Reduce the number of credit cards that you have. The more credit cards you have, the lower credit score financing institutions give you and, consequently, you are charged higher interest charges & placed under more stringent conditions.
With multiple credit cards, keeping track of your expenses becomes a more difficult personal accounting task.
Believe it or not, you can live with only one credit card. With only one credit card, the monthly billing statement becomes an accounting record of your expenses. You only have to add your cash expenses (which are probably not a substantial portion of your monthly …read more

Credit cards enable you to spend future cashflow, income that you haven’t earned yet but expect to earn with some certainty (e.g., regular paying job, income from own business, etc).
Credit cards are temptations to live beyond your means. You are living within your means if you are able to pay off the entire balance in your monthly bill. This is the best position for you. You are, in effect, getting a 30-day loan from the credit card company interest-free.
There is a GREAT TRAP in small intallment plans paid through your credit card. The amount appears so …read more

One big reason for households to spend future income through the use of & dependence on credit cards (and pile up credit card interest & penalties) is the huge portion of monthly cashflow that has to go into servicing a mortgage.
During the previous period of easy housing money, financial institutions were tolerating and allowing mortgages that ate up as much as 35% to 40% of the household’s monthly cashflow. This is one road to financial disaster.
Having to carry more than 30% of monthly cashflow to service a mortgage will leave inadequate cash for other necessary expenses and lead to …read more

Your credit card is a source of interest-free loan. But, this will work, if and only if you think of your credit card as a tool for personal cash flow management –rather than additional cash in your wallet.
It often happens that a purchase has to be made before your expected cash has become available. If you know that your cash will come in before the bill from the credit card falls due, make the purchase with your credit card –but pay off the whole purchase when your cash comes in and save yourself the interest cost. …read more

Credit Cards, so that they do not become a heavy burden (you can end up paying as much as 30% on interest & penalties), have to be managed just like any regular bank loan.
It is important to keep a proper mindset. Do not think of your credit cards as additional cash in your wallet. Thinking of your credit cards as available cash, you tend to purchase items that you want –rather than those which you really need. Or, if the purchases were for items you really needed, if you didn’t have the available cash in your …read more

Before the end of the first semester of this year, you will be receiving the windfall from the recently passed “stimulus” bill:
individuals = $600
couples = $1200, $300 additional for each child.

This will be an excellent opportunity to climb out of subprime. Pay down as much of your credit card as the windfall will be able to cover. If you are in the deepest of the subprime category, you can be paying as much as 30% in additional interest and penalties. By using your windfall to pay down this debt, you will in effect be earning that much …read more

Having found errors in your credit score and credit risk rating by obtaining a credit rating report from TransUnion (www.transunion.com), Experian (www.experian.com), or Equifax (www.equifax.com) and you have requested the credit bureaus to correct the errors and they are not listening or not doing anything, you can do the following:
Write a brief, factual letter explaining the error/s for inclusion in your credit history. The credit bureau is obligated to provide a copy to anyone who asks about your credit history.

Have the credit bureau append modifying words to the item you are contesting, e.g., “disputed” or “under review”, etc
Keep a …read more

The best way to handle a credit card and maintain a high FICO score and a low credit risk rating is to pay off the whole amount in your billing statement.
In the first place, this practice prevents your credit card balances from bloating to an amount that you will have a difficult time in covering in the future.

In the second place, the unpaid balance jacks up your credit risk rating (even if its a case of leaving a $50 balance out of a $1000 account). If the unpaid balance remains for five months, you run the risk of getting …read more

Credit card applicants or holders who have a credit (or FICO) score below 600 or a credit risk rating of R5 & higher are given subprime credit cards.
There are major and small issuers and financial institutions who specialize in subprime credit cards, some of whom are predators, do not make full disclosures, and even drop a borrower into a subprime category just to be able to charge a higher interest rate. (Caveat: the pre-approved credit card you receive in the mail –with free membership fee & other enticements– may be subprime.)

Subprime cards carry extra fees and …read more

In addition to the credit score (or FICO score) where a score below 600 will drop you into the subprime category, financial institutions also do a credit risk rating where a borrower is evaluated according to a scale of 1 to 9, the lower scale being the better risk and deserving of lower interest.
To the number is attached a letter modifier: R (revolving as in credit cards) or I (installment as in a house or car loan).
Numbers 1 through 6 indicate the number of months you are habitually in arrears or late in payments, the number 1 declaring that you …read more