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Credit Cards – Can You Really Live Without Them?

In 2007, having a credit card is no longer a luxury or even a convenience – it’s a necessity. You can’t rent a car, check into a motel, or order online without a credit card. If you want a cell phone, you’ll probably have to purchase prepaid minutes – at a premium – unless you have some plastic with your name on it. And without a credit card, you either have to carry around a lot of cash, make frequent trips to the bank, or hope that the stores you patronize will accept your personal checks.

Credit Cards Can Be Lifesavers in the Case of an Emergency

Worst of all, people who lack sufficient access to credit are the most likely to use payday loan services. Later in this series we will explore this subject in depth, but for now, just consider this: If a single mother is hit with a sudden, unexpected expense – say a car repair for 600 – what can she do if she doesn’t have the money? She needs the car to get to work, and she doesn’t know anyone who can afford to lend her the money out of friendship. So she decides to use the local payday loan shop and ends up paying a 530 percent APR (annual percentage rate) interest. If, instead, she had a credit card with at least 600 of available credit, she wouldn’t have had to use the payday charlatans, and would have paid a much, much lower interest rate. Many people who use payday loan services, even once, fall into an inescapable spiral of debt, where they work all week to pay back their payday loans, and then have to take out new payday loans to meet their weekly expenses. People who use their credit cards responsibly never fall victim to this scenario.

Credit Cards Can Help With Budgeting

Credit cards help spendthrifts easily track their expenditures. One simple technique is to use one credit card to automatically pay your recurring monthly expenses (phone, cable, utilities, etc.), another to buy your groceries and gas, and a third for all other expenses (entertainment, eating out, etc.). When you get your bills each month you can compare how much you spent on your wants versus your needs and make adjustments as necessary.

Protections Offered by Credit Cards

Although the media likes to focus on the “epidemic” of identity theft, the truth is that using a credit card is much safer than using cash, a check, or virtually any other means of exchange. If you’re carrying cash and your wallet is stolen, you’ll never see a dime of your money. If a merchant cashes your check and refuses to grant you a refund, chances are, you’re out of luck. But in either scenario, using a credit card would have offered you protection.

If, for example, your wallet full of credit cards is stolen, you will not be liable for any more than 50 of fraudulent charges, per card. This is the legal limit, but in reality, most card issuers don’t even hold you liable for the first 50 – they just stick the merchants with the bill. And if a merchant refuses to give you a refund that you deserve, you can file a “chargeback,” in which the credit card company will side with you 99 percent of the time. Paying in cash or with a check offers no such protections.

Your Credit Card – Don’t Leave Home Without It

Credit cards are ideal for traveling abroad because they automatically convert to the local currency. This means you won’t have to waste time with the money changer or carry around several foreign currencies, and of course, not carrying cash makes you much less susceptible to pick-pocketing.

The main thing to understand is that credit cards can be wonderful tools that greatly enhance our lives. All that we need to do is be informed, active, and responsible users of these powerful little pieces of plastic.

Stay safe.

Sincerely,

James
www.CC-Yes.com

Credit Score: What Is It and How to Get Yours For Free

In the United States, your credit score is everything. It is something that you should take care of or if you dont, getting a phone, cable or gas line hooked up in your home can be difficult to do. There are also certain companies that take a look at your credit score first before they even hire you. Even if you are qualified to do the job, a low credit score can ruin it all for you.

Your credit score is also analyzed by creditors, such as banks and credit card companies. Just try to imagine that you need to get a loan to start your own business, with a low or bad credit score, you have a lesser chance of getting that loan approved or you may get it approved but with high interest rates. The same thing goes when you apply for a credit card. Credit card companies or banks that issue credit cards will first take a look at your credit score before they can get your application approved. A high credit score means that you have a greater chance of getting the best credit card deals with a lot of features and also with low interest rates for your every purchase using a certain credit card.

Even if you are applying for a mortgage, a car loan and other kinds of loans, your credit score will play a very important role in it. This is why it is very important for you to have a high credit score and maintain it that way or increase it.

First of all, you have to understand what a credit score actually is. A credit score will represent a three digit number from 300 to 850. This number will represent a calculation of the likelihood of whether you will pay their bills or not. This means that if you have a high credit score, creditors will be sure that you will pay your bills or your loan.

In the United States, FICO or Fair Isaac Corporation is the best-known credit score model in the country. They calculate your credit score using a formula developed by FICO. The system is used primarily by credit industries and consumer banking industries all across the country.

Credit scores are calculated in the following factors:

Punctuality of payments This will be 35% of the calculation. If you pay your bills on time or before the due date, your credit score will tend to be higher.

Capacity used This will amount to 30% of the calculation of your credit score. It will contain a ration between the current revolving debts to total available revolving credit. If you use your credit card and if you dont use its entire credit limit, you will get a higher credit score.

Length of credit history This will amount to 15% of the calculation of your credit score.

Types of credit used This can affect 10% of your total credit score.

Recent search for credit or the amount of credit obtained recently This will amount to 10% of the total calculation of your credit score.

Surprisingly, not many people know their credit score and often end up wondering why they got denied for their loan or credit card application. You can easily obtain a copy of your credit report by requesting for it from FICO or from the credit reporting agencies. They will be able to provide you with a free calculation of your credit score every year. It is also a great way to find out if there are any errors in your credit report that may be causing you to have a low credit score. You can request it to be fixed in order to let you have a higher credit score than before.

Always remember that your credit score is an important factor of your life. Keep it high and you will get better deals on loans, and credit cards.