Posts Tagged ‘Credit Cards’

Credit After Bankruptcy? Seriously?

Wednesday, July 1st, 2009

Have you been through a bankruptcy? Think you’ll never qualify for credit again?

Well, don’t think like that … of course you’ll be able to get credit (you always will be)! How, you ask? Well, a number of banks offer “secured” credit cards, in which a debtor has to put up a certain amount of money (as little as $100 in some cases) into a separate account at the bank to guarantee payment. Usually the credit limit is equal to the security given, and is slowly increased as the debtor proves his or her credit-worthiness. Two years later, debtors are then eligible for mortgage loans on the same level as those with normal credit (who have never filed for bankruptcy).

The size of your down payment and the stability of your income is much more important than the fact you filed bankruptcy in the past! Although the fact that you filed for bankruptcy will stay on your credit report for 10 years, it will become much less significant the further in the past the bankruptcy date is.

Plus, you’re probably much less of a credit risk after your bankruptcy than before it, when you were struggling to pay all of your growing bills! This should give you some hope for the future. Good luck!

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Working Towards A Better Credit Score

Friday, May 1st, 2009

Raising your FICO credit score is important if you want to get a better rate on future loans, but the process will takes time and there are no quick fixes. In fact, quick fixes are usually detrimental to your score, because they usually backfire eventually. The best advice one could receive is to take your time, and learn the right approach to building credit.

To start improving your credit score, you must make sure you’re paying your bills on time and managing your available credit wisely. The most important item is definitely going to be your mortgage (make sure you pay it on time each and every month). Also note that installment loans (where you borrow a set amount to buy things like new furniture or appliances) are given more weight than credit cards.

A few additional rules to help you boost your score: 1) always keep your borrowing well below your credit limits, because your FICO score will suffer if you are maxed out on your credit cards, 2) never have more than two or three credit cards because a large number of credit cards will also lower your score, and 3) definitely don’t apply for several credit cards at one time; it makes lenders nervous and will lower your FICO score dramatically.

Many other factors will also affect your score, but this is pretty a good start! My advice: do your research and always be prepared — Good Luck!

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Cash Back Credit Cards are Great (If Used Responsibly)

Friday, April 3rd, 2009

Credit cards are the most valuable to those who know how to use them. How to use them properly: 1) by never leaving a monthly balance on the card, and 2) by making payments on time. If you can follow these two simple rules, then a cash back credit card is perfect for you.

First, choose a card type that will work to your advantage. Everyone has a certain type of credit card that they can profit from the most. For instance, a gas card will profit those the most that drive a lot of miles each month, and need to maintain a car. This is because the points that are given for your purchases can be used toward your purchases of gas. Some gas cards will even give you points for car maintenance expenses, and possibly the points may even be applied toward buying another car. A card that is selected for your greatest monthly expenses will give you the most benefits.

Also, see how much of a percentage of cash back is given toward your more ordinary purchases like food, medicine, and gas (you’ll want the highest percentage you can get). This feature is especially important if you have balances on other credit cards. You can transfer them to your new cash back credit card and enjoy a 0% APR balance for up to 15 months. This gives you great savings in interest and can help you to reduce those other credit card debts.

Of course, the best thing for you to do is to choose a cash back credit card with a low interest rate, no annual fees, or hidden charges. In addition, remember that by using it right, you also are building up a credit score — one that will allow you to buy the big-ticket items (especially if all of your credit cards aren’t currently maxed out).

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What to Look for in a Credit Card Company

Wednesday, February 25th, 2009

Choose wisely. When selecting a credit card, you should shop around for the best deal. Compare different cards based on your own situation, and try to look for the following benefits:

• A low annual percentage rate (APR). The lower the rate, the less interest you have to pay.
• The interest calculation method. This affects how much interest you pay, even when the APR is identical.
• Low or no annual fees. If the issuer charges an annual fee, ask them to waive it.
• All other charges (i.e., late payment fees, transaction fees, over the limit fees, etc). These can really add to the total cost of your charges.
• A grace period. Some credit cards charge interest from the day that the charges appear on your account. Other cards offer a grace period for you to pay off your balance before interest charges begin to accrue.
• The credit limit. Keep your credit limit low (about $500 or less) to make sure you don’t get in over your head.
• Wide acceptance. A major credit card is convenient, and easier to manage.
• Services and features, such as cash rebates, frequent flyer miles, extended warrantees, etc. Think carefully about the true cost of these programs when you consider interest and other charges.

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