25th November 2008
Imagine that you’ve gotten far behind on your credit card payments. The accounts have been closed, but you manage to pay off your balances before they get charged off as bad debt. Since you’ve made good with your creditors, you’re shocked when your credit score doesn’t rise as a result. What’s going on here? Is it really worth it to pay off your debts rather than waiting for them to fall off of your credit report in seven years?
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It’s true that credit scores require patience. It takes a while to move them in either direction, but they tend to sink faster than they rise. That’s one unfortunate truth. Another is that, even though it might take months or years to get your credit score where you want it, it’s not a good idea to play the waiting game with delinquent accounts. Pay them off as quick as you can.
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Why shouldn’t you save your money and just wait things out? There are several reasons. First, if you intend to buy a house someday, you’ll want your credit report to reflect that you paid your debts in full. Unresolved debts will disqualify you from most mortgages. Even if you paid the balances late, and even if the accounts were sent to a collection agency, it’s still better to pay up. Lenders will look at you more favorably if you do.
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Also, consider the nuisance you might have to deal with if you decide to permanently default on your debts. You could be targeted by bill collectors, property liens, and even lawsuits. Depending on the size of your debt, you could have your paychecks garnished. It’s much less stressful to just pay the money you owe and not have to deal with harassment and litigation.
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Finally, if any of your accounts are still open while you’re paying them off, this repayment will be noted on your credit report. Timely repayment history makes up slightly more than a third of your FICO score – the credit model used by most lenders. Start making monthly payments in full, as soon as possible. Your credit score will reap the benefits.
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It’s sad but true that some people let their debts go indefinitely. They watch the negative items come off of their credit reports in seven years’ time. Others who pay their debts in full have to wait the same amount of time for negative marks to come off.
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When you get behind in your payments, you’re not adhering to the agreed-upon repayment schedule, and the creditor has the right to report this to the credit bureaus. If you can’t avoid delinquency, at least pay off your accounts when you’re able to rather than letting them sit. By showing that you’re interested in making good on your debts, you’ll qualify for more loans than people who never pay up.
<p><br><br>This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for <a href="http://www.creditorweb.com/">credit cards</a> online.
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24th November 2008
When the economy is tight, people start getting a little desperate about what their next move should be. While it is always important to have a plan, it is equally important to be careful of jumping on the bandwagon with every new idea that comes along. Some offers and ideas can be a great idea, but others will do little more than set you up for more problems down the road.
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<b>Wave and Go- You May Want to Wave Good-bye to This Trend</b>
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One trend in the credit card industry that is still on the rise is the ability to “wave and go.” While waving your card at a card reader may seem like a convenient way to use your card because it will get you out the door faster, there are hidden dangers to using this technology. It’s much easier to spend money without realizing it. When you don’t need to take the time to scan your card before you leave the store posts, those small purchases can add up quickly and you may not notice how much money you’re actually spending.
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The “wave and go” technology works by placing a small computer chip with a tiny antenna that can respond to radio waves from the card reader right inside your credit card. These “wave and pay” cards are intended for quick purchases of or less. There’s no signature required and no PIN number necessary. . Quite often, you’ll find “wave and pay” card readers at convenience stores, fast food restaurants, drugstores and movie theaters. While you certainly save time waiting in line and you’ll be using a hot new technology, it’s very easy to spend more than you planned. Avoid this trend unless you’re already very responsible with your credit.
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<b>Rewards are Great- If They Stick Around</b>
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Another credit card feature that many people are thrilled with is reward plans. Everyone loves to get something for nothing and the idea of earning bonus points, cash back or frequent flier miles for every dollar you spend can be too intriguing to pass up. However, be careful when using these plans as your criteria for choosing which credit card you affiliate with. In the current economy, you may just see these rewards disappear when you least expect it. For example, in the past, some companies have provided double points for everyday purchases on their charge cards. Over the past couple of years, double points have been eliminated by many companies, including American Express. Other major card providers have diminished their rewards plans on cards by rolling back their cash back amount from 5% to only 2%.
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The problem is many people choose a credit card based on these potential rewards. You may forgo other helpful credit card benefits in order to get a better rewards plan. When that plan disappears, you’re stuck with the card you chose without the benefit that was so important to you when you signed up. Rewards can be wonderful, but don’t let them be the deciding factor in which credit card you choose to use
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<b>Free Balance Transfers Aren’t Always Free</b>
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One of the primary features some credit card companies will use to attract you to open an account are balance transfers- the option of transferring your balances from other cards with a higher interest rate to your new card, carrying a lower interest rate. While saving interest is very important, be sure to read the fine print and know what your balance transfer fee is. Some companies may charge as much as 0 or more for their balance transfer fee- those “no fee” transfer promotions generally have gone by the wayside. There may also be a limit on the amount you’re able to transfer. With the tightening economy, great deals on balance transfers are becoming much more difficult to find
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Overall it’s important to remember that credit cards can play a significant part of your financial strategy. But when the economy gets tough, remember that credit card companies are not in the business of saving you money. They are in the business of making their own money. Read all the fine print carefully before you sign, and if you don’t understand exactly what a feature is all about, ask questions and don’t make a commitment until you know the answer.<br><br>This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for <a href="http://www.creditorweb.com/">credit cards</a> online.
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10th November 2008
Around the country, many schools have begun cashless purchasing processes in the cafeteria. There are a variety of methods used to keep track of the purchases, from student ID cards that operate like a debit card to fingerprint systems to simply giving the cashier your name or student number to have your purchase deducted from the account.
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Just as retailers around the world having to accommodate the preference of consumers to swipe their cards rather than pay using cash - and accept credit or debit cards for everything from a pack of gum to McDonald’s cheeseburgers, our school systems are following suit and an increasing number are using credit card-like systems to pay for lunches.
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All of the methods of buying lunch without cash may be giving students mixed messages regarding making purchases, though. When the child doesn’t physically hand over .75 or whatever the price of their lunch is, do they understand that they are still in fact paying for it, when they swipe their ID card or scan their fingerprint? It most likely depends on the age of the child, but there are some concerns that giving a child an ID card or alternative method for paying for their lunch reinforces the idea of using credit to buy - “buy now, pay later” - regardless if the parents have deposited money onto the ID card or lunch account for their student, it’s not what the student experiences when they go through the line to pick up their lunch. Is it possible that cashless lunch systems at schools will continue to send positive messages about buying on credit?
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Some people would say that’s an invalid concern, or one that doesn’t require much thought. But as the nation continues to struggle with people spending more than they can afford using credit, it’s worth considering how moving away from a cash based lunch system for our young people might affect their attitudes regarding spending as they get older.
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It’s easy to understand the benefits of these cashless lunch systems. First of all, for children who come from lower income families and receive a reduced lunch or free lunch program – using alternative methods to pay for lunch ensures it’s a private matter. The other students in line will not know whether the child paid a quarter or two dollars for their lunch if it’s a swipe of a card, giving an ID number or scanning a fingerprint to pay for the meal.
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Secondly, paying with these alternative methods reduces the possibility that a child will lose his or her lunch money on the way to school, spend it on snacks instead of lunch, or get it stolen by another child – but that’s only if the system allows parents to deposit money to the account online. In some school districts, parents have to send a check to school with their children for it to be deposited to the child’s lunch account. The checks can still be lost on the way to school, but at least it would reduce the possibility of someone else taking it and using it.
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Another benefit of cashless lunch systems include giving parents the ability to see what their youngster is eating for lunch. Many of the new school lunch payment systems allow parents to log in and deposit money into their lunch accounts, and even view what the students are purchasing. Did Junior eat a healthy lunch at school today, or did he buy cookies, a bag of chips and a Nutty Buddy? <br><br>This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for <a href="http://www.creditorweb.com/">credit cards</a> online.
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9th November 2008
Credit is a sticky subject for many young adults. Some listen to their elders’ well-intentioned but misguided advice and avoid getting any credit cards of their own while they’re in college. Others jump at every card offer they get, which leads to a lot of available credit and a lot of temptation to spend. But it’s the third category of young adults that we’ll discuss today: the piggybackers.
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What’s a piggybacker? Simply put, it’s a young adult who doesn’t have a credit history of their own. But because they want to establish one, they’ve been added to their parents’ credit card accounts as an authorized user. This does wonders for the youngster’s credit; they reap the benefits of their parents’ years of timely payments. And since the parents can control or limit their child’s spending, it doesn’t really cost them anything to add a child as an authorized user.
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Piggybacking benefits an adult child by making them attractive to lenders and landlords. Many young adults have trouble finding financing for a car, or quality living space, on their own because they have no established credit. But when their credit is linked to their parents’ history, youngsters enjoy a surge in their credit score.
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Some piggybackers don’t even have credit cards of their own. They just do it for the positive credit history. But what happens when it’s time for a piggybacker to strike out on their own and apply for a card in their name? When they get removed from their parents’ accounts, will all of that great credit history vanish?
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Experts say it won’t, as long as the separation is done right. Rather than removing an adult child from your credit card accounts immediately, give them about twelve months to establish a credit history of their own. When they apply for a credit card or a loan, they’ll be likely to get it because of the good credit score you both shared. And when they’ve made timely payments on their own credit endeavors for a year, they’ll have a strong enough history to stand on their own two feet.
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They should also use that year of overlap to find a steady job. Lenders want to see not only a stable credit history, but also proof of a regular income. It won’t do your adult child much good to have a high credit score but no apparent means to pay for their loans.
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Finally, keep piggybacking in the family. There has been a lot of debate over this practice in recent years, but FICO finally announced that its new scoring model will disallow piggybacking between strangers while family members can continue to engage in the practice together.
<p><br><br>This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for <a href="http://www.creditorweb.com/">credit cards</a> online.
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