Credit scores are touchy little things – reacting negatively to events and situations that you think should be positive.
For instance, if you’ve paid cash for everything all your life, you probably feel pretty virtuous. But when it comes to credit scores, you’re sunk, because you don’t have any payment history for the credit bureaus to report.
The same effect results if you have credit cards “in case of emergency,” but never use them. No payment history equates to lower scores.
Or, you might have several credit cards, but use only one of them, so the other card issuers have closed your other accounts for non-use. This reduces the amount of credit available to you – and again, lowers your credit scores.
Consolidating all your balances on one low-interest card in order to pay off your debt sooner also has a negative effect. Even if you have 5 cards – each with a $10,000 credit limit – a balance over $5,000 on just one card will bring your credit scores down.
It makes sense to most of us to look at the total credit available and compare it to total use, and they do take that into consideration. But they also want to see less than 50% use on each individual card – with 30% being better.
If you’re working on credit repair…
If you’ve had credit problems and are working to repair them, you can also lower your scores by practicing good habits.
It seems that each of us is put into a “category with our peers” when it comes to credit scores. People with sparkling clean credit are in one category, those with a few late payments are in another, those with a bankruptcy are in another. And those are just a few of the categories – there are many.
While only those with a clean credit history can attain the highest scores, we’re all rated in comparison to others in our category. By the same system, one late payment can drop a 700 score by 100 points, but will barely affect a score of 580.
So paying off old debts, paying down credit card accounts, having collections come off the report due to age, and other activities that should raise scores can actually lower them.
That’s because those positive actions raise the consumer into the next higher category – where he or she is rated in comparison to others in the same category.
It’s kind of like kids in school. The 9th graders are top dogs in Junior High, but when they suddenly go off to High School, they’re once again at the bottom of the ladder.
This is certainly a setback for consumers who are struggling to raise their scores. But the good news is that with continued good habits, they’ll soon rise to the top of their current “category.”
When your credit is in the basement, those TV and e-mail ads that promise to make your troubles go away can be pretty tempting.
But the truth is, if you really do have a bad credit history, they cannot make it go away. And the ones who make those big promises are the ones you should avoid like a flu bug. These are the companies that propose to use illegal means to clear your report. And instead of helping you, they could land you in legal hot water – all while taking their heft fee, of course.
Some credit repair companies are on the up and up, but they can only do so much, and the things they can do are all things you could do on your own.
All they can do is correct errors and oversights.
For instance, if there is information on your credit report that is false, they can help you file dispute letters. This could be an account that you’ve paid in full but it is still showing as unpaid. It could be an account that has gotten on your credit report via a data entry error. It could be a data entry error that shows you owing 10 times your true balance.
If you have negative information that is old, but has not been removed from your report, a credit repair company can help you prove that the time limits have passed and get the credit bureau to remove the negative information.
If you’ve had a bankruptcy that should have removed charged-off accounts from your credit report, they can help you get that done.
The Credit Repair Organizations Act has set forth regulations for these companies, and so that you will be aware of those regulations, they are required to give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you do business with them.
One of those rules is that they may not charge you any fees until they have completed services performed under a written contract with you. And, since you may have made the decision under stress, they are not allowed to perform any services until 3 days after the contract is signed. This gives you time to cancel without payment.
Your contract must set forth exactly what they will do for you, plus the total cost and payment terms. The contract must also include a time frame, and any guarantees must be in writing. In addition, they must reveal their company name, business address, and phone number. If all they have is an Internet address – stay away from them.
You have always used credit cards with a lot of discretion and responsibility. You never made expensive purchases with credit cards and paid back your dues in time. But one day you just choked when you found out that you have exhausted the credit limit. There were all kind of items in your credit card statement but you brought none of them. Why did this happen? Well, to put it simply, you were a victim of credit card fraud. This can lead to serious monetary loss and compel you to look for credit card debt attorneys.
The pretty looking plastic cards are quite convenient to use and are much preferred over cash. Moreover, the youngsters actually believe that the use of credit cards is a trendy thing. Indeed, credit cards are quite an innovation and have changed our lives permanently but it has also introduced a new genre of crime. Credit card fraud via identity theft is a crime that is soaring at an alarming rate. Unscrupulous people would draw money as well as use goods and services by using your account, in this kind of fraud. Does that mean you won’t make transactions using credit cards? No way. You just need to play smart and know some tricks in order to combat the cons. Here are some tips which would help you to counter credit card fraud:
Things to do when you receive a new credit card:
- Make sure that the seal is not tampered.
- Do not forget to add your signature on the reverse side of your card.
Protect your CVV (card verification value) number:
To protect you from credit card fraud, you are provided a CVV number by the credit card company. This is a three digit number printed on the back side of your card. If anyone gets to know this number then he can make online purchases (where the physical presence of the card is not required) using this number. To keep this number a secret, you should make sure that transaction processes are completed in your presence. If you need to provide a photocopy of your credit card to someone then leave out the side with the CVV number.
Things to remember while making transactions online:
- Before the transaction check whether the connection is encrypted or not. This means, the URL of the concerned webpage should read like https://www.xyz.com instead of http://www.xyz.com/. The https:// stands for a secure connection where hacking is not possible.
- Be sure that the website is completely safe. You can visit siteadvisor.com or mywot.com to check the reputation of the site. Do not give your credit card details to sites you don’t know well.
- Phishing emails are all over the place these days. They would pose as legitimate businesses and ask for sensitive information like credit card details. Mark them as Spam and do not reply to any email which you do not recognize.
- Beware of clone sites. These sites resemble legitimate and trustworthy sites and deliberately deceive people. Upon visiting, they would tempt you to shop with your credit card and subsequently steal your money.
Smart moves:
Monitor your account activity regularly to detect suspicious activity. You can use mobile alerts, offered by almost all financial institutions, for this purpose. It is cheap as well as useful.
Take caution before disposing your expired credit card or any document that mentions your credit card number. It is best to shred documents before you throw them into the trash can. Remember that if someone has enough sensitive information about you then he can also apply for a credit card in your name and start purchasing things.
You need to be a prudent and responsible person to keep the frauds away from your money. So remember what you have read to protect yourself. Good luck.
The most common issue among the consumers are making late payments and getting dunning notice from the creditors. There are several reasons for being financially strapped like losing of job, over expenses or emergency financial issues related to family.
Due to the high interest rate on the credit card that varies between 10%-30% APR, the repayment plan becomes more expensive. And prolong payment of the minimum balance along with the mounting APR charges on the outstanding balance would make it overwhelming.
What are the possible ways to get out of credit card debt?
1. Avoid paying minimum balance:
If you pay off the outstanding amount each month then it would be easier to get out of debt. Paying only the monthly minimum balance would prolong the repayment plan. And the accruing interest rate on the outstanding amount would make it unfordable for your pocket. The credit card companies lure the consumers with a bait of minimum balance payment. These companies trap the consumer into the maze of debts therefore go for a credit card debt settlement program in order to come out of debt.
2) Design a budget to avoid debt:
Preparing a budget helps to curb your reckless expenses as that would help you to avoid debt. Unless you pay off your existing debts it would not be possible to design a budget. In order to avoid the debt trap prefer changing your mode of expenditure. You need to redesign your budget plan if your expenses exceed your income. On failing to take proper measures might place you again in a severe debt problem.
3) Take up loan against 401(k) plan:
You take loan against any investment plan in order to pay off the debt. The interest rate on these loans is 1-2 points higher than the average rate. But when interest rate of the other loan is compared with the card interest rate the former appeared to be cheaper. But there is a negative aspect to it in case you plan to change your job. This debt takes 5 years to pay off but switching jobs gets the debt transferred into due. On failing to pay of the amount would be treated as taxable due that would be charged with penalty fee. If you are planning to change your work place then pay off the loaned amount immediately.
4. Hire a financial advisor:
Hiring a financial advisor would help to give you a quick relief from the mounting debts. This advisor helps to negotiate with the creditors on your behalf. He often restructures your budget plan according to your current financial situation. The financial advisor leads you towards a debt free life while giving a new meaning to it.
5. Try to settle with the creditor:
On giving a valid reason and explanation would help you negotiate with the creditor. You can settle the owed balance along with the interest rate that would make the repayment plan reasonable. If your creditor doesn’t agree with the settlement amount then threaten him of declaring bankruptcy. He would fail to retrieve the amount if you file bankruptcy therefore he might agree with the terms of negotiation.
These are the simple ways to get out of debt with ease and that would help you to achieve financial liberation.
This article has been written by Angela Sanders. She is associated with Oak View Law Group, a trustworthy debt settlement firm.
If you own a small business, you probably carry a business credit card.
If you use it as a tool, it can be a huge asset. It can help you see exactly where your money is going, and it can carry you through those times between you needing to pay a bill and your customers’ payments coming in. It can even save you money by providing rewards for items that are essential to running your business.
Some rewards credit cards will give you cash back for gasoline, restaurant meals or air travel, while some will provide rewards for buying office supplies necessary to your business. Just make sure you use it for items that really are necessary – don’t spend to get the rewards.
Also, as tempting as it may be, never use your business card for personal expenses. If you do, the IRS will declare the interest you pay on that credit card as non-deductible. So unless you buy your uniforms from Macys – don’t use it there!
The only safe way to use a business credit card is to pay it in full each month. Unless your business has suffered a true emergency – such as the transmission going out on your delivery van, or the furnace in your store blowing up – you should never use it for purchases that aren’t in the budget for the current month.
Getting into debt is a huge mistake that small businesses make – and it’s so easy with a credit card in your pocket. You can convince yourself that you really “need” a better looking desk and a nicer chair – or that your computer simply has to be upgraded this year – or that those motivational posters are important.
But the truth is, the only things you really “need” to spend on are:
- Things that make it possible to do business, such as the raw materials for your products, your employees, your rent, your power, and your phone.
- Things that improve your service and bring you more customers / profits.
- Marketing your business. But beware in this area. With easy credit, it’s easy to fall for advertising schemes that don’t return a dime on your investment.
In today’s credit climate, running up huge balances is downright dangerous – especially on a business credit card. Why especially? Because business Credit Cards don’t fall under the provisions of the CARD Act of 2009.
That means your credit card issuer can change the interest rate on your existing balances. If you make a mis-step, such as running your balance too high, your beautiful 5.9% interest rate could suddenly become 25.9% Worse, you don’t even have to make a mis-step. They can do it for no other reason than they want to earn more profit.
What would that do to your business? Would that additional interest put a serious drain on your monthly profits? Be careful.
Some credit cards are basic in their offerings, looking as mundane as the card sitting next to them, but not the ZYNC from American Express. This credit card allows you to place your personality into the card. You get to choose which lifestyle pack will suit your life with this secured credit card.
Are you always on the go? If so you might discover the Go Pack for the ZYNC American Express is going to fit you the best. You get to earn 2x the rewards points on airfare of the other cards. You also have an annual membership to the credit card registry at a $29 value. The feature provides a way to cancel and replace any lost or stolen cards with one call. There is also an emergency passport replacement assistance tied to the account. Avis and Budget have thrown in a deal with savings of up to 25 percent. Hertz provides 20 percent savings plus GPS for 2 days free with a rental. For those on the go a $50 credit is offered for vacation packages, though this is a limited time offer.
The Social Pack is a whole different animal with 2x membership rewards on restaurants and any events purchases you make. You also obtain access to event tickets before they hit the public sphere.
Is staying connected a must for you? Why not save a little with the ZYNC American Express Connect Pack? This package offers rewards points on mobile and cable services such as internet, cell phone use and more. You can also use less points if you shop at the member reward site exclusive to American Express holders.
Environmental savings are definitely worth every penny to make less of a footprint on the earth. Why not make your credit card work for the earth with the Eco Pack. You get rewards points when you buy green merchandise from certain green merchants. You also use fewer points on the American Express rewards site. With green living tips and gifts this pack is certainly for anyone who loves the environment. The Eco Pack has one more interesting feature in that it will purchase $1 of carbon offsets from TerraPass, which helps to reduce the carbon emissions of dairy farms and landfills in the US.
Eco Pack is the only card without an annual fee. All others are $20 for each year. The basic card is $25, so there is even more savings with the ZYNC. You will not pay interest when you pay in full each month, and you have purchase protection. A card that offers your personality to bank rewards for you is what American Express has created.
The hitch in obtaining this card is American Express’ strict guidelines. American Express is a card for people who are responsible with credit and their credit history. The company offers their ZYNC, basic, business credit cards, and even student credit cards to those who have the high credit scores.
Credit card issuers weren’t happy when the CARD Act of 2009 was signed into law. Between May of 2009 and the August 2009 and February 2010 dates when the new regulations went into effect, they worked hard to ensure new profit sources.
But in spite of that, Americans are carrying less debt than they were a year ago. Average credit card debt in the first quarter of 2010 was down 10.6% from during the first quarter of 2010.
Fewer consumers are falling 90 days or more behind on credit card payments as well. That figure is down nearly 16% – from 1.32% in 2009 to only 1.11% in 2010.
With fewer penalties, and no surprise interest rate increases, consumers have been able to make a larger dent in their credit card balances in spite of higher interest rates overall.
Under the terms of the CARD Act, credit card issuers may not increase the rate on a consumer’s current balance unless he or she is 60 days late – or unless the card carries a variable rate.
Many cards now do carry a variable rate, but the fluctuations in interest are minute – changing only with the Prime Rate, which has held relatively steady. Compare this to the previous rate increases of as much as 10 to 12% in one month before the CARD Act went into effect.
Another plus that resulted from the CARD Act is that issuers can no longer slash a consumer’s credit line to a level that will trigger an over-limit penalty. Before the act, there were reports of credit limits being lowered to as much as $6,000 below the customer’s current balance owed.
For consumers who could not find a way to pay the balance that exceeded their new credit limit, over-limit fees continued to mount. These, of course, caused their credit scores to plummet, making it doubly hard to borrow money elsewhere to pay down the balance.
The CARD Act is also making it easier for consumers to pay down their debt. Where a consumer’s entire payment used to be credited toward their lowest interest balances, now any amount over the monthly minimum is credited toward their highest interest balances.
In the past, a consumer might have had a high interest purchase balance adding to his debt month after month, and was unable to pay it down until any low interest balance was paid in full.
Another good sign for our economic future is that Americans seem to be less eager to take on new debt. According to TransUnion, the number of new cards opened during the first quarter of 2010 was down 24% from the same period last year.
If you are looking for a credit card that rewards you with travel or other great benefits, you don’t want to pass up Blue Sky from American Express. Once the ultimate credit card of choice, you had to be invited to carry this prestigious card and pay off your balance monthly. Now with Blue Sky you can reap all the benefits and carry a balance if you absolutely have to. There is no annual fee and there are introductory 0% APR rates for six months if you act quickly. Once your introductory period is over your rate will be determined by the Prime Rate plus 13.99%.
Once you used to have to fight to use your points to redeem travel; however, with Blue Sky credit cards you have no restrictions or blackout dates. These credit cards offer you the ability to use any airline, and book any hotel or car rental company. If you are worried that your points will expire you needn’t as the best credit card in the world Blue Sky from American Express doesn’t have any expiration dates.
You may be thinking that it will take a long period of time to accrue enough points to go on that great family vacation. The truth is you can start redeeming travel rewards with as little as 7,500 points. If you use your credit card to purchase gas, groceries, dining out and clothing you will see how quickly the rewards add up. Another great benefit of Blue Sky credit cards is that the company watches for any fraudulent purchases for you. Since identity theft has emerged this is a feature that you don’t want to live without.
Not only will you have a plethora of choices in airlines, hotels and car rentals you can also save money. Many of your favorite travel partners offer discounts when you use the Blue Sky credit card. When you are issued your credit card from American Express they will give you all the details on the Blue Sky Travel Savings Program. Looking for an immediate travel benefit? J. W. Marriott and Renaissance Hotels have partnered with Blue Sky by American Express to give you a complimentary breakfast on weekend stays. If that isn’t enough to entice you they have added one more incentive: $100 off your next stay!
All these options and benefits come with travel protection and excellent customer service. You can have foreign currency or American Express travelers checks delivered to your home or office if you have five to seven business days before departure. When renting a car this great credit card gives you additional loss and damage insurance for no extra charge, and if there is trouble in paradise the Global Assist Hotline is available 24/7. There are more than 500,000 ATM’s that accept your Blue Sky credit card so if you need extra cash it will be close at hand.
The reputation that American Express enjoys enhances your credit card benefits even more, so when you are looking for the best credit cards choose Blue Sky.
Everyone has different needs when it comes to credit cards. Before you can apply for a credit card you need to understand what it is you are looking for in that card. Credit card companies understand the different needs, which is why they tailor their products to suit you. You may find one company has four or five cards to cater to various customers such as the American Express ZYNC card that offers four different options. They offer a ZYNC green card, travel card, social pack, and connect pack. It caters to different age groups and individuals.
A person who enjoys events, concerts, and other forms of entertainment may find the social pack a better option with the ZYNC card. However, there is the little matter of being able to qualify for the credit card of your choice. We will discuss qualification requirements a little later once we have explored the brands of credit cards, types of cards you might encounter, and certain terms and conditions.
There are four popular brands of credit cards: Visa®, MasterCard®, American Express, and Discover®. Visa® and MasterCard® are the two most prominent brands. They are accepted all over the world, with Visa® having the most customers. The Visa® and MasterCard® brand can be found on bank cards and other company credit cards. For example AAA, a motor club, offers a credit card with the MasterCard® symbol to their members. Orchard Bank® also has a branded credit card. Though the bank is separate from MasterCard® Company they use the symbol for their cards.
The brand is only important when it comes to the use of the credit card. Some companies do not accept American Express or Discover® due to the extra fees associated with accepting those cards in their store.
Brand is a consideration you should make when you apply for a card, but it is most likely secondary to the type of card you apply for. There are rewards cards such as travel, business, dining, shopping, student discounts, and cash back rewards. If you can use your credit card wisely by paying off the balance each month a rewards card can be very effective for you. The student rewards come with Student Credit Cards designed specifically for high school and college students. The rewards are provided for text book, tuition, and other school related products one might need.
These rewards are different from someone who has a business credit card. A business credit card provides awards on office supplies, dining, and other business related shopping. Travel rewards can be part of a business card or be on a personal travel rewards card. The travel options offer discounts on hotels, rental cars, and points for free tickets.
Other types of credit cards include balance transfer credit cards, prepaid credit cards, and bad credit credit cards. Balance transfer credit cards offer an introductory deal on balance transfers, typically with a 0% APR for twelve months and a 3% transfer fee. Prepaid credit cards and bad credit credit cards can work for a similar solution. The one thing these cards have in common is bad credit as reflected on free credit reports. If you have bad credit it is hard to get an unsecured credit card, but there are bad credit credit cards you are almost guaranteed to receive. These cards will help you rebuild your credit scores. Prepaid credit cards are secured credit cards because you place a certain amount of money in the account to use. You cannot use the card unless it has money in the account. It also helps you rebuild your credit.
Examining the brands and types of cards leads us to certain terms and conditions you need to consider. You need to examine the card for its APR, introductory deals, and the annual fee. Some of the credit cards offered have annual fees like American Express.
Simmons First Visa Platinum credit card is a card for those who do not have bad credit. It is a great card if you have good to excellent credit scores. The annual percentage rate on purchases can be as low as 9.25% variable, which is lower than most of the popular branded cards on the market.
The Visa Platinum credit card also has another attribute that makes it highly interesting. Simmons First Visa Platinum is a rewards card for travel. When you make purchases with your secured credit card you are earning rewards to help you travel to places you have been dreaming about.
Travel rewards are offered for every dollar you spend. How it works is that you get one reward point for each net dollar you spend on your Simmons First Visa Platinum Rewards card. Once you reach enough reward points you can turn them in for a US based airline. There is no limit as to the airline you can travel on, as long as it is a US based company. There are no blackout dates or seating restrictions, and you have a choice of ticket class.
Cardholders like you will also find other travel rewards as part of the program. You can book hotels, cruises, vacation packages, car rental, or even use the rewards at restaurants. There is a one stop process for redemption of points with the account.
