All Articles Tagged "credit card"
I first realized my relationship with money had worsened during my free-spirited days at Norfolk State University. Sallie Mae’s deep pockets fully financed my course load during that time (and a little extra for books and some spending money). Ever since then it has been an uphill battle to regulate my budget while climbing out of steep debt that averages about a hundred grand. Add to that the fact that I am now a 27-year-old freelance writer and that checks don’t always come on time, and it is safe to say that my money can be quite funny. Nonetheless, even with the financial hurdles and constant #BBHMM (“B***h Better Have My Money”) attitude, I always believed a credit card led you down a winding rabbit hole to a financial abyss. I ignored the applications in the mail and assumed that a credit card would make a tough situation even worse.
Until a few weeks ago.
My financial illiteracy started as a kid. Growing up, I never wanted for much. My dad, with his own set of emotional issues tied to the almighty dollar, bought me almost anything I asked for. As for my mom, well, I learned later on that she made ends meet with ease having witnessed her mother struggle to do the same before her. It was not until my parents split, and I matriculated into middle school, that I realized my family was not sitting on piles of cash. Debt pretty much became a part of my family. Still, I received an allowance like any other teenager, opened birthday and Christmas gifts I’d asked for (but most likely not the entire laundry list of ridiculous items desired), and had enough lettuce, so to speak, to eat and hang with friends after school. This made it pretty difficult to understand the importance of having and saving money.
By 17, I’d finally acquired my first taste of employment (to this day, I still hate that looming smell of popcorn when I enter any Target and the sterile scent of a nursing home). However, making my own money created even more of a financial monster. With the help of team sports, our local mall, my boyfriend, and gas prices, money did not last long after payday (see: shopping).
Fast forward to that hellish window of time post-graduation before you gain your footing in the world. The financial stains I acquired from living in New York City as an unpaid intern (so much fun…) wreaked havoc on my wallet and wrestled away the tight grip I’d had on my simple finances. Even after I snagged my first salary-paying gig, I was renting a room in Brooklyn, racking up more bills (and paying off old ones because such is life) and fighting the ever-present dark cloud of “unforeseen expenses.” It was tough. Eventually, all of these spinning plates converged, making it imperative to reroute my habits with money in order to build stronger credit and map out a budget that reflects my means.
So after extensive research (and harsh warnings from my sister), I made a major decision a few weeks back. I found that having a credit card on ice could be both great for emergencies and a springboard toward the type of good credit that’ll set homeownership and healthy financial fitness in my sights. It takes discipline though.
Understanding your money and designing a realistic financial plan is the only way to keep your head above choppy financial waters. Therefore, balling out at brunch or taking weekly trips to Topshop must take a back seat to the bigger picture. Even traveling must sometimes be nixed or found for cheap in order to bring proper balance to your finances in the long run. If I could give my younger self any advice, I’d remind her to simply be smarter; save at least 10% of every paycheck; know that every party doesn’t have to be attended; and realize that keeping up with the Joneses is a frivolous feat.
So as I stare at my mailbox in anticipation to start a new financial chapter, one that requires less free-spirited spending, and more economic responsibility, I look forward to breaking the financial illiteracy that often runs rampant in my family and build a strong financial future my kids can one day be proud of.
Credit companies love baiting consumers by saying,”Hey, we’re interest-free!” followed by a murmured “for 12 months.” After the teaser period passes, card issuers trap their members with a 21 percent interest rate — that’s more than two percent higher than last year!
According to CardHub, for the first three months of 2014, credit card rates were “higher across the board” in comparison to the same time last year. On average, American cardholders have been hit with a 21 percent interest rate — an increase of 2.12 percent percentage points from 2013, The New York Post reports. This might not seem like much, but it accrues into a significant difference over the long-term.
“I think credit card companies are essentially realizing that consumers are more focused on introductory rates. So they are not paying much attention to what happens after the introductory rates,” Odysseas Papadimitriou, CEO of CardHub, said.
The words “zero percent APR” might be alluring, but consumers are neglecting to read the fine print. When the teaser period ends, the interest rate will jump — sometimes astronomically. Assuming a customer hasn’t paid off his or her balance yet, rates can range from 9.99 to 25.99 percent, depending on his or her credit score. Your typical credit card rep won’t know or will not go out of his or her way to tell you. So check the company’s terms and conditions. Determine how long the introductory rate lasts and pay off your balance before the higher interest rate kicks in.
You can open the card, take advantage of the perks, and close it when the teaser period expires, but even that comes at the expense of the cardholder:
“Your credit score takes a small hit every time a card issuer pulls your credit report to see if you qualify for a new card. A new card also shortens the overall age of your accounts, which dents your score. Lastly, closing an account reduces the amount of available credit, another ding to your score,” FoxBusiness said.
And buyer beware: the teaser period may end quicker than you expected, for example, if you’re late with just one payment.
More than 50 percent of card holders, according to ABC News, fail to pay off their balance before the teaser period expires.
From Black Enterprise
Unless you’re a college kid establishing credit for the first time or someone looking to reestablish credit after a major financial setback such as bankruptcy, there’s really no reason to carry department store credit cards. The scenarios above usually make them a great last resort, but if you already have established credit and are looking to dump debt for good, then check out three reasons to ditch those department store cards once and for all.
1. They are useless when you have a real emergency.
Look in your wallet right now. Ask yourself what good that Victoria’s Secret card would do if you had a flat tire tomorrow. Or, how would that Macy’s card help out in the emergency room? Not looking good, eh? In the face of an actual emergency, department store credit cards are simply worthless. And oftentimes the money you can’t find in your budget to save is going towards the interest on department store stuff you didn’t need and likely couldn’t afford in the first place.
2. The interest rates are too high.
Forget about those fake introductory rates the nice lady at the counter offers you. As genuine as she appears, she’s trying to meet her daily enrollment goal and keep her boss off her back. It’s your job to read the fine print and understand the APR.
The APR is the actual yearly cost of using the credit card and includes the additional fees or costs associated with your transactions. An important point to remember with many department store credit cards is that rewards, perks, and discounts shouldn’t come at a price of high interest rates or overwhelming fees. Interest rates on some department store cards may range from 16 percent to as high as 22 percent, despite the low APR pitch that you were probably given for the first three to six months.
Read more at BlackEnterprise.com
Credit card debt is no joke. Too many purchases and a missed payment can have you in the hole and paying through the nose in interest fees. How many of us have or are dealing with credit card debt, or know someone consumed with payments and more payments?
For some reason, we just can’t seem to get away from credit cards. If you have been looking for alternatives, here are some to consider.
From Black Enterprise.
A recent Federal Reserve report states that Americans have increased their credit card usage, in fact the category that includes credit card debt has hit its highest point since the fall of 2010.
The average American carries at least $10,000 in credit card debt. At the height of the recession, credit card use had slowed down greatly as we all tightened our belts, but as unemployment continues to remain a problem, I fear that people may turn to credit cards again as a means of paying everyday expenses.
Here is the smart way to make credit cards a part of your financial picture:
1.) If you are going to use a credit card, get the lowest interest rate possible.
For more best practices when using your credit card, click through to Black Enterprise.
As a millennial generation heads into their 20s and 30s, many have had either a great or not-so great example of what it means to manage their money. Although the age of careers, job searches, marriages and first homes are approaching, many millennials still have no clue what it truly means to manage money for their long-term success and comfort. Even parents are sometimes shaky resources for personal finance information.
A 2012 U.S. News Money article finds that Generation Xers (who are now in their 30s and 40s) are the generation with the most financial frustration. Retirees are increasingly responsible for their own savings, income, and financial futures. Let’s face it, we all can use an old-fashioned money management lesson every now and again.
Let’s all learn a little bit from past generations, and keep your money flowing with these old school money management tips.
As college students head to class, it’s important that they’re armed with information about how to manage their personal finances. Nothing is more dangerous than a college student with a credit card and absolutely no knowledge about how to use it.
Just last week, Madame Noire offered lessons on how to save money while you’re in school. But taken a step further, personal money management means being prepared for the financial decisions that students have to make over the course of everyday life, some of them bigger than others. The most important financial decision students will make, possibly during the first week of school, is whether to sign up for a credit card.
Kiplinger offers a number of tips that promise to make life easier long after graduation. For instance, “stay on top of student loans.” On the topic of credit cards, the outlet suggests foregoing them all together. The magazine cites studies showing that college students typically carry a balance and often don’t know the interest rate on their card.
Fact is, many students actually do sign up for a card, in many cases because they simply need access to those funds for school expenses. Rather than swearing them off entirely, Fox Business takes a more tempered view, suggesting that students simply learn more about what they’re getting into. The site recommends looking for the best interest rates and monitoring your credit score.
But, let’s be real: There are many adults who don’t keep track of their credit score. The mere suggestion could seem overwhelming to a college student who’s juggling studies and other responsibilities, or one who’s just out on their own for the first time. The best advice is to teach the basics of responsible spending. One of Forbes’ lessons is, “If beer appears on your budget as a category in its own right, you may have bigger problems than personal finance.” Sage advice right there.
USA Today reminds us that keeping balances low and teaching kids about limits is the path to take. Be mindful of where your money is going. Know when it’s time to stop shopping, or save money for that big thing that you’ll have to buy later in the semester. It’s also a life lesson that’s useful beyond graduation.
Do your back-to-school shopping during your state’s “tax holiday.” Not every state has one, but if yours does, or you live within traveling distance to a state with a tax break, it might be worth it to make the trek. (As long as you don’t spend more money on gas getting there.) Among the states with a tax holiday are Florida, New York, and Maryland. No matter where you are in the country, you can also follow these money-saving back-to-school tips. Maybe there’s a trip to the outlets in your future?
And, just an FYI, some states also have tax breaks on things other than back-to-school items.
Use a credit card with a good warranty program. We depend on so many gadgets. And if one of them breaks, it’s costly to replace. CardHub.com has analyzed the pros and cons of the different cards to find the ones with the best programs. Amex and Discover topped the list.
Get health insurance. Planned Parenthood has pulled together an infographic that outlines the benefits for women of the Affordable Care Act. Did you know that half of women put off doctor visits because of the cost? And more than two-thirds of women pay more out-of-pocket expenses than men? Since the law was passed this year, 45 million women have been promised no co-pays for preventative care. And nearly five million women will get tax credits to help pay for insurance.
Save on energy costs. Using energy efficient light bulbs, making sure your air conditioner is in good working order and unplugging appliances that use power even when they’re off. These are just a few of the ways you can save on your energy bill.
Follow these tips and spend less at Target. Because you know you can’t walk out of there on a normal day without spending at least $100. Put the markdown schedule in your calendar!
Become a freegan. The freegan movement has been on the rise for the past few years, but it’s hitting the mainstream these days via Project Runway. One of this season’s designers, Fabio Costa, is a proud freegan. So what is a freegan? A person who cuts down on consumption, environmental impact and cost by dumpster diving, participating in swaps, scouring Craigslist’s free section, squatting and foraging. Learn more on this Freegan website.
Prepare for a move to Niagra Falls. Starting this fall, Niagra Falls, NY will try to attract young professionals with $3,942 (up to $6,984 over two years) for to help pay student loan debt. Recipients have to live in the downtown area and should be in the clear with landlords, mortgage brokers and student loan administrators. Funding for this program will last for two years and subsidize 20 recipients. Who doesn’t want a view of the Falls?
Ugh! You woke up after a late-night of dinner and drinks with friends. You drag yourself out of the house to grab some breakfast. You go to pay. And BAM! DECLINED! How did that happen? Are you sleepwalking to Bloomingdale’s?
It’s a real pain in the neck, but a lost or stolen card happens. Reporting that and getting a new card is a pretty simple process. The most important thing is making sure your credit isn’t all messed up by some baddie with sticky fingers.
The key to preventing major credit damage is keeping an eye peeled for anything strange. Look over credit card statements when you get them. If you use online banking, go to your account once per week with the expressed purpose of going through purchases to make sure you’re responsible for all of the transactions listed.
If you think something fishy is happening, act quickly. Contact the card issuer and the credit bureaus — Experian, TransUnion and Equifax. The bureaus can place an alert on your credit report, which will last 90 days or longer. This is a free and useful service. You can even ask for a credit freeze, which will stop anyone, including you, from getting credit in your name.
For your online shopping, look for “secure servers.” Oftentimes we see these security guarantees on big sites like Amazon, PayPal, and Ticketmaster. It’s just as important, if not more, to look for those advisories and the “s” (“secure”) on the “https” in the URL of smaller sites you’re unfamiliar with.
Unfortunately, you can’t prevent everything. But being vigilant will save you a lot of headache down the line.
A credit card can be a wonderful tool if used wisely. It can allow you to earn points on everyday purchases or for buying things that you would purchase anyway. A credit card can also give you a short-term no-interest loan if you pay it back within the statement period. However, not all credit cards are created equal and when you are shopping for your next card, you should take a few things into consideration to choose the right card for you.