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Credit Card Quandry PDF Print E-mail

Do I need it?
Exercise control!
Be smart!
Time is money; can I pay it back soon?

OK, I’m here to give it too you straight, credit cards can be trouble. If your not careful they can cost you more money and headaches than you ever bargained for.

If you’re reading this section there’s a good chance that you already have a credit card or have some sort of credit card history

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If you’re like most people you’ve experienced either the good, bad and ugly of credit cards. For starters, credit cards are not cash, they are not extra money, they don’t save you money and they are not it your best interest. With that being said they aren’t bad as long as you have some self-discipline when using them. Your discipline should revolve around whether or not you can afford what you’re purchasing.

Credit card interest rates are revolving, which means that the balance and interest to be paid could continue indefinitely. Ever wonder why it takes you so log to pay down your credit card balance when your only making a minimum payment; it’s because your dollars go to the monthly interest amount first and whatever is left will be applied to the line balance. This is the reason it’s possible for a credit card balance to grow even though a minimum monthly payment in being made.

If you’re using credit cards you want to be sure that you’ve secured the lowest credit card rates around. Typically department store credit cards have higher interest rates than bank label credit cards.

When it comes to credit cards you’ve got to be straight with yourself; if you don’t have the discipline to use the funds and pay it back promptly then you shouldn’t be using them. Negative, delinquent or credit card debt is one of the main reasons for negative credit standing.

A credit card is a open-ended line of credit that allows you to borrow up to the balance of your credit lines limit.

  1. Universal Default: If you have any type of revolving credit, installment credit or home mortgage loans you should be aware of the term universal default. Universal default basically means that if you become delinquent on a loan with a creditor, this information can be passed to your other creditors and they can it turn increase your Interest Rate to the default rate even thought you haven’t missed a payment with them. Example: (If further clarification is needed)
  2. Studies show that 70% of ALL Credit Bureaus have some sort of error on them, does that include yours? Like my moms you to say, don’t trust what someone else has to say, check it yourself. It has been estimated that over 70% of all Credit Bureaus have some sort of error on them. I’m not talking about misspelled names or incorrect addresses; I’m talking about serious errors like incorrect collection accounts and double reporting of credit items. Negative credit issues can cause you to pay a higher Interest Rate on loans, higher car insurance premiums and maybe even the chance at landing that dream job. Legislation has been enacted to protect consumers from erroneous credit reporting, but you can’t take advantage of this protection unless you stay on top of your Credit Report.
  3. Your Credit Score and history are for sale whether you like it or not: Have you ever noticed that when you apply for any type of credit all of a sudden your mailbox becomes littered with credit card pre-qualifications and loan offers. The reason this happens is because your credit information is for sale to whomever is willing to purchase it. This is referred to a “soft pull”; soft pulls allow creditors to check on your credit standing and decide if they want to extend a pre-qualification letter. Soft pulls do not have a negative affect on your Credit Report.
  4. Limitless pitfalls for late fees and interest rates: As a consumer you need to be aware and beware. Late payments can often snowball into unmanageable situations, and when this happens there are really not limits to the fees your creditors can charge you. These fees can cause you to go over your credit limie, your interest rates to increase, your payments to double among other things. It’s important for you to be conscious of what you can and cannot be charged. Please refer to your lending terms disclosure to ensure that your aware of what could happen.
Everything is negotiable: Sometimes bad things happen to good people, and sometimes these situations can prevent you from meeting some of your financial obligations. When this happens you should feel obligated to contact your creditor and negotiate late fees or over limit charges. If you’ve displayed positive Credit History and overall good credit character more than likely they’ll be willing to work with you. It’s really not in the creditors best interest to stick it to you, the more they bend you over on fees the less likely you are to pay the original amount that you owe.
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