Consumers reject financial advice in favour of financial frivolity

It would appear that even though their “friends” aren’t as flexible as they used to be, consumers are still stretching their credit cards beyond the comfort zone.

The vicious circle of debt manipulation involving banks, consumers and commercial credit companies is putting consumer spending under strain, as funds begin to dry up. In May 2005, the Financial Times reported the accusation that banks were fuelling Britain’s personal debt problem by repeatedly offering debt-ridden customers loans they were unable to repay.

As the UK’s personal debt increases by £1 million every four minutes, credit card spending habits still seem to be spiralling out of control. According to Credit Action, nearly 66% of the adult population have a credit card, with multiple card holding becoming a growing phenomenon in the UK. More than 60% of card holders possess at least two cards, with 10% holding at least five cards. There has also been a significant rise in the number of personal bankruptcies. In the year up to March 2005, 37,886 people were made bankrupt, a 30% increase on the previous year.

Credit Action reported that some credit card companies reduced their minimum repayments from 3% to 2% last month, which has been seen by some as irresponsible. To put this into perspective, a £3000 credit card balance at 17.9% APR would now take more than 40 years to repay if the minimum repayment of 2% is paid each month, in comparison to 19 years with the 3% minimum repayment. Barclays even warned of falling profits for the Barclaycard credit card division last month, as more customers missed repayments and bad debtors increased.

For those consumers with regular incomes and strong credit records, credit cards with APRs as low as 6.9% are available, that’s less than half the standard APR most consumers have to pay on the cards in their wallet. By just using a variety of online personal finance tools, consumers can save themselves considerable grief by undertaking some financial homework.

In the UK, a variety of websites are available to compare credit cards, loans, life insurance, car insurance, mortgages, savings accounts, Child Trust Funds and current accounts. With just a few clicks of the mouse, a trusty search engine and a clear definition of the relevant search terms, such as “credit card guide” or “loans guide”, the consumer can have swift access to a number of useful research sites including moneynet.co.uk, moneyfacts, moneyextra and uSwitch. These companies are specially set up to provide impartial consumer information and by using them for personal finance research, the consumer could effectively save thousands of pounds by choosing the most appropriate credit card, loan and mortgage accounts, not to mention securing good deals on car insurance, life insurance, travel insurance and household insurance.

Rachel writes for the personal finance blog Cashzilla.

http://www.cashzilla.co.uk/

Cashzilla is a psychological, technological manifestation of the financial pressure Rachel faced when she graduated from her very expensive, much extended degree.

Rachel uses Cashzilla as online therapy for the state of her finances.

Rachel has used http://www.moneynet.co.uk/ and http://www.creditaction.org.uk/ in the references for this article.

Credit repair involves removing inaccurate, misleading or outdated information from your credit report. Credit report repair may help you get better interest rates. If you are being denied credit, it may help you get the credit that you deserve.

Most people understand the importance of establishing and maintaining a good credit record. You opened your first checking account and maybe got your first credit card or car loan and then something went wrong, so now you are searching for information about credit repair. You are not alone. Credit report repair is a major issue for many people and has created a relatively new market, particularly on the internet. Companies offer to sell you your credit report information and your FICO scores. They offer, for a price, do-it-yourself credit repair software and “professional advice”. Consumers are bombarded with information from television and radio personalities. Some of whom have no experience or knowledge in credit repair issues. Anyone can offer to sell you anything and if you are not careful, you will waste money on bogus “credit reports” which have nothing to do with your personal credit report information.

The first step towards credit report repair is to obtain copies of your credit reports from the three major credit bureaus. Before you can complete a credit repair program, you need to know what information is causing your credit problems. You are entitled to a free copy once in a twelve month period. You can view and print your credit reports by visiting www.annualcreditreport.com. The Federal Trade Commission advises that you spell it correctly or you may end up at an “impostor site”. Once you have this information, you are on your way to credit report repair.

The next step towards credit repair is to report inaccurate information to the credit bureau. If you dispute information on your credit report, the credit bureau is required to investigate. They are not required to investigate and remove information in a timely manner. If you only have a couple of negative items, then you may be able to handle this part of the credit repair process yourself. However, those with large numbers of discrepancies often become frustrated at this point and give up on the whole idea of credit report repair. They continue struggling for years with high interest rates or even being denied credit entirely. This does not have to happen. There are law firms that can help.

As opposed to credit counseling services and “credit advisors”, legal counsel familiar with the laws regarding credit repair issues may be able to help you resolve your credit problems in a timely manner. They can handle the red tape, paperwork and multiple requests to credit bureaus that are sometimes necessary to remove items and complete the credit report repair process. Fees for these services vary, but if you are stuck carrying a balance on high interest credit cards, then you are paying hundreds of dollars per year in interest. Interest is money thrown away. Even worse, if you can not buy a house because of information on your credit report and are stuck paying rent then you are throwing away thousands of dollars per year. Credit repair is a worthwhile investment, whether you have the patience to do it yourself or you enlist the help of a legal professional.

The writers and editors of the Credit Repair Blog are committed to providing accurate information about credit repair issues. Visit us at http://badcredit-repair.com

Getting your first credit card is a big deal and all young people look forward to it with bated breath. We wait for years to be able to apply successfully for out own credit card. This is one of the first things that make us feel like real grown ups. Unfortunately for many they do not have any idea of how to manage the credit once they get it. Just because you feel like an adult does not mean that you know how to act like one. In fact, many real grown ups don’t know how to manage their credit any better.

Credit cards are a big responsibility and they are so convenient that you can find yourself in serious debt before you even know it. Who keeps track of all the money they spend each week? No many people. And if you have a credit card with what seems at the time to be unless credit you can easily find yourself spending, and spending, and spending some more.

Credit cards should only be used in case of an emergency. And I don’t mean an emergency like you have a hot date and nothing to wear to it. No, I mean a medical emergency or something of that nature. The more you use your credit cared the easier it gets to use it all of the time. Keep your usage down to a minimum at all times.

Credit cards can be used anywhere these days. Even halfway around the world. If you use your card too much you will find yourself paying thousands of dollars in interest each year. Credit is not free, it costs you in the form of high interest rates.

Martin Lukac, represents, #1 Loans USA, a finance web-company specializing in real estate/mortgage market. http://www.1LoansUSA.com

There are a lot of questions about using credit cards. Here’s some important points for you:

A quick look around on the Internet this morning shows that more than 9 million people in the UK do not pay off their credit card balances each month. (The principles of what follows are the same in the USA, or wherever you are right now.)

The average balance left outstanding is over £1000. The interest charged on such a balance varies according to the card, but we have seen rates of up to 29%!

When you bear in mind that banks are offering somewhere in the region of 3% interest on account balances, it’s easy to see how such a fantastic amount of money is turned over within the banking and finance industry!

Consider a card with an average outstanding balance of £1000: with an interest rate of 19%, this could take over 20 years to pay off at minimum payment levels! On a balance of £1000 at 19% for 20 years, you’d pay back a total of £3889.

Credit cards are a tool designed to make a profit for those who issued them. They are not provided for your convenience! The only way it makes sense to use a credit card is to only use it up to a point at which you can pay the full balance each month.

In other words you are using it to access money you already possess, and not using it as a form of loan. To use a credit card for a loan is going to be some of the most expensive credit you will ever encounter.

I know that life isn’t always easy, and some people will say they need to use a credit card to get by. This is the worst position you could be in, and it is really important that you do something about your financial circumstances if you are in this position. Continuing along that path will steadily and inexorably lead to financial disaster.

Nobody said it’s easy! But I would be doing no service at all if I avoided the facts, even if it’s not what everybody wants to hear.

Another unwise use for a credit card is to get a cash advance from an ATM machine. whereas with purchases on the credit card there is an interest-free period up until the next payment is due, there is no such period of grace for cash withdrawals. Use a debit card instead.

And be aware of the deal with store cards. These can typically carry some of the highest interest rates around. Any savings are often have wiped out by the fact that you are encouraged to buy more then you otherwise might have, and even if they are genuinely savings, they are typically dwarfed by the total interest when the balance is not paid in full.

Use your credit card wisely, use it to your advantage, and get on the right side of the credit card game.

David Andiers is the owner of
RF Credit which is a premier resource for credit information.
For more information, go to:
http://www.rfcredit.com

No doubt you’ve heard a lot of bad publicity about professional credit repair companies and which is why you’re reading this article, very much determined to do everything yourself, in fact, to do whatever it takes to fix your bad credit.

But let me assure you first that not all professional credit repair companies are to be held in contempt. There are still some credit repair companies that may be relied on to provide you with quality and efficient service - without breaking any laws.

The credit repair process - if undertaken alone - is not something that’s easy as following a cross-stitch pattern or reading a recipe for lasagna. There are a lot of steps involved and each of those steps would be equivalent to hours of contemplation, typing and waiting.

Sometimes, the waiting is the worst part because you don’t know if you’re waiting for something good or for something bad. But with the help of a professional credit repair company, you can at least be assured that everything they have to say shall be good because that’s what you’re paying for.

But if you’re truly determined to stand alone in this issue then let me try to help you at least by enumerating the steps you’ll take and which are involved in the credit repair process.

Credit Reports - I’ve said this over and over and still, some people don’t believe that it’s necessary to look at their credit reports because they say they know what would be written there. That’s such a wrong attitude to take when we’re talking about credit repair.

Credit reports are the very reason why you’ve got bad credit and there’s a need for credit repair. Credit reports are the documents that your creditors and bank managers are also holding to weigh their decisions regarding the second mortgage you’re applying for. It’s also the same document that you must hold in your hand!

When reviewing what’s inside your credit report, you must understand the need to be thorough so don’t skip any line, in fact don’t even try skimming a word of the document. You must check everything. Even your personal information - name, address, Social Security Number and the likes - are not exempt. Anne B. King is different from Anne C. King.

Disputing Items - This is the part that’s looked forward to the least when it comes to credit repair. It’s always hard to confront someone with a mistake that he made because who would ever want to acknowledge anything that he did wrong? If you’re not ready to dispute items, maybe you can’t repair your credit alone.

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

There are thousands of Americans out there who may not be aware that there is such a thing as a prepaid credit card. If you are one of these people, don’t worry. Yes, there is such a thing and if you read on, you’ll quickly learn of its advantages of a prepaid credit card.

It’s important to possess a credit card – even if you don’t plan on using it. Why – because it establishes a credit rating and everyone single person has a rating. A credit rating is designed to let banks know what your financial situation is like, and your ability to repay debt. Nowadays, more and more people are shopping online. Have you ever tried purchasing something without a credit card? This scenario is probably unlikely. If you want to purchase something big, like a car or a home, it is next to nearly impossible to do it without some form of credit. For those of you who have had credit problems in the past, there is hope. That hope comes in the form of prepaid cards, which allow you to open an account (like a bank account) and load the card as you wish. The process is similar to using debit cards, except with this form of credit card, you are helping your credit rating to improve rather than to deteriorate more.

If you have no credit, chances are, it’s because you are young and starting out in today’s society. It is also possible that you have less than perfect credit, forcing you to start re-establishing your credit history, once again. Since it is important to establish a good credit history, owning a credit card is a good start, but only under certain conditions. Regardless of what anyone might say, if you have bad credit, you’ll need to take immediate steps of action to erase the debt that’s causing your credit to go from poor to bad. It goes without saying – building good credit is so important today, especially for young adults wanting to buy a house or a car one day. Most young adults don’t have the cash upfront to afford a home. That is where having good credit comes in handy. If you have good credit, a bank will be more likely to approve you for a mortgage on a house or a lease on a car. If you have bad credit, you may be stuck in no man’s land.

You can’t erase bad credit, but there are things you can do to change it for the better. As previously mentioned, getting a credit card to help with bad credit is a wise move. Every month, your credit card company will send credit reports to credit bureaus, which are designed to help you re-build credit. It is important to note that once you receive a credit card, the responsibility is on you. You’ll need to make sure that you’re paying off your monthly balances in full. It may also be helpful to get a secured credit card – that way, you’ll have to maintain a certain amount of money in your account at all times. It’s also good to obtain a copy of your credit report to track positive (and negative) changes being made.

There are many advantages to using a credit card, such as these. First of all, they work like regular credit cards. This means you can use them worldwide. You’ll also get superior customer service and protection as you use your card. Prepaid cards are also easy to get. You can pick them up anywhere – whether it’s online or at the local retail store. There are also no interest charges. That’s because you’re not borrowing anyone’s money. You’re using your own. This also means that you won’t go into debt by using your prepaid card. It’s simple to use and effective in today’s world where it’s easy to spend too much when you may not have the cash to pay for it later on. Be smart and consider a prepaid card.

©Copyright 2005. Caitlin Crosain is a successful writer and publisher of resource websites on how to Repair Bad Credit and qualify for Secured Credit Cards and Personal Loans

A mileage card can be both a bane and a boon. If you’re someone who pays off the balance well in time, then a mileage card can well be your friend, but if you’re not a big spender and don’t have the financial resources to incur the finance charges created by not paying off your card balance, a mileage card can be quite a financial foe.

A mileage credit card is an asset to any dedicated flyer, if used correctly, no doubt. But the catch remains in the phrase “if used correctly.” Just because you are earning extra miles for charges on your mileage cards does not necessarily mean you have the upper hand in this game. If you don’t look closely, it just might be a more expensive proposition than you first anticipated.

What Is So Different About A Mileage Card?

A mileage card is one amongst the bewildering array of ways to earn, and spend, credit card rewards that savvy consumers are being offered these days. A mileage card will convert miles earned for purchases into hotel stays or restaurant meals. A mileage card also enables you to use these miles where you stay, and then earn extra miles yet again.

The Pros of Mileage Cards

What’s a bigger plus to the spender than earning a travel dividend for money that has to be spent on purchases anyway? Did you know that business travelers get double miles if they charge their tickets with mileage cards? It does sound too good to overlook!

Especially when you have acknowledged that the priciest part of any major trip is airfare, you simply cannot ignore the thought of your routine toothpaste purchase bringing you closer to that African Safari that you’ve always dreamt of going on. Your mileage cards might just bring you a little closer to that dream.

Mileage Credit Card…It Can’t Be All Good!

1) If you cannot afford to pay off the card balance every month then a mileage credit card is definitely not your best bet. The exorbitant rate of interest you would incur on your card balance would do nothing less than mortify you. Of all the major mileage cards, the lowest ongoing APR for mileage credit cards is around 17% and above.

2) Heard of blackout dates yet? If not, then you definitely aren’t the informed mileage credit card owner that you thought you were. Blackout dates (which happen to be prevalent) typically fall on major holidays and are off-limits for redemption through your accumulated mileage.

3) Forget about splurging on a new extravagance on your mileage credit card to get 20,000 – 30,000 miles. There is a cap on many of the current mileage credit card offers, which does not allow you to accumulate more miles and reward points in a given period of time.

4) Since there is a time limit attached with most offers, make sure that you shop the expiration dates for accumulated mileage on your mileage credit card. A mileage credit card deal would really be futile if the miles begin to drop away just as you draw near to a free ticket.

5) The biggest drawback of mileage cards is the membership or annual fees. If the membership fees that you will have to pay exceed the potential rewards, then it’s not worth the effort or your time to use the mileage credit card.

…And Finally

While entering the realm of mileage credit cards with the knowledge of what can go wrong, this should not to deter you from researching the various card offers and applying for a mileage card, if it is appropriate for your particular circumstances. There are many benefits attached to mileage credit cards so well, just make sure that you do your homework before applying!

For more information on finding great mileage card offers, Robert Alan recommends that you visit CreditCardAssist.com

You can buy a home to live in with poor credit. However, you will save thousands in loan costs if you maintain good credit.

A bad credit report leaves home buyers with nonprime loans which cost more money because of:

• high point charges
• high loan processing fees
• prepayment penalties
• high interest rates

If you desire to buy your dream home or investment properties to build your future wealth, you must maintain good credit.

Avoid these 12 common credit mistakes to build strong credit and save money in mortgage loan costs.

1. Mortgage lenders often scrutinize the type of credit used. Consumer credit, the kind associated with department store credit cards and finance companies, has high interest charges and deducts points from your credit score.

2. “Too much consumer credit,” a common remark in credit reports, is caused by too many lines of credit or too many credit cards.

3. High balances caused by only paying the minimum due or maxing out credit cards or lines of credit generate deep drops in scores.

4. Cash advances costs higher interest and extra fees. These extra charges accumulate and keep balances too high.

5. Charging over your limit and paying penalty fees causes negative “high proportional amounts owed” remarks on credit reports and deducts points from credit scores.

6. Late payments, sometimes even only by one day, cause unnecessary late fees. Late payments often increase account interest rates.

7. Some consumers charge more than they can afford. This causes a snowball effect of amassing debt with no easy way to pay it off.

8. Co-signing a loan raises debt-to-income ratio and possibly adds “too many consumer accounts” on your credit report, which lowers your score considerably.

9. Don’t ignore credit problems. Talk to creditors before making late payments and make correction arrangements. This action heads off negative reporting to credit reporting agencies.

10. Report address changes to creditors to avoid misplaced bills and late payments.

11. Use your full legal name to protect yourself from confusion. Avoid partial names, different names, and initials. If appropriate, use Sr. or Jr. Report name changes to creditors to avoid confusion.

12. Check your credit report often for mistakes and protection from identity theft.

Avoid credit mistakes to build strong credit and keep your credit scores up. Understand the difference between good credit and the credit needed to obtain real estate financing. Finance your dream home or dream investment portfolio!

Copyright © 2006 Jeanette J. Fisher

Jeanette Fisher offers Free ebook: “Credit Tips for Mortgage Financing” at Real Estate Credit Help http://www.recredithelp.com

With interest rates rising, low or zero percent credit cards may soon become a thing of the past. However, the wise shopper can still secure a low rate by carefully shopping around. Here are some ways you still get a bargain rate card:

Contact Your Current Provider. Chances are the interest rate with your current credit card provider has been inching up for the better part of the past year. Whereas previously you could have had a 5% rate, the card may now be up to 8, 9, or even 10%. What can you do? Contact your credit card provider and ask for a lower rate. They can tell you no, at the risk of you going elsewhere, or give you a fixed lower rate. If your provider refuses to budge, see if they would consider a lower rate for a certain period of time, let’s say for six or twelve months. The added savings of the temporary lower rate can be beneficial especially if you have a big purchase coming up that you plan on paying off within 6 to 12 months.

Shop Around. Like most Americans, you probably are receiving solicitations in the mail for credit cards. If that is the case, find the plan that works the best for you and apply. Usually, a low introductory rate is offered as well as balance transfer options. If the card has no annual fees and no additional fees are assessed for transferring funds, go with the new company especially if the rate is lower.

Consolidate Your Debt. If your current credit card provider won’t lower their rate and the new card company’s rate isn’t quite as low as you expected, consider obtaining a debt consolidation loan through a lending institution. To get the lowest rate possible you may have to offer up something as security – for example, the equity in your house – to obtain the lowest rate. Do this only if you have sufficient equity and can reasonably expect to pay the loan or line of credit off.

The Federal Reserve Bank has raised interest rates ten times since June 2004. Still, lending institutions can and are offering lower rate credit cards and loans. As a savvy consumer you can and will find the best deals out there.

Matthew Keegan is The Article Writer who writes on just about any and every issue imaginable. You can preview samples from his high performing site at http://www.thearticlewriter.com

The Annual Percentage Rate (APR) is the amount of interest rate that is chargeable to any outstanding balance of a credit card, which is the amount you have charged to your credit card for a month. If you don’t make the full payment within the grace period, the credit card company has the rights to charge you an interest rate for their services, a fee known as the APR. Thus, the lower the APR, the less you have to pay for the services of your credit card.

Low APR cards usually incur an interest rate of lower than 6%. However, certain companies offer 0 APR cards. This literally means that you won’t have to pay for any interest charges on top of your outstanding balance even if you delay payment for several months, or sometimes up to a period of one year. This is the main reason why many users opt for a 0% APR as a balance transfer card or as a method to consolidate their already huge credit card debt.

Users of both good and bad credit histories can benefit from a 0 APR card. Those with a good credit history can make the minimum payment required to keep their credit card services, without fear of the interest rates accumulating. As 0 APR is only available for a limited promotional time period (usually between 6 and 12 months), card users are also able to clear the debts from their other credit cards that carry a higher APR. These balance transfers are able to help users save a substantial amount, as long as they settle their outstanding balances within the promotional period.

What’s more, card users with bad credit histories are able to cut down the amount of interest rates incurred upon their huge debts. 0 APR cards usually allow cash advances of several thousands, which can help consolidate huge debts. Of course, all these come with a fee but nevertheless can still dramatically help reduce debt that would otherwise go unpaid. This means that the credit card user gets cash advance at practically no cost, at least for the next 12 months.

Adam Goldman recommends Find Credit Cards to compare 0 APR cards.