I think there is a heck of alot of wisdom in advising your children to avoid credit cards up until the age of 20. It takes time to understand the worth of money, how to earn it and how to manage it. Youngsters given credit cards, miss out on these important principals.
However, there certainly is some sense in your offspring getting onto the credit ladder at some point and here’s why:
1. Building up a good credit history can be important for the future. Particularly when you come to obtaining a mortgage.
2. According to Javelin Strategy & Research, 8.4 million Americans became victims of identity fraud. Most cards now offer high levels of fraud protection - particularly important in light of increasing numbers of us shopping online.
3. If you follow the principal of taking on a card with no annual fee and low APR then credit can become a useful tool in your everyday life. Particularly, if you ensure that the balance is always paid off at the end of the month, or at least towards the end of a 0% introduction period.
Divorce can be a tortuous affair, at best. However, it appears that it might just have got a whole lot worse.
Recent research suggests that more and more ex spouses are seeking retribution by taking out joint credit cards, car hire and equipment leasing after divorce. By using the name of their ex spouse they can then indulge in reckless spending or cause untold damage to equipment that has been leased. It’s kind of like the financial equivalent of taking a pair scissors to a wardrobe of clothes!
Often, only the true extent of the damage can be ascertained from your credit reference - obtained from the likes of Transunion, Experian and Equifax.
Fortunately, the law can help expunge marks on your credit score.
David Rubinger, spokesman for Equifax says “if your ex-spouse used your name and Social Security number to take out credit without your knowledge, that person has stolen your identity.” It doesn’t matter to a credit agency whether you have been the victim of credit fraud by a criminal, friend or ex spouse.
The key to reclaiming your credit history back is to report the situation immediately to the credit company and the credit referencing agencies. They will require you to fill in a full report to the police on the matter.
However, if you have a joint account that was created with your ex spouse before the divorce, then the situation is a little different
Experian spokesman Rod Griffin says. “If you have a joint account, you’re considered fully responsible for that debt,” It is still possible to file a dispute with reporting agencies who have 30 days to investigate the situation.
The common sense approach to this is to shut all joint accounts down when you divorce and be vigilant for a vengeful spouse looking to smear your credit record!
(Via USnews)
An interesting article from WRAL.com asks the question:- “How rewarding are credit cards that promise rewards?”
It’s a very good question and in my experience the answer is that some are more rewarding than others.
This is backed up by Consumer Reports who have recently sized up credit-card reward programs and found some good ones. For example Blue Cash from American Express is thought to be among the best US based cash-back cards, although it’s patently not suited to everyone..
According to WRAL.com:
“Consumer Reports urges people to be aware that card companies offering 5 percent cash back on purchases usually have restrictions. The American Express Blue Cash card, for example, offers 5 percent back only after a cardholder has spent $6,500 at supermarkets, gas stations and other locations. Likewise, the Discover Open Road card gives 5 percent back on gas and car maintenance only for the first $1,200.”
Tobie Stanger of Consumer Reports advises that:
“It’s important to know the specifics of your card and keep an eye out for any changes in terms, also everybody must size up which card is best for them.
You have to understand the terms. The credit-card companies have become very creative, and the terms can be confusing.”
Tobie Stanger goes on to say:
“If you regularly carry a balance on your credit card, don’t even bother with these cards because the finance charges will eat up any rewards. But if you pay your balance every month, they can be great”.
The story is always the same. Pay your balance off at the end of the month…
Posted by Tom Wilkins on Thu 23rd August 2007 at 06:00 AM, Filed in Credit Tips
If you’re unlucky enough to get yourself into a hole with credit card debt then don’t despair. Firstly, it’s not the end of the world although there is a price to exacted in terms of poor credit ratings and bankruptcy. Nonetheless, there is alot of help out there should you need guidance. Credit card debt counselling is one way of helping yourself.
The process should run as follows:
1. Realise you need help and approach a trained debt counsellor.
2. Thoroughly explain your situation to the counsellor.
3. The counsellor should talk through all the options available to you.
4. Solutions might include:- budgeting, debt consolidation onto lower interest rates, asset disposal and remortgaging.
5. Cut down the number of credit cards you own.
6. If you really have to use credit cards, shop around for the cheapest APR.
7. Try to pay off your balance at the end of each month.
The key point to recognise from this sort of counselling is that you have ultimately over spent and need to moderate your spending in the future. Talking to someone can help crystallise some of these objectives and encourage you to take action.
If you’re looking to be rewarded for your spending habits then you need to select your credit card carefully.
The two best examples we have been able to find are as follows:
TOP CASHBACK CREDIT CARDS
Capital One Cashback with World Mastercard Card
• Earn 4% cashback on all purchases for the first 3 months.
• Continue to earn 1% Cashback on all purchases after the first 3 months.
• Free Travel Insurance and Travel Assistance for you and your family.
Not bad!
American Express Platinum Credit Card
• 3% for first 3 months.
• Followed by 0.5% for spend up to £3,500, 1% from £3,501-10k, 1.5% thereafter.
The great thing about these deals is that every bit of spend counts - the more the better. Maybe consider paying for weekly shopping, utility bills, holidays etc on these types of cards. The rewards can really add up.
In addition, why not double up your spend on these cards by nominating other cardholders for the same account.
