The very first step you need to take to repair bad credit, is to focus on paying all of your bills on time. At the same time, begin reducing credit cards and other loans you may have. Using certain credit building tools may help too.
It’s a lot tougher to repair your bad credit than it is starting to establish new credit. You’re now in a more difficult position of trying to convince credit card issuers and other lenders that you can be an acceptable credit risk.
Even though you’ve messed up before and got behind on your payments, you have to convince them that you will do everything in your power to change your ways.
Each month, when all of those dreaded statements come in for your charges to those plastic cards in your wallet, your card issuer usually lets you know that you don’t need to payoff the balance. “Just pay this minimum payment”, they tell you, and before you know it, you have a high outstanding balance. Now you begin to wonder how to get rid of credit card debt.
Unfortunately, now it’s not so easy. For some individuals, there may have been a good reason why they only paid the minimum payment each month. Problems such as unforeseen medical cost, or the family car passed away, or even loss of a job.
But for many others, it was just poor cash management. They didn’t have View full post…
Each of us has our own pre-conceived ideas as to how money plays a part in our daily lives. Because of those ideas, it’s no wonder money myths are so prevalent. What’s more, this hype perpetuates not only from friends and acquaintances, but financial professionals as well.
Some of these sayings remind me of the saying “old wives tales”, and indeed, they may be. This first one is a good example.
Never payoff your credit card balance in full because it will affect your credit score in a negative way.
Wrong – Keeping an outstanding balance on a credit card will not improve your credit score. View full post…
Posted: December 5, 2015 Under: Credit Cards By: Gust Lenglet
Have you ever wondered if you really need a credit card? I can hear some saying, this guy must be nuts, who can live without at least one credit card? There are some though, who are highly disciplined and won’t have a credit card in their wallet.
This can be a mistake, however, because with proper use of a credit card, you can build a strong credit score. We’ll give you some tips about credit cards and credit score, and for the very few of you, some advice to consider.
Do I really need to have a credit card?
We all have different wants and needs as well as personal lifestyles, so on to the answer to the above question. There are some who have managed their finances very well for many years and have not used a credit card. They don’t expect their situation to change, and have even saved a tidy sum for possible View full post…
Posted: September 26, 2015 Under: Credit Cards By: Gust Lenglet
My grandparents taught me something when I was young; paying for everything with cash keeps you out of debt. Their philosophy was that it’s too easy to get in over your head and mismanage money if you are using a piece of plastic. They called this debt the hazards of having a credit card.
It is very easy to overuse and misuse a credit card. Here are the following ways:
Disposable credit cards are also known as pre-paid cards. Pre-paid cards do not require good credit to get. In fact, these credit cards are not even linked to your credit report. There are multiple cards to choose from; grocery stores, gas stations, pharmacies, Walmart, and Target all carry them. Pick which one suits your needs, load money and use it wherever they are accepted.
Disposable credit cards are handy when traveling. I’ve had my credit card number stolen before while traveling so I now go to great lengths to protect myself and my financial information.
These are great options for children or adults that are beginning their journey into learning money management. While they will not help you build credit, they will not hurt your credit. View full post…
Posted: February 22, 2014 Under: Credit Cards By: Gust Lenglet
Why Your Student Needs a College Student Credit Card
College is usually a young adult’s first foray into the adult world of responsibility. Without a strong money management strategy, a college student credit card can cause college students to quickly accumulate debt if they are not careful.
There are several ways, including a college student credit card that can be a great ways for students to learn about handling debt effectively.
If you do not feel your student is ready for a credit card of their own, you can add them on as a user to one of your credit cards. Your student will then have the responsibility of using a credit card but with additional limitations and liability. It is important for you to understand the risk of taking a chance on someone else running up debt on your credit. Make sure that you have the means to pay off any debt if your student cannot.
Another option to teach your college student about money management is to have a debit card for day to day expenses, while a college student credit card can be used only for emergency purchases. With a debit card, your student will have to keep on budget or risk running out of money before the next pay period.
How to Get A College Student Credit Card – Learn How to Use Credit Cards
All too often, as most teens enter college, they are bombarded with offers for a college student credit card. More often than not, they haven’t received any type of guidance on how to use credit cards, and for some, the temptation can be overwhelming.
This is especially true for those college students that attend a college or university away from their home town. For many, this is their first experience at “leaving the nest”, and besides being homesick, they realize that they are on their own and must begin to make decisions that parents used to make for them.
One of the first items on the agenda, is to open a checking account if that wasn’t done prior to leaving home. Many experts in the financial field recommend that a checking account be established in the student’s junior or senior year of high school so that you’ll have some time to guide them in proper handling.
Proper use of a college student credit card is one matter where the student must be trained, and under the watchful eye of the parent. To do that, it may be a good idea to give the student a card in his/her senior year of high school, and in that way, you’ll be available to offer advice and other assistance.
Teaching the student how to use credit cards is not a one time lesson or lecture. There is a learning curve that comes from experience and they need to understand how to use the card responsibly.
They need to be shown what high interest rate credit cards can do to a budget. Explain to them how individuals get into serious financial problems with credit cards by purchasing unnecessary items without sufficient income to repay the debt.
If possible, show the student what happens when only the interest, or some small minimum payment only is paid each month. I call this an evergreen account because the principal balance never changes.
One way to train a student how to use credit cards is to set them up with a secured card for a few hundred dollars. In that way, they can use the card, but the liability is fixed at the amount of the cash securing the card. This may also teach the student how to establish credit in their own name in the future.
Using the secured card while they are in high school will give the parent an opportunity to observe their behavior and ability to handle the card. If the results are satisfactory, then the parent can move the student up to a regular card with a little higher limit. Also encourage the student to repay the entire balance each month to avoid wasting money on interest charges that are not tax deductible.
There are many different types of offers that students will be tempted with, and one gimmick that appliance and furniture dealers push are “same as cash” purchases. They allow the credit card holder to purchase appliances or furniture interest free as long as the entire balance is paid off in 6 months. Many financial planners advise against these types of purchases as they can backfire when a card holder purchases more than they can repay. Then the day of reckoning comes and new problems begin.
Our firm provides the information in this website for general guidance only, and it does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with a competent professional tax, accounting, legal, or other professional advisers. For information on how to use this data, you are advised to read our Legal Disclaimer page and our Circular 230 page.