3 Tips to Avoiding Bankruptcy with Credit Card Usage

Every day, millions of people all across the globe us a credit card. Credit cards can be used for anything from shopping to business expenses. A credit card makes it easy to purchase the items we need or want now, without having to pay any of our hard earned money upfront. 

However, credit cards can be a mean tricky devil. It is important for every credit card owner to be mindful of their expenses and usage so that they do not end up in debt. Many credit card users can fall behind on payments very easily and eventually have to file for bankruptcy to avoid the large sum of money debt they now owe credit card companies. It is best to avoid this situation and below is three helpful tips to allow you to do just that!

Set Credit Card Limits/Usage

It is important for every credit card holder to set a limit or usage amount. If you have one credit card that you use for gas purchases, then make sure you use the card only for that purpose. If you have a card that can only hold $1,000 then do not go over this amount. Be sure that the amount your card holds is an amount that you can pay. If you cannot make the credit card payments then do not make the purchase. Too many times, credit card holders will see an item they want and purchase it, with no thought to how they will pay for the item later. Think out each purchase so you are sure that you will not go into debt.

Emergency Only

A smart idea for credit card holders is to have one card that is for emergency use only. And by emergency use, I do not mean late night pizza and beer runs. One credit account should be open that allows you enough credit if your vehicle breaks down, you need an emergency flight to a loved one, etc. you need a line of credit that is good and upstanding so you have an option if something comes up that you cannot afford. However, be sure that you consider this card as an emergency option only.

Pay Your Debts

If you are going to use your credit card on a regular basis, then be sure to Pay Your Debts!!! It is essential that you never miss a payment. If you miss one payment, a fee is tacked on to the amount you owe. If you miss again, another fee is added. This can cause your bill to continue to rise and since you already owe a large amount of money, added debt is not something you want! This is why it is so important to be sure that you can pay the debt you owe. Make sure the monthly payment is something you can handle and always add extra to your payment, if you can, so the amount will be paid off quicker.

The basic goal is to use your credit card only when you need to and make sure you can make and do make your payments. If you stick to this golden rule then you will be able to have a successful line of credit and stay away from monster debt or bankruptcy.

Visit the author’s suggested site  CreditCardColumn.com for Small Business Credit Cards.

4 Simple Ways to Secure A Mortgage Loan Despite a Bad Credit History

It is very rare for people to always be granted loans. Even those with average credit are still getting denied by banks and other lending institutions. One might even say that it is part of the experiences of growing up. Money doesn’t grow on trees as they say. Why should it be handed out to you that easily?

For those whose names have been marred with a history of bad credit, however, the implications of the rejection are far more severe. Given that they already have a red flag waving over their profiles, the big concern is that they may not get the money they need. The good news is that they can still get a loan despite that bad financial record. They can still show the lenders that they deserve a second chance.

In order to secure a loan, the first thing you should do is to secure all required documents. This is the most basic thing you have to accomplish. Don’t even think about covering up the facts by lying. The lenders will be running a background check on you anyway. If you lie and get caught, then you certainly won’t get that loan approval. Lenders build their business on trust. If they can’t trust you, they wouldn’t want to do business with you. It’s as simple as that.

That’s just the tip of the iceberg, though. Let’s say, for example, you would like to take out a mortgage. However, you’re worried that your application will be shot down on account of your credit history. Here are some more tips that you can use to get that loan despite having bad credit.

1. Be informed about your credit rating – Some people automatically assume that they have a less than ideal credit score. It can be because they previously had a bad experience, or they’re just not sure if their profile fits the kind of loan they are eyeing. However, the truth is that there is a cap as to what is likely to be a bad credit rating.

If you have a score of 620, then that is incontestably a bad rating. If, however, you get something just a little above 620, that’s a little bit more manageable. It’s still not in the safe zone, but at least it’s not so bad as to keep you from actually taking out a mortgage. That is why it is important for you to get your credit report. Knowing just how much you owe should give you a credible strategy for taking out a mortgage loan with a bad credit history. Aside from that, it should also “alert buyers to any credit errors that should be remedied before making any application for a pre-approval or mortgage application.”

2. Don’t dwell on the bad, highlight the good – What this simply means is that you should focus on your other assets. Of course, it’s not to say that you should cover up your bad history with credit. As mentioned above, that’s just going to work against you. Instead, you can put front and center other financial assets. It can be an impressive insurance account, or even a retirement package. While you may not necessarily be liquid at this point, at least there are things for you to look forward to.

3. Show good faith by offering a large down payment - The other thing you must do to secure a loan with bad credit is to project the image that you are in this deal for the long haul. While it may seem like giving out a large sum for down payment is counter-intuitive, it will definitely show the lenders you are invested in the property.

By paying a larger sum upfront, it also puts the lenders at ease because it minimizes the risk for their part. This in turn could help you nab that much-needed loan to fund your needs. Of course, the problem then turns to coming up with that down payment.  You might consider selling a prize possession, or saving your money. Some states, cities and municipalities also have programs that may be able to aid you with a down payment.

4. Make a practical choice – Understandably, you want to get a nice home to move into with your family. Then again, you also have to be realistic about your situation. If you do have a rather ugly credit standing, then don’t even think about getting something that is way out of your budget. Otherwise, you’ll only perpetuate the cycle of having bad credit. It’s not a place you would want to be stuck in at all.

Take a good, hard look at the kind of house you want and its amount. Then figure out how much you can afford to spend. Keep in mind that having bad credit will mean the mortgage will carry a higher interest rate. It’s not exactly fun, but it’s what you’ll have to deal with as a consequence of your record.

Despite that, however, what is most important is that your chances of getting mortgage financing with bad credit is still pretty good. It’s definitely going to take a lot of hard work on your part. You will have to do a lot of convincing, too, so that you can get your loan approved. But as many other people with bad records have proven, having a red flag on your credit record can be overcome. It’s going to make things a lot harder for you, but it does not have to be something that should permanently incapacitate your loaning capabilities. 

Feel free to join the discussion on the matter, or share your insights and comments below.

Author Bio:

Amy Johnson is an active blogger who is fond of sharing interesting finance related articles to encourage people to manage and protect their finances. She also covers topics on how to identify credit card fraud that can help people protect their credit from credit scams.

Simple Steps To Getting A PPI Refund

Payment protection insurance serves as a helping hand if you are unable to repay the borrowed amount due to illness or unemployment. They policy is also mis-sold by making lenders along with mortgage loan or credit card. The customer pays a huge amount without the knowledge of being insured with a PPI policy. Many PPI policies are mis-sold by the lenders so make sure that you get the right policy that serves your need. Talk with the lender and find out whether your credit has covered this policy. If you are one among the people who are suffering with this mis-sold issue then it’s the time to refund your ppi claim. 

Check out your claim: Firstly, it is important to know whether you have a PPI cover or not. If you feel that you are paying huge charges for your credit, contact the lender and ask for the credit reports. Analyse your payments. Take the help of the lender company and know whether you have the right to refund the compensation.

Know its status: If you owe the policy, find out its status. This can be done by gathering documents, files and statements regarding your finances. Go through the reports and know the amount you have deposited. If you think that the lender gave you a faulty cover then keep the documents safe with you and demand for your payments.

Identify how it is mis-sold: Before claiming the refund find out the way it has been sold.

• Did the lender explained you about exact terms and conditions of your policy 
• What is the exact cost of your policy 
• Were you forced to take the cover? 
• Know about your payment duration. 

Take the help of claiming companies: Plan for claiming the policy by yourself or by consulting the any PPI claims management company. These companies will do the work on your behalf and reduce your burden.

Wait till the process completes: It takes certain time to get back your compensation. Wait patiently till the time arrives. Meanwhile contact the claiming company and know about its progress. Go through their plans and statements.

Take the advantage of ombudsmen: Ombudsmen offer free services regarding these issues. They can reclaim the policy on behalf of you. You can claim the policy even if your debt has been paid off. It does not affect your credit score and you can claim different policies at the same time though they are offered by different banks.

Learn from the experienced people: Millions of people faced this problem and got the solution. Web sites such as consumer action group is popular where you can get the help from the people who has solved this problem.

Complain: make a complaint to the lender about the refund. Then your bank will intimate you whether they are responsible for this complaint or not within a specific time. If you feel that the creditor has not responded properly then take the help of financial ombudsman or the court.

Follow these simple steps and claim for the amount you deserve. Utilise the consumer’s right and get the instant refund from those financial institutions.

Author Bio:
My name is Maria. I am a tech writer from Manchester. I am into Finance, Technology, Travel, and Health :). Catch me @financeport

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5 Rules When Loaning Money To A Friend

Image via WikipediaBorrowing money from a friend is the fastest way to ruin a relationship. The borrower usually has tried every other source for credit. Their credit cards are maxed out. The house is mortgaged fully and lines of credit are closed. The party may have lost their job or an emergency has happened. By the time they get to you the situation is desperate.

In this time of recession who doesn't know someone or a family who is having very hard times. They were unprepared and life hit them broadside. You want to help because your friend is in need. But should you? Will they be able to pay you back. 

They probably will, but be prepared to lose the money. Through their own fault or fate they are showing their lack of financial knowledge. The mistakes they made could possibly be made again with your money. If you must make a personal loan why not take a few precautions and do it right.

1. Consider alternatives

Borrowers who fail to repay bank loans may face legal problems, but those who can’t make good on loans to friends or family can be hit not only with legal trouble but also the loss of a personal relationship. That’s why it’s a good idea to think about all your options before approaching someone you’re close to for a loan. Consider trying more than one bank, for example, or exploring borrowing possibilities at credit unions or other sources. It may also be possible to cut back on your spending instead of taking a loan or to postpone your plans for a big purchase until you have saved the money you need.

2. Get it in writing

One of the potential pitfalls of a loan between friends or family is their informality. A handshake is a popular way to cement a deal, but a written document is a better idea for both sides. That’s because problems can arise when the friend lending the money expects it to be returned within a short time, while the borrower believes he or she can pay it back over an indefinite period. When lending money to a loved one, it’s often hard to insist on knowing when the loan will be paid or to ask for regular payments. 

To protect your relationship and your wallet, it’s best to put it in writing. Write down the amount of the loan, when and how it will be paid off and if the borrower will pay any interest. This kind of promissory note clarifies the borrower’s responsibilities and can help prevent misunderstandings later. The note should be signed by both borrower and lender, and each one should keep a copy.

3. Be realistic

While written documentation is a great idea, remember that it will not prevent potential payment problems. That’s why it’s important for both people to be realistic before they enter into the deal. If you know that a loved one likely won’t be able to repay you, for example, offer instead to help him or her solve problems by developing a monthly budget or working out a payment plan with creditors. 

If you are uncertain you will be able to repay a loan, consider asking loved ones to brainstorm other borrowing options. Doing so may preserve your relationship so that it is still in force long after any money problems are over.

4. Give honest updates

If you borrow money from a friend or family member and find that you are unable to repay it as expected, let them know about the problem right away. Explain what went wrong and when you do think you’ll be able to make good. It may be a difficult conversation, but your candor and consideration for the other person will go a long way in helping to preserve the relationship.

5. Give the money as a gift.

Personal loan are notorious for not being repaided. If you have the means, offer them the money as a gift. If not the full amount, a percentage of the amount needed. Doing this heads off a possible confrontation or uncomfortable situation that could come down the line. It's better to keep the friend and lose the money instead of the reverse.

The Early Warning Signs of Debt

Image via Wikipedia

Debt seems to catch people by surprise, there are a few warning signs of future credit problems that you should be aware of. If you know what to look for, you can still turn things around before it's to late.

Who's the most likely to fall into debt? Even though we are all susceptible to credit problems there are several groups that are more likely to have credit problems, according to Credit Counseling Groups. They are:

• Young people
• Households with children
• Low-income households
• Retired people

What are the warning signs of debt? The earliest warning signs of a credit problem include not having much money in your bank account but seeing high figures on your credit statements. As you shuffle money and credit around to try and make ends meet, you may see these additional warning signs as indicators of debt. They are:

• Regularly paying bills after their due dates
• Using cash advances on credit cards to pay off other credit cards (you may also be using cash advances for basic purchases, like rent or groceries)
• Asking family and friends for money
• Looking for a second job to make ends meet

If you see these signs get ahead of the problem. Most likely you don't have a budget. This will allow you to see how much money is coming in, and where your money is going. Also, once you create a plan to get out of debt, your budget will be a trusted map to show you the way.

If neither a pencil and paper nor an Excel spreadsheet appeals to you, check out Mint.com online home budget calculator. Simply put in your income and expenses and the calculator will give you a report of what’s costing you the most, how much you’re short each month, and what your debt ratio is.

Next try to get ahead of your debt. If you are having trouble paying back lenders, it’s wise to contact them. Let them know you’re having trouble and see what arrangements can be made to pay them back. Most creditors would rather get less of your money than not get any at all.

Keep in mind that free credit counseling services are available for everyone. If your only sign of debt so far is a super-high credit card bill and a mediocre bank account, it may be a good idea to get help with a new financial strategy before things really get out of hand.

Once you have your new financial strategy and budget in place, be extremely disciplined when it comes to spending. Your biggest purchases in the months that follow will be paying back debt, so now is not the time to increase your debt load any further. If you’ve racked up a lot of retail debt on things like entertainment, clothes and restaurants, you’ll need to look for more frugal options.

If your only have a small debt to repay count yourself lucky you doing something about it now. Most people wait way to long when the damage is extreme.



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