Top 3 Credit Card No-Nos

At this point, everyone knows about the credit crisis. Banks gave credit to high risk borrowers who were often completely unable to pay the debt that they incurred.

Whether or not you were (or are) one of these people, struggling to make ends meet as well as pay off a debt which may seem insurmountable, there are some unofficial rules to using your credit card that you should know about. Keep yourself from going into deep debt, or stop from shoveling yourself any deeper, by keeping these top three credit card no-nos in mind:

1. Don't use a credit card to pay for another card. This needs clarification: consolidating credit cards can be an excellent idea. You're able, very quickly, to eliminate hundreds of dollars worth of debt by putting all of the money you owe on a single card, with a single payment (which means that you have less of a chance of missing that payment and incurring additional charges) and a single, lower, interest rate. That's sounds perfect, so what's wrong with using a credit card to pay for another credit card?

The answer is that many people are exactly consolidating their credit cards as they are procrastinating payments. If this sounds like you, do everything you can to stop this terrible spending habit immediately.

For clarity's sake, what you should not be doing goes something like this: you log onto your credit card's website and notice that you have a payment due today. So you pull out another credit card, one which you have more time to pay the minimum monthly bill for, and charge the bill on that.

The problem with this line of thinking is that you aren't ever actually reducing your total debt. Instead, you prolong the time that it takes to pay the debt, and raise the amount of interest that you ultimately have to pay.

2. Don't use a credit card to pay for shady purchases. This may sound obvious, but you'd be surprised at how many people make purchases with credit because they figure that bank will somehow protect them from anything that isn't legit. They might. But betting on something like that when you can just avoid a purchase that seems too good to be true for one which is smart and safe can end up costing you more money than you can afford--and your identity, which is a nightmare to try to recover from. Just ask anyone who's had their identity stolen.

So if you're at a website you're not completely sure is a real company, paying for something at a flea market that you think might be stolen, or otherwise handing that little rectangle of plastic to anybody you think could do anything with your information you don't want them doing, think twice. Your bank probably has policies enacted that will protect you in some way, but what if they don't?

3. Don't use your credit card to earn reward points. You may be shaking your head right now, calling this rule insanity. Especially if you're on a computer that you were able to buy because of reward points, or on a plane whose tickets were purchases with points you earned doing nothing more than using your card for purchases.

But ask yourself: were the things that you paid for to get those points services and goods that you were going to buy anyway? If the answer is a definite yes, then you've used the reward points program to your best benefit, and you've got nothing to worry about. But if, for any reason, at any time, you made a purchase with those bonus points in mind, you've fallen in the trap of bonus point programs.

Every time that you charge your card for something that you were on the fence about, the credit card company makes money, and you lose it. You may feel good about the purchase; after all, a part of you wanted whatever it is you bought, and now you have it, plus you have some bonus points to spare. But if you'd never enrolled in the bonus point program, and you take away all of the purchases you made solely because of that program, then you may have ended up spending far more money on things you would never have bought to get that final reward than you would have buying the reward itself outright.

What is a Credit Rating?

The Word is introduced by 3 agencies called FICO, Means after the Fair Isaac Credit Org, among so many companies this has became the first company who started the word using credit ratings in the year 1950. A FICO score is all about score of numbers starts between 300 to 900, and formally evaluate the certain risk where a person poses to a lender. is a rating between 300 is known as too high risk profile , while in the other side 900 syndicates opposite the 300 means there is virtually no risk.

This FICO ratings is also calculated on the certain percentage of the total credit you are in to and utilizing like 30% of the basic FICO score) which is normal, You must had have lines of open credit in Google or certain places which is (15%), and the sort of credit lines you need have is like (10%), how a big extant of your past boundary of credit have been (10%), finally your amount of delinquent payments and disbursements is (35%).

As some certain a principal of thumb, a credit rating has to be around 500 is also a great amount of risk which many lenders will obviously refuse a boundary of of credit, also for those that do allow one also be penalize the money-owner with great amount of interest rates and which will be much more impossible terms. A credit rating above 850 will grant the lowest possible interest rates and a very small down payment where applicable. A credit rating of over 650 is good is also sufficient to get comfortable a desirable terms and consequential always be accepted for Fresh and new lines of credit.

Many companies and org offering the online access to your credit rating. These sites are also providing the related informational and reports from each 3 major agencies, so finally grab the suggestions on how to improve it. and improve Your rating.

3 Tips to ignore The Credit card Trap

Credit cards are like become a part of daily life and now days most among us have a money wallet full of credit cards. Even it provides
Numerous amount of convenience, it also reaches to us with an immense scene of responsibility - a responsibility that so many people just hardly contain. What you actually ought to identify is that, a credit card which is in reality just nothing more than a huge expensive loan and liability. Until you arrange in correct way, you might discover yourself in a very serious financial fix earlier then you recognize it.

This is just Because credit has nowadays become such a unnecessarily maintained matter bans, several institutions and even few stores are also handing out some cards as if it is little bit candy - which enticing more us to spend . There are few things which are really changing but in lack of your own strict discipline there is no actual solution.

Just check out 3 very unique tips and idea for basic Wealth management with a credit card.

1. Do not allow yourself more than one Credit Card

Even if tempting to take up each offer that reaches your path, you just ought to be little firm on. the time When we require something it might be a huge temptation to just purchase it on credit and after purchasing "worrying about making a payment for it in the future ahead". The main difficulty is that it will most likely come back to locate you. One credit card is enough for purchasing and lots of people do not have the effective skills to manage more than one card effervescently

However always try to ignore it.

2. Disburse Your Card In total in each Month

Spending is the happy area of a coin. But Paying after purchasing is most horrible part of that coin. Also, its so frustrating that you one day you will wake up and see yourself knee deep in so much debt. The simply way to use the credit card sensibly to disburse off your credit cards in full in each month. also the interest is a real horrible trap and the time when you do not make you complete reimbursement then there are some chances that you are spending for a fortune in.

3. Try to ignore purchasing the Luxuries in Credit

If you are planning to purchase a brand new TV, or new cloths, the integration to buy luxuries on credit is always available. "The important realty is so many shops, stores now offering credit shopping also credit cards makes it so easier than ever since so grab it ". All the time you do not have to check your wallet now and then and take cash out it, also the time when you feel you are in a great extent of getting higher in debt because of credit cards. I will advice you that you start having cash simply - just make a use of it for some time lets say for 1 week or two week then you will be able to control your credit card debt.

Credit card debt: obstacle for your peaceful finance life (part 2)

.....I am back again, to throw some more bright light on the necessary facts associated with Credit card debt releif issue.
On my last post regarding this topic (where I firstly came up with this issue & started discussion.....I guess,), I made you aware of the common financial mistakes and wrong, uncalculated financial steps responsible for the accumulation of credit card debt. I told what it takes to get unpaid heap on your cards, and why its a FATAL HABIT (as I described it) to use a lot of cards. But then, how to avoid card debt completely? How careful we need to be while taking any financial step, and what are the right financial steps we need to take to save ourself from card debt? How strict, choosy & picky we need to be about purchasing all the stuff via credit card? All these questions always keep haunting every simple, middle class working guy....like you all, I have also been looking for answers to them for a long time and came up with a few solutions & tips...which I trust, are useful for card holders to keep in mind.
Lets see, if my words help you:

1) 1st of all, stop unlimited, unmeasured & unleashed use of your cards. Keep in mind: your cards are to support you in case you find any tough situation, where you need money & you dont have the cash to pay. Their purpose is to provide an instant monetary backup...by letting you borrow from your lender, whenever you are in need to make any payment. You are not supposed to finish the total credit limit given; so, purchase your loved things, enjoy, buy gifts; but within a limit. You have to set the limit of card use every month, according to your income & overall financial capacity.

2) To be able to configure that card use limit, (i.e. exactly upto what amount of card resource you should spend in a month in shopping & other things), the best way is to draw your own income-expense budget each month. The budget, of course, has to be made according to your income. Then, you can make a list of things you have to purchase or should purchase each month, as per the priority. Initially, try to stick to the buy of priority only....try not to go out beyond the enlisted things too much.

3) Try to reduce the habit of borrowing. More loans are there....more amount of unpaid money piling up on your cards. Those, who take loans every now and then...are generally, more likely to drown into debt. Ita a fact.

4) Why unnecessarily using too many cards? What is the facility? You might say: man, I am getting huge credit balance!! Then give a look at the odd side: more credit balance in your hand, more consumption, more misuse....after all, its hard for us to resist the temptation to spend more, when we are getting more. Isnt it?

5) Try to carry out a monthly calculation on the debt (if any) you have got on each of your cards. This calculation should be done at the starting of each minth, when you are getting your income in your hand & are set to draw the monthly budget. This shall help you to get the clear picture of your present debt scenario; you can act accordingly.

Credit card debt: obstacle for your peaceful finance life (part1)

Its true....that plastic piece looks a small thing and seem to be an ignorable object no doubt, but the monetary debt generated out of it is really demonic & scary.....it is enough to disrupt your otherwise peaceful financial life. And the debt scenario of this type in US is staggering, indeed.....inspite of US govt. taking several steps at times & distributing several public tips to brun the card debt of poor Americans. But, among al;l other debts, the debt with your card is the worst thing for your life....it may easily hamper your tension-free life. Right now, people from half of America are drowned in debt they have produced on their credit cards. And what are the reasons of such huge amount of money on cards being irregularly paid or not paid at all?

Well, we always know the main negative factors:

1) ill-measured, unlimited use of cards, always beyond the credit balance given....without considering one's financial capacity to repay all these;

2) Incorrect expense budget calculation or NO BUDGET CALCULATION at month's begining....so no idea of what are all to be purchased, purchasing upto what amount to be maid this month to balance between income & expense;


3) Cursed habit of taking loans every now and then....for each unimportant items that come in way, without considering the true necessity;

4) We use a huge no. cards, provided by different lenders....its a damn fatal habit. Its a very linear equation: more cards you use, more "missues" of your cards actually you are making by making unrestricted & unleashed use....means, more debt is mounting up on each of your cards at month's end. Add those individual debt up together.....you shall faint seeing the figure.

Indeed, there are more to discuss on this topic......but thats all for this post.....I shall come up with more on the next one.

Some card deals can damage your credit

There are some credit card related deals which take a severe toll on your credit instead of acting for it. These deals are totally enticing for cash-strapped users, who try to make it through the holidays. But these apparently loocrative deals would massively damage user’s credit profile in the long run. Sheryl Garrett, a certified financial planner said, "Consumers need to be aware that all credit isn't good credit and that some credit may get you into worse financial trouble than you're already in." This fact has also been supported by Gail Cunningham, the hon’ble spokesperson for the National Foundation of Credit Counseling (NFCC).
I would like to make you aware of such credit card offers that you should stay away from.

Store Credit Cards
Paying for that pricey cashmere sweater is a lot easier to stomach when you get 10% off just for opening a store credit-card account. Just be prepared to feel a little queasy when you see what that card does to your credit score.
We know well that when a consumer sends application for a credit card, an inquiry on his credit history and on his overall financial condition and capability is carried out. This may slightly lower his credit score, says Paperno. On other hand a consumer's credit utilization is increased by many store credit cards which carry low credit limits. But the biggest demerit of these cards: they charge dangerously high interest rates. For example, A Macy's (M: 10.30, -0.63, -5.76%) credit card bears 22.9% annual percentage rate (APR); in case of making 2 late payments (either consecutive or twice in a six-month period) APR increases upto 24.9%

Variable Interest Rates
Before applying for any variable interest rate card all customers should read the fine print to sense the highest extent the interest rate can increase upto. Each credit card bears a variable interest rate; based on card issuer’s decision, it may rise or fall at any time. A sudden spike in interest rates often makes the consumer unable to pay his full balance amount; this, often, severely acts upon their credit score and credit report. Of course, customers can also find and go for a fixed interest rate card, though this type of cards are not much available. Besides fixed-rate cards have their own drawbacks, like…the Pulaski Bank Visa (V: 55.62, -0.14, -0.25%), for example, offers a 6.50% fixed APR. In case of any missed payment the rate increases upto 22% .

Balance Transfer
We often receive the 0% card balance transfer checks in our mails which tempts us to use them; but be careful…… the credit card you are transferring the balance to MUST NOT carry a lower credit limit than the one you are transferring the balance from. Otherwise, that transaction would affect your credit utilization rate and thus, reduce your credit score. These kinds of balance transactions may increase your debt too, for these balance transfer deals usually charge fees upto 2% to 4% of the total amount being transferred. So you have to pay around $80 on a balance transfer of $2,000.

Overdraft Reserve Accounts
Most of the banks offer overdraft reserve accounts to the willing checking account customers. There is a positive point of reserve account: it cuts the pesky overdraft fees imposed by all banks. The negative point: account holder has to pay back the balance immediately in case he dips into that account. Otherwise, a blackmark of late payment comes in their credit history which affects their credit score. Your regularity and timeliness of payment making are two most important factors considered for building your FICO scores, a source confirmed. They account for 35% of your total FICO score.

Credit cards help to brighten your credit profile

Indeed, it is true that Credit cards are very useful for building up an impressive and attractive credit profile. Cards are being widely used by thousands of U.S. citizens to either make or repair their credit history for improving their credit score.
We know well that credit cards can be separated in two categories – 1) secured credit cards and 2) unsecured credit cards. Normally, those persons without a credit history keep a secured credit card. The most interesting point associated with secured credit card is that no deep inquiry is done on your credit report once you apply for a secured credit card. Because you deposit your own earned money as security fund to subscribe to such cards….you take them at your own risk. But, unlike this, unsecured credit cards solely depend upon your credit score. Unless your credit score is high enough, you are not eligible to get unsecured credit card. Moreover, a deep inquiry is done on your credit report when you approach a financial firm for an unsecured credit card which remains in your credit report for two years.
Anyway, whether you have a secured or an unsecured credit card, does not matter. Both of them can be effectively used to enhance your credit score. BUT you must use your credit cards on a regular basis, and, more importantly, you MUST pay off the credit card debt on time and try to maintain a transparent card bill payment report. It helps to improve your credit history. An impressive credit history contributes as much as 35% in your FICO score. Moreover, you should not spend away more than 30% of the net credit limit given on each card…. The reason is that more you spend the less will be the balance available on the card ; and the amount owed would increase. This gives negative impact on your credit score.

I would like to share with you all some tips obtained from industry experts about the fruitful use of your credit cards in order to make your credit score go high and to built up a bright credit history:
1) Before shopping anything or paying utility or other bills using your card, make sure that you have sufficient savings to repay the money within the due date. You are required to pay the minimum amount due within that due date to stop the black mark of late payment from being put on your credit report. Moreover, you should repay the credit card outstanding as early as possible for you.
2) If your bank increases the credit limit on your card, you should ask them to lower the limit so that you can keep a control on your expenses and thus, restrict your monthly payment budget. Improving your credit history does not require a high credit limit on your cards.
3) Do not go out on a credit cards collecting spree from different firms. Stay away from a lot of cards—stick to a maximum no. of two so that you can keep track and accordingly cut down on your payments. Your “credit card hungriness” is another negative factor; it creates a bitter impression for your credit score.
4) If you by chance fail to pay off the entire amount you spend on a card at a time then you must not use the card again until you pay back the entire outstanding amount.
5) Always you should apply for credit cards which are free of cost---i.e. no annual charges apply for using them. Do not get influenced by the reward points offer and make purchases only to acquire points.