Do you ever wonder why people get stuck paying installments every month on credit cards on to find out that they have barely chipped the debt after a year. The answer is that most credit cards out there are set up for the consumer to always be in debt. The more debt you owe the more the credit card company owns you.
When you are looking to get a credit card, the key is to shop for it and don’t let it shop for you. Sounds foolish but if you think about it, how many times have you received brochures in the mail for a new credit card and since it so convenient you fill out the form and mail it out? It’s so easy these days that you can fill out a credit card form and send it out literally in 2 minutes. What I would suggest is that rather than go for the first offer thrown to you, collect all the brochures then make time to sort them out and study them. Trust me this will pay off in the future.
The most important things to look for in a credit card brochure is APR(annual percentage rate), annual fee and grace period. You should then check things like late payment penalties and charges, over limit fees etc.
ANNUAL FEE A flat, yearly charge.
APR A measure of the cost of the finance charge which the company charges on your balance yearly.
GRACE PERIOD A time period in which if your complete balance is paid off then you pay no finance charge. This is usually 25 days, but most people carry a balance to the next period so they end up paying the finance charge.
It is also important to deduce the finance charges which you are paying for your credit card. The finance charge is the amount you pay to use the credit offered to you, therefore it is based on the amount you use. Most credit cards companies use the average daily balance method to calculate the finance charges on your credit card. The issuer calculates the balance by taking the balance on your account each day during the billing cycle and averaging it. The issuer then uses this number to deduce a charge.
Below is an example of a possible saving scheme on can use to saving on credit card charges.
CREDIT CARD SCENERIOS:
Terms VISA 1 VISA 2
Average monthly balance $2,500 $2,500
APR x .18 x .14
Annual fee + $ 20 + $ 0
Finance charges
annually $450 $350
Total cost $470 $350
As you can see if you carry a balance averaging $2,500 through the year you will end up paying either $470 or $350 in finance charges alone. Imagine if you were only paying the bare minimum which is $20 a month you would not even put a dent In your debt.
There are loopholes around all these charges which can get you paying nothing at all to creditors. One way to do it is to transfer all your balances to a card that offers introductory 0% APR. Most credit card companies use this tactic of offering 0% Introductory APR to lure new customers but beware because the APR usually shoots up to about 20% after 6months. As long as you keep transferring your balance you will never pay APR charges. Some people who already have great APR’s already of about 11% usually don’t realize that once you have a late payment, even 1 day late, the creditor automatically puts your account on the highest APR possible and usually is about 30%.
Shop wisely and get the best deal for you. Learn more about Credit and Credit repair at www.1800aaacredit.com .
Friday, January 5, 2007
STEP BY STEP CREDIT REPAIR EXPLAINED IN 2 MINUTES
Credit repair takes time and patience but with the right information you can be well on your way to AAA credit and a new life. Although the process itself is long it can be explained in 1 page.
First you have to learn how to analyze all the data presented on your credit report then become a master at disputing these claims. With the credit bureau you will have tofind anything that is incomplete, inaccurate or just wrong. If anything has been recorded wrongly you have the right to dispute it even if you do posses the debt. The bureau then has 30 days by law to correct any wrong items or delete entirely from your report. It might take them up to 6weeks to send you a new report and you should check if the disputed items have been removed or updated. If you have not received a reply within 6 weeks send a follow up letter with all the older correspondences and remind the credit bureau about the 30 day law.
There are ways to get around the technicalities of the dispute. Always make sure that you do not dispute more than 3 items at one time. Once those 3 items have been updated or removed entirely, then you move on to the next 3. Understand also that sometimes when you dispute, the negative entry does not just automatically come off your credit report. You have to be very persistent and keep on writing to the credit bureau till they eventually come off. Understand that credit repair is not a sprint but a marathon.
Areas to be disputed include “Charge offs”, “Paid as Agreed”, “Tax Liens”, “Late Payments”, “and Bankruptcy”. These constitute the majority of negative items that occur on a credit report. On each and ever one you have to quote the “account name” and “account number”, then write detailed letters to each of the three credit bureau stating that all accounts have either been paid in full or do not belong to you. Credit bureaus usually perform an investigation into the debt by contacting the creditor. What you should know is that many creditors either don’t have the time or don’t have any documents to prove the debt. A lot of times if a negative item is more than 3 years old, many creditors will not respond to the credit bureau inquiries because of lack of records. This means that the negative entry must be deleted from your credit by law.
Steps to Dispute
1)Obtain your credit report
2)Decide which items you want to dispute.
3)Write letters.(The acceptable format can be found at ASANIWELLS WEBSITE, see link below)
4)Always hand write your letters.
5)Keep copies of all correspondence.
6)Keep separate file copies on each credit bureau.
7)Keep on writing and following up as they reply.
Learn more about credit repair and obtain official letters at www.1800aaacredit.com
First you have to learn how to analyze all the data presented on your credit report then become a master at disputing these claims. With the credit bureau you will have tofind anything that is incomplete, inaccurate or just wrong. If anything has been recorded wrongly you have the right to dispute it even if you do posses the debt. The bureau then has 30 days by law to correct any wrong items or delete entirely from your report. It might take them up to 6weeks to send you a new report and you should check if the disputed items have been removed or updated. If you have not received a reply within 6 weeks send a follow up letter with all the older correspondences and remind the credit bureau about the 30 day law.
There are ways to get around the technicalities of the dispute. Always make sure that you do not dispute more than 3 items at one time. Once those 3 items have been updated or removed entirely, then you move on to the next 3. Understand also that sometimes when you dispute, the negative entry does not just automatically come off your credit report. You have to be very persistent and keep on writing to the credit bureau till they eventually come off. Understand that credit repair is not a sprint but a marathon.
Areas to be disputed include “Charge offs”, “Paid as Agreed”, “Tax Liens”, “Late Payments”, “and Bankruptcy”. These constitute the majority of negative items that occur on a credit report. On each and ever one you have to quote the “account name” and “account number”, then write detailed letters to each of the three credit bureau stating that all accounts have either been paid in full or do not belong to you. Credit bureaus usually perform an investigation into the debt by contacting the creditor. What you should know is that many creditors either don’t have the time or don’t have any documents to prove the debt. A lot of times if a negative item is more than 3 years old, many creditors will not respond to the credit bureau inquiries because of lack of records. This means that the negative entry must be deleted from your credit by law.
Steps to Dispute
1)Obtain your credit report
2)Decide which items you want to dispute.
3)Write letters.(The acceptable format can be found at ASANIWELLS WEBSITE, see link below)
4)Always hand write your letters.
5)Keep copies of all correspondence.
6)Keep separate file copies on each credit bureau.
7)Keep on writing and following up as they reply.
Learn more about credit repair and obtain official letters at www.1800aaacredit.com
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