Archive for August, 2010

August 12th, 2010

Ask The Expert June 14-15

I offer readers answers to write-in questions at CardRatings.com .  Here are just a few examples that I will share with you from time to time.

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Question: Can I get an American Express credit or charge card if I had a bankruptcy three years ago?

Answer: This is a difficult question to answer as other issues are involved such as what you have been doing since the bankruptcy. As an example lets say since your bankruptcy you have purchased a home and a car and made regular payments on these for the last 3 years and never been late. Though more difficult to obtain because of the bankruptcy and probably with a higher interest, you would probably be approved. If on the other hand you have had no credit extended or worse yet been late on a payment since the bankruptcy, your chances for approval are far less.

But you are on the right track as the 3 year point does offer one of the first time periods after bankruptcy for a better evaluation of your score. Adding to all of the above please realize credit extension has become far more difficult with the economy. All you can do is try.

Question: Which credit card has the longest grace period?

Answer: A grace period for any card is dependent on your contract. Some cards have 25 days and some 30. Some cards have 0 days grace period. But the greater question may be why is this question even coming up? This is why I ask.

Over 30% of your credit score is based upon on time payment history. It is the single most important issue of your credit score. Therefore, you simply do not want to be late on any payment and therefore want to make your payment early enough that the mail reaches the creditor well before the due date… not on or after the due date. That way the grace period makes little difference in affecting your score except to maximize it.

I usually explain a late payment as pouring a ice cold buck of water over you and trying to make up the difference with warm stones which are follow-up on time payments.

Question: If my husband and I have a credit card together, and he passes, will that leave me with no credit history?

Answer: You will have credit but nowhere near as good a credit as if you got a card in your own name. In fact any credit but especially a secured credit would be wise.

You might be interested to know that there is a hierarchy of debt with a high value on things like house, car, and other secured debt. The hierarchy is then followed by unsecured debts such as credit cards. You should also be aware of secured credit cards which are credit cards in every respect only they are secured by a savings deposit of usually $300 or more dollars. These type cards are usually available at most major banks. The very good thing about a secured credit card is they are reported to the credit bureau as a secured debt which helps build your credit score. Of course financing a car in your own name is even better. Just be aware that any late payment on anything can lower your score.

Question: I want to apply for a credit card that I will use only for gas purchases. Which credit card offers the best rebate for this purpose?

Answer: There are actually any number of cards to fill your need especially for cash rebate. Even Shell has a rebate card that you might look into. But Capitol One offers 3% cash back on gas and groceries and Discover offers 5% cash back. The same holds true for Chase, American Express and others. I would think the more important questions might be: What is the interest rate? Is there an annual fee? What is the default rate? Is there any introductory rate?

Your selection also has to do with limitations on any individual card. For example some cards may be 5% but limit you to the first $100 purchase in a month. Another might be at 3% but have unlimited rewards. In this case depending on your needs, the 3% maybe you better deal.

My suggestion is view some of the cards at cardratings.com and make your choice

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The truth is the average consumer can eliminate all debt including their mortgage with the money they currently earn in an average 7.5 years. I have been teaching people how to do this for years and you can see how it is done yourself by receiving the free Debt Freedom Mini-Course via email.

You might also want to know that that eliminating all debt is like getting a 40% Tax-free Salary Increase.  If you don’t believe me, read the blog about it.

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August 11th, 2010

Ask The Expert June 10-11

I offer readers answers to write in questions at CardRatings.com Here are just a few. examples that I will share with you from time to time.

Question: Which has a lower APR on a personal credit card, Visa or MasterCard ?

Answer: There is no way to answer this question as each card will have its own determination based upon such issues as purpose of card. Is the card primarily as a student card, a secured card, a rewards card, etc? Then within each of those purposes the heaviest criteria will be the individuals credit worthiness. A poorer credit history applicant whether for Visa or MasterCard will have a much higher APR than the applicant with a good credit rating. If everything were identical, the APR would probably be the same. I would say rather than trying to determine which card has the lower APR between MasterCard and Visa, the more important issue is what is the purpose of the card and then which card offers the best terms.

Question: Is there any way to know how large of a credit line you will be offered when you apply for a credit card?

Answer: Your credit line offering is dependent on numerous factors. To begin with each type card will usually have preset highs and lows. This is determined by the lender when the card package is set up. You can sometimes determine this from the marketing material available. Then within those limits, your credit limit will be determined by your credit worthiness and past credit history. The exception is a secured card limit is determined by how much you have as collateral against the card in your savings account. One of the best resources to determine what your credit limit might be is to ask the approving authority and they will offer you at least some general guidelines. But short of these guidelines the answer to your question is no, not really.

Question: How do I check the balance on my credit cards?

Answer: There are a number of ways to check your balance. The most certain way is to keep your receipts and keep a running tally. You should do this anyway to verify entries when your credit card statement is sent to you. Check each receipt not only to insure you actually made the purchase but that the total is correct. You can also check your balance by looking at your statement when it arrives. But if you need your balance sooner there is usually an 800 number in association with your card that you can call and get an automated teller response or a live counselor. Often times you can also set up an account to view your account online. But beware of the fact that any statement online or over the phone might not include your most recent transaction. Therefore keeping receipt is always the safest bet.

Question: How long is the grace period for a discover student card?

Answer: The grace period for any card is dependent on your contract. Some cards have 25 days and some 30. Some cards even have 0 days grace period. For example if your contract has a statement such as the following in association with “Grace period” you should note what is not said. “We will not charge you periodic finance charges on new purchases, or any portion of a new purchase, paid by the due date on your current billing statement if you paid your entire balance on your previous billing statement in full by the due date on that statement.” It says nothing about extended grace period and therefore you can assume there is none. If you no longer have your contract or cannot find it, you should call your card holder to be certain.

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The truth is the average consumer can eliminate all debt including their mortgage with the money they currently earn in an average 7.5 years. I have been teaching people how to do this for years and you can see how it is done yourself by receiving the free Debt Freedom Mini-Course via email.

You might also want to know that that eliminating all debt is like getting a 40% Tax-free Salary Increase.  If you don’t believe me, read the blog about it.

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