Are You Using the Right Credit Card?

According to a report by CNNMoney, consumer reliance on credit cards is on the rise. The statistics used by CNNMoney were provided by First Data, a credit card processing business. Since the end of 2008, when consumers began relying more heavily on debit cards to make purchases, credit card use has been down. That all changed in April of this year when retailers noticed an uptick in the number of persons applying for credit and using credit to make purchases. I thought this would be a great time to talk about the ways to use a credit card and receive the perks without going into debt. Only charge what you can afford to repay in full. This rule is an oldie, but a...

Posted on Dec 04, 2011

Looking for a Reasonable Small Loan? Find it Below

In my work, I spend a lot of time reading articles and information about credit, debt, and many different money management strategies. Many times what I read is frustrating and it feels like the average American is never going to get a break when it comes to dealing with payday loans, overdraft protection, and access to credit for emergency needs. However, one company has surprised me. Their name is Emerge Workplace Solutions. I mentioned them a while ago in a Tweet and in a Facebook post, but even then I didn’t really understand what they do for people. Emerge is an employee benefit company. Through employers, they offer financial counseling and access to small dollar loans for employees. But it doesn’t stop...

Posted on Nov 09, 2011

Layaway. Is It Really a Good Deal?

It is an amazing thing to see this holiday season – the restoration of layaway. Back in 2006 Wal-Mart stopped offering layaway saying that, as most consumers had access to credit cards, it just wasn’t necessary or profitable. Now they’ve brought it back, but only for big ticket items like electronics, jewelry and some toys. Sears (and Kmart) are back on the layaway scene as well. Sears’ advertisements tout your ability to put anything on layaway. Just pay a $5 fee and 20% down on the items and in eight weeks you can take the merchandise home. So is layaway really a good deal? Well let’s do some calculations. I found a child’s bike on sale for $99.99. To put...

Posted on Nov 06, 2011

The Truth About Closing a Credit Card?

Many people are under the misconception that closing a credit card will damage their credit score. While this may be true in some circumstances, there are many instances in which it will not hurt you. Below are the important factors to consider when deciding whether to close a credit card account. Credit card utilization Do you still owe a balance on the credit card?  If you do, this is probably NOT the time to close the card. By electing to close a card before it is paid off, you effectively lower your available credit limit-to-credit balance ratio (utilization ratio). To have a good credit limit ratio, you need to keep card balances at 30% or less of your available credit limit. When...

Posted on Oct 26, 2011

Tip 3. Carefully consider the benefits and costs to putting medical debt on your credit card

Putting medical bills on your credit card may relieve one debt, but can increase your debt overall. Medical expenses tend to come in large numbers. A few tests and an overnight stay in the hospital can run into the thousands of dollars. One of the most frustrating positions to be in is when you want to pay a debt, but the only way you can afford to do so is by incurring new debt or making minimum payments.  That extra burden may put you at serious risk for falling behind on debts or even for filing bankruptcy. One thing to consider when using a credit card to pay medical bills is the amount of available credit remaining on your credit card...

Posted on Oct 11, 2011

Debunking Two Credit Card Myths

Yesterday, I read an alarming article that was featured on a on a reputable money blog. It was a worrisome read, because there were a number of problems with the information that was presented.  So, today, I thought I would try to put to rest some of the erroneous facts discussed in the article – they represent some of the same myths I hear from people when I am out in the community teaching classes. As you read through this article it is important to keep one rule of credit reports and credit scores in mind. Your debt-to-limit ratio is one factor of how your credit score is determined. The ratio measures how much debt you owe compared to how much...

Posted on Aug 17, 2011

Return of the Credit Card Offer

In the past month I have received over 13 offers for credit cards and car loans. At first I thought I had been added to mailing lists because I recently bought a home, but then I realized the door to credit is starting to open back up. In 2007-2008 lenders started tightening lending. The fall of the housing market led to many people defaulting on their credit card payments. In addition, the Credit Card Act of 2009 left credit card companies concerned that they would not be able to pull in the revenue they used to receive from high interest rates and over-the-limit fees. They began offering fewer cards and those were only available to people with very good or...

Posted on Aug 03, 2011

Debt After Death - Who's Left Paying

I recently read an article about a woman who is being hounded by the creditors of her deceased mother. In spite of repeated telling the creditor that her mother is deceased and sending them a copy of the death certificate, the creditors continue to contact her making demands for payment. Their requests vary from, “wouldn’t your mother want you to pay this bill for her?” to, “If you don’t pay this bill we are going to report you to the credit bureaus.” So does she have a responsibility to pay off the debt? Probably not. There are very specific situations in which you would be responsible for the debt of a spouse or a family member. Those include being a joint...

Posted on Jul 19, 2011

Balance Transfer Debt Consolidation

Many people use balance transfers as a type of mini, do-it-yourself debt consolidation loan. The idea is to open a new credit card account, with a low or zero percent interest rate, and transfer the balances from the higher interest, higher debt credit cards onto the new credit card. The idea is you will have one payment to make and pay much less in interest – hence you save a lot of money. It is true that this method may save you money because the interest on the consolidated debt accrues at a lower rate or not at all. However, since the Credit Card Act of 2009, we have seen many creditors increase balance transfer fees from 2% of the balance...

Posted on Jul 18, 2011

No More Credit For Stay at Home Parents? Check it Out

The Federal bank is proposing that anyone who cannot show an income source should not be able to obtain credit in their own name. Seems reasonable, right? If you are a stay at home parent, you may not think it is reasonable at all. While you manage the household finances, without an income of your own, you will be unable to obtain credit. All finance decisions will have to be based on your spouse’s income and credit. In 2009, Congress passed the Credit Card Accountability, Responsibility, and Disclosure Act. One of the provisions of the Act restricted banks from issuing credit cards to students under the age of 21 who could not show a source of income. The point was to...

Posted on Feb 28, 2011