Category Archives: credit cards

How To Improve Bad Credit

The negative impacts of bad credit are extremely well-documented. The Balance strongly affirms that bad credit is generated by bankruptcies, property repossessions, late payments, and other poor financial decisions. Individuals who suffer from bad credit are furthermore likely to be charged higher interest rates and higher security deposits. They may also be denied loans altogether or have apartment applications turned down. Nevertheless, with the right lifestyle changes, bad credit can be transformed into excellent credit.

Do Not Buy What You Cannot Afford

One of the most common causes of bad credit stems from the individual’s decision to make purchases which surpass their budget. This could mean making excessive credit card charges or buying a house or car that one simply cannot afford. The consequences of living above one’s means come in the form of paying interest, having property repossessed, and, of course, maintaining a low credit score.

To avoid this unfortunately common mistake, people must remember to live below their means. Just about everyone wants to have a fancy house and trendy car, but not everyone can afford these luxuries at the desired time. In the foregoing situation, putting money aside for nice things and gradually saving is considerably wiser than making unaffordable purchases and being stuck with the devastating financial consequences.

Make Payments In Full and On Time

Another common error which often breeds bad credit is the failure to pay charges in full by the time they are due. Unfortunately, many individuals believe that they only have to make the minimum payments. Of course, this theory is incorrect. People who only make the minimum payments on their credit cards will face considerable interest charges on top of the funds that are already owed. In certain cases, interest charges have been known to outweigh original charges.

Interest should be avoided at all costs. It can take decades to completely pay off and moreover serve as metaphorical dead weight for anyone who is striving to improve their credit score. Some of the best ways people can keep track of the amounts owed to credit card lenders are by keeping track of payments and even calling the credit card company to find out how much more money needs to be put on the card to avoid incurring interest.

Look Into Getting A Secured Credit Card

A secured credit card is very much like a regular credit card, however, there are some differences. For starters, secured credit cards generally require customers to make deposits which amount to half or all of their credit limit. For instance, individuals who want a secured credit card with a limit of $1,000 will be mandated to make a $500 or $1,000 deposit before the card can be used. The purpose of the aforementioned payment is designed to cover customers who fail to make applicable credit card payments.

Many secured credit cards do come with application fees, annual fees, and processing fees. Individuals should be aware of the foregoing fees prior to obtaining a secured credit card.

A Final Word

Transforming bad credit into good credit is a step-by-step process which requires time, discipline, and patience. It may not occur in one day, but people who adhere to the aforementioned suggestions will inevitably see their credit scores improve with time.

Authored by Gabrielle Seunagal

7 Tips to Avoid These Costly Credit Card Mistakes

Credit cards can be friend or foe to your wallet or pocketbook, it all depends on how you utilize them and of course, manage them. So, what can you do to make certain you aren’t accidentally engaging in improper credit card habits? There are ways to avoid all of those spine crushing fees–specifically if you start making your monthly payment on time. And if you pay more than what is required you’ll be even better off.

It seems, that no matter how many times we read about critical credit card mistakes, they just keep happening. There’s no way to know for sure if it is just due to forgetfulness, or the inability to stay on task and meet goals. In this respect, we’ve put together a help list to possibly prevent new credit card holders from falling into the same tragedy so many others have.

Let’s see what we’ve come up with. And just remember, managing your credit card activity better can free up more money for you! It will ensure you have some kind of safety net without stress. Most certainly, you won’t need to look for high interest loans when you better manage your spending.

Don’t Let These Haunt Your FICO Score For Years

If you can avoid these costly mistakes you can protect your financial future. Unfortunately your FICO score has an impact in many areas of normal, everyday life. While it isn’t like this everywhere in the world–it is in Canada and the US. Because of this importance, you have to stay vigilant. You can repair poor credit when you think smart too!

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  • Don’t view your credit card as if it is free money: Nothing is free in this world and viewing a credit card as an easier way to have access to money is not wise. You have to pay it back, and you have to do it on time. Stay on budget, and don’t treat a credit card like a blank check for your entertainment.
  • Don’t live beyond your means and make senseless purchases: It can be easy to pick up that jacket you’ve been wanting all week, but can you really afford it? You have to be able to pay for what you charge, and too many get carried away. If you plan on paying of your purchases at the end of the month you’ll be fine. If you don’t and you over spend, then you have a real problem.
  • Don’t max out your credit cards: When you overspend you can easily max out your credit card. This is bad for your credit history and bad for your pocketbook. It shows you’re living on credit and not on income. Don’t do it! It is also expensive to pay back and you never know when you might not be able to pay.
  • Don’t apply for more credit for all the wrong reasons: Only apply for additional credit if you’re doing it to minimize current credit card costs. If you have an offer where fees are less, then it might be wise to transfer a balance over. Just don’t do this to spend more money.
  • Don’t not know your credit score: When you’re applying for credit cards don’t just blindly do so. You need to be aware of what your credit score is so you are aware of what offers suit you best. Applying to just anything actually can lower your credit score as you get too many inquiries on your credit report in a short time.
  • Don’t ignore the fine print on an offer: It is sad to apply for credit, receive an offer and then just blindly dive in. You need to read the fine print to be aware of fees and any rewards that might be available. Too many Canadians get overly excited for an offer and just take it. This is a big mistake. Take your time and know the creditor!
  • Of course you should never miss payments: Missing one payment isn’t a sin, but if you are constantly late on your payments and always in behind on what is owed, then this is bad. Creditors will not favor someone who can’t stay on top of their debt. Don’t get in over your head and always meet your payments like clockwork.

If you follow these tips then having a couple of credit cards can be great for a consumer. Stay on a budget and they can work even better. The more you use your credit and pay it off in full, the better your credit report will look. Go and overspend and not pay back in a timely manner and your credit report will suffer. Be smart and take advantage of a couple credit cards to prove your creditworthiness–not bury yourself in debt!

Tips to Avoid My 5 Personal Money Mistakes

Depressed and stressed university student. CREDIT: Janine Wiedel/Getty Images

Finances can be confusing to many young Canadians across British Columbia–and stressful, I know this personally. It is never easy admitting mistakes we might have made in the past, especially when it comes to your money and spending–but it is the only way you can really transform for the better. Now, it is common to make money mistakes in your 20’s and 30’s, and even sometimes into your more mature years–definitely if it’s about investments gone awry. Hopefully our tips we share with you here will help you to avoid any and all types of financial blunders throughout every phase of life. It would be helpful, wouldn’t it?  Please read on for some of the most common, and easiest financial mistakes people make daily.

Financial Mistakes That Are Totally Avoidable

Remember, there are unique financial mistakes for different phases of life, some more critical than others even. For example, when you’re 18 you don’t think much about how you’re spending money, but it can have an impact. However this isn’t as detrimental as it would be when you’re at the age of saving for retirement. Something to think about, right–because really, you’re never too young to start saving. Let’s look a bit closer at what works and what doesn’t and how you can stay ahead of the financial game!

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Mistake #1 Why are you trying to keep up with all of your friends? You don’t need to splurge and spend money like a crazy person just to look cool, this isn’t high-school anymore! Looks can be extremely deceiving, so don’t fall into the trap you’re trying to avoid.

Mistake #2 Lose the reckless attitude about managing your money because you’re young. It’s all too common. You think that you don’t have to worry about managing and saving your money properly because you’re just a college student. Well, think again. Developing the right mindset about money when you’re young helps you better manage it when you REALLY need to!

Mistake #3 Don’t go into credit card debt! Too many college students go into debt to pay for college, or to get by while a student. Many creditors take advantage of young people during this time, so try your best to avoid credit cards and other high interest loans. These money mistakes can have long-term consequences.

Mistake #4 Don’t spend too much on a car! Going into large debt for a car can be a college students biggest mistake. If you can save the money for a good running vehicle, a few years older, it will be the best solution for you. This will help you avoid the stress of making a car payment month after month.

Mistake #5 An inability to start a budget can cause financial stress when you don’t need it. You’re never too young to begin keeping track of what you spend and where your money goes. You should plan and document all of your transactions, finding ways to mend holes and begin putting money aside for that possible rainy day.

Stanford University students listen while classmates make a presentation to a group of visiting venture capitalists during their Technology Entrepreneurship class in Stanford, California March 11, 2014. Stephen Lam/Reuters (UNITED STATES - Tags: EDUCATION) - RTR3QTMX

Do You Know The Credit Card Do’s and Don’ts?

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Yes, credit cards can be useful financial tools if they are used responsibly–unfortunately, credit cards are highly mishandled, everyday and all across the globe.  Too many see these as a means to an end, or a reason to splurge on those things they wouldn’t ordinarily have considered purchasing.  Furthermore, financial experts find that too many turn to credit cards to support their monthly living expenses, something that is a financially suffocating lifestyle. Remember though, individuals or families who use credit cards right can really benefit financially!  This can help boost credit scores and illustrate strong credit worthiness.

Financial experts also insist that blind refusal to credit cards can create long-term financial mistakes.  You don’t just want any credit card either.  If your current credit score is significant enough you can capture a great card with low interest rates.  Remember, using it wisely can really boost your credit score.

Let’s examine some of the most critical do’s and don’ts of credit cards within Canada today.

Top 8 Do’s and Don’ts with Regard to Credit Cards

Just remember to use your card or cards only for high priority items and you will avoid the pitfalls that so many Canadians suffer from.  The headache and hassle is often brought on by mistakes, but you can be smart when you’re trying to build your credit, there’s no doubt about it!

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  1. Many Canadians are already aware of this one “don’t”, but here it is anyway–you should never use half of your credit available!  The maximum should be 30% to 35% of your credit, because in this way you’ll show lenders that you don’t need that credit card to live month to month.  It proves your smart and credit worthy!
  2. You don’t need more than 3 credit cards, and 3 is really pushing it.  If you have too many credit cards in your wallet, this can hurt your credit versus helping it.  Why?  Imagine using 30% of all three at a time.  This illustrates you are living on credit–because you’re just shuffling it around.  It’s okay to have 3, but watch how you use them!  With credit cards come responsibility and often times too many leads to disaster, or rather, temptation in over spending.
  3. You should choose credit cards with a low interest rate, ALWAYS!  If you can’t get that then our advice is to wait until your credit is a little better.  The Financial Consumer Agency of Canada can help give concise details and help on what to look for and what to expect!
  4. It should be common sense to know to pay your bill in full every month to avoid those higher interest fees and other penalties credit card companies just love to apply when you don’t!  So, don’t overspend and you’ll be able to do this.
  5. Don’t succumb to those cash advances so many credit cards now provide to trustworthy customers.  You can easily get sucked in and then have a hard time recovering from this.  Try to avoid cash advances at all costs!
  6. Don’t lose receipts!  You should always record and file receipts so that if a charge comes up questionable you have something to go to in order to refute it.  This also keeps your finances streamlined, with regard to credit card transactions.
  7. Make sure you read the fine print of any credit card you sign up for.  If you don’t, you can only blame yourself.
  8. Sign up for spending alerts if you feel you can’t keep track of how much you’re spending.  This will ensure you don’t go over a budget and you stay within that 30% median of credit card usage.