Finances

Have you ever looked at your credit card statement and ended up just scratching your head in frustration? Well join the club! But don’t take any comfort in the fact that you have plenty of company, because lack of knowledge can cost you?.right on your credit report, and once there can stay with you a while.

Adding to the challenge is that almost every creditor’s statement is slightly different, varying in format and billing cycle and interest calculations. You first want to check what you purchased and what you borrowed, so make sure you save all your receipts to make sure you weren’t charged for something you didn’t buy or were double billed. Immediately dispute any discrepancies via phone and in writing.

Next you’ll want to verify the interest rates being applied for each type of purchase. Remember, cash advances almost always carry a higher interest than normal purchases and interest usually accrues from the date you received the money. Also, if you have any balance transfers with introductory interest rates, verify that it is correctly noted and hasn’t been increased prematurely.

In their quest to get you to sign up for their credit card, banks and financial institutions are coming up with more and higher incentives to entice you. Frequent flyer miles gave way to gas miles which opened the door for cash rebates and reward points to be used at ‘our fine member merchants’. When most other things are equal (APR, annual fees, fees for transfers et al), the style of reward points and how you can make use of them can be the deciding factor in which card you choose to put in your wallet.

One of your best options for a credit card these days is one of the current crops that offer higher rewards/rebates for purchases made in gas stations, convenience stores and supermarkets. These so-called ‘everyday purchases’ are the market that credit card companies want to capture. That’s why the big push to highlight the convenience of using a credit card for things like grocery shopping - a great way to keep track of your purchases, they point out - gasoline purchases and other everyday incidentals. In order to get you to do that, they’re offering rewards and cash back on those purchases that are higher than those for other purchases.

In addition to the APR (annual percentage rate) and the finance charges, most credit cards have a number of ‘fees’ associated with their use. Some fees are unavoidable with a particular card (like an annual fee or a program participation fee), while others are triggered by certain circumstances. The most common fees are listed below. To get a better idea of what your credit card may cost to use over the course of a year, check your card’s terms and conditions and your user agreement to see which fees may apply to you.

Annual fee:

An annual fee is charged for the privilege of having the card, whether you ever use it or not. Many credit cards offer no annual fee and a low interest rate to their best customers, or to those with excellent credit. If you’re trying to recover from a bout with bad credit, your only choice may be a card with a relatively high annual fee. In that case, look for one with the lowest APR you can get, and be careful to avoid triggering other fees.

Cash advance fee:

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.

Once you’ve been paying off a credit card for a while, you might be offered a ‘payment holiday’. You’ll get a letter, saying that since the company knows it’s difficult for some families around Christmas (or whatever other excuse they think up), they’re offering you a month off from paying, as a ’special present’.

Why Would They Do That?

Offers of payment holidays typically have a very high acceptance rate. People think it’s great that they can take a month off from the stress of paying back debt. What they don’t usually realise is that these ‘holidays’ aren’t a present at all - they’re a great money-spinner for the credit card company. For the company, it’s a win-win situation: they get to make big profits just by making their poorer customers happy.

How Can Letting Me Off Paying Earn Them Money?

Well, that’s where the trick comes in. If you read the small print, you’ll find that the payment holiday> isn’t interest free! You’re still being charged interest - and since you’re not paying anything back that month, the interest will be there next month for you to pay interest on (compound interest, you see).

How do these people get my name? If you have a credit card, your name is sold to third parties, if you do not want this to happen, you must contact your credit card companies to inform them that you do not want your information sold. Check the privacy notice that comes with your bill. If you enter contests, your information becomes public. Also, when you buy a new product, and fill out the warranty cards, those companies sell that information you provide to other companies. Since when does your toaster manufacturer need to know you households’ annual income to extend a warranty on your toaster? Thieves use dumpster digging, phishing, and pharming to obtain your information. Things they steal from your trash include:

? Pre-approved credit card offers ? they complete them and have the card sent to them at a different address
? Loan applications- they complete the application and have the money sent to a phony address.
? Bank statements- they then have your bank account number and can print counterfeit checks

Becky Palmer, a Consumer Credit Counselor, knew of someone who had their wallet stolen, and they used the credit card to buy a $5000.00 gift card at Wal mart, this then become very hard to trace.

Fixing a credit report starts with seeing what’s on it. You may get access for free online. Try a search for “free credit report.” Alternately, when you are denied credit based on a report issued by a local credit reporting agency, you can request a free credit report from that agency within 30 days.

A quick look and you’ll have an idea why you were denied credit. Now how do you fix what you see? What if you find incorrect information on the report? What if you want to change information that is accurate, but unfair?

First, if there is anything you want to dispute in the report, you can write a letter to the agency. Tell them exactly what is incorrect, and they must investigate. Send copies of any documentation, such as canceled checks, and send it all by certified mail.

The agency must contact the source of the disputed information. If they recieve no confirmation within 14 days, they must delete the item from their files, and send you an updated report. You can demand that they send the corrected report to all creditors that recieved your credit report in the previous six months. This last part won’t be done automatically, so be sure to demand it.

If you have a bad credit rating, then you might find that your ability to get financing, loans, and even some jobs is greatly diminished.

Once you have a bad credit rating, it might seem like there’s nothing that you can do about it? but you don’t have to believe that. It’s not as difficult as you might think to get by with a bad credit rating; with a little work and time you can even repair it! Of course, before you do that it’s important to realize exactly what a credit rating is.

Every time a lender or other creditor makes a report concerning your payment history to them, this report affects your credit score.

Your credit score is a numerical indication of the positive and negative reports that you’ve received from creditors and lenders; if the number is high then you have a good credit rating, and if it’s low then you have a bad credit rating.

Basic credit repair

Get organized! Make a folder for all your correspondence offline and online. You will have to do some snail mailing but in most cases you can work your repair online.

Mortgage loans are some of the most difficult loans to receive if you have bad credit because lenders focus heavily on your credit score and history of making payments on time. However, there is credit and loan help for individuals interested in home mortgage loans.

There are many online resources and loan counselors that will provide you with plenty of options for credit and loan help, but often times when you are interested in applying for a mortgage loan the best thing you can do is increase your credit score.

You can pay a credit service to help you increase your credit score, or else you can obtain a copy of your credit report and work on getting negative information removed yourself. This will save you money and improve your score. Simply view your credit report and then send a letter to the credit reporting agency that certain information is inaccurate or wrong and ask for removal of the information. Frequently, this will work whether the information is accurate or not and you will have an instant boost in your credit score, which plays a heavy role in your obtaining a mortgage loan.

How Lenders Operate ? And How They’ll Make a Tidy Fortune from the Unknowing

Credit card companies might seem like immensely clever, money making enterprises that exploit every loophole to maximize the interest payments ? and profits ? they are taking from you every month. Nothing, however, could be further from the truth. These financial institutions operate on simple principles and exploit the fact that consumer demand and their customer’s naivety will keep business turning endlessly over.

It doesn’t have to be that way, however. Know what to look out for and you can cut your overheads and stop these businesses from making a dime more than they have to.

Lenders exploit the fact that people use one card for many purchases. For example, if you use a balance transfer special card rate for spending in the supermarket or mall, they deliberately structure repayments in such a way that you’ll pay a fortune on the entire balance. To properly play your plastic you need to deploy an army of cards as weapons in the war against consumer debt. Using the right tool for the right job will smash your credit card costs.