Prime Rate Credit

My boyfriend and I live together. We do not share bank accounts as I personally do not believe that to be with someone, even married, that you have to share checking accounts, or even credit accounts. We do have our home we bought last year in both of our names, but even that is slightly split in that he is on one of the loans (we got two mortgage loans, it was the best way for us to go at the time), and not on the other because we had varying credit.

Which is funny because now he actually has better credit than I do, perhaps because my name is on the larger mortgage and that symbolizes a higher debt to income ratio for me, especially since I am partially self employed, which is typically a harder income to prove than a regular “salary” job. However, I digress. We both receive plenty of credit offers in the mail, ranging from special loans to balance transfer credit cards, to mortgage lines of credit that can be transferred into fixed rate low interest loans, but he still receives the bulk of the credit card offers.

Like I said, I think that even though I have a higher income and pay my bills on time every month, it is looked at as higher risk to extend more credit to me because of my debt ratio, so he does still get the bulk of the credit card offers. However, when do you know if it’s worth it to transfer a lot of outstanding revolving debt to a card that may be just the same thing pretty much after your introductory period is over? Well, it’s important to read the fine print on these.

Always go for something that says “fixed rate”, otherwise they “reserve the right” to change your APR terms on you any time, which can end up being the opposite of getting you out of debt, but instead steeping your further into it by increasing the interest you owe on your existing debt. Always have your calculator ready.

We’ve sat down and actually calculated, when the term is over, and how much you are paying for monthly payments, you are actually saving in the end on interest when taking on these deals, and sometimes you are better off just sticking with several balances on lower APR fixed rate cards rather than transferring it all to one card. Sure, it’s easier to make one payment a month as opposed to 2-5 payments to separate cards, but who cares when in the end you are paying more money for the luxury to do so?

My boyfriend and I live together. We do not share bank accounts as I personally do not believe that to be with someone, even married, that you have to share checking accounts, or even credit accounts. We do have our home we bought last year in both of our names, but even that is slightly split in that he is on one of the loans (we got two mortgage loans, it was the best way for us to go at the time), and not on the other because we had varying credit.

Which is funny because now he actually has better credit than I do, perhaps because my name is on the larger mortgage and that symbolizes a higher debt to income ratio for me, especially since I am partially self employed, which is typically a harder income to prove than a regular “salary” job. However, I digress. We both receive plenty of credit offers in the mail, ranging from special loans to balance transfer credit cards, to mortgage lines of credit that can be transferred into fixed rate low interest loans, but he still receives the bulk of the credit card offers.

Like I said, I think that even though I have a higher income and pay my bills on time every month, it is looked at as higher risk to extend more credit to me because of my debt ratio, so he does still get the bulk of the credit card offers. However, when do you know if it’s worth it to transfer a lot of outstanding revolving debt to a card that may be just the same thing pretty much after your introductory period is over? Well, it’s important to read the fine print on these.

Always go for something that says “fixed rate”, otherwise they “reserve the right” to change your APR terms on you any time, which can end up being the opposite of getting you out of debt, but instead steeping your further into it by increasing the interest you owe on your existing debt. Always have your calculator ready.

We’ve sat down and actually calculated, when the term is over, and how much you are paying for monthly payments, you are actually saving in the end on interest when taking on these deals, and sometimes you are better off just sticking with several balances on lower APR fixed rate cards rather than transferring it all to one card. Sure, it’s easier to make one payment a month as opposed to 2-5 payments to separate cards, but who cares when in the end you are paying more money for the luxury to do so?

All of us, at one point or another, feel like we’re going to lose it when it comes to paying bills, keeping track of what you’ve paid out to whom, and the sheer frustration that occurs when you simply don’t have enough to pay the bills, and it seems like you are constantly “robbing Peter to pay Paul” so to speak. I’ve been there, and I’m sure many of us can identify with these feelings of stress, and yes, sometimes even hopelessness when we know we are simply not brining in enough income to justify our way of life.

And yet, so many Americans are still living this way, living paycheck to paycheck, that is, and worrying about it only when they sit down to pay those bills they’ve accrued and realize that they’ve overspent for the month. You have to realize that if you’re paying so much in bills that you cannot put away any money for retirement or any type of interest bearing account, that you are simply spending too much and bring in too little income to be able to comfortably and justifiably be spending that much.

So many young couples and young people in general are finding themselves in this same unfortunate situation, and this is a large part of the reason for the recent housing slump and the “mcmansion” phenomena where young families think they need to keep up with the Joneses or buy the nicest items and furniture on the block so that they can keep up a more lavish lifestyle than what their income comfortably permits.

My advice to those who are living in this financial fastlane without the income to back it up is to seek the help of a professional financial analyst or counselor, and they will in turn force you to write down all expenditures and come up with an alternate budget so that you can begin saving the way you should be again. We all need help sometimes, and there are tons of excellent counselors who can help us budget our money and get our financial priorities straight when we can’t seem to get them straight ourselves.

There may be some good news for those of you who A.) own a home and B.) have been thinking of using the equity leverage of your home to help you to consolidate some high interest debts that are doing nothing to help improve your financial standing and in fact may be hurting your financial rating, known as your credit score, or FICO. What do I mean by possible high interest debts?

Well, credit cards with high interest, for one. There are also loans that are high interest and other forms of revolving debt or personal loans that are detrimentally high and would do much better for the consumer if consolidated under one roof of lower interest debt. Or of course you could consider a low apr balance transfer credit card to do the same.

The form of consolidation we are talking about here of course is a home equity loan or home equity line of credit, most of which offer a substantial benefit over higher interest revolving debts and installment loans that happen to be a high interest debt as well. Take for instance a furniture loan that you took out, which increased the percentage dramatically most likely when your introductory period was over and started charging interest, many times retroactive back to the date of purchase, once that intro period was over.

Wouldn’t it be nice to use the equity of your home to do something good for your family and your debt management, and use it to your benefit instead of paying thousands of dollars in interest to several different vendors? The other good thing now about home equity loans is that a portion of the loan is actually tax deductible, which can make this loan a lot more attractive.

Of course, there are always balance transfer credit cards if you don’t own a home which can offer an attractive alternative to those seeking to consolidate their debts.

There are many credit services out there that promise to erase or eliminate your debt. Usually, they are offering you yet another credit card without looking into your credit history. Along with a credit card of this nature, there is often a pledge of collateral or security on your part.

Debt consolidation loans are another common offering by credit repair companies. The monthly payment may look appealing if it is lower than the collective amount of your present credit obligations. It is often at a high interest rate and it will take you years longer to pay off your present debt.

Another downside to a debt consolidation loan is that usually you must offer collateral such as equity in your car or home. If you run into trouble repaying these loans and default, possession of your car or home is at risk.

The end result of either of these scenarios is that you will sink further into debt if you go for the extra credit card situation. And if you do the debt consolidation, you will be further into a debt situation for a longer time.

So, consumer beware. Before applying for a debt consolidation loan or second mortgage financing, get as much information as possible. This can be done by writing to “Facts for Consumers,” Bureau of Consumer Protection, Federal Trade Commission, Washington D.C.20580.

I read a powerful piece by my favorite financial self help guru, Suze Orman, the short haired blonde dynamo who seems to really care about the people she tutors in the ways of money.

Suze was saying what you choose in the new year to do in January as far as paying off the balances of the credit cards you may have racked up over the holiday, or just let them have a running balance, may have a great effect on your financial life in 2007.

She says that not only will paying off your credit card balances any way you can lift a huge weight off your shoulders and allow you to focus on other, loftier financial goals for the year, but you also gain a tremendous sense of accomplishment and respect for yourself, which can have a domino effect into other areas of your life, including your financial life.

So really it’s kind of a credit card karma if you will. If you pay those balances quickly, other things in your financial life will go more smoothly. In other words, skimp for one or two months, depending on the damage done, and you just might be able to pay off some of those balances and gain a fresh perspective for the new year, and some newer, better goals for your finances.

I’ve been reading a lot about how so many American families still live paycheck to paycheck, even those that most of us would consider in the upper echelon of the financial and economic American society, that make a household income of $200k or more per year.

But how could this be? I would think that this amount of money would allow any family to live comfortably.

But that is not always the case, even if families are not constantly taking vacations and indulging in all the finer things in life all the time, many are finding it hard to struggle by, and are using credit to get them by, only to find that they might be stuck in a high interest payoff.

This is why getting good deals on credit cards is so important, but not only that, good deals on loans and other lending agencies lump sum payments is important as well, so that you aren’t finding yourself in a neverending cycle of robbing Peter to pay Paul.

Add a kid or two into the picture, and you’ve got all kinds of new expenses to think about. Doctor’s visits, clothes, toys, formula, you name it, kids are EXPENSIVE, and many people don’t really understand how expensive kids can be until they’ve had one or a few. They really can put a strain on anyone’s budget (although, from what I’m told, they’re worth it:)

There are now several credit counseling agencies that are there for the thousands - no millions - of Americans who have gotten into debt that is out of their control. Millions of people now have gotten in over their heads by overspending their budgets, and spending more money than they are making.

This trend has only gotten worse as of late, and doesn’t really show too many signs of slowing, especially with the rampant cost of living.

Housing has gone up, gas prices have gone up, and heck even the cost of the food we eat every day has gone up . It seems lately that inflation is outpacing our salaries, and the out of control credit debt is just one of the many side effects of a society dependent on lenders, banks, and lines of credit to get the bare necessities, and many times to indulge in the finer things in life.

So, out of this trend there have been born many consumer credit counseling agencies, some free and some who charge, which propose to help consumers settle the score with creditors. How? Usually they will negotiate either lower, flexible payments to pay off their credit in exchange for the destruction of the credit cards, and removal of any leftover credit on the cards.

Other times they may negotiate a lower APR (interest rate), so the consumer can pay the card off in less time, and with less constraints of impending interest racking up every time they make a payment.

Here is a list of some of the more well known Credit Counseling Agencies :

CCC - Consumer Credit Counseling - Free, non-profit organization which is government and creditor subsidized.

MoneyManagement.org

FamilyCredit.org

Another tip, which seems very “common sense”, but is actually key in keeping good credit and building good credit from virtually nothing, is to pay your bills on time, all the time.

Paying your bills in a timely manner is important because some companies report late payments as well as just plain old delinquencies to the credit bureau, who is in charge of your individual credit report.

A system that I’ve found works very well for me is to keep track of them either on a written list, which I keep in my purse with me at all times, usually in my checkbook, so it’s easily accessible, of all of my bills for the month, when they are due, and mark them off when I’ve paid them so I know I don’t need to worry about them.

I then write down the same bills again the next month, and start with a new list, and do it allover again. This way, I know EVERY MONTH I am paying my bills on time. Not only does just doing this one simple and obvious thing help dramatically improve your credit, it also prevents you from having to pay those silly late fees on credit cards and phone bills. Heck, I think even my phone company now charges a nominal late fee in the form of about $.20.

The credit cards are the worst because many of them charge anywhere from $30 to $40 just for being late on one month’s credit payment. This can really set you back, especially if you’re only able to pay the minimums on your cards!

Remember late payments and missed payments are an almost fail safe way to damage your credit, and we all know that repairing our credit takes much longer and takes much more gumption to correct than it does to mess up.

Take care of your bills on time, it will save you a lot of headaches and a lot of wasted money in higher interest on loans that you will need to take out later in life.

I recently read an interesting article about the current state of the economy, and the guy that wrote it thinks that a lot of our economical problems boils down to one fact - that Americans take out more credit than they can handle. This type of get the credit now, worry about the bills later or “spend now, worry later” is what is killing a lot of American families.

I have a Honda CRV, a 2005 that I purchased back in June of 2005, and I love it.  Anyways, I bought the car brand new, and got the special rate of 2.9% financing.  I asked during the sale process whether I would be penalized for trying to pay off my car early, and part of what I loved about the deal is that the answer to that was “no” I wouldn’t be. 

What the finance officer at Honda told me was to make sure I write two checks, one for the amount of the payment, and then an extra one, for whatever amount I wanted to pay over the minimum due, and write the words “toward principle balance” on the check so that the processors of my payment at Honda would know that it goes toward the principle (call me silly, but I thought that’s what they’d do anyways, but oh well.)

I just got a bill.  I paid aobut $200 extra and this bill is reduced by that much - it’s just funny how they do that to you!  Assuming you want to pay the minimum always, so they can get more money over the long haul!  Of course, I’ll keep paying more than the minimum, but I can’t blame them for trying - that’s how they all stay in business!