Pierre Money Mart Blog

About half (48 percent) of all Americans have credit-card debt, yet nearly one-third (30 percent) have taken no steps beyond monthly payments to reduce it in the last 18 months. That’s the finding of a new survey conducted by Harris Interactive that assessed Americans’ attitudes about and behavior towards their credit-card debt.

Reducing monthly expenditures (such as eating out, entertainment, travel, rent, and cable television costs) was the most common way (other than making regular monthly payments) for debtors to try to alleviate their debt. Two in five (43 percent) said they had made those efforts in the past 18 months.

Yet only 28 percent had transferred credit-card balances to lower interest-rate cards and just 13 percent had contacted creditors to negotiate reduced interest rates or payment plans in the past 18 months.

According to the survey, 52 percent of all credit-card indebted Americans have had credit-card debt for between two and five or more years. Fully one-fifth have not been credit-card debt-free for five years or more; 11 percent claim they have never been without credit-card debt.

Debt is the biggest problem for adults between the ages of 25 and 45. Two out of three (66 percent) people age 18-24 say they have no credit-card debt at all. However, credit-card debt becomes far more prevalent after age 25; consumers between that age and age 34 the percent of people without credit cards crops to just 37 percent. Between the ages of 35 and 44, the precentage drops even lower, to 36 percent. After age 45, however, credit-card debt becomes less of a problem. For those age 45-54, 38 percent say they are without credit-cad debt. By age 55-64, 48 percent have no credit-card debt, and nearly two-thirds (61 percent) of those over 65 are free of credit-card debt.

The Banklady’s tips to reduce credit card debt:

“a FEW things you can do”

1. DO NOT waste money on Gambling and Lotteries- more and more Americans are throwing money out the window and giving it to these illegal foreign gambling services or state lotteries that have awful odds of winning.

2. Watch less movies, eat out less, find a bank that does not charge a monthly checking fee. Little things like that go a long way!

Options to reduce high-interest Credit Card Debt-

1. Consolidate your Debt. Use a online debt consolidation service.

2. IF you own a home: Pay off Credit Card Debt with a Debt Consolidation Loan.

Having a bad credit report can cost you a place to live and a job. Try moving into an apartment or buying a boat and not being able to show good credit. How is one supposed to change their credit without using credit? You can’t. You have to prove your credit even if it’s damaged. That is why we recommend credit reports to check up on the status of your credit all the time.

According to a Public Interest Research Group survey, 79% of credit reports featured errors which is nearly four in five, suggesting that the odds are strong that your credit report isn’t as clean as it should be. Even worse they found that 25% had serious errors which is bad enough to lead lenders to refuse you credit or employers to refuse you a place to work when you need it most, including buying a house or car. A bad credit score can even be the cause of some people not being able to open a bank account.

Watch for Scams.

There are many online credit scams that claim to give you a free credit report. Be sure and read the fine print and make sure it is not just for some special niche. We at Banklady have picked a known company to provide our credit reports and they offer free trials or paid credit reports, depending on what level you want the “Free” credit report is a credit report that is for thirty days free then they charge you if you wish to continue the credit card billing. There are also credit report companies, Clear Credit for example, that give you a free credit report only if you sign up for their credit repair service which bills you for each error found on your report. We recommend our credit report or one that you have to actually pay for and find out about your credit. Your credit is something that you cannot take forgranted so make sure you get the best report from the big three. By law the big three are supposed to grant you a free credit report each year but its more hassle to write in to each agency when all you have to do is sign into a credit report website and have it all done online. If you are applying for a loan, your lender normally gets a credit report for you so you can check lenders and save money on a credit report this way as well.

Watch for Identity Theft.

With the growing and record-breaking news of identity theft on the rise, and more and more information on the internet we certainly recommend ordering a credit report at least every six-months or a year. If your wallet has been stolen, or if you think you left your credit card receipts at a gas station; there are many ways people scam the system.

Always Double Check Receipts – No matter how small they are! You do not want to get ripped off.

Make sure you keep every receipt and double check your credit card statements, do this to even avoid businesses or restaurants taking advantage of you. One visitor said “my waiter ripped me off and wrote a tip for ten dollars on a $23.19 tab.” This was not authorized and because she kept her receipt she immediately called the credit card company and got the charges reversed.

Use a trusted company when obtaining credit reports online

We use one of the Worlds largest banks or credit reporting agencies to insure we get credit monitoring and credit reporting without having to worry about the information going out to the wrong person resulting in ID Theft. Through our partner of Citibank we offer a free credit report online for 30 days and if you forget to cancel it is only $12.95 a month which is cheap compared to most offers you see for credit monitoring. It is a small amout to pay to prevent theft of your identity or possible bad marks on your credit rating.

How do Issuers evaluate my Credit? Issuers determine credit worthiness by what are called the three C’s of credit (capacity, character and collateral). Capacity refers to your ability to pay given your income and existing debt. Collateral refers to any assets you have that can secure payment (e.g. bank accounts, home ownership). Character refers to factors such as your payment history and length of employment. The criteria for accepting applicants vary between issuers and credit card products.

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How do I evaluate my credit? You can get a very good idea by looking at your credit report. Three separate bureaus maintain a different snapshot of your financial history and provide copies of this report to creditors upon request. It is important to make sure information on these reports are accurate, especially if you have been turned down for credit and don’t know why.
It has never been more important to know where you stand financially. Take charge and find out your credit score now. Don’t become a victim of identity theft–monitor your credit today! Worried about managing your debt? Look here for credit repair and debt consolidation.Annual Fee: Some credit card issuers charge an annual fee for the privilege of using their card and carrying a balance – typically between $15 and $100 a year. Sometimes this fee can be waived if you use your card frequently, or if you transfer a certain balance to the card or even for asking! If you are planning on paying your bills within a month or two from the date you make purchases, you should probably be looking for a card with NO annual fee. The total annual cost (interest charges + annual fee + any other charges) is ultimately what matters. If you have good credit there is no reason you should be charged an annual fee unless you are earning miles or rewards that offset the fee.

Annual Percentage Rate (APR): APR can be either “fixed” or “variable rate” interest (”floating rate”). Fixed rate APR’s are usually a little higher, but you know exactly how much you will be charged each month. With a variable rate credit card the interest is based on a published index + an adder – for example, “prime rate + 2.9%”. If you expect to be carrying a balance, you want to look for a credit card with the lowest rate. As of November 15, 2003, the prime rate (the most common published index) is 4.0%.

Introductory Rate: Various credit cards offer a low “intro rate” or 0% APR that switches to a higher variable or fixed rate. You should know how long the introductory rate is applicable and what APR the card will carry after the introductory period elapses. Be aware that the introductory rate for some cards will be terminated if you are late with a payment, also watch closely when the low or 0% APR ends.

Grace Period: A credit card grace period is the time between the day you make a purchase and the day when interest begins to be charged. For most cards, it is 25 days from the billing date. If you carry a balance, many cards have no grace period and you will be charged interest from the day you make a purchase.

Other Fees: How much is the penalty for being late? How much do you pay if you go over the credit limit? How much does your bank charge you for an ATM withdrawal (cash advance fee)? Is the interest rate for cash advances the same or is it higher than the card’s “regular” APR? Many of these questions can be answered in our smart credit tips and credit card fees.

Benefits such as frequent flyer miles, rebates, etc: A number of issuers offer additional benefits to card members. Rebate cards allow you to earn cash back and discounts on goods and services based on card usage. Frequent flyer cards allow you to earn miles for each dollar charged. With special interest cards (e.g. golf and ski) you receive discounts and accumulate points towards purchases. Banklady.com offers several rewards cards on our credit cards page.

How are Finance Charges Calculated? Most issuers use the Average Daily Balance method for calculating interest. This means that if you don’t pay your bill in full, interest will be charged from the day a charge is posted to your account. Some issuers charge two months of interest when you switch from paying in full each month to carrying a balance. This is called Two Cycle Billing. The other two methods for computing charges are Adjusted Balance and Previous Balance. Normally, the exact formula for interest calculations can be found on your bill.

In recent years, more people than ever before have found themselves deeply in debt with no remedy in sight. For many of those people, filing bankruptsy seems the only answer. In the majority of cases, however, this is not the case. With some careful planning, skilled help and patience, people can repair their credit.

The first step toward repairing credit is to find out exactly what is owed and to whom. Current copies of credit reports should be obtained from all the major credit bureaus. Free copies of these reports are available if credit has been denied recently, usually within thirty to sixty days. If any inaccurate information is shown on any any of the reports, this information should be disputed. This action may be initiated by telephone but it is better to do this in writing for documentation. Credit bureaus must investigate disputes promptly, normally within thirty ydays. If this time passes and no correspondence or other communication is received, the credit bureau should be contacted again, both by telephone and in writing.

Often credit bureaus will update files and not notify the individual. If this has happened, request a copy of the updated report. Credit bureaus usually furnish free updated copies. Be persistent until the inaccurate information is removed. It may have a great bearing on future creditworthiness.

After incorrect information has been removed, repeat the process with each credit bureau that carries the inaccurate information. This is necessary since the credit bureaus operate independently and changing records with one will have no bearing on the files at another bureau.

Here are some of the most disputed credit report items:

* outdated information, usually over seven years old
* inaccurate personal information
* credit information that belongs to somene else (This is quite common.)

If a large number of credit inquiries appear in the file, request that the credit bureau merge multiple inquiries from the same source. This will help future credit ratings since an excessive number of inquiries is seen as derogatory.

Always keep credit information current by obtaining copies of credit records at least once yearly after resolving problems. This will also act as an alert to any credit fraud that may be occuring.

After obtaining a credit file and starting the dispute process, evaluate your financial situation. If you find that you are unable to make at least the minimum payment on outstnading accounts, immediatley contact creditors. Many will appreciate your willingness to pay and will attempt to help set up plans for payument. Do not make promises which cannot be kept. A small payment is preferable to a large payment that never arrives. Sometimes this contact can be enough to reduce payments and forestall more severe measures. If not, a more serious step must be taken.

This next step is to consult a credit counseling agency. These organizations are invaluable in solving financial problems. They are staffed with trained individuals experienced in the credit field. Do not confuse these agencies with the commercial “credit repair” companies who claim that, for a fee, they will wipe your credit slate clean. Don’t be fooled. There is no legal way to do this. Any procedures they might use are available to you free of charge.

A counselor at a credit counseling agency will take all the information concerning your financial situation, evaluate it and decide the best strategy to use in solving your problem. You will be asked to abide by certain rules while receiving services. These rules may include closing charge accounts and canceling credit cards or paying your bills through the agency. It is to your advantage to abide by the rules as these agencies are perfectly safe. They are non-profit and will not ask you to pay for their services. Although the repayment period may be long, do not accept offers of credit while receiving services from these organizations since this will only delay the process and could possibly result in you being refused further services.

Here are some suggestions for maintaining good credit after the credit repair period is over:

* Live within your means. Do not return to the bad financial habits that resulted in credit problems the first time.
* Create a budget. Know where all your money is going. Small purchases can add up and make it difficult to meet important obligations. Keep records of all money spent for one month. This detailed record will show where spending cuts need to be made. It will also alert you to any spending problems.
* Plan for financial emergencies by depositing a fixed amount of income to a special “emergency” account. Do this as if paying another monthly bill. This money will insure that emergencies such as illness or loss of job do not catch you totally unprepared. Try to accumulate enough in the fund to pay bills for at least six months.
* Finally, make a conscious effort to be “money smart”. This will be a lifelong task but will eliminate the chance of falling back into the bad credit trap of the past.

Credit scoring predicts borrower behavior
Until recently, bad credit was something of a mystery. That’s because there was no uniform, statistical way of measuring people’s credit behavior. A few years ago, however, a company called Fair Isaac Corporation developed a uniform credit scoring method called the FICO score. Because each of the major credit bureaus (Experian, Equifax, and TransUnion) have different information about you, your FICO score established by each of these companies will differ somewhat. You FICO score is one of the best indicators of how good or bad your credit is. To come up with your score, the information in your credit report is compared mathematically to the credit report information of millions of others. Your future credit behavior can more easily be predicted based on this data. Most lenders use the FICO score as a starting point when deciding whether or not to extend credit to you.

Low scores: the good news
Having a lower FICO score doesn’t mean you won’t be able to borrow money. In the past, before credit scoring became standardized, many lenders were hesitant to take any risks at all. They were not good at predicting who would default on a loan and who would not. They would see one negative item on a credit report and simply refuse to extend any credit at all to some individuals. Today, however, even borrowers who have problems in their credit history have access to credit. Standardized credit scores and statistical models allow lenders to predict borrower behavior more accurately. As a result, many companies now offer a wide variety of credit programs tailored to individuals of varying risk levels. High-risk borrowers who may not have qualified for credit in the past are now more likely to do so. Lenders usually charge those individuals higher interest rates.

Credit scores: the good, the bad, and the average
FICO credit scores range from a low of 300 to a high of 850. The higher your score, the better. According to Experian, one of the three major credit reporting bureaus, the average American credit score is 677. Fair Isaac suggests that to qualify for the most favorable lending terms, including the lowest interest rates, you need a score of 720 or higher. The three major credit bureaus, as well as the Fair Isaac Corp. and other companies, will make your credit score available to you for a fee.

The most important factor: your payment history
Many factors go into determining your credit score, but some factors are weighed more heavily than others. The most important factor is your payment history, which accounts for approximately 35% of your credit score. Payment history includes payment information on credit cards, mortgages, auto loans, and other loans. Missing payments or making late payments will affect your credit score negatively. Bankruptcy or other financial judgments against you also have a negative impact on your score.

Other factors affecting your credit score
The amount of money you owe, how much credit you have available to you, and the proportion of credit balance to total credit limit all affect your credit score. The length of your credit history is also important. Having a long, good credit history is obviously better than having a short credit history. Also taken into account is recent credit activity (such as applying for a new credit card) and the type of credit you have used in the past (credit cards, installment loans, consumer finance loans, etc.)

What to do if your credit score is low
Your credit score is not the only criteria a lender looks at when deciding whether or not to give you credit, but it is a major factor. Most lenders also look at your credit report, which gives details about your credit behavior. If you can show that your most recent payment history is good, despite past credit problems, many lenders will give you credit. Making a sincere effort to manage your credit responsibly will help to raise your credit score over time. Lenders each have their own guidelines and criteria for granting credit. In some communities, it pays to get to know your local lenders personally. Once they get to know you, they may feel more comfortable giving you credit even though your score is not as high as they would like.

The bottom line? Just because you are turned down for credit by one lender doesn’t mean they all will. Some credit companies specialize in working with people who have past credit problems. It pays to shop around.

TIP: Do not be fooled by companies claiming to raise your credit score over a few days.  You must be patient and persistent if you wish to improve bad credit.

What separates us from our competition is that we will tell you even if we cannot help. We will not set an appointment with you if we do not think we can help you get a Auto Loan Bad Credit History. We do not want to waste your time.

Even in the rarest of circumstances that there is no loan for you, we will help you in other ways. We will show you how to dramatically increase your credit score in a short period of time. We will even take the time to walk you through your credit and show you how to read it. Or if there is another company that we feel can help you better, we will even tell you how to get a hold of them. Don’t let Auto Loan Bad Credit History hold you down from the car of your dreams.

The most important thing to remember is that what you do from today forward is what really counts, not what has happened in the past. A wise man once said “If you keep doing what you have been doing, you are going to keep getting what you have got.” The time for change is now.