structure of the card number varies by credit card system:

American Express - Digits three and four are type and currency, digits five through 11 are the account number, digits 12 through 14 are the card number within the account and digit 15 is a check digit.

Visa - Digits two through six are the bank number, digits seven through 12 or seven through 15 are the account number and digit 13 or 16 is a check digit.

MasterCard - Digits two and three, two through four, two through five or two through six are the bank number (depending on whether digit two is a 1, 2, 3 or other).

The digits after the bank number up through digit 15 are the account number, and digit 16 is a check digit.

 

 

Now, pull out one of your credit card, see if your can decode your credit card number.    

Holiday sale ads: they blanket the airwaves, jam your mailbox, and add another pound to your Sunday paper.

Soon you’ll be bombarded with ads for pre-holiday sales, preferred customer specials, early bird sales, midnight madness events, coupon savings days, and, don’t forget, post-holiday sales.

Sure you want a good deal, but just how do you decide if the deal is real?

The following some tips can help you get the most for your money:

* Shop around

A “sale” price isn’t always the “best” price. Some merchants may offer the sale price on the item you want for a limited time.

Other merchants may discount the item you want everyday. Also, when you’re comparison shopping, make sure you have: the item’s manufacturer, model number, stock number or other identifying information.

* Read sale ads carefully

Some may say “quantities limited,” “no rain checks,” or “not available at all stores.”

Before you step out the door, call ahead to make sure the merchant has the item you want in stock. If you’re shopping for a popular or hard-to-find item, ask the merchant if he’d be willing to hold the item until you can get to the store.

* Take time and travel costs into consideration

If an item is on sale, but it’s all the way across town, how much are you really saving once you factor in your time and the costs of transportation and parking?

* Look for price-matching policies

Some merchants will match, or even beat, their competitors’ prices. Read the merchant’s pricing policy carefully. It may not apply to all items.

* Go online

Check out Internet sites that compare prices for items offered online. Some sites also may compare prices offered at stores in your area.

If you decide to buy online, keep shipping costs and delivery time in mind.

* Carefully consider bargain offers that are based on purchases of additional merchandise

For example, “buy one, get one free” or “free gift with purchase.” If you don’t really want or need the item, it’s not a deal.

* Ask about sale adjustments

If you buy an item at regular price and it goes on sale the next week, can you get a credit or refund for the discounted amount?  What documentation will you need?

* Ask about refund and return policies for sale items

Merchants may have different refund and return policies for sale items, especially clearance merchandise.

The holiday shopping season is in full swing. Whether you’re shopping online, by phone or at the mall, chances are you’ll use a credit card for some of your purchases.

Here’s some tips to keep in mind when you shop:
 
1. Keep track of all your spending
 
Incidental and impulse purchases add up. Remember credit cards are just like loans -you have to pay what you owe.

Owing more than you can repay can damage your credit rating. That can make it hard to finance a car, rent an apartment, get insurance, a job - even send flowers.
 
Pay your bill on time, and in full, if possible. If you don’t, you’ll have to pay finance charges on the unpaid balance - and it takes forever to get caught up if you just pay the minimum. 

2. Keep an eye on your credit card and account number
 
* Never lend your credit card to anyone.

You’re responsible for paying the bill. Any problems with the bill can damage your credit rating.

* Don’t sign a blank charge slip.

Draw a line through blank spaces on charge slips above the total so the amount cannot be changed.
 
* Never put your account number on the outside of an envelope or a postcard.
 
* Be cautious about disclosing your account number over the phone unless you know you are dealing with a reputable company.
 
* Carry only the cards you anticipate using to help prevent loss or theft.
 
* Report your lost or stolen credit card or ATM card to the card issuers as quickly as possible.

Many companies have toll-free numbers and 24-hour service to deal with such emergencies.

Follow up with a letter, including your account number, when you noticed the card was missing, and the date you first reported the loss.

3. Keep good records
 
Save your receipts. Compare them with your monthly bill. Promptly report problems to the company that issued the card. Usually, your statement will provide instructions for
disputing a charge. 

If you order by mail, phone or online, keep copies or printouts with details about the transaction, including any warranties, or return and refund policies if you’re not satisfied.

You should have the company’s name, address, phone number, the date of your order, a copy of the order form you sent to the company or a list of the items ordered and their stock codes, the order confirmation codes and the ad or catalog from which
you ordered. 

Bad credit can happen to good people. Don’t despair. There are many ways you can get your credit back in shape.

But you have to start working on it today — and keep working hard to show potential creditors that you’re serious about getting your credit back in order.

As you do so, your credit score will improve, resulting in better credit offers and a substantial savings in money.

Here are 6 simple easy and surefire ways to restore your credit: 

1.  Open new accounts and pay them off 

Being able to repay a variety of new accounts is a key step in rebuilding your credit. 
  
That means that devising a strategy to open and pay off as many different kinds of accounts as you can is better than adding more debt to an existing credit card.
 
2. Start small
     
Rebuilding your credit can be similar to starting over from scratch, and starting small may be the easiest option. 
  
Credit cards from department stores or your local credit union can be useful.
 
3. Consider asking for help
     
If you can’t qualify on your own, ask a friend or family member to cosign for a small loan or credit card. 
  
If you can stay current on a major credit card account or small auto loan, this will speed up the process of re-establishing good credit on your own.
 
4. Consider a secured credit card
     
They are guaranteed by a deposit that you make with the credit grantor. The cards offer the purchasing power of a major credit card. 
  
Just make sure the grantor reports payment histories to one of the three major credit bureaus so you’re building your positive payment history.
 
5. Use your new accounts in moderation
     
Make payments that are more than the minimum. You can keep a small balance so that your positive payment history will continue to show up on your credit report.
 
6.Keep your balances low
    
Avoid carrying a balance that is more than 30% of your credit limit (creditors may view it as excessive debt that you may not be able to stay current with.
 
Be patient. The payoff is worth it.  It takes some time for your new credit history to gain momentum.

You’re demonstrating that you are not depending on certain credit cards and loans for your financial survival.  With patience and timely repayments, you’ll likely be able to
build a new credit history that creditors will look upon favorably when making decisions about your ability to handle even more credit.

Personal saving as a percentage of disposable personal income has dipped as low as 1 percent in recent year.  If you are like most Americans, one minor tremor is all it would take to shake your whole financial foundation.

In addition to long-term savings, financial experts agree that consumers should aim to have at least three or six months’ living expenses saved for emergencies.  If you are having trouble establishing a nest-egg, don’t despair.  The following are some simple ways to boost your saving:

1.  Pay yourself first

Saving is the cornerstone of financial security, so make it a priority.  After all, a lack of savings can turn a minor financial setback into major financial crisis.

2.  Make it automatic

Having money automatically deducted from your checking account into a savings account helps to ensure that you meet your savings goal.  Even better, if your employer has the capability to automatically deposit your pay check have some funds directed into a savings account.

3.  Turn a hobby into income

Many people have untapped talents,  Whether you enjoy photography, painting, knitting, or metalwork, consider possible ways to earn money by doing what you love best.  Baby-sitting and lawn work are also good ways to earn additional money.

4.  Downsize

Most people have garages, basements, and attics full of items they no longer want or need.  Holding a garage sales or advertising some of your things online ,such as selling on e-Bay, could result in a boost to your saving account.

5.  Use gifts wisely

If you receive unexpected funds, do not be tempted to spend them thoughtlessly. Instead, put all money received from tax refunds, inheritances and gifts into an interest-bearing savings account.

Finally, make a commitment to pay down debt.  Reducing your debt allows you the freedom to make smart future financial choices.

Below are some useful suggestions on how to minimize fees and finance charges:

Help keep the cost of credit down by paying on time and not exceeding your credit limit.  Do you know paying later or exceeding your credit limit will cause early expiration of promotional rates and may cause your APR to increase

- Avoid late payment by checking the due date on your statement when it arrives as it may vary from month to month

- Allow 5-7 days mail time for your payment to reach the credit company

- Ensure the fastest processing by using the remittance slip and envelope provided with your monthly statement.

- Avoid late payments by paying online or enrolling online automated payment service. It is fast and free. 

Avoid Overlimit Fees by never allowing your balance to exceed the credit limit shown on your monthly billing statement (leave room for finance charges).  You can view your balance online or call credit care company at any time at the toll-free number on the back of your credit card.

Reduce your finance charges by paying more than the minimum amount due.  Although you have the flexibility to pay only the minimum amount due, you can significantly reduce your cose of credit by paying in full or making larger payment.

Remember, you can avoid finance charges on your retail purchases by paying the balance in full each month before your payment due date.

While credit bureaus keep track of how you handle credit, there are other companies that monitor and report how you manage or mismanage your checking account.
 
And, as some of you may have learned, even a single bounced check reported by one of these services may be enough to make it difficult for you to get a credit or get a merchant to accept your check as payment.
 
Check reporting protects financial institutions and merchants (such as retailers and grocery stores) from losses associated with bounced or fraudulent checks.
 
Under the Fair Credit Reporting Act (FCRA), a bounced check or other wrongdoing reported to a check reporting service may stay on your record for as many as seven years!

What should you do if a banking institution turns you away because of an unfavorable report about your banking account?

Ask the bank for the name, address and phone number of the company that furnished the report, so you can request a copy and look for incorrect or missing information.

Under certain circumstances, such as if you’re denied a new account at a financial institution, you are entitled to a free report. 
 
If your financial institution was the source of an error in your check report, it is required by the FCRA to contact the check reporting service and have the record corrected.
 
Also be wary of services on the Internet or elsewhere that offer to help you find a bank or “fix” your check history.  These services usually involve a fee, and some may make
false or misleading representations.
 
Frequently balance and monitor your checking account to avoid bounced checks. Don’t close one checking account before you have established another one.
 
And before closing your account, make sure any outstanding checks have cleared and account fees have been paid.

 

Most of you use credit or debit cards to pay for online purchases.  I encourages you to take steps to make sure your transactions are secure and your personal information is
protected.

Although you can’t control fraud or deception on the Internet, you can take action to recognize it, avoid it and report it. 

Here’s a few tips:

1. Use a secure browser software that encrypts or scrambles the purchase information you send over the Internet to help guard the security of your information as it is transmitted to a web site. 

Be sure your browser has the most up-to-date encryption capabilities by using the latest version available from the manufacturer.  You also can download some browsers for free
over the Internet.

When submitting your purchase information, look for the lock icon on the browser’s status bar, and the phrase “https” in the URL address for a web site, to be sure your information is secure during transmission.

2.  Check the site’s privacy policy before you provide any personal financial information to a web site. 

In particular, determine how the information will be used or shared with others. Also check the site’s statements about the security provided for your information. 

The statements may includes “Privacy Statement”, “Acceptable Term of Use”(AUP), “Anti-Spam Policy”, and “Disclaimer”.

Some web sites.  Disclosures are easier to find than others. Look at the bottom of the home page, on order forms or in the About or FAQs section of a site.  If you’re not comfortable with the policy, consider doing business elsewhere.

3. Read and understand the refund and shipping policies of a web site you visit, before you make your purchase.  Look closely at disclosures about the Webster’s refund and shipping policies.

Again, search through the web site for these disclosures.

4. Keep your personal information private. Don’t disclose your personal information your address, telephone number, Social Security number, bank account number or e-mail address unless you know who’s collecting the information, why they’re collecting it and how they’ll use it.

5. Give payment information only to businesses you know and trust, and only when and where it is appropriate like an order form. 

Never give your password to anyone online, even your Internet service provider.  Do not download files sent to you by strangers or click on hyperlinks from people you don’t know.
Opening a file could expose your system to a computer virus or a program that could hijack your computer.

6.  Keep records of your online transactions and check your e-mail for contacts by merchants with whom you’re doing business.  Merchants may send you important information about your purchases.

7. Review your monthly credit card and bank statements for any errors or unauthorized purchases promptly and thoroughly.

Notify your credit or debit card issuer immediately if your credit or debit card or checkbook is lost or stolen, or if you suspect someone is using your accounts without your permission.

On your first attempt to get credit, you may face a common frustration: sometimes it seems you have to already have credit to get credit.

When you apply your credit, some creditors will look only at your salary and job and the other financial information you put on your application.

But most also want to know about your track record in handling credit–how reliably you’ve repaid past debts.

If you have no credit history, it may take time to establish your first credit account.  Here are 5 ways you can begin to build up a good credit history:

(1).  Open a checking account or a savings account, or both.
 
These do not begin your credit file, but may be checked as evidence that you have money and know how to manage it. 

Cancelled checks can be used to show you pay utility bills or rent regularly, a sign of reliability.

(2). You might borrow a small amount from your credit union or the bank where you have checking and savings accounts.

Some banks may approve your credit application even if you do not
meet the standards of larger creditors.
(3).  Apply for a department store credit card. Repaying credit
card bills on time is a plus in credit histories.

(4).  Ask whether you may deposit funds with a bank to serve as
collateral for a secure credit card. 

The banks will issue a credit card with a credit limit usually no greater than the
amount on deposit.

(5).  If you don’t qualify according to your current credit rating, you may ask someone co-signs a loan to established credit history for you.

Because a co-signer promises to pay if you don’t, this can substantially improve your chances of getting credit. Once you have repaid the debt, try again to get credit on your own.

Most important, before you apply for credit, ask whether the creditor reports your credit history information to credit bureaus.

Most creditors do, but some do not. If possible, you should try to get credit that will be reported. This builds your credit history.

If you’re turned down, find out why and try to clear up any misunderstandings.  There maybe reasons other than lack of credit history. 

Your earning may not meet the creditor’s minimum requirement or you may not have worked at your current job long enough. Time may resolve such problems.

1. Have your tax refund direct deposited into your bank account.

The benefits include receiving your tax refund faster and knowing that your refund check will be safe and not lost or stolen.

Direct deposit also provides an easy way to save part of your tax refund, because ‘what you can’t see you can’t spend.’

The large numbers of consumers mistakenly believe that paper checks are safer than direct deposit when, in fact, the opposite is true.

Paper checks account for more than 90 percent of the reported problems with its federal benefit payments.

You also have the flexibility to directly deposit your tax refund in up to three different
accounts at three different U.S. financial institutions.

2. If you need cash and you can’t wait for your tax refund, carefully consider your options and costs.

In particular, “refund anticipation loans” arranged by tax preparers for people who file their returns electronically, will get you cash in just a day or two, and the loan will be paid back
with your tax refund, but the costs are comparable to very high interest rates.

Also remember that people who file their returns electronically using the IRS “e-file” service can receive refunds in two weeks or less.

3. Make good use of your refund.

Consider paying down or paying off your loans and other bills, starting with the ones that charge the highest interest rates on unpaid balances.

Start or add to an existing savings account. Or, fund a retirement account or college savings plan.

4. You can pay your tax bill using your credit or debit card but beware of the costs.

Your financial institution may offer small incentives - such as miles, points, cash back or
other rewards for using your card - but factor in the processing fee, which can be substantial, especially for credit cards.

Other costs also may apply, such as interest if you don’t pay your card balance in full by the due date, and overdraft fees if your debit card withdrawal exceeds your account balance.

5. You can have your payment withdrawn electronically from your bank account.

This service adds speed and convenience. You can also file your tax return early and set the payment withdrawal for a specific date, such as April 15.

Ask your financial institution about any fees it may impose. But make sure you have enough funds in your account when the payment is to be made.

6. If you need to borrow money to pay your taxes, you have several choices but all come with fees and costs.

The cheapest way to pay your tax bill is to tap your bank account. But if you must borrow
the money, options include bank loans, an monthly installment plan and your credit card.
Using a home equity line of credit may be an option, but remember that you could lose your home if you are unable to make the payments.

7. Take advantage of free tax preparation services.

One program helps to promote is the Volunteer Income Tax Assistance (VITA) program, which provides free tax-preparation help to low- and moderate-income taxpayers at various locations. Click here to read more detail.

Some VITA sites even have representatives from banks or other organizations who can assist in other ways, including opening a bank account or obtaining a credit report.