Credit demand is still insatiable. Much of the western world now borrows increasingly on credit cards and this is set to continue.
But what if you wanted to wean yourself off easily available credit. What would you do?
Here are some ideas:
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Something I am getting asked about with greater regularity is how to manage a merchant account facility for e-commerce purposes. To be honest it’s a bit of a minefield and there are some solutions that work better than others.
One possible option is the package provided by UK based payment service provider - Axiar Payments.
The big question is what does this type of company actually add to the average e-commerce based business.
Here are some things to chew on:
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A nice piece from the Consumerist which is an ironic reminder of how not to spiral into a black hole of debt
“You’re too far in debt ...
1. If you can’t remember the last time you had zero balances on all your credit cards.
2. If your FICO score is below 650.
3. If you don’t remember what you bought on your credit card last month.
4. If you don’t really know how many coffees, teas, soft drinks or snacks you buy every week.
5. If you use your credit card for utilities, food, snacks and so on, and you’re not doing it to earn frequent flier or bonus points.
6. If you have money in a 401(k), but you have to live on your credit cards in order to put it there.
7. If you have no money in any sort of general savings account.
8. If you’re still paying for restaurant meals you can’t remember eating.
9. If you have to take a cash advance from one credit card to make a payment on another one.
10. If you ever held a garage sale to raise money to make credit card payments.”
I think even the most sensible of us that own credit cards can familiarise ourselves with these ten points.
It’s not rocket science but the experts at the UK based Consumer Credit Counselling Service (CCCS) have suggested that credit card holders should pay off more than their minimum payment on balances.
More often than not the minimum payment will leave the debt virtually untouched paying off predominantly interest. It’s common stuff but how many of us do it?
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Posted by Tom Wilkins on Mon 4th June 2007 at 10:29 AM, Filed in Credit Tips
Credit ratings can be tricky things. You often don’t know how their produced or calculated and yet we all rely on them in our every day lives.
By following some simple principles you can ensure that your ability to obtain credit is unfettered.
1. It is certainly worthwhile obtaining periodic credit checks on your self - you just never know what’s sitting on a database record with your name on it. From personal experience my credit score was affected by an unscrupulous individual I was renting accommodation with - even though my own financial records were and have been impeccable.
2. Where possible, set up a direct debit to pay off your card balance at the end of the month. It’s simply crazy paying double digit APR’s. Consistent and regular payments also count favourably on your credit score.
3. The era of having wallets stuffed full of credit cards is probably over. There is strong evidence to suggest that owning several credit cards may have a negative impact on your score.
4. Pushing right up to your credit limit each month can also have an impact.
This is all common sense, but how many of us follow these simple principles?
