Credit Card Management in 5 Simple Ways

The following credit card management tips are excellent ways to manage your credit card before it controls your financial-life.

1. Do not memorize your PIN number - If you know your pin number then it would be extremely tempting to spend on your credit card every time you go into a shop or are short of cash. The only way to stop this behaviour is to stop using your PIN number. The only way to stop doing that is not to memorize it in the first place. There is nothing wrong with spending money on it on the Internet when you can weigh up the options, but impulse buys are often what get us into debt in the first place. This also goes for the cash cheques that credit card companies send out to their customers. Just burn them as soon as you get them to stop yourself from using them.

2. Keep a track of your spending with a diary or spread chart - This allows you to track what you have spent in a month, what you are buying and thus allows you to see whether or not you can afford to pay off the bill and cut out any unnecessary expenses. It is easier to realise just how much debt you are getting into if you can track your payments.

3. Make use of online balance facilities - Many companies now have online tracking facilities or automated numbers that you can call for an up to date balance. Make the most of them because you will be better able to track how much you have spent in a different way to the above point. You can even use them in conjunction with each other. If you use Internet banking or the credit card facilities then you will also be better able to pay off as much as you like whenever you like.

4. Research any offers on your current cards - Some cards may have 0% purchase or balance transfer deals. Make the most of them if you are in debt or do need to spend on your cards. Others have anniversary deals as well so you can use them to manage your bills as and when the offers become available.

5. Reduce the number of cards that you have to one or two for emergencies only - If you only have one or two cards for emergencies only then you will be equipped for disaster but ready to avoid debt as well. The more cards you have the more opportunity you have to get in debt so cutting the amount down will give you a better sense of where you are financially.

This entry was posted on Friday, December 7th, 2007 and is filed under Credit, Credit Cards. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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How Credit Scores Affect Mortgage Applications

With a good credit score an applicant will receive prompt response from many lenders, all of them offering low interest rates and low down payment options. The loan amount offered also may be high. On the contrary a low credit score would result in a lot of rejection from various mortgage financers. Because creditors wouldn’t come forward easily to give credit to individuals that have a history of difficulty in repaying existing loans. After all, creditors take risk when they finance mortgages against the credit history of a debtor. Naturally, they will wish to remain on the safe side and pick up less risky ones that have good credit histories. A good credit score means less chance of missing on payments and therefore less risky.

But there are some real risk takers that will come forward to finance mortgages for individuals with bad credit scores. They would charge high down payments and always high interest rates though. They may also fix additional charges for every little paper work and may charge high closing rates. The loan amount offered will also be considerably less. The individual with poor credit scores will not have much choice but to accept the terms and conditions as there are no other alternatives. This is a tight situation and to avoid this you must have a good credit score.

People with bad credit may fall in to the trap of ’secured loans’. Secured loans are the ones where the loan applicant offers an asset as collateral security. The lender becomes secure about the repayment of the loan and not the borrower. Securing a loan with bad credit score becomes easy only when the applicant is willing to offer some asset as collateral security. This again is a very dangerous situation where an individual runs the risk of losing his entire collateral asset in case of failing to pay the loan installments in time. An individual should always avoid such type of a loan.

Resort properties normally require large amounts of finance which a person with bad credit may find it difficult to obtain. So it is always advisable to keep your credit score high. Incase the credit score becomes low due to unavoidable financial reasons it can be improved upon. There is no need to lose hope simply because a person has a low credit score. If the property that he intends to buy has good equity he should go out and try to obtain finances for it. There are many sub prime lenders willing to offer their services.

For a review of your credit report as it relates to a mortgage loan and a consultation on the best loans available to you, give us a confidential, no obligation and no cost call.