Written on January 16th, 2012 by Samanthano shouts
Credit cards have been a staple in American homes for quite some time. The current great recession has forced many to utilize credit cards to make ends meet. This is completely understandable and necessary for those that have adopted this practice. However, there are pitfalls that should be avoided at all cost. Activity that can affect your credit score can be detrimental to your ability to access much needed cash later on. Here are a few tips on how to stay on top of what matters most.
Limits
Some credit card users may believe that having a lower monetary limit on his or her credit cards is a good thing. This is certainly not so. Having a lower limit will probably result in you maxing out that credit card much sooner that a credit card with a much higher limit attached to it. This can be interpreted as an undesirable quality in the way you handle your financial responsibilities. Having a balance of $500 dollars on a card with a $500 dollar limit is far worse than having that same balance amount on a credit card with a $1,500 dollar limit.
This issue is compounded if credit card users with very low limits have several low monetary limit credit cards. Having several cards that are maxed to the limit can be quite damaging to a credit rating.
These types of cards are more typical of store credit cards than bank credit cards.
Credit card users should look to use only about 30 percent of his or her total monetary credit card limit. The more you have to use, the better—this will likely result in a much more favorable credit rating score.
Interest Rates
Credit card interest rates can be quite daunting. Typical rates are currently at 18%-25%. That is extremely higher than most people can afford. What a lot of credit card users don’t know is that it is possible for these rates to be lowered—or switch to another card that does not have such a high rate. Some consumers have been able to reduce rates to 7%-8%. Contact your credit card company to find out how you may be able to get a lower rate.
Be Alert
Making payments to your credit card company is very important. However, most modern people are continuously multitasking and completely busy—this may leave very little time for managing payments, even when you do have the money to pay.
Most credit card companies have some sort of payment reminder alert system that you can utilize to make sure that you make your payments on time. Go to your credit card company’s website and sign into your account. Within your account you should find options that allow you to set up a payment reminder alert that will be sent to you on a timely basis. This can be sent to your email address or directly to your mobile phone. The choice is yours.
Keeping these few tips in mind while handling your credit card management can be quite helpful and save you a lot of money and headaches in the long run.
Resources:
Financially Fit: http://www.finance.yahoo.com
Main St.: http://www.finance.yahoo.com
Written on September 4th, 2011 by Samanthano shouts
What You Should Know
There has been a lot of talk lately regarding the ratings of financial institutions. Standard & Poor’s financial recent rating statement regarding the U.S. has really put the world in a spin about the American debt crisis. The thing is what does all of this really mean for the average American?
Standard & Poor’s, Moody’s, Fitch, A.M. Best
These are the four main U.S. entities that specialize in rating financial institutions. What they do is to figure out how well a financial institution or other such entity’s credit rating is by using similar standards as done for individuals seeking credit. This includes calculating how much debt has accumulated, the time frame of this accumulation, the ability to meet the payment schedule, and the frequency of requests for credit, just to name a few bits of the criteria. This helps to determine if these institutions are worthy enough for investment. These ratings can make or break an institution’s capability to borrow: which is an extremely important aspect in big business. This will determine how far an entity may be able to expand or grow. Without the ability for growth and expansion a potential borrower will surely be stifled and soon shrivel to competitors. And recovery from such a perilous fall may take a very long time.
These four rating powers inspect and report on the credit ratings of institutions such as banks, not for profit organizations, federal and state financial institutions including governmental entities.
Foreign Matters
S&P created an international ripple effect reaction to their announcement, downgrading the American financial status from AAA to AA, in August. This is the first time in the history of S&P that they have given the U.S. such a rating. This has had an upsetting impact on the way people are conducing their business ar0und the world as well as giving way to very public criticism against the U.S. Countries such as China have immediately brought up questions about the stability of the U.S. dollar continuing to be used as an international “reserve” dollar. However, S&P is the only one of the American agencies that has marked the U.S. with a downgrade, so far. Fitch and Moody’s still have the U.S. under the highest rating for their standards.
Meanwhile other regions like Australia have been showing their strength in having a stronger credit rating. They are currently being seen as having one of the strongest economies right now, with stable credit activity.
What this means for the average American
The average American will feel the effect of the downgraded American credit rating if any part of their income is supplemented with foreign funding. A lowered credit rating could mean that the U.S. will have less financial resources to borrow from to use as a reserve to support particular American programs such as government retirement benefit programs, as well as other social specific programs. The U.S. has also been using foreign money to supplement military functions including war efforts in recent history.
Only time will really be able to tell what is going to happen next. For right now a primary task at hand will be to improve job growth and reducing the U.S. debt crisis. This combination will be a sure road to economic recovery and the rebuilding of the American financial status.
Resources:
CNN: http://www.cnn.com
EHow Money: http://www.ehow.com
Maps of World – Finance: http://www.finance.mapofworld.com