Bad Credit Loan Articles and Blog Posts

Submitted by Alice Bryant  on Thu, 04/23/2015 - 10:35

In the past few years, times have gotten challenging for the average working-class American. The banking crisis, a recession, job losses, changes in healthcare and tax requirements, as well as a number of other factors, have led to a dwindling middle class. More and more working class Americans are relying on credit cards, loans, and other temporary measures to get through difficult economic times and lenders are taking advantage of the situation in which demand exceeds supply.

Unfortunately, this model of doing business may seem helpful on the surface, but is designed to keep middle-class people stuck in a cycle of paying off interest rather than debt. It also often leaves those below the poverty line seeking help from all the wrong places.

Bad Credit Financing: The Good, The Bad, And The Ugly

Although there are a number of good and reliable companies, things such as credit cards, payday loans, and home and car loans for those with bad or no credit come with interest rates as high as 400%. In some cases, the terms of financing designed for those struggling financially are worse than what one would see from a local neighborhood loan shark.

While visiting a loan shark is a foray into criminal activity, those lending to desperate Americans at rates of interest and payment terms that count on the borrower not being able to meet the burden of on-time payments has gone largely unchecked. Sadly, it has also driven many into default, repossession, and bankruptcy. However, in 2008, things began to change when the bottom fell out of the banking industry.

The collapse of many of the major banking institutions, as well as much smaller ones, was perilously close to the start of the Great Depression in 1929. That fate was narrowly avoided by government intervention, but one of the factors responsible for the crisis was predatory lending. In short, banks were targeting poor Americans for home and car loans and betting on the fact that these loans would not be paid back. The rich got richer and the poor got poorer, until the model of doing business caught up with everyone. Suddenly, even the wealthiest banks in America were as bankrupt as the people who went to them for help.

After such a catastrophic event, the United States government started to pay more attention to lending practices across the country. Credit card companies were given new sets of rules preventing them from abruptly raising interest rates, and predatory lending was swiftly put to an end. However, services such as payday loan companies and "bad credit" credit cards have still been considered legal and not committing any infractions in charging rates of interest up to 400%. Unethical, perhaps, but the government decided people understood the terms when agreeing to these loans. Meanwhile, these business practices hurt those lenders that offer reasonable terms on lending to middle and lower-class Americans. It is the ones taking advantage that end up being advertised the most, that work to be the most successful, that promise "the money you need now" while minimizing the strings attached.

Putting An End To Exploitation

In 2014, all of that changed when President Obama decided to look into these forms of financing, and declared many of them to be predatory lending practices. While not illegal, measures are being put into place to put a cap on the maximum rate of interest and penalties handed out by those offering bad credit loans. As a result, the institutions in business to take every last dime from those struggling to make ends meet, or those who offer loans and wait for borrowers to default and get money back from the government are being forced to close up shop.

While the government is working to protect people who need to borrow money in the form of a payday loan, credit card, or traditional loan, it is still each individual's responsibility to avoid falling into traps that will make a bad financial situation worse. For those in need of a payday loan or bad credit financing, it's important to remember that reputable lenders do exist and it is not wise to choose the most popular option without comparison shopping. However, even the most honest of lenders will charge a higher rate of interest to those considered a poor credit risk.

Strong Financial Decisions Begin With Information

A good start for every American is to know what's on one's credit report, and to actively monitor the situation. Establishing good credit is not a privilege reserved for the rich, but it does require responsible financial behavior and diligence when it comes to keeping an eye out when lines of credit are required. Borrowing money is certainly not a bad thing, not even if a payday loan or bad credit financing is needed. Having no credit presents as badly on the credit report as having bad credit, so choosing the right lenders and only borrowing what you can afford is essential to building a better credit profile. Of course, a better credit profile leads to lower rates of interest and can end up saving a borrower thousands of dollars as a consequence.

For those who aren't sure where their credit stands, it is important to take a look at the nitty-gritty details, especially if poor credit is leading to a payday loan or credit card company. There are services available online that give you a free credit score. However, this is in actuality not always what a lender sees when doing a credit check.

There are three bureaus that run credit reports on every American: Equifax, Transunion, and Experian. The problem is, not every lender reports to all three bureaus, so a score may be substantially higher or lower on one report than another. It is best to invest in a service that shows the details of each bureau's report, including the all-important FICO score, a number that defines your credit-worthiness in three digits. These services also provide monthly updates, helping the average person to keep track of financial decisions and dispute anything that may be an error.

Can Payday Loans Still Be A Good Thing?

In the meantime, if one does need a payday loan, it is important to use it as such and pay it off as quickly as possible. These lending sources are not bad when used properly; in fact, they are designed to benefit working-class Americans who have been put in bad situations due to an unexpected emergency. Unfortunately, studies have shown that over 70% of those who need payday loans are using them to pay for food, shelter, and other basic needs. This becomes a cycle that feeds itself and only ends up in extraordinary debt. While the government is cracking down and putting laws in place to govern those who offer payday loans and bad credit financing and keep the poor from being exploited, it is also the borrower's responsibility to make intelligent choices that don't end up keeping the wheel of debt and borrowing money turning.

Submitted by Alice Bryant  on Fri, 04/17/2015 - 10:06

Everyone needs a break once in a while, but having bad credit can limit your ability to take that much needed vacation. However, it is possible to still take that break. Smart planning is the best way to overcome this obstacle, while still being able to maintain the ability to improve your credit standing. What are some strategic methods that can help put vacation plans into motion?

1. Set a Realistic Savings Goal

Decide the type of vacation the family desires, and then consider the cost of the entire getaway. Once that amount is known, then it is important to consider the weekly budget and determine the amount that can be put aside each week towards the vacation fund. Make sure this amount is reasonable, and that it does not cut into the money needed to pay bills or buy groceries. As the vacation fund starts to grow, the family will become more motivated to save instead of splurging on a new outfit or eating out at a fancy restaurant. Any extra, unnecessary purchases can end up postponing the vacation for additional weeks or even months.

2. Make all Bill and Loan Payments

It may seem like a good idea to skip a payment on a credit card or a loan payment, but this method of saving money right now will cost much more in the long run. Late fees and other penalties can be added to your bill, and the next time a payment is due, more than twice as much will be owed. Not meeting the agreed upon minimum payment requirements can add additional debt that will make recovery from bad credit more difficult.

3. Search for Deals and Bargains

The internet has several different methods of searching for vacation deals. Decide which type of vacation you wish to take and start comparing prices based on that. Airfares, hotels, and package deals can easily be priced and booked online, plus there is even a chance of catching last minute deals that can come at a huge discount.

Prices for each vacation will vary based on whether it is peak season or off-peak for each specific location. An off-peak vacation will most likely be the more economical choice. Being flexible with the dates and the location is also a plus that can help save money. Check several different travel sites on a regular basis to compare prices and have the possibility of catching that dream vacation at an unbelievable price.

4. Work on Your Bad Credit Score

Regardless of how a vacation is paid for, using credit to make payments is much easier. Make sure to continue making payments on any debt that has accumulated and get a credit score that anyone would be proud of. Always pay at least the minimum amount on any bills, and keep whittling down the account balances.

Once a credit card is able to be attained, it will make booking the next vacation a breeze. Consider a credit card that offers rewards, such as flight miles or hotel stays. Over time, the reward points earned for using the credit card and paying it off on time can be used to save money on another vacation. With enough reward points, a free vacation may be waiting in the future.

The tips that are listed above can help anyone gain a restful vacation away from a debt filled life. Bad credit is an aspect of life that can affect everyone, but it is up to each individual to take control of the problem. Make an effort to pay off accounts that can be credit score changing and do what is necessary to maintain good credit. Doing this will make the next family vacation an easy to plan trip that will create priceless memories, which will not be forgotten for years to come.

Submitted by Alice Bryant  on Thu, 04/09/2015 - 14:44

The unfortunate thing about having bad credit is that once your score sinks low, it can be hard to dig yourself out. You have fewer opportunities to show companies that you can be financially responsible. You know that when your score improves, you'll be eligible for better deals, so it's a smart move to try to improve your standing. Fortunately, if you remain focused on being better with your money, you can get to a score you'll be proud of.

What Causes Bad FICO Scores

A few different things can be causing your low FICO score, but there are three main reasons. The first is simply having a lack of available credit. When you're just starting out in life, banks don't yet know whether you're going to be financially responsible, so they simply deem you "risky". Once you start making regular payments on a card or loan payment -- even if you need to have a cosigner -- you'll start to see some improvements in your score.

Late payments are another major cause of a poor score. When a lender sees that you make payments 30, 90, or more days late, they'll definitely be less likely to give you a card or a loan. Your "credit utilization" can also play a big part. This a ratio of the amount of debt you have to the amount you have available. For example, it looks a lot better if you have only $100 out of $1,000 charged on your card than it does to be using $900 out of $1,000.

The Bad Credit Cycle

What happens when you have a low FICO score is that you get caught up in a cycle. The companies who are willing to offer you a loan or card are going to give you lower limits and higher interest rates. This double-whammy makes it harder to get out of the cycle.

When your limits are fairly low, it's easy to find your utilization rate high. For example, it's common for those who have a low score or no score to get a card that has only a $500 limit. A single trip to the grocery store could easily bring your utilization rate over the ideal 30 percent rate. When you compare this with someone who has a good score and $20,000 in available funds, it's easy to see how this can make a really big difference.

Furthermore, higher interest payments makes it much more difficult to pay down your balances. If you're paying less than the full balance on your card, every time you pay your credit card bill, a portion of it goes toward the interest and a portion goes to pay down the principal balance. When you have a high interest rate, a larger portion of your payment goes toward interest. Lowering the interest rate can help you pay down the bill faster, thus improving your utilization rate, but without a good FICO score, you can't get those lower interest rates. Again, you can see how this cycle means you feel trapped.

Building Up Your Score

Getting out of this cycle means getting serious about improving your FICO score. The first thing you should do is to always pay your bills on time. Your payment history accounts for 35 percent of your score, so when you pay on time, it can make a big difference quickly. Even if you can only make the minimum payment, it's essential to pay by the due date. If you turn this around, you'll start to see improvements in your score. They add up over time.

Secondly, strive to pay down your balances or maintain a low utilization ratio. You may need to stop using your cards in order to get to where you want to be. As your balances go down, your FICO score will start to rise. You may even find that the combination of a higher score and lower utilization means that the lender will increase your limit. Resist the urge to use this higher limit. Remember that your goal is to maintain a low utilization ratio. Spending more will keep you in the bad credit cycle.

Help for Extreme Cases

For some people, the problem comes from having a FICO score so bad that they can't get approved for a card. If you can't prove that you're creditworthy, you can't improve your FICO score. If you've had cards canceled due to non-payment, or just don't have enough on your report to get your first card, you have a big problem.

The key to solving this is to get a secured credit card. These cards require you to pay a deposit that's equal to the amount that will be the limit on the card. Essentially, you're borrowing your own money, but you're also starting to prove that you're financially stable. By keeping a low utilization and making on-time payments with this card, your FICO score will start to increase, and you'll soon be able to get a regular card.

Fixing your FICO score isn't something that's going to happen overnight. It takes some hard work and dedication to turn things around. Fortunately, once you break out of the cycle of low credit, it becomes a lot easier for you to maintain your good score. You'll have higher limits and lower interest rates. As long as you are smart about your money, you'll enjoy the benefits of a better score.

Submitted by Alice Bryant  on Fri, 04/03/2015 - 10:44

Job seekers may find landing the perfect gig difficult with less than perfect credit. When applicants get turned down repeatedly for jobs or promotions, the question arises, “Is bad credit hurting your job prospects?” Today’s employers are not only looking for people with the right credentials and experience, but also the right credit score. They reason that if an applicant has difficulty paying bills on time, they might also lack the character and commitment to meet the demands of full time employment. Applicants with payment histories might be perceived as inconsistent and unreliable. Human Resources directors may be quick to reason that if an applicant cannot meet personal monetary obligations, they might not be a good candidate for working in high profile positions that require attention to detail, financial management or accountability. Increased indebtedness usually translates into increased stress which can affect employee performance or tempt otherwise trustworthy employees to abscond or embezzle funds. Finally, employees facing collections and dodging harassing phone calls can easily become distracted and preoccupied with making extra money by working overtime or moonlighting, lessening their ability to perform optimally in eight-hour jobs. Whether these assessments are true or not, applicants who are not creditworthy could find themselves at a distinct disadvantage for obtaining home financing, loans, rental housing, and sadly, employment.

Where Can You Find Your Credit Score?

Developed by the Fair Isaac Corporation (FICO) to help determine consumer creditworthiness for mortgage lenders, the FICO score gives potential lenders an accurate picture of an applicant’s payment history, good or poor. Every adult consumer in America should have a credit report which reflects past payment practices dating back three to ten years. If you’ve ever bought a car, rented an apartment, or paid a utility bill, chances are that you have a report filed with a credit bureau. Bureaus provide consumer reports to banks and lending institutions, property managers, retailers, and business owners who make decisions about whether to extend loans, lease or sell real estate, or hire potential employees. A consumer with poor or slow credit may have scores of 300-500; whereas, consumers with scores of 700-850 are rated excellent. Consumers can find their reports online through any one of three major agencies: Transunion, Equifax, and Experian. Some bureaus charge a small fee to access reports, while others are free.

How Does a Payment History Impact Your Credit Score?

If a potential employee has filed bankruptcy, failed to meet monthly retail credit obligations, or is habitually late paying rent, that kind of history can result in negative listings and lower scores over time—sometimes as much as 20 to 50 points. Unpaid medical bills, charge-offs, delinquent utility payments, or rental and mortgage payments that are 60 days past due all contribute toward accruing poor scores and adversely impacting a candidate’s ability to find and secure good careers. Low FICO scores can also limit a consumer’s ability to obtain low interest loans, mortgages, or auto financing. Potential lenders usually charge higher interest rates and require larger deposits from consumers with a history of missed payments.

How to Repair a Bad Credit Report

Rebuilding credit is not an impossible task; however, it will take time, commitment, and cash. Before applying for more jobs, applicants should check personal files through one or more reputable reporting agencies. Most consumer credit bureaus offer low- or no-cost online queries to quickly assess scores, review delinquencies and settle disputes.

.A candidate with a poor FICO score has several options:

1. Apply for a position with a company that does not require credit reporting. If applicants seeking better jobs feel that bad FICO scores are blocking their chances of advancement, some may opt to apply at businesses that do not check credit. Temporary staffing agencies, manufacturers, call centers, and privately owned small businesses may hire well qualified individuals without regard to creditworthiness. Taking a lesser paying position provides income while applicants resolve credit report issues.

2. Hire a consumer credit repair company. If debtors don’t feel comfortable handling their own repair, working with a reputable agency is a good option. Such agencies help negotiate settlements with creditors, dispute errors, and get negative listings removed from reports, typically within 60 to 90 days. Counselors may charge a monthly, annual, or flat rate fee to repair credit. Costs can run as much as $75 to $100 per month or a flat fee of $200. Deal with a reputable company that has a good Better Business Bureau (BBB) rating. Debtors should avoid fly-by-night operations that make unrealistic promises. If it sounds like it’s too good to be true, it probably is.

3. Pay bills on time: A consistent payment history can boost scores a few points and go a long way toward reestablishing creditworthiness. Promptly paying small household bills, such as utility, cable and monthly cell phone expenditures can quickly help job seekers get back on track with credit.

4. Open a secured credit account: Several banks and financial institutions offer consumers the opportunity to rebuild creditworthiness by opening accounts with a relatively small deposit, usually $350-400. Secured cardholders can use the account to purchase goods and services based on current balances. The advantage to using a secured account is that it allows debtors to reestablish a consistent payment history when credit purchases are promptly paid.

5. Establish a revolving charge account with a local retailer that offers 90 days same as cash. Short term financing provides a good record of consistent, timely payments. And you don’t have to break the bank to reestablish credit. Simply purchase a $100 piece of furniture and pay if off within three months. Repeat the process a second or third time and the applicant with bad credit is on the way to recovery.

Is bad credit hurting your job prospects? There is a solution to resolving credit woes. Don’t be afraid to implement some of the steps listed above. Promotions, bonuses, a better life with better credit and a higher paying career might well be within reach

Submitted by Alice Bryant  on Fri, 03/27/2015 - 10:31
Using credit cards responsibly is a tried and true method of building up your credit score. Unfortunately, some cards are better for this than others, and if you have a low credit score, you may be getting stuck with some of the bum deals. Learn how to recognize bad credit offers and find the ones that will really help you build your credit.
 
Harvester Cards
 
Known as "harvester cards", some credit companies aim to "harvest" money from their customers by charging fees to use the cards. Most credit card companies earn their money when customers carry a balance from month to month. At that point, the user is paying an interest fee to the credit card company. If the user is late on a payment, he'll also incur a hefty late fee, which is another way that credit card companies make money.
 
A harvester card, however, earns money by charging customers an annual fee -- usually somewhere around $100 -- and a monthly fee on top of that. These charges occur even if the cardholder never even uses the card. When you sign up for the card, you immediately start out with owing the company this money. To make matters worse, harvester cards typically have a low credit limit, so the monthly fee seems disproportionate to the amount of money owed, effectively increasing the annual interest rate.
 
Spotting These Cards
 
Unfortunately, the companies that make harvester cards typically market them toward people with low credit scores. If you don't have good credit, and you've gotten a card offer in the mail, be very wary. Most credit card companies try to send offers to people who have good credit.
 
Read the fine print on the offer very carefully, and try to ignore the marketing claims. For example, the card offer might tout a low interest rate, but if it also comes with high fees, the deal isn't really that good. Pay special attention to any fees that the card charges, including annual and monthly fees. If that information isn't readily available, call and speak with a representative, or consider getting your credit card from another source.
 
Getting Rid of Them
 
If you've already made the mistake of signing up for a card that turned out to be a harvester card, there's still hope. You need to close the account. Closing the account means that you'll have to pay off the balance first, though, which can be challenging. The sooner you can close the card, though, the less you'll pay in the company's excessive fees.
 
If you don't have the chunk of money you need to pay the balance in full, consider trying to transfer the balance to a new credit card. You'll pay a small fee to the new company, but it's likely to be less than what you'll pay the harvester card.
 
Effects on Credit
 
Part of your credit score is based on your payment history and whether you make your payments on-time. In this respect, even a harvester credit card can improve your credit score if you're making sure to make your payments by the due date. 
 
However, the amount of debt you have in relation to available credit is also a factor in your credit score. In this respect, a harvester card could be bad for your credit. Since the cards typically have low credit limits and the annual fee and monthly charge are added immediately against the credit limit, it can have a negative effect on your debt to credit ratio. For example, if your credit limit is only $250 and you pay an annual fee of $100 and a monthly fee of $10, you're already using more than 40 percent of your available credit, and you haven't even made any purchases. Even responsible credit card use where you never carry a balance might mean that you're constantly close to your credit limit.
 
Better Options
 
There aren't as many options out there for people with bad credit, but they do still exist and it's smart to look for these other choices when you want to build up your credit. Start by going to the bank or credit card that holds your checking or savings account. Explain your situation to the representative and mention that you've been a loyal customer for a certain number of years. Ask if there are any credit cards available to people in your situation. You may find that a credit company is more likely to work with you if they already have a relationship with you.
 
Another good option is to look for secured credit card options. When you get a secured credit card, you put down a payment that's equal to your credit limit. For example, if you give the company $500, your credit limit will be $500. It's a little bit like loaning money to yourself, but the good thing about using a company for this is that they'll report your behavior to the credit unions and it will raise your score. Companies that offer secured credit cards are sometimes like harvester card companies, in that they may charge an annual or monthly fee, so you do need to be careful and do your due diligence. Once you start getting offers for unsecured credit cards, you'll know that your score has improved and you can get one of those cards and close the secured card. When you close the secured credit card, you'll get back the money you originally put into it.
 
Credit cards are often a double-edged sword. You need them to help build up your credit, but the high fees that some have can be a big hit to your pocketbook. If you need to improve your credit score, do careful research before you accept any type of credit card offer.
 
Submitted by Alice Bryant  on Tue, 03/24/2015 - 08:25
TransUnion, Equifax and Experian--the nation’s big credit reporting agencies (which keep records on more than 200 million people and influence their ability to obtain credit) have agreed to improve their approach to fixing errors and the way they treat medical debts on consumers’ reports. The New York State attorney general announced that his office had reached a settlement with all three agencies, affecting consumers all over the nation. 
 
This settlement was initially prompted by an investigation that stemmed back in 2012. The investigation began after some New York consumers were frustrated that they were having issues with correcting errors on their reports. Even though consumers are allowed to dispute any inaccurate information in their credit reports, the entire process has been criticized by consumer advocates for many years. The credit bureaus often outsource thousands of disputes daily to workers overseas who are generally told to translate the problem into a three-digit code that simply goes into a computer system; the code and any documentation given to the by the consumer are sent to the creditor. If the creditor verifies the information, no further investigation takes place. As a result, many people are unable to get their disputes resolved.
 
With the new agreement plan, those automatic rejections will no longer be an issue. Specially-trained employees will have to review all supporting documentation submitted by consumers involving mixed credit files — in which a consumers’ file is blended with another person’s report — fraud or identity theft.
 
Another win for consumers in this agreement is that the credit bureaus will have to wait 180 days to list any delinquent medical debts on credit reports. Given the complicated way in which medical bills are charged and paid, it is not uncommon for delays in payment to negatively impact credit reports, often without consumers even knowing about it. 
 
Last year, the Consumer Financial Protection Bureau released the results of its own study, based on five million anonymous credit records, which found that consumers may be severely and overly penalized for medical debts that go to collections. About half of unpaid collections on consumers’ reports are medical related. There are far too many people that are shocked to find out about medical billing problems only after having a bill sent to collections and being forced to deal with the already damaged credit. This is long overdue for the agencies to finally agree to remove medical debts that were reported and subsequently paid by insurers.
 
FICO has also recently stated that delinquent medical debts should not be an accurate predictor of a consumer’s financial behavior. Last year, they said the latest version of its credit score would no longer weigh medical debts as heavily as in the past.
 
The three companies will implement a 6-month waiting period before reporting medical debts on consumers’ credit reports, providing more time for consumers to resolve the issues that may actually just be a result of a delayed insurance payment or another dispute. The credit agencies will also remove medical debts from reports after the debts have been paid by insurance companies.
 
Furthermore, the credit reporting bureaus will take additional steps to make sure consumers are aware that their credit reports are available online for free at least once a year from each of the credit agencies, by going to the annualcreditreport.com website. The agencies will now have to include links to that website on their home pages, as well as provide another free report to consumers who experience a change in their credit reports after initiating any disputes.
 
The settlement agreement requires all three of the agencies to introduce the changes, which the bureaus said would be put in place nationwide over the next three years. However, most changes will be carried out over the next 6-18 months, according to the Consumer Data Industry Association (the trade group that represents the credit bureaus).
 
This is big news for almost every consumer in the nation. The settlement is a huge victory that will benefit millions of consumers.
 
Submitted by Alice Bryant  on Fri, 03/13/2015 - 13:21
Sometimes saving money is as easy as canceling a magazine subscription. Here are just 20 household expenses that can be cut, slashed or even eliminated entirely by enterprising minds.
 
1. Coffee
 
According to a recent Workonomix survey, the typical consumer spends more than $20 a week on lattes and espressos. This adds up to almost $100 a month and $1,100 a year! Skipping the Starbucks can make a huge difference in personal finance and money management, so buy a coffee maker and say no to the green logo.
 
2. Cleaning Products
 
There are only two things needed to maintain a pristine household: baking soda and white vinegar. The former will remove dust, dirt and grime from just about every surface; the latter will de-rust and de-grease anything it contacts. When combined, they make a fizzy mixture that can clean everything from clogged drains to dirty dishwashers.
 
3. Cable Television
 
In the age of the Internet, cable services are largely obsolete. Entire seasons of television can be found on sites like Netflix and Hulu, and new, individual episodes of network programming can be downloaded from iTunes very shortly after they air. Streaming videos are often available on official network websites, too.
 
4. Hefty Insurance Packages
 
Different states have different laws regarding auto insurance, but generally speaking, the only required coverage is liability coverage. Things like "comprehensive collision coverage" and "uninsured motorist coverage" are extraneous add-ons that can be tossed aside.
 
5. Gym Memberships
 
This is another expense made unnecessary by the Internet. YouTube has an entire collection of fitness videos, zumba routines and how-to weightlifting guides, and they don't cost a dime to use. Forget about gym memberships and personal trainers when the same material is so freely available online.
 
6. Late Fees
 
Companies will often waive late fees for customers who fall behind in their bill paying. The one caveat is that accounts need to be in good standing for exceptions to be made; if payments are routinely or excessively delayed, companies have no reason to be generous.
 
7. Phone Services
 
Competition is fierce among phone service providers, so it's easy to get a good deal with the right preparation and research. Look for someone who price-matches their rivals or offers to buy out their competitor's contracts. Pay-as-you-go phones are another option; they don't usually have contracts at all.
 
8. Excessive Energy Bills
 
Lowering the thermostat by just a few degrees can mean big savings on the monthly bill. Most people can't even tell the difference between 70° and 72°. It's also possible to save money by investing in energy-saving appliances the next time you're in the market for a new refrigerator or washing machine.
 
9. Fast Food
 
Instead of a breakfast from McDonald's that costs $8, go to the grocery store and buy biscuits, bacon and cheese. The total might come out the same, but the portions will be bigger, the ingredients will be fresher and there will be enough to enjoy several meals instead of just one.
 
10. Movies
 
Ticket prices climb higher by the day, and popcorn has never been anything other than outrageous. But what if little Suzie just can't wait to see the new Disney movie? Consider going during the day when matinee prices are lower. There are usually special offers, coupons and discounts that can be found on the theater's website, too.
 
11. Lawn Services
 
There are do-it-yourself guides for everything from gardening to reseeding entire yards. Instead of paying third parties for landscaping, it's often cheaper to just roll up one's sleeves and exert the effort personally. As a bonus, the final result will be more rewarding, too!
 
12. Individual Portions
 
TV dinners aren't just nutritionally deficient; they're also an expense that really adds up. The same goes for single servings of meat, dairy, produce and dessert. Start shopping at a warehouse club and buying things in bulk or family sizes. Products that are unneeded at cooking time can be stored or frozen until later.
 
13. Automatic Charges
 
When looking to cut superfluous expenses, it's important to take stock of one's unused memberships and unwanted subscriptions. How many magazines are still being read? How many museums and aquariums are really being visited enough to warrant their fees? Cancel everything that isn't used on at least a weekly basis.
 
14. New Clothes
 
There are a variety of tricks that will make old wardrobes seem like new again. For example, soaking shirts in salt water before washing will help brighten their colors. Putting shoes in the freezer will remove odors and eliminate the need for a new, non-stinky pair.
 
15. Name Brands
 
Generic brands are often just as good as their more expensive counterparts, especially when it comes to things like cosmetic products and prescription medicines. They carry the same ingredients and have the same effects. One just has a fancier label.
 
16. Personal Grooming
 
Haircuts and eyebrow waxes are necessary evils for a professional, put-together appearance, but they don't have to be received in an expensive salon. Look into DIY guides for personal grooming tasks.
 
17. Unused Electronics
 
If that lamp always stays plugged in even though no one in the house ever turns it on, it's racking up a small but consistent "phantom" charge. Televisions, laptops and other electronic devices are the same way. Unplug things when they aren't in use to save on monthly electric bills.
 
18. Consumable Habits
 
There's no better time to quit smoking. Just a pack a day can cost anywhere from $1,000 to $4,000 a year depending on state tobacco prices. Drinking is also an expensive hobby, especially in bars, clubs and other late-night entertainment avenues where prices are notoriously inflated.
 
19. Childcare
 
Day cares can be a huge drain on one's pocketbook. Better alternatives are camps, community centers and after-school programs that will supervise children and teach them something new. Ask around the neighborhood to see what options are available for working parents.
 
20. Single-Use Items
 
Instead of buying a new pack of batteries every month for that finicky remote, invest in rechargeable batteries that only need to be purchased once. Instead of buying a flimsy razor because it's the cheapest option, buy a high-quality one that will last for years. These expenses are larger in the short term but better for budgets in the long run.
 
These are just 20 things that can severely cut into a household's income. For people who are serious about saving money and reducing their monthly expenses, this list can be used as a guideline for smarter, more affordable living.
 
Submitted by Alice Bryant  on Fri, 03/06/2015 - 15:08
Saving money is easier said than done. Putting money aside and creating healthy spending habits takes time, focus and dedication. Consumers around the world really have to psych themselves into saving for a rainy day, emergencies, and retirement. Anyone who wants to improve their financial literacy has to take the time to reflect on their behaviors and educate themselves on savings accounts and different investing strategies. In time, it is possible to secure a strong financial future. 
 
Track Spending for a Month 
 
First, consumers need to know how they spend money. This means tracking everything from fixed expenses like rent that do not change and weekly purchases like coffee, movies, and eating out. Understanding key behaviors helps people make smarter decisions about their money. For example, a person who eats out for every lunch can save hundreds of dollars by bringing sandwiches three days out of the week and making his or her own coffee in the morning. Shining a light on spending helps people see their habits so they can learn how to break them. 
 
Stay Away from Impulse Buys 
 
When shopping online or in stores, consumers should take their time with purchases. Instead of buying a new toaster or pair of jeans, one should walk away and see if they still think about the product a week later. If a consumer still wants the item and would even buy it if it was twice as expensive, then it is worth the purchase. Savvy spenders understand how to look for deals and wait on purchases. Instant gratification is temporary. Saving money has long-term benefits. 
 
Make the Most of Certificate of Deposit Accounts 
 
A certificate of deposit (CD) is an account that helps people make money just by saving. Consumers can place anything from $500 to $1,000 into the account and agree not to touch it for a year or more. Thus, people earn higher rates of interest. This is perfect for people who often save but dip into their savings accounts. If anyone touches the funds, there is a penalty to pay. Thus, consumers are encouraged to leave their money alone. To make the most of these savings, one should compare interest rates before choosing any one CD. 
 
Carry Cash on a Weekly Basis
 
The problem with debit cards is that people forget how much they are spending when they stop at a gas station and buy candy or go shopping. After making a budget, consumers should carry cash to keep mind of what they are spending. Newer bills are actually seen as more valuable, so people are less likely to fork them over on impulse buys. All fixed expenses can still be paid with cards. Using cash for miscellaneous purchases really helps people develop healthy spending habits. 
 
Automatic Savings Transfers
 
Many banks today allow people to automatically transfer money each week to their savings accounts. If $20-50 dollars a pay period is transferred to the savings account, consumers are more likely to leave it there. Over time, habits about savings are created. After all, one will know that every paycheck will have a portion going towards their savings. 
 
Avoid ATMs and Go into Banks 
 
Consumers often forget that they have to pay fees when they use ATM machines. Going into a bank when a person needs cash reminds him or her of where this money is coming from. Additionally, it could stop a person from making an impulse buy that could affect them saving money. This also ensures that people receive crisp bills that they are less likely to fork over for a pack of gum or snack before they get home. 
 
Look into Incentive Programs 
 
Some banks have special programs to help people save money. For example, if a person spends $12.10 at the grocery store, the bank will round this amount up to $13.00 and place the 90 cents into the savings account. Over time, this really does add up. Consumers need to get into the mindset that every cent really does count. Investing in savings incentive programs helps people get in the habit of putting money away for a rainy day. 
 
Make Financial Goals and Visualize Them 
 
Images and charts help people better visualize their goals. Thus, if someone wants to save $200 a month, it is important to track this progress. Smart consumers will use charts online where they can watch their savings come in. Some people like to put little charts and savings-related images on their desks or fridge to help with this process. When the goal is met, it is okay to treat one’s self. This is another way to positively reinforce smart savings. 
 
Piggy Banks Aren’t just for Kids 
 
Putting silver coins into a piggy bank after every purchase is a great way to save money. In a year, people can actually end up savings hundreds of dollars. Every coin adds up. People forget about loose change because it seems so small in comparison to a ten dollar bill or debit card balance. This is an easy way to put money away and forget about it. Every six months, it can be beneficial to count this money up and put it into a savings account. 
 
Stack Receipts
 
It helps to save receipts and separate them into fixed expenses and unfixed bills. The visual of these paper documents helps people spend less. The only way to psych one’s self up into saving is to identify behaviors and work on changing bad habits. A stack of receipts pinned to a corkboard or fridge helps with this process. 
 
Get a Reality Check with Big Purchases
 
When a purchase comes up, it is important to assess its importance. For example, take a $200 smartphone. A consumer who makes $10 an hour should think about whether it is worth half of a week’s pay for these items. Doing the math helps people put purchases into perspective. Additionally, consumers start thinking about their time, their income, and how to separate wants from needs. 
 
Prevention Is Important 
 
People who take care of themselves are more likely to avoid emergency bills. For example, consumers should take their car in for an oil change every 3,000 miles to avoid break-downs and other issues. Similarly, regular dental cleanings and doctor check-ups help people avoid expensive medical and dental bills. 
 
A survey by Bankrate said that fewer than 20% of consumers consider saving money a priority. People who take the time to change their spending and saving habits will get ahead and have money for retirement and major purchases like buying a car or home. All of this takes time, of course. Consumers have to psych themselves up so they see saving as a necessity. With time, people can break bad habits and really develop a strong nest egg. 
 
Submitted by Alice Bryant  on Thu, 02/26/2015 - 14:59
Even if your credit is just decent, it's not all that difficult to find a credit card. Besides those card offers that arrive in the mail from your bank, you can also go to the websites of major credit and financial companies to apply for cards there. That's to say nothing of the huge variety of credit cards offered by airlines, stores and hotel chains.
 
Of course, with so many options to choose from, you can bet that they're not all created equal. It can be difficult to find the card with the best terms, but with a little diligence, you can often narrow down your choices to just a few. Here are some of the signs that indicate a bad credit card.
 
No Rewards Program
 
These days, many credit cards offer rewards programs that give you special perks when you pay with the card. There are all kinds of them available. Many cards may qualify you for special discounts at certain stores, restaurants or hotels. Others may reward you in the form of a percentage of your money back on purchases. Some even help you save money on gas when you pay for it with your card, potentially tens or dozens of cents off of each gallon.
 
Then there are the credit cards that use a points-based rewards program. These are most often seen with cards issued by retailers. As you make purchases on the card, you accumulate points that can later be redeemed for products or services offered by that company.
 
If you play your hand right, these rewards programs can even be used to reduce your spending on everyday items, like groceries or household products. There are dozens of cards available that have these rewards programs, so don't settle for one that doesn't even give you an incentive to use it.
 
High Interest Rates
 
When you don't pay off your credit card balance each month, you're inevitably going to pay interest on what you owe. Unfortunately, if a card comes with a high annual percentage rate (APR), you could end up paying a ridiculous amount. In some cases, a high APR can keep someone from being able to fully pay off their balance in a timely manner, keeping them in long-term debt. Furthermore, once they do finally manage to pay off the balance, they've likely paid considerably more for the original purchase than it was worth.
 
For instance, assume for the moment that a card has $1,000 with a 20 percent APR and minimum payment of four percent. If you just pay the minimum, you'd need to pay around $40 per month. However, it will take you almost seven years at that rate. Because of the added interest, by the time the balance is paid off, you've paid over $500 more in interest alone, for which you received nothing.
 
Now assume that you have the same balance and minimum payment percentage on a card with a ten percent APR. The monthly payment will still be about the same, but instead of seven years, it'll take you less than five with minimum payments. Plus, you will have only spent an additional $200 or so as interest.
 
Although it's never recommended to carry a balance on your credit card, it's not always avoidable. Because of this, it's wise to steer clear of cards with an obscenely high APR, which only cost you more money. When you really need to use the card for something that will take months to pay off, you don't want to pay more than you have to.
 
Low Limits
 
Every card has a pre-defined limit that dictates how much you can charge to it. It's not often advisable to max out any credit card, but a high limit can be a blessing in an emergency. For instance, if your car breaks down and needs repairs your bank account can't handle, you likely won't be able to cover them with your low-limit card, either. In addition, having a card with a high limit can even boost your credit score. This is because a higher credit limit compared to your balance gets you a better rating. If you stumble across a card offer that only gives you a $500 or lower credit limit, you should keep looking.
 
Costly Penalties and Fees
 
Credit card issuers make most of their money by nickel-and-diming customers. They charge a fee for things like cash advances and withdrawals, ATM use, balance transfers, paying your bill online or over the phone, and possibly much more. For this reason, be sure to take a close look at the fine print or terms of use for any prospective credit card. If it looks like they'll levy you with fees left and right, especially if you intend to do the things they charge you for, find something else.
 
Varying Interest
 
Varying interest rates are a clever but devious tactic used by some credit card providers. It's the old bait and switch. They lure in customers by offering temptingly low interest rates, which is the first sign that something is amiss. If it seems too good to be true, it usually is. In reality, this great interest rate you think you're getting can be changed by the company whenever they choose, without notifying you. What's worse is that you can rest assured that it will change, and it'll hit you below the belt, right in your wallet.
 
Always choose a card that comes with a fixed interest rate, even if the APR is a little more. However, it's necessary to advise caution even with these. In certain cases, companies can and will change the interest rate even on a fixed-rate card. Again, be sure to read the fine print before committing.
 
Foreign Transaction Fees
 
If you travel outside the country at all, whether it's for pleasure or business, you'll want a credit card that doesn't work against you for this. Many cards levy special fees on credit transactions done overseas, which are often around three percent of what you charged to the card. When you're paying for your entire trip with your credit card, this seemingly low figure will quickly grow. If you need a credit card for use in a foreign country, look for one that works with the payment terminals there, and that has the lowest possible fee on these transactions.
 
Credit cards can be nice to have, but selecting one that saves you money instead of costing you takes some effort and research. Fortunately, by sticking to the tips above, you can better understand what to avoid and what to look for when choosing the right credit card for your needs.
 
Submitted by Alice Bryant  on Fri, 02/20/2015 - 16:37
Most people recognize the importance of maintaining good credit and aim to make the right decisions to maximize their credit scores. However, these same people almost always fail to maintain a good credit score because they have bad credit habits that guarantee failure from the start. Therefore, it is critical to recognize your bad habits so that you can make decisions to avoid the most common mistakes that can crash your credit score. Below are seven of the most common habits that you will need to break in order to maintain a good credit score.
 
1. Accepting Every Credit Card Offer
 
Most consumers get new credit card offers on an almost daily basis. However, it is not a good idea to accept a high number of credit cards because this can severely damage your credit score. Consumers who have dozens of outstanding credit cards demonstrate to prospective lenders that they doubt their own ability to make their future payments on time. For this reason, credit agencies tend to lower the credit scores of consumers who have a high number of outstanding credit cards.
 
It is generally recommended to hold no more than five credit cards. You can have a couple of store cards in your name, but avoid accepting every offer that you come across. Making a habit of this can save you great amounts of money on higher interest payments in the long-run.
 
2. Ignoring Small Payments
 
Even the smallest payment is just as important as your largest bills. Credit agencies can penalize you severely if you fail to make a small payment on time. Failing to pay small balances that you owe shows lenders that you likely to engage in unethical behaviors that could cost them money. Therefore, it is important for you to pay attention to small payments and make sure that you pay them on time.
 
Consider using one of the hundreds of smartphone apps that are available in today's world for consumers to manage their expenses. You can use these apps to give you routine alerts that remind you about small payments that you might otherwise neglect. Developing a system to help you remember to make your small payments can clean up your credit report and make you more attractive to lenders.
 
3. Ignoring Credit Card Payments
 
Some consumers get so fed up with paying for their credit cards that they start to ignore their monthly credit card bill. Unfortunately, this will only hurt you in the long-run. Your credit card might only charge a small late fee, but your account will go into collections after 60 days. When this happens, you will have to pay the penalty interest rate and could face a lawsuit if you continue to ignore this problem.
 
The most damaging effect associated with late credit card payments is their effect on your credit score. Even a single late credit card payment can bring down your credit score by dozens of points. Get in the habit of allocating enough money for your monthly credit card payment to prevent ruining your credit score for this reason.
 
4. Not Checking Your Credit Report
 
Federal laws require credit agencies to make free credit reports available to consumers. Credit reports can keep you informed about the status of your credit history and help address small disputes before they become big problems.
 
There is no reason why you should ignore your free annual credit reports. Simply get your free credit report every year to know where your credit rating stands.
 
5. Paying Bills at Random
 
You should devise a strategy to make your outstanding bill payments in the most advantageous way possible. Bills that have the highest interest rates should always come first. It is also important to pay down bills that have the potential to accumulate significant costs through miscellaneous fees or more expensive penalties.
 
You should carefully analyze your personal financial situation to determine which payments should be made first. Sit down with all of your bills and contracts to find which creditors are likely to charge you the most in interest and fees. You should then start to make your payments beginning with the most expensive loans. From there, work your way down to the less expensive bills as time goes on. Paying your bills down in a methodical way can save you great amounts of money and improve your credit score.
 
6. Borrowing Cash
 
Most credit cards offer the ability to borrow cash for making routine installment payments. However, many consumers do not realize that borrowed cash is treated differently than ordinary purchases. Most credit card companies charge a much higher interest rate for borrowed cash than with ordinary purchases. Cash balances also stay on your credit card for a longer period of time because ordinary purchases come off of your outstanding balance before cash purchases.
 
Borrowed cash can hurt your credit score because it demonstrates that you could be struggling to make your payments on time. Consider any alternative to get some extra cash on your hands before you borrow cash from your credit card company to make purchases.
 
7. Skipping Payments
 
Monthly installment payments are not optional choices for consumers who have signed a contract and agreed to make payments on time. Late payments almost always go on your credit report and can quickly bring down your score. Even during the hardest financial times, you should always make your payments on time. It might cause you short-term financial pain to not have some extra spending money for the next month, but late payments can cost you thousands of dollars in the long-run.
 
If you have no choice but to make a payment late, you should at least consider contacting your lender to see if you have any available options. Many lenders are willing to move a payment to the end of your loan's term if you have demonstrated an ability to make your payments on time. Lenders are also more likely to grant you a grace period on their own initiative if you contact them in advance about your potential inability to make a payment.
 
Executing Your Credit Strategy
 
The most important thing that you need to do is take action to eliminate the bad habits that are ruining your credit score. Consider working with other people in your life to help you stick with your commitment to make good credit decisions. You should also routinely refer back to these bad credit habits to ensure that you are not starting to stray from your intention to change your ways. By following the right credit habits in the years ahead, you can look forward to a good financial future that is free from worries and stress.
 
Last updated on Apr 25th 2:31 pm