Debt Views

Most adults own credit cards and use them regularly. In fact, credit cards are marketed on college campuses, to get eighteen-year-olds hooked on using them. Many financial advisors will tell you to get rid of your credit cards, but often people want to keep them to build their credit, or in case of an emergency. If you are one of those people who wishes to utilize a credit card on a regular basis, here are six suggestions that could save you money:

1. Try to pay off the credit card bill each month. This is the best way to build up your credit. Do not charge more than you are able to pay when the bill comes. If you are truly unable to pay off the entire bill, at least aim to pay off more than the minimum payment. Statistics tell us that 35-40% of people only pay the minimum each month, and soon find themselves in a sinkhole of debt.

2. Never pay your credit card bill late. One secret credit card companies know is that they can charge you whatever late fee they wish for a late payment. Often this is $30+ dollars! And, even if your payment is only an hour late, they can charge this fee. Make sure your bill is paid early each month.

3. Read the credit card terms in detail before you sign up for a new card. Some people will eagerly transfer their balance to a card that promises 0% APR for a year. Before you get excited, read the fine details. Remember that APR means Adjustable Percentage Rate (meaning the rate can change). See what the balance transfer fee is (often 3% of the balance). Find out what the interest rate is after the first year is up.

4. Check your account balances often. Identity thieves count on consumers not looking at their credit card statement. Many consumers have told me it was not until they took a thorough look at their monthly transactions that they realized their credit card number had been stolen and used for fraudulent charges. Be on top of your account, and do not become a victim.

5. Pick a card with good rewards. If you plan to use a credit card, look for one that has excellent rewards like cash back. If you fly often, check into frequent flyer miles. A gas card can help you save money at the pump, provided you pay the balance monthly.

6. Be aware of the consequences of going into debt. Use your credit cards responsibly. Frequent charging of items you cannot pay back leads to a cycle of more and more debt. Eventually, you could be facing a variety of unattractive options, including bankruptcy.

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There are some web sites on the Internet that offer credit cards to people, that are actually unique. In this sense, the credit card issued can only be used on the particular merchandising site. This is a perfect opportunity for those with bad credit to in a way rebuild their credit.

By being approved for one of these types of Internet credit cards they have the ability to purchase products on the web site, and pay them off.

This of course goes on your credit report so it looks good to others that see you are paying on some kind of credit card.

Some web sites that offer these merchandise credit cards extend you the credit as long as you are buying products from their web site. It can be used for almost all of the products they have on their web site however in some cases if the amount of the product is fairly high they will ask for a small down payment.

Several people are going with these web sites that offer credit cards on their site only simply because they do have decent products and occasionally get new products.

Seasonal items are also listed during those times of the year when it is the appropriate time and the web site knows these products will sell.

Using the web site credit card, you have monthly payments of course, just as if it were a regular or standard credit card, however the interest rates might be somewhat lower and you cannot qualify for cash advances. It is for the sole purpose of purchasing items off of the web site offering the credit card.

These merchandising web sites that offer credit cards for use explicitly on their web site is becoming more popular and more people are starting to use them.

There is a fee to get the initial credit card from the web site as well. But through the United States postal service you are also sent a catalog with their complete line of products on the site. If you go to the web site looking for a product and its in the catalog, however you cannot find it on the site, in most cases you simply type in the item number, if it comes up that the item is sold out, you will be asked if you’d like the web site to back order it for you.

Although there are a few other web sites that offer this same type of merchandising credit card that have hardly any kind of product line whatsoever. These could be web sites just starting out, or on the other hand web sites that are going to close out their web site and are simply not reordering the products like they should. In this case, they will probably recommend that you order directly from the catalog using the toll free number which is also available for most of these web site merchants.

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We all need credit to survive in today’s society, it turns the wheels of our economy and, used properly, credit is a great asset. Most of us have loans, or other types of credit, which can be managed without difficulty.

But debt becomes a very real and serious problem when people cannot afford the repayments and, when used to excess it can create problems that spoil lives for years to come.

Falling unemployment, rising earning and low base rates have combined to encourage people to take on more debt. The UK National Association of Citizen’s Advice Bureaux (NACAB) says its centres have seen a 46% increase in the number of consumers with debt problem during the past five years.

A temporary lapse in financial good sense can leave a lasting impression on your creditworthiness. Loan defaults and County Court Judgements (CCJs) stay on the files of credit reference agencies for six years (unless you pay it off within the first month). Many find themselves in a Catch-22 situation.

They have sorted out their finances, but can’t get credit because of a past financial record. And until they get a credit card, they can’t build up a new ‘clean’ credit history.

Being turned down for a credit or store card can be embarrassing. Whilst being turned down for a mortgage can be devastating if you have saved hard and are desperate to buy a home.

The first thing a lender does when considering you for a credit card, loan or mortgage, is to check your file and the main reason for refusal is a poor credit rating. Credit information on millions of UK adults is stored by credit rating agencies and loan providers check out this information, which includes details of unpaid bills, CCJs and any previous applications for credit.

Lenders often operate credit-scoring systems to allocate points to the information on your file along with your application form, such as your age, job and whether you are a homeowner.

No matter what your credit or debt history, even if you are blacklisted by banks, you can often still borrow what you need, save what you can, and solve your money problem.

It is possible to repair your credit status without being evasive or by using the services or dodgy credit repair companies – which can charge anything up to £200 for doing nothing you can’t do yourself through credit reference agencies.

Don’t just go from lender to lender hoping to be accepted. Every time a check is made with credit reference agency it shows up on your file, leaving a trail of evidence showing you are being refused by others.

If you are refused credit, always ask why. It might be to do with their scoring procedures. Different lenders use different system, so you may find you can get a loan or credit elsewhere.

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