Cash Smart USA

In the wake of the subprime meltdown, credit card issuers are decreasing credit limits. Even those credit card users with good credit scores and very solid credit histories are getting caught up in the fray.

American Bankers Association says even people with credit scores of at least 720 are not immune. The lending standards of 65% of domestic banks have tightened on credit card loans. There is a sense of fear among credit card issuers, who are questioning the viability of the large financial institutions in America.

American Express has reduced the credit lines of at least 50% of its credit card holders.  Before the subprime meltdown, approximately 20% of their customers experienced cuts during their periodic reviews.

Lower credit card limits will shrink a consumer’s ability to spend.  Medical issues or temporary unemployment will leave consumers with less credit to cover these kinds of costs and consumers who carry credit card balances will, most likely, see their credit score drop, since 1/3 of a FICO credit score is influenced by how close you are to your credit card limit.

A sound suggestion is to do everything you can to lower your credit card debt.  Carrying credit card debt is not a good thing to do, especially these days.  A credit card company who is looking to reduce credit lines looks at those consumers with big balances and worry that you may not be able to pay your tab.

Some things to consider:

1. Watch the mail you receive

· Look for 0% balance transfer offers that come and take advantage of them

· Credit card issuers must notify you before they lower your credit limit

· Review monthly statements for any changes (i.e. a lower credit limit, any interest rate spikes or any new penalties)

2. Check your credit report

· Credit card issuers will review consumers’ credit reports for any ‘red flags’ (i.e. late payments to other credit card companies, sudden build-up of high credit utilization rates, or sudden build-up of debt)

· Check your 3-in-1 credit report for free at www.cashsmartusa.com – if there are any errors, report them to the three major credit bureaus: Equifax, Experian, and TransUnion

3. Sign up for online alerts

· To help prevent over-the-limit fees on your credit card, ask your credit card issuer if they offer an ‘on-line alert’ that will notify you as a cardholder that you are nearing your credit limit

4. Shop around

· If your credit limit is decreased, do not cancel your credit card as this will decrease your credit score

· Shop around for other credit card offers that are more attractive with lower or no interest rate – one website where you, as a consumer, can compare credit card offers is www.cashmartusa.com/credit cards

“I don’t have any credit cards because I don’t want to get into debt.” “Financing a home is the worst thing you can do!” It just blows my mind when I hear people say such things! Now don’t get me wrong, I agree with these statements if they are made by someone who may have a legitimate addiction to buying things on credit or have no business buying a home because of their unstable income. I’m talking about grown adults who think renting is the safest way to live, or those who think that anyone with a credit card is irresponsible when it comes to money.

The need for good credit is everywhere. Whether you’re looking to buy or rent a car, finance a home, or even get a new job, everyone is looking at your credit to determine if you’re a good “risk” to loan to. And for those who think renting is the safest way to live, I compare it to driving a car without insurance. A man in my aunt’s apartment complex was recently diagnosed with cancer. He was going to need to spend months in a hospital and then move to a rehab facility. With the mounting medical costs and not needing to live at the apartment anymore, he requested to break the lease without penalty. The apartment complex denied his request and sent him a bill for nearly $10,000 to break the lease.

Now don’t read into this and think I’m saying this is his fault for not buying a home, but after hearing this story (and numerous other like it for that matter), why wouldn’t someone finance a home? If something similar happened to someone who financed a home with mortgage insurance, they would be released of their obligation to make their payments and, in most situations, have additional funds available to help pay the medical fees.

“But I can’t afford a home,” you may be saying. I can understand that, but have you looked? In the current state of this economy, home ownership is more affordable than it used to be. In many cases, the mortgage payment is lower than a payment on a monthly lease in the same neighborhood (sorry to burst your bubbles landlords). And with the equity it builds and tax breaks that are offered, many times it makes MORE financial sense to own a home. Although it does require some savings up front, if someone doesn’t have enough for a down payment, how are they going to pay for any unforeseen emergencies? They need to start finding where they can cut corners and save now!

Now, to the whole premise of this article: “But how do I achieve the good credit I need in order to get approved for such things?!” Well, with a little time and hard work, practically anyone can get the good credit they deserve.

I promised you a list, so here’s the list:

1. Start with one card. - Make a small purchase of something with an amount you know you can pay-in-full when you receive the bill in the mail. Pay the bill immediately upon receipt.

2. Go Secured - A secured credit card is a great way to get a credit card if you’re just starting out and can’t get approved for a regular card. How it works is you put down a deposit with a bank equal to your credit limit and the money acts as collateral. If you pay each bill on-time, the bank will begin increasing your credit limit. If you don’t pay your bills, the bank keeps your money and the account will be listed as another derogatory on your credit report.

3. No minimums! - Pay as much as you can beyond the minimum that your credit card requires you to pay.

4. Balance your credit card - View your credit card as an extension of your actual checking account. That way, you be less likely to get into more debt than you can handle.

5. Avoid the interest - Do not ever charge anything to a credit card unless you know you will have the money in thirty days to cover that charge. If there is a balance left after the monthly payment is made, you will have to begin paying interest charges as well.

6. Stay well under the limit - Whatever you do don’t max out a credit card. Doing so can actually hurt the good credit you are trying to establish. You will earn a much stronger credit score if you show restraint in using your credit card and keep your balance below 30% of your credit limit. Remember you are building your good credit slowly and deliberately.

7. Be careful during emergencies - If you do need to carry a balance on a credit card because of an emergency that has happened, do it right. Make at least the minimum payment, if not more, each month and just keep in mind that it will take longer to rid yourself of that debt and will cost you more money in interest charges the longer it isn’t paid off.

8. Consider before you close - If you have had a credit card for some time but do not use it - take caution if you’re considering closing the account. Closing the account can actually lower your credit score. When lenders look at your accounts, they look at the average age of those accounts. It’s better to keep the account open, but cut up the credit card.

The key to your financial well-being is knowing how to use your credit wisely and responsibly. And building a good credit history for yourself will save you money for the rest of your life.

Credit cards after bankruptcy are possible to obtain as some banks advertise to those with credit problems. Some lenders prefer that the bankruptcy is not recent and may not extend credit if it is. If an applicant has some good recent credit history then there is a better chance for him or her to be approved after bankruptcy. Some lenders only approve credit cards after bankruptcy for consumers who agree to a secure account. The consumer deposits money into an account to cover any charges made. This provides some security to the lender and helps the consumer to rebuild his or her credit.
One of the main reasons that a consumer might want to apply for credit cards after bankruptcy is to rebuild credit. However, this may not be wise for the person who can not be disciplined with finances. Lenders that approve people with poor credit for a charge account often do so with extremely high interest rates and other high fees. For the consumer who can not be disciplined with finances there are financial counselors who can help. A consumer would be wise to learn how to live on a budget so that financial problems are not repeated.
For those consumers who can be disciplined with credit cards after bankruptcy obtaining one account might help to rebuild credit. The main goal is to obtain one that has a very low limit and does not have a bundle of fees. Pay off the balance in full each month to avoid having to pay the high interest charges and do so within the terms of the contract to avoid penalties. Use the account only for emergencies and do not be tempted to raise the credit limit. Making the payments on time every month and keeping the limit low will raise the consumer’s credit scores.
Credit cards after bankruptcy can make it easy to make purchases online. A card is much easier to keep up with than carrying cash around and it is easy to see where the money is going when the statement comes each month. Most banks today offer debit cards that can be used as credit cards and the availability of funds is based upon the balance in the checking account. The only thing is that these are not reported to the credit bureaus so they do not help to rebuild credit. For the consumer who is interested in applying for credit cards after bankruptcy more information can be found online by doing a search.

Low cost dental insurance can provide adequate coverage for individuals and dependents especially regarding preventative care. Different plans can be found online that allow individuals to choose the best one for their specific needs. When choosing the right benefit plan pay attention to the exclusions, the benefits on preventative maintenance like teeth cleaning, and if preexisting conditions are covered. Finding out the specifics on coverage is very important. Some plans offer discounted rates on certain procedures while others may be based upon a specific percentage. Low cost dental insurance may have limitations on what is covered. Various plans do not cover orthodontic procedures such as braces and dentures or cosmetic changes.

Information about the different types of dental plans can be found online for anyone who wants to find coverage. Different types of low cost dental insurance include dental health maintenance, indemnity, preferred provider, and scheduled. Dental health maintenance is the least expensive program where dentists are paid by the insurance company for specific treatments and services and sometimes patients are required to pay a co-payment. Indemnity allows patients to choose the dentist of their choice. The plan pays a portion or a specific amount of each procedure and the policyholder pays the difference. Preferred provider organization (PPO) is where patients seek treatment from dentist within the member network. Patients may be required to pay a yearly deductible amount as well as paying a co-payment. Scheduled plans reimburse patients for covered procedures after they pay for them based upon a scheduled amount.

Vision, prescription drugs, chiropractic care, and hearing aid devices may be included with low cost dental insurance. Member services using a network provider may allow for significant discounts on all of these types of services. Sometimes employees offer this type of coverage with group health insurance. A person interested in low cost dental insurance should check with their human resource department before opting for coverage to make sure that he or she does not have the option for dental care coverage through the workplace.

Some online carriers advertise coverage that can be tailored to fit the needs of the individual or family. Various insurance companies and carriers advertise low cost dental insurance with no deductible. Plans that have a network of dentists do not normally guarantee the discounts unless one of them is used for services. Additional coverage options offered may be elected for an additional premium amount. Most plans offer the biggest discounts on exam fees, teeth cleaning, and fillings. Preventative care can make a big difference on how much a person spends on dental care over their lifetime. Preventative care can help to keep teeth healthy for a long time.

Debt settlement letters are made on behalf of a person who is trying to negotiate payment for past due accounts in an effort to get out of debt and repair financial history. Organizations that perform debt settlement can be found online or a consumer may choose to try to handle negotiations with creditors alone. Most creditors are going to want a certain percentage of the past due balance before they will negotiate with the consumer. Debt settlement companies often develop relationships with creditors and can usually negotiate better than a consumer can alone. During negotiations, interest and late charges should stop as well as harassing phone calls and letters by the creditor. A debt settlement company can help to make sure that this happens.

A consumer may receive a debt collection letter from a creditor or a third party collection agency that offers a lump sum settlement that is less than the actual balance owed on a past due account. If the offered amount is satisfactory then there is no reason why a consumer should not go ahead and accept the offer but should try to deal with the actual creditor when doing so. The most important thing is to make sure that the creditor is going to report the settlement to the credit bureau as a paid off account or paid as agreed so that it will affect the credit score in a positive way. The best way to handle this type of situation is to let a debt settlement company draft a debt settlement letter with the agreement that serves as a counter offer to a creditor including all of the specifics about reporting to the credit bureau.

Correspondence with a creditor or collection agency should be documented. The consumer should keep a file on the account by recording the date, time, and person of contact, and what the conversation was about. Any mailings about the account should be sent certified mail, return receipt requested for proof of mailing. Debt settlement letters should be drafted in a professional manner to document any agreements about the account that are made over the telephone. When dealing with a collection agency the consumer should make sure they are a legitimate agency that is representing the creditor before having any correspondence with them.

If there is any question as to the legitimacy of a debt the consumer should not agree to settle until he or she confirms that the money is owed. Even making one payment can legally make the consumer responsible for the debt because that is the same as saying that it is legitimate. A debt settlement company can guide the consumer in communicating with creditors and collection agencies. Sending out a debt settlement letters should not be done until the consumer has verified and confirmed that it is a legitimate debt. Even after confirmation has been made the consumer should not be fast to settle until the creditor agrees to the negotiated terms on paper. Any legitimate creditor will be glad to comply.

If a person is contacted by a collection agency there are some things that should be done. Always get the name of the person who is calling, the phone number, and the address. Write down the name of the company they are representing, the account number in question, and the full amount of what it owed or being collected. Ask the collection agency for a follow-up letter of the phone call. If a collection agency attempts to collect a debt by using harassment then the person being harassed should write a letter to them asking them to discontinue contact. If this happens a person can hire a debt settlement company to help in handling this type of situation.

After everything is finalized and the lump sum settlement has been paid according to a debt settlement letter, the consumer should check his or her credit report to make sure that the creditor has listed the account as paid in full or paid as agreed. The creditor may need a couple of weeks or so to get this taken care of but if the consumer has waited as long as 30 days for this to appear on the credit report and it still has not been done then follow-up with the creditor is needed. The agreement letter should be copied and sent to the creditor as a reminder of the agreement. In addition, it never hurts to go ahead and make a phone call to the creditor as well and then follow-up with the written reminder.

Mortgage loan companies provide loan options and services to help an individual purchase a home, avoid foreclosure on a home, refinance a current mortgage, or even take out a second mortgage. With equal lending opportunities mortgage loan companies work with consumers to meet their needs for housing whether that is taking out a second mortgage for remodeling or making repairs on a home. They also help consumers who need options of getting out of debt. Requirements for financing may differ according to guidelines set by the lender. Issues associated with financing include credit history, income, current debts, and the ability to pay closing costs.

Individuals interested in information on a new home loan or refinancing can do a search online for mortgage loan companies and find out a great deal of information. Many lenders online have frequently answered questions as well as informative articles to help people find answers to their questions. Information can also be found on different loan types, current interest rates, any fees associated with a home loan, the available terms on various types of loans, among other things. Most lenders online offer free quotes for any interested parties. They also provide mortgage calculators so that the interested party can calculate interest rates for a monthly payment amount or see an amortization schedule.

Equal opportunity lending allows customers to be qualified based upon their ability to repay a loan and is not based upon race, color, religion, marital status, sexual preference, gender, age, or disability. Some mortgage loan companies are in partnerships with organizations that promote civil rights, reform, fair housing, law and justice, and community improvement. Many participate in consumer-awareness programs that help protect the consumer from bad lending institutions. In addition, they work with programs and organizations that offer assistance to first-time homebuyers.

Lenders are usually more than willing to talk to a potential homebuyer about interest rates, payments due, fees paid, prepayment charges, loan terms, right to cancel, and credit history. When a customer is turned down for a loan from mortgage loan companies because of their credit, the loan officer should counsel them on how they can go about repairing their credit and raising scores. A lender may recommend credit repair services that can help. They should let the potential customer know that their underwriters offer fair evaluations on a customer’s ability to repay a loan. Main factors considered in that evaluation include income, credit score, payment history on a current mortgage, and debt to income ratios.

Refinancing a mortgage is a consideration for the homeowner who wants to save money with a reduced interest rate or to convert an adjustable rate to a fixed rate. A homeowner who is having difficulty meeting the current monthly payment on his or her mortgage may want to consider refinancing to lower the payment. This is especially a good idea if interest rates are low.

Other reasons to consider refinancing a mortgage include being able to pay off the loan sooner and cashing out the equity to consolidate debts. A free consultation is advertised by many lenders on the Internet. Be sure to make a list of questions ahead of time so that it will be easier to make a decision on options.

Some things to gather in helping when refinancing a mortgage are recent mortgage statements showing the payoff amount, tax documents, income verification such as recent paycheck stubs, and any other financial information such as existing debts. Having information on current assets might help as well. A homeowner should collect information on banking such as account statements and any retirement plan statements. Ask a lender about any other information that might help to expedite the process.

An individual who is considering refinancing a mortgage should check into whether or not there will be closing costs and a down payment due. Some refinancing options may include no closing costs or down payment but the interest rate may be a little higher. Another thing to check into is whether or not there will be a survey or appraisal of the property needed and who will have to absorb the costs. Ask about other fees that may apply and if they will be absorbed into the refinancing or if they will become part of the closing costs.

Refinancing a mortgage may include a pre-qualification process where the lender wants to find out about cash reserves and income requirements. Sometimes a pre-qualification does not take into consideration a borrower’s credit history. After pre-qualifying, a borrower may have to provide the documents necessary for income verification and any other personal assets. The lender will probably check credit history and the interest rate could be adjusted based upon the borrower’s credit score. The best way to begin this process is by doing a comparison online by lender and doing some research on options. Find a lender with competitive rates, a variety of different types of loans, and options that are attractive for refinancing a mortgage.

High risk health insurance can be found online for the individual who has been denied coverage from other insurance companies. Sometimes a person may be denied coverage because they are suffering with a serious medical condition. Some states offer high risk medical insurance to those with serious health problems by pooling them together to get a group rate. Tax dollars help to fund these high risk pools. In order to qualify for a high-risk policy an individual has to have been denied insurance and must provide a proof of denial letter. Another qualification includes being denied by current insurance on a medical claim for a pre-existing illness.

To apply for high risk health insurance an individual should check online to see if their state provides high risk medical coverage. There can be limitations to a policy for individuals who have been denied medical insurance and a person can be denied for high risk health insurance. It is up to the insurance companies and the policies that they operate under. However, it is possible that they will cover an individual who is in need so it is worth checking into. If an individual is denied he or she can ask for assistance through other programs operated through the state or the county of residence. The best way to find out about such programs is to contact Human Services.

A medical exam may be required through a high risk health insurance company. Along with a denial letter the insurer will look at a person’s medical history and current diagnoses. This may lead to coverage but with limitations. Policies that are considered group coverage may not have as many limitations and may not require a medical exam. Group policies are cheaper because the rate is based upon a group of individuals instead of just one person. Group policy plans are less likely to deny coverage to a person with a serious medical condition.

The limitations for high risk health insurance may be based upon the seriousness of an illness and may exclude some medical conditions. The plan will have a maximum benefit for coverage even if the illness is covered. After a person reaches this maximum amount he or she will no longer be covered under the current policy. If a person is eligible for Medicare or Medicaid they will be denied high risk coverage. If there is a question about eligibility of Medicare or Medicaid coverage the individual may need to apply for it and obtain a denial letter before they can be covered under a high risk policy. The best way to find out options is to do a search on the Internet for high risk health insurance.

Equity lines of credit are based upon the difference of the value of the home and what is left owed on it. If a homeowner owes less than the fair market value then he or she may want to take out an equity line of credit to use against remodeling, home repairs, or for other needs. Lenders often offer some perks with taking out revolving credit on a home loan. These may include no annual fee, no closing costs, no application fee, and low interest. Approval for a loan will depend upon income, debts, and financial history.

A homeowner should take into consideration that there will be a monthly payment on the equity line of credit that will need to be paid on time every month. As the funds are used from the balance the payment will increase. The interest will not change over the life of the loan if the homeowner chooses a fixed rate over a variable rate. Some plans have restrictions on how much can be drawn on an equity line of credit at one time. Lenders online can provide information on the particulars of an equity line of credit.

Equity lines of credit can be used at the discretion of the homeowner when needed but how much that is used at one time may depend upon the terms of the loan contract. Some lenders issue checks to the homeowner that can be used to draw on the loan. A homeowner may decide he or she needs to use the money to pay down other financial loans or debts. Some people use it for vacation expenses, for paying on medical bills, school tuition, or to get them through a period when income may be lower or interrupted.

Many homeowners choose to take out an equity line of credit because they want to get out from under credit card debt. This can save the homeowner a great deal of money because the difference in the interest on the credit cards compared with the interest on the equity line of credit will probably be considerable. In addition, the interest expense on the loan can be used as a tax savings at the end of the year. A person should consider the savings when paying on credit card debt can really add up to a lot of money especially if he or she is behind on their payments and the balance is increasing because of late fees and over the credit line fees.

A credit card introductory rate that is considered desirable will include a low fixed rate preferably with zero percent for the first six to twelve months and the option of transferring high interest balances from other accounts. Sometimes these types of offers come with rewards and special features that make them even more appealing. Some include cash back rewards, frequent flyer reward points, rental car insurance, travel insurance, and extended warranties on some purchases. The banks that offer points allow the customer to gain points on certain purchases and then redeem them on airfare, hotel, cruise offers, and rental car expenses. To qualify for an account that has no annual fee and low interest the applicant will need to have a good to high credit score.

An important consideration for choosing the right credit card offer should include how the interest rate is affected with cash advances. The credit card introductory rate may not apply to cash advances since a higher rate is often used to calculate interest charges. A consumer would do well to ask questions and read the conditions of the agreement before applying for a charge account. Finding out how the finance charges are calculated can save the consumer from suffering with regret later on. A consumer should also find out when late fees apply and if being late with a payment could mean higher interest. Some banks automatically raise the interest rate even if the customer is one day late with a payment. Payments are usually due every 25 days.

The best way to avoid interest charges is to pay the balance on the charge account every month. Paying the minimum monthly payment will automatically cause interest to be figured on the remaining balance with very little of the payment being applied to the principle. A person should not be tempted to charge each month more than he or she can pay off. Keeping the limit maxed out and only making the minimum monthly payment could mean delays in paying off the purchases for years.

Some revolving charge accounts have many fees associated with them. These include cash advance fees, balance transfer fees, over the credit line fees, late fees, maintenance fees, annual fees, and even administrative fees. A credit card introductory rate may include zero interest for 6 months but there may be other charges and fees associated with it that make the offer unattractive. Individuals shopping for a credit card account would do well to talk to an account representative about possible fees associated with the account.

Three types of accounts associated with revolving charges include premium, regular, and secured. A premium account normally includes a high credit limit, lower interest, cash rewards on certain types of purchases, travel insurance, and other benefits. Premium accounts may offer a credit card introductory rate of zero percent for up to 12 months. A secured account is usually set up for the benefit of the creditor to ensure payment for high risk individuals who have low credit scores. This involves the customer opening up a security deposit account. The amount in the account is how much the customer can charge. A regular account does not usually require a security deposit but has higher interest and lower charging limits compared to a premium card.

Consumers who have difficulty exercising restraint with credit cards should consider carefully before acquiring one. Even one with a low credit card introductory rate may not be a good idea because eventually the interest will go up and the monthly payments will have to be made on time or late fees, higher interest, and over the credit line fees will apply. A person needs to learn to exercise discipline and restraint in the present so his or her future will not mean a path of indebtedness and possibly lead to bankruptcy court. Use some wisdom about acquiring credit and remember that though it may be fun buying things on credit the end result is anything but fun and instead can be a heavy burden to bear.