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Avoid These Bad Credit Card Habits and Be Debt Free

bbcred — Thu, 11 Aug 2011 03:44:40 +0000

Many people who own credit cards get stuck in serious debt problems primarily because they failed to manage debt and credit effectively. While using a credit card is not bad, consumers need to pay close attention to their credit card use to avoid debt-related problems. In this article, we present 5 bad credit card habits that cardholders need to steer clear from to be debt free:

Using a credit card on a whim. A lot of people walk around with at least one credit card in their wallets and at anytime they see an item they want, they simply take out their card and charge the purchase without considering the possible consequences. Such a habit is risky especially if you are living on a budget.
In fact, consumers must never use a credit card for an unplanned or impulsive purchase for the simple reason that unexpected credit card expenses can ruin your monthly budget plan. If buying a particular product or item was not in your plan for this month, don’t charge it to your card.

Carrying a balance frequently. You don’t need to carry a balance in your account to get a good score. Although it’s perfectly okay to submit only the minimum due payment for the month, consumers are advised to pay in full or pay off as much as they can from their balance. In fact, you can avoid bad credit if you make it a habit to pay your credit card balance in full each month. You can also save a significant amount of money in a year if you can eliminate interest rate charges from your bill. If you pay in full, you don’t have to pay any interest.

Not checking your credit card statement. Some people do not bother to check if the items or charges on their bill are accurate. However, errors can occur and you could be charged for purchases that are not even yours. To make sure that you will not be paying for debts that you did not owe, you should evaluate your credit card account statement and dispute errors if applicable.

Delaying payment. You do not need to wait until your due date arrives before submitting your payment. If you can pay at an earlier time, then you are strongly encouraged to do so. Keep in mind that when you delay payment even just for one day, you get penalized with a late fee. Even worse, late payment can badly hurt your credit history and credit score.

Applying for more credit cards than you can handle. Some people may need at least three different credit cards to meet their needs. However, before you sign up for a new card, seriously consider whether it fits your needs and lifestyle. Don’t send a credit card application just to get a freebie. Once you get approved, you may find it more difficult to manage multiple accounts and cancelling a card can hurt your credit score.

About the Author

Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit personal loan and bad credit cards to people with bad credit.

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Reestablish Credit with a Bad Credit Credit Card

bbcred — Mon, 25 Apr 2011 00:50:37 +0000

Would you like to repair your credit? If yes, a secured credit card can help you. On this post, we present practical suggestions on how you can use a secured credit to achieve your goal.

Get approved despite bad credit. If you have a low score, you may not qualify for standard credit cards as most issuers require at least an average rating. However, a secured card is especially designed for people with bad credit and no credit history. This type of credit card is a special tool for establishing and rebuidling credit.

Prepare for a deposit. Approval for a secured credit card is not based on the customer’s credit history. Instead, it is based upon the customer’s capability to submit the required deposit. The deposit gives the credit card issuer assurance that in case the cardholder defaults from payments, funds are readily available to pay the debts. Hence, the security deposit also defines the range of the cardholder’s limit.

Ensure credit reporting. How can a secured credit card be a tool for establishing and repairing bad credit? As your payments are reported to the credit bureaus, you are proving your capability to manage debt. This is why it’s important to choose a credit card that provides credit reporting service. Remember that not all cards advertised as a bad credit credit card may include this provision.

Use your secured credit card. Owning a secured credit card will not be beneficial if you will not use it for payment. Keep in mind that you need to show that you are capable of managing debt. By using your secured card and paying off your charges on time, you can raise your credit score one step at a time.

Submit payments on time all the time. Payment history makes up 35% of your personal credit score so it’s very important to be prompt in paying your credit card bills. Even a single late payment can hinder your score from increasing or may cause your score to drop even more.

Request for an upgrade. After six months or a year of using a secured credit card and paying on time, you deserve to have the account upgraded to an unsecured account. This way, you don’t have to maintain a security deposit and you can lower your interest rate. Some secured credit card issuers will give upgrade after 12 months but if you have been consistent for the past 6 months, you can try requesting for an earlier transition.

About the Author

Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit loans and bad credit cards to people with bad credit.

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How to Use A Credit Card to Improve Bad Credit

bbcred — Wed, 30 Mar 2011 02:17:05 +0000

There are many reasons why people get into bad credit. Sometimes, bad credit is an after-effect of a situation beyond a person’s control such as unexpected loss of job, illness, or family problems. So can you get yourself out of bad credit?

You can use a credit card as a tool to improve a bad credit situation. If this sounds like a strange advice, check out the following tips on how you can use a credit card to pull your credit together.

Pay off your debts first. Of course, if you presently have debts, you need to work on debt repayment first before anything else. What if you have multiple debts and it’s not possible to pay all your creditors at once? Prioritize your debts and focus on paying one debt at a time.

For example, if you are behind your mortgage payments, then obviously this is the most important account that needs your attention. You could end up losing your home if you fail to take action on time. If you have other secured debts, you should definitely do your best to pay these debts first to save the collateral you submitted.

If you have credit card debts, check which one has the highest interest rate and pay it off completely. You can also pay off the credit card with the lowest balance. The goal is to eliminate at least one account from your list of debts. Then you can work your way from one credit card account to the next. As you try to pay off each credit card, don’t forget to make minimum payments on the other cards to avoid incurring penalty charges.

Negotiate with your creditors. Don’t be afraid to speak with your creditors and ask for modifications in your current repayment terms. For instance, you can request for the late fees to be waived or for the interest rate to be reduced. With regards to your loan, ask your creditor if the repayment period can be extended so you can enjoy lower monthly payments. If you are in a financial crisis, negotiating with your creditors can be your lifeline to recover from bad debt.

Rebuild your damage credit. As soon as you paid your debts, you should begin working on improvement of your credit. You can do this by using your credit lines again. This time, use your credit card with caution. Regular activity is important to show creditors that you are capable of managing debt and credit. Use your credit card at least once a month, making sure that you can afford to pay off your full balance. It does not need to be a big purchase. What’s more important is that you can pay it back on time.

Be patient and monitor your progress. Repairing bad credit does take time. It depends on how bad the damage before you can regain good credit once again. The important thing is that you are taking a positive step forward. Keep track of your improvement. Check your report after six months and make sure that your credit card payments and loan payments are accurately reported to the three major credit bureaus.

About the Author

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About Guaranteed Approval Credit Cards

bbcred — Thu, 08 Jan 2009 19:02:56 +0000

Having bad credit or a low credit score can really limit a person’s choices when it comes to money matters. Since most lenders require good or excellent credit, you may find it very difficult to get an approval. The question is, should you get a guaranteed approval credit card? Consider the following points:

Not all guaranteed approval credit cards are the same. Not every credit card that offers instant approval is worth signing up with. Some credit cards with guaranteed approval will get back at you through excessive rates and hidden charges. Caution is a must if you’re going to get a guaranteed approval credit card.

Use your guaranteed approval credit card to improve your credit. A guaranteed approval credit card can be a great tool rebuilding your credit history. However, this will depend on how you handle your account and your repayments.

The interest rate isn’t the only fee you should be concerned about. Don’t just find a card with a low interest rate. You’ll want to make sure that there are no unreasonable costs associated with it.

Do all instant approval cards report to the credit bureaus? The answer is no. Obviously, you’ll want to get one that does report your payments to the major credit bureaus as this is the only way you can improve your bad credit.

Owning a guaranteed approval credit card is just the first step. If you’re really serious about rebuilding your credit, getting an instant approval card is just the first step. In order to successfully rebuild bad credit, you need to use your bad credit credit card regularly and be consistent in submitting your payments.

Never sign up with reading your contract. Some people skip the credit card’s terms and conditions because they’re too long and written in such small print. But doing this very important step can save you from the risk of signing up with the wrong guaranteed approval credit card.

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Improving Your Credit with Bad Credit Unsecured Loans

bbcred — Mon, 28 Jan 2008 07:44:28 +0000

If you have bad credit or a low credit score, you should be interested to learn about bad credit unsecured loans. When in need of financial aid in a hurry, you can be assured that your loan application can get approved even if you have a poor credit score.

There are bad credit loan lenders that require their applicants to submit collateral for their loan. Homes or cars can be submitted as security for these types of loan. But for some people, submitting their own property as collateral is too risky. There are loan applicants who are unwilling to put their properties on the line.

As the name implies, a bad credit unsecured loan will not require the borrower to submit any form of security. Although unsecured loans often have higher interest rates, some borrowers prefer to take them because they do offer more convenience and flexibility.

Can bad credit unsecured loans help you improve your credit? The good news is, yes, these loans can be part of the tools you use in improving your credit. How? Once you get approved for your loan, make sure that you’ll be able to submit your loan payments on time throughout your loan’s term. The easiest way to do this is to ask them if they will take the payment out automatically from your account each month. Doing so will ensure that your credit score will be slowly, but surely increase. As you prove your credit worthiness as a borrower, your timely payments will be reflected in your credit report. In time, you should be enjoying an excellent credit status if you keep up with your good paying habits.

Are bad credit unsecured loans recommended for everyone? Of course, the answer will depend on your present situation. Where would you spend the money you’ll get from your loan? Do you really need it in a hurry? Can you wait a few months until your credit report has improved before you start applying for a loan? If it’s possible to hold off on getting a loan until your credit score has improved, then definitely you should wait. Nonetheless, whether you get the loan now or later, make sure that you are financially prepared to take on your new payment responsibilities.

Things to consider before getting a bad credit loan

Are you currently paying on another unsecured or even secured loan? If so, have you thought about asking them to increase your credit line before you go out and try to find another lender? If they are willing to do so, you can save your credit score from the extra pull.
Have you set up a budget? Can you REALLY afford to take out a new loan?

Remember, getting a bad credit unsecured loan doesn’t exempt you from your responsibilities as a borrower. If you get approved with a bad credit loan and you fail to keep up with your payments, you will just damage your credit further.

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About the Author

Liz Roberts is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit loans and bad credit cards.

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