Wise Use Of Credit Cards

Wise Use Of Credit Cards

by Joseph Kenny

Using your credit cards wisely might be the most important and beneficial decision you can make towards financial health. The reason for this is simple: high interest rates on credit cards can cost you more than money if you find yourself unable to make your payments on time.

Consider this: For most consumers, home payments (or rent payments), along with automobile payments are usually the two most expensive debts that a consumer carries. These two payments alone can often account for over 30% of a consumer's take home pay per month. When high-interest rate credit cards are added to this, the overall cost per month can easily reach 60% or more of take home pay. That does not leave much for other expenses such as food, clothing, car insurance, personal loans, etc. For many consumers, the payments on their credit cards are the most expensive debt that they carry. In other words, the total amount of money that they have to send in on payments is higher than what they spend on home loan payments or automobile payments.

There are many reasons why credit cards can become a threat to your financial health, but the number one reason is that they are so easy to use. The number of people who use credit cards for small, incidental purchases is staggering. Consumers often forget that if they do not pay off the entire balance owed within the grace period allowed they will be charged interest. Some companies will be fair about this charge, but most will happily charge as much as they can for the credit they are extending to you.

To make matters worse, if you are late on your payments, or if you do not make any payment at all, this can be reflected in your credit score. It does not take very long at all for delinquent payments or non-payments to hit your credit report and once they are on your report they stay there for up to seven years. These marks against your credit will often cause lenders to either deny you future loans or cause them to levy higher interest rates on accounts that you may wish to open. All in all, late payments will cost you money in the future.

The very best way to handle credit cards is to pay off the balances as they occur. This not only makes you look good in your credit report but it also keeps you from having to pay those high interest rates for balances that are carried over. The second thing to do is to avoid using your credit cards unless you honestly need to do so. Instead of paying with your card, pay with cash. This one action can save you more money than you might imagine. Yes, it is easier to pay with the card sometimes, but it is also more costly.

If you feel you are already in trouble, sit down with your statements and make a plan to begin paying them down. Start with the credit cards that have the lowest balances. Once these are paid off, move to the next highest and begin paying these down. It will take patience and sacrifice, but it can be done and soon your credit cards will be under control.

The Ultimate Credit Restoration Guide Brings Hope For Fast Credit Repair

The Ultimate Credit Restoration Guide Brings Hope For Fast Credit Repair

by Paul Johnson

One of the coolest things that consumers now have complete control over in the age of fast credit repair is the fact that they can prohibit the sharing of information by credit affiliates. This is any information about you that would inevitably be used for marketing purposes. This means essentially, that you can stop some of those unsolicited credit card offers that you see in the mail. You can do this by going to www.optoutprescreen.com to fill out an electronic form to stop these offers from ever reaching you.

How does this actually help your credit you might ask? There is a really enlightening explanation for this that I'll cover here. Many times loan officers will deny loan programs to otherwise worthy borrowers because they fall short; many times the borrower will be short a mere 10 or even 5 FICO points and will consequently be rejected for loan approval because they barely missed the mathematical range! Flashback to about 8 years ago when I had recently graduated from college in Business Information Systems; I had applied for a mortgage when my credit was a bit on the poor side. I believe my score was around 500 at the time, and the lending company I had contacted for the initial loan application didn't even call me back, ever! I was waiting for 2 weeks wondering what had happened and if I needed to re-mail my loan application to them. Another week went by and still no phone call! I literally was stopped in my tracks time after time, application after application with no such luck after multiple attempts with different loan companies.

Now flash forward to 2007, whenever I visit mortgage companies working with real estate investors, I see those same type of applications heaped together, haphazardly in a pile on the floor or in some loan officer's ignored file cabinet somewhere. I decided a few years ago that I wanted to make sure that there was an opportunity for those people who ended up in that pile like I did, if they wanted to and could use the information to re-build their credit effectively, that there would be real hope for them. I learned long ago via the hard way that it doesn't take 7 years as I'd previously thought to restore my credit. I had thought that I needed to wait 7 years until everything bad would drop off, not use any credit during that time, and then slowly start re-building my credit lines by the end of the 7 year period (this is really what I thought!). This is one way of doing it I suppose but that method turns out to be a 9 year plan at best to see real results. Think that's too long to wait to get your credit back up to par? Well, so do I and fortunately I have learned that if you don't want to wait that long than there's a much quicker way to go about building your credit in a short amount of time.

What I would suggest is that if you are in a hurry to get a loan, you can use the optoutprescreen.com option and utilize their 5 year electronic Optout if you need to repull or re-score your credit with a current lender to quickly give your credit score a high octane boost. There is also a permanent option found on their site and if you're not under any time constraints, you can print this out, sign it and mail it in to be permanently taken off the credit card offer solicitation list. Although the permanent Optout option takes longer to submit since it's not electronic, it provides the greatest boost to your credit score in a relatively short amount of time.

The 5 year and permanent Optout options will not stop any affiliate bank offers from reaching your mailbox, however, since they are marketed through institutions that you are already doing business with outside of the credit bureaus. For example, if you have an account through Bank of America, and do the Optout, BOA or any of their financial affiliates will still be able to send you offers for their credit cards since you do business with them.

So what does the Optout actually do for you? A lot actually.. The Optout will prevent all credit bureaus from being able to sell your information to other credit card companies which is where the majority of these offers originate from in the first place. The Optout also greatly reduces identity theft since it eliminates a lot of unwanted mail from floating around with your personal information on it. One of the greatest things the Optout does that most people don't realize, even though it says on their website that "these inquiries from the credit bureaus do not hurt your credit", which is true; yet in about 60% of cases, this Optout will actually boost the client's credit score anywhere from 5-30 points! This is why I love to tell loan officers about this, because if they have a client who is only a couple points away from a program, they can opt them out (with the client's permission) or have the client opt themselves out with the website, wait about 10 business days, repull credit and in about 60% of the cases they'll get an immediate 5-30 point FICO score increase! This is huge because even a couple of points can be the determining factor to whether someone can qualify for a mortgage program or not.

By utilizing this simple tip, I've been able to help dozens of investors recently to boost their credit score into a qualified range enough to get them the loans they wanted and really needed to make their investment vehicle worthwhile. For the life of the loan, this locks many of them into a much lower rate that literally will save them many thousands of dollars from the loan they would've received (or not received) had they not boosted their credit score within the 2 or 3 week period before their credit was re-pulled.

Oh, how I wish I would have known about this a few years ago when I finally qualified for my first investment property! How about 8 years ago when my first loan application ended up in a chaotic pile somewhere on some indifferent loan officer's desk. This is why I ended up doing a lot more research with regards to fast credit repair and helped put together an entire Ebook dedicated to this subject. This book is literally filled with the most effective tips and strategies that are currently being used by savvy investors and loan officers to boost their client's FICO scores through the roof. You can get a copy of the "Ultimate Credit Restoration" Ebook through our website found at UltimateCreditRestoration.com to learn more about the best credit restoration secrets that we've discovered in 2007 to help you not only restore your credit but ultimately enhance the quality of your life for 2008 and beyond...