Posts tagged ‘credit’

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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May 27th, 2010

Divorce and Debt Advice

In Divorce, Debt and Credit , you learned that until you are divorced financially you are still joined at the hip in debt.  This article continues with more advice on the divorce and debt arena from some pretty savvy divorce and debt folks I know.

Experian

Experian says, “There are several ways you can prevent credit obligations from making divorce more difficult – and reestablish your own distinct credit lines after divorce occurs. You may wish to consider the following:

  • Communicate with your ex-spouse. Make as clean a financial cut as possible.
  • Communicate with your creditors. Decide which credit belongs to whom, then ask each company and bank that extended you credit to transfer the debt to the name of the person who will be responsible.
  • During divorce negotiations, keep your joint bills current, even if you ultimately will have no responsibility for the debt. If you don’t, your creditors could become more reluctant to release one party from joint liability.
  • Ask the credit grantor to remove your spouse’s name as an authorized user or close the joint account to additional charges.
  • If your spouse runs up large amounts of debt, you should cancel as many of the accounts as possible. Inform all creditors, in writing, that you are not responsible for these debts. This may not prevent them from trying to collect, but it does show that you attempted to act responsibly.
  • Upon your divorce settlement, you and your ex-spouse might consider obtaining individual consolidation loans to cover your share of the joint bills. Pay off the joint bills with your individual loans and close all joint accounts. This helps ensure you’ll be responsible only for those bills you agreed to pay. It also will help you establish or reestablish credit in your own name. “

Points To Ponder From Yours Truly

Though critically important for surviving this terrible time, emotions and so many other issues divert attention away from personal credit and its impact. Here then is a checklist and summary for a potential divorce in order to best protect your credit and rating:

  • Get a bank account in your name only.
  • Get at least one unsecured credit card in your name only. At a minimum get a secured credit card but in your name only. (This should occur whether divorcing or not.)
  • Ask to freeze any joint accounts with an outstanding asset or liability (bank, credit card, loans, etc.) so that both signatures are required before any transactions can be made.
  • Notify all creditors in writing (and call them). Document dates and who spoken to.
  • Have joint accounts closed if a zero balance or if possible have the account placed in the primary responsible party’s name only.
  • Instruct all creditors that you want all authorized users removed except the primary holder.
  • Inform all creditors you are not responsible for charges from that point on if not in your name.
  • Get copies of your 3 credit reports and inform all credit bureaus when the divorce is final. Make every effort to separate your credit file from that of your former spouse.

The primary party of any credit may have to re-qualify with the lender. This also means whoever will be responsible for a mortgage will probably have to refinance in order to remove the secondary party’s responsibility.

MyVesta.com and Divorce.net

MyVesta.org adds the following great suggestions: “Make sure your name is listed on your utility accounts, an item often overlooked by many. When you go to get credit, they often look to see if you have a phone number in your name. If you don’t, even if you are listed in the phone book at that number, it can be problematic.

“Before signing the divorce papers, consider one addendum: change of name authorization. Crazy as it seems, many states require your ex-spouse’s signature before issuing you a driver’s license or other ID in a previous or maiden name. Men who added hyphens during marriage could encounter identity trouble, as well.”

Divorce.net offers very fitting final thoughts:  “Your spouse may be in contempt of court for disobeying a court order that requires him [or her] to pay certain bills. However, if you are jointly liable to a creditor as in the case of a mortgage or co-signed credit applications, your spouse’s contempt of court is NO EXCUSE for your non-payment. It simply isn’t a legally sufficient defense to say, “It’s no longer my responsibility because the court ordered my spouse to pay.”

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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.

Posted in Credit Score and Repair | 1 Comment »

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May 24th, 2010

Divorce, Debt and Credit

Divorce, Debt & Credit… Facts you need to know.  Until your debt and credit are divorced, you are not divorced!

 

Before a divorce, during a divorce, and after getting a divorce you need to concern yourself with credit… credit establishment, credit files and credit scores. Though divorce and credit is a concern for both men and woman, woman tend to have the greater credit difficulty due to societal standards. Therefore, I encourage woman of any age or marital status to learn as much as possible from this and other articles.

But for all men and woman, essential credit and financial matters must be addressed when contemplating a divorce in order for either and/or both parties to fiscally survive. Even if legally divorced, until finances are divorced, there is still a partnership as will soon be apparent.

Here are some key points concerning credit that should be dealt with.

Joint Accounts – Joint Responsibility

The Federal Trade commission says: “If you’re considering divorce or separation, pay special attention to the status of your credit accounts. If you maintain joint accounts during this time, it’s important to make regular payments so your credit record won’t suffer. As long as there’s an outstanding balance on a joint account, you and your spouse are responsible for it.”

If you divorce, you may want to close joint accounts or accounts in which your former spouse was an authorized user. Ask the creditor to convert these accounts to individual accounts.

By law, a creditor cannot close a joint account because of a change in marital status, but can do so at the request of either spouse. A creditor, however, does not have to change joint accounts. The creditor can require you to reapply for credit on an individual basis and then, based on your new application, extend or deny you credit. In the case of a mortgage or home equity loan, a lender is likely to require refinancing to remove a spouse from the obligation.

SPECIAL NOTE: any time you open an individual account, you may authorize another person to use it. A creditor who reports (good or bad) credit history to a credit bureau, will report it in the file of any person you have named as “authorized user” as well as your own file.  

BEWARE – Defaulting on a Joint Account

Regardless of any court decision, if one joint account holder defaults on a loan, I guarantee the creditor will not care who the court ordered to pay it. The creditor will definitely come after the other joint account holder. Even if declaring bankruptcy, a creditor will make every effort to reclaim their lost revenue or property from the surviving spouse.

Therefore be fully aware that if a creditor does not agree to transfer joint accounts to an individual, then both of you are still responsible for full repayment to the creditor, regardless of how you’ve agreed to split the bills in the divorce settlement. If a spouse fails to make a payment, a creditor will come after the remaining joint holder, regardless of any divorce agreement. Additionally both joint holders will have negative comments on their credit file regardless of fault. 

Point To Ponder

And from yours truly I add this. Until you are financially divorced with your own credit established, you remain tied to your former spouse. Divorce is not the tidy little package some people would like to think it is. It is not simply a matter of walking out one day. Over and above issues of child support and alimony, there are other financial ramifications beyond the emotional ones. The greater the communication at these times on both parts, the less of an impact there will be to both parties and the sooner the final separation will occur.

Communication is critical in a marriage. It is just as critical in a divorce.


 

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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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