It’s almost that time of year again, and with the economy in an uncertain state, many holiday shoppers may be looking to cut back on large expenditures for the holiday season. Holiday financing can help save money and your credit, if you’re smart about how much you spend and set realistic limits from the start.

Buy Now, Pay Later – At What Cost?

Traditional holiday credit in the form of 90 days of no payments and no interest is common in many stores, and it can help you to improve your credit standings as well, if you’re smart about how you spend. The key is to only purchase what you know you will be able to pay off within the timeframe of the special offer. This will allow you to save money in two key ways – by avoiding the interest payments if you’d charged your purchases to a credit card, and by keeping the balances on your credit cards low during the holiday season.

Where many people fail to shop wisely is by taking advantage of the deferred payment options in addition to spending on their credit cards. This is often a costly mistake – people end up over-extended, and then they are hit with compound interest charges that accrue from the moment of the initial purchase. That’s three months of interest charges added into the initial purchases, and many times, the interest rate is several times higher than that of a typical credit card. So how can you take advantage of holiday financing without breaking the bank? It’s simple if you plan ahead:

• Make a budget: Plan out your purchases now, before the holiday rush, and get a cost estimate of how much you’re likely to spend before you start your shopping, whether online or in retail stores.


• Make a plan: Big ticket items can often take advantage of special financing directly from the store so shop around and find the one that makes the most sense for your budget.


• Stick to the plan: When it’s time to shop, keep your price range in mind – don’t give in to the temptation to use your credit cards to finance your holiday if you’re using deferred payment options as well. You want to be able to pay off all of your holiday shopping before those high interest rates set in.


• Read the fine print: Make sure that any deferred payment plans you agree to spell out the exact date that payment is due in order to take advantage of the special financing. Be aware that if you miss the initial payment date, the interest rate may default to a much higher percentage – so shop wisely.
  

One word of caution when it comes to deferred financing – while it can help your credit score to maintain reasonable balances on your credit cards throughout the holiday season, if you default on the deferred payment arrangement, it will undo all of your careful planning and hard work. These finance companies will report any late payments the same as your credit card company, so be certain to budget wisely and don’t overspend. If handled properly, buy now, pay later can pay off not only in interest savings, but in saving you the holiday credit crunch as well.

Labels: budgeting, credit, deferred financing, finance, financing, interest rates

Just about everyone has received the offers in the mail: "You're Pre-approved for a New Platinum Card!" or "0% Financing – Pre-approved!" Often, these offers come just at a time when you are making improvements to your credit score – either through a credit repair service, or through careful management of your debts and payments. Other times, these types of offers come when you are already in financial trouble – just after a bankruptcy, or when you are having trouble making payments on other obligations. And nearly every time, these offers contain terms that are all too-tempting until you take a look at the fine print and realize that the great offer comes with some heavy fees attached. Typically, these types of pre-approved offers come with annual fees, account maintenance fees, high interest, and no grace period for purchases. But for a person who isn’t credit savvy, the numbers in large font and bold type can seem too good to pass up.

Receiving offers for credit that you did not initiate is nothing new for most consumers. However, some people may be surprised to realize that this type of marketing is not limited to credit cards. People with troubled credit history, people just out of bankruptcy, and people who are shopping for a mortgage or to refinance are just a few of the broad demographics that data mining companies keep track of, and within these demographics, smaller subsets are often taken. Your personal information (name, address, financial profile, etc.) is then sold to various companies who use that information to market credit card offers, lines of credit, or even mortgage loans directly to you. Information about your household size, your debt-to-income ratio, or even the types of magazines you subscribe to can be included in these types of data mining schemes.

When you have problem credit, these types of offers can seem like a life-line, or vindication ("My credit score must be improving; I'm receiving offers for new credit cards!") but more often than not, these offers are just another trap to weigh you down with more debt and financial obligations that you may not be able to meet. These institutions will have information on your income, housing status, family size, and other data that can be gleaned by combing through public records and other areas that you may not suspect. And they tailor their offers to provide themselves with the greatest potential for profit, usually to your detriment.

So how do you stop these unsolicited offers and maintain your privacy? On most of the offers you'll receive, there is a toll-free number that you can call to tell companies that you don’t want your information sold to third parties. If you opt-out of these types of pre-screened offers when it comes to your credit, it will eliminate much of the problem. Be skeptical of any offer for credit that you did not initiate, especially if you're shopping for a mortgage. Credit bureaus may flag your account and offer other banks a chance to market their options to you as well – in general, if you've got a good deal, stick with what you know. If you don't have a deal you’re happy with, do your own shopping around. In this way, you are more likely to be fully informed of the financial decision you are about to make.

Offers of pre-approved credit can make you feel like you're back on the right track again when it comes to improving your credit score, but the real test may well be your ability to say no to these types of offers and continue the smart financial habits that improved your score in the first place. Don't let clever marketing tactics get you into trouble financially – always initiate your own inquiries for new credit, and avoid the pre-approved pitfalls.

Labels: credit, credit card offers, credit repair service, credit scores, finance, opt-out, pre-approved

Most people only think of improving their credit score when they want to apply for new credit such as for a house or car loan. What many people fail to realize is that poor credit can affect your current status and not just your future ability to gain new credit. Many companies that you continually do business with, or have a line of credit with make periodically check your credit report. When they do, if they notice that your credit score has fallen, they may make adjustments to their business relationship with you as a result. This is entirely independent of any payment history that you may have with that company. For instance:

Your credit card company may raise your interest rate due to a lower credit score even if you make your payments to them on time. This is often included in the terms and conditions that are provided when you accept the card, though many people do not realize that until after they are slammed with higher fees.

Businesses may shorten or eliminate any grace periods you have for payment if they notice late payments to other companies. This is because you become a greater risk for payment based on their own internal credit policies. What this means to you is, when that 30-day grace period evaporates, you are suddenly reported for being late on payments that were considered on time before.

Your insurance rates may increase as a result of lower credit scores; some unscrupulous insurance companies may even attempt to cancel your policy. Higher rates will show up at policy renewal as you are moved into a new risk class with the company. Cancellation of your policy may be enacted due to only one missed payment and without notice if your credit score is deemed too low.

Many companies run a credit check on prospective employees, and do not hire prospects with scores below a certain level. This can be for many reasons, but often companies site that individuals with poor credit often have issues that cause distraction and poor employee performance.

If you work in a company that requires a security clearance lower credit scores can endanger your employment as you are considered a greater risk to security if you have a low credit rating. People with jobs that require security clearance are continually evaluated on a number of factors, and their credit score is one of those.

As you can see, there are numerous ways in which a poor credit score can affect your life in the here-and-now, not just the future. With the current problems in the financial sector, these issues can only be expected to worsen as banks are forced to restrict their lending and credit lines to those who have excellent credit. Poor credit can cost you hundreds or even thousands of dollars in rising interest rates, higher premiums, and shorter payment cycles.

Because credit and credit ratings are used so often in our society, credit management services are becoming more popular with all individuals, not just those with poor credit ratings. Improving your credit score will not only help with getting future lines of credit for a big purchase such as a mortgage or car, but it can also help to improve your current credit situation as well.

Labels: bad credit, credit, credit repair, credit scores, poor credit

Are you there yet? Have you gotten to that point? Are you sick and tired of paying high interest fees? Are you sick and tired of being declined and embarrassed every time you apply for a loan? Don’t you think it’s time to take a stand?

When you finally get to that point, then you’re ready. But, until you get there, you’re probably not going to take action. If you’re not there yet, you might as well stop reading this.

But, if you are ready, then it’s time to start on your journey to financial peace and good credit. And once you get there, never go back. You work just as hard as the next guy. So, why should you have to pay more on a loan than he does? Don’t you think you’ve paid the banks enough money? The banks have plenty of money. Quit paying them more than you have to!

If you are sick and tired of living paycheck to paycheck and always begging the lenders to give you crappy loans then I want you to say this out loud right now:

“I’m done. I’m done living like a broke fool and I’m taking a stand RIGHT NOW. I will not let the banks make me their slave any longer.” Then, you’re going to take action, RIGHT NOW. Here’s what you’re going to do:

1. Get your credit repaired. Sign up with Lexington Law Firm and get it repaired NOW. Let the professionals clean up your credit for you. It’s very affordable.

2. Never let your credit get that bad again. Learn how the credit game works and promise yourself that you will never find yourself in that hole again.

3. Live below your means. That doesn’t sound fun, does it? Well, neither does being broke and being a slave to your lenders. Start living on a budget. Control your money so that it doesn’t control you. You know which spending habits you need to change. Change them. It’s time RIGHT NOW.

4. Pay off your debts and start saving money. If you're not sure how, check out Dave Ramsey's Financial Peace.

5. Help your family and friends. Help them realize what’s going on. Show them that they don’t have to be miserable and live like everyone else. They can break free from their chains too. Show them how.

Dave Ramsey, one of my favorite financial experts, says it like this: “If you want to be rich, look around and see what rich people are doing and do rich people stuff.” Rich people don’t pay high interest fees. If you keep doing what poor people do, you’re going to stay poor. You don’t have to. Take action and take advantage of all that life has to offer!

Labels: credit, credit repair, credit repair tips, credit report repair, financial peace