October 15th, 2008 Admin
The American Family Financial Crisis
Our country is in a major financial crisis. Some states have been affected more severely than others. Economists predict that over one-third of our country wouldn’t be able to make it without a job by using the money they have in savings. That is an alarming number of people who have been spending more than they have been saving. Consumer debt, more specifically credit card debt, and sub-prime mortgages are a constant worry for many families.
Credit card debt is not an uncommon thing these days. It used to be almost unheard of hear of people who were buried under thousands of dollars in credit card debt. Now, it isn’t shocking to hear that families here and there have $19,000 in credit card debt or even upwards of $100,000 on their credit cards.
People have been forced to skip payments on their mortgages. This can be especially costly with an adjustable rate mortgage. Some mortgages have increased by $200 per month, or even more. The problem is that too many people jumped into too many loans before carefully considering their budget.
Financial counseling services, as well as online budget services are in full swing. Communities and business around the country have begun offering more credit and loan counseling services. These classes are filling up with people who can’t afford almost anything anymore because everything they make is going towards debt payments. A big problem is that most of this money is being paid towards interest, not principle.
Maybe this crisis is a good and bad thing. It has sparked people’s interest in learning how to manage their finances. The majority of this country does not understand money management or the correct way to save and spend. Hopefully, this crisis will inspire more people to get out of debt and start saving for a rainy day.
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October 6th, 2008 Admin
Is It Still Worth It? Frequent Flier Miles
Americans have loved frequent flier reward programs since they started to be offered. Earlier this year, Delta’s SkyMiles frequent flier program had over 41 million members. United’s Mileage Plus reward program had over 52 million members. The AAdvantage Program, offered by American Airlines, had 60 million members. But, when was the last time you looked into one of these programs?
Recently, the airline industry has struggled to stay afloat. Rising gas prices and terrorist activities have threatened the livelihood of the airline industry. Because of this, airlines have had to start charging more and more fees. There are now fees for checking more than 1 bag, checking even 1 bag, etc. Is it even worth it to have a frequent flier card anymore?
When you think about it, the days of “free” reward travel are virtually gone. You really can’t use enough airline points anymore to have your trip completely paid for. The airline companies have had to charge different fees to prevent this so they can stay in business. Credit card experts recommend cashing your frequent flier credit card in and getting a gas reward card instead.
If you don’t want to give up your frequent flier credit card just yet, here are some tips that can help you save some money.
1. If the airplane ticket costs less than $200, pay cash for it. If the ticket costs more than $200, use your mileage points.
2. It may be time to cash in your card if you find out that your frequent flier airline decides to cut back the number of cities it serves. Think about cashing in your card especially if they stop service to your city.
3. Cash in your airline miles, no matter what, if they are nearing the date of expiration. Don’t assume that you’ll have those miles forever. Use them now instead of having them go to waste.
4. If you don’t pay off your credit card every month, frequent flier programs may not be for you. This is because each programs has a high annual APR.
5. Think about the sign up bonuses. Other reward credit card programs do not come with an automatic sign up bonus. Most airline programs do come with at least a 20,000 or 25,000 mile sign up bonus. This may be beneficial if you want to start taking trips before you start using your card.
You need to think long and hard before signing up for a frequent flier program. The airline industry has just gotten so expensive. Even if you do earn a “free” ticket by using your points, you may be charged a lot of fees. Think about whether or not you should just cash in your airline reward credit card
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September 3rd, 2008 Admin
How Can Inactive Credit Affect Your Mortgage?
Your credit report tells so much about you. It basically tells what kind of person you are. If your credit report shows a history of on-time payments, low credit card balances, and a good mixture of credit types, it shows lenders how responsible you are with your money. On the other hand, your credit report can tell them a completely different story. A short credit report, high credit card balances, late payments, etc tell lenders what kind of a financial mess you are.
You don’t want lenders thinking that you are anything but completely responsible and on the ball. The best way to do this is by having a long, strong credit report. It is important to understand what affects your credit report so your credit report can be strong and your credit score can be high. Credit scores are directly affected by credit reports. The weaker your credit report, the lower your credit score and vice versa. Make sure that you have a good variety of credit accounts. Make your payments on time or early. Have a low income to debt ratio. These are easy ways that you can make your credit report better.
If you are considering buying your dream home, or any home/condo for that matter, you need to make sure that your credit report is in check first. Check your credit report with all three credit bureaus before sending in that mortgage application. The three credit bureaus contain different information, so you’ll want to make sure you are good to go with all three.
Could your credit report be a little stronger? Is your credit report holding you back from qualifying for the rate you want? Your inactive credit accounts may be to blame. If you haven’t been using certain accounts, the lender might wonder how good you really are at managing your debt. It is better to have one or two credit cards that you use often, even if they have a balance, than it is to have several cards with several balances that haven’t been used in years. Remember, it is better to have a few credit accounts that are used often. Your goal shouldn’t be to get as many open accounts as possible. This is also a warning flag to lenders. They wonder what will happen to all of these open accounts if you come across financial trouble.
August 18th, 2008 Admin
Let me share a little secret with you. Pay your college tuition with your credit card. Seem a little scary? You have to be careful, but this can be a great benefit to you, especially while you are still in school. My husband and I have paid our tuition with our credit cards since we got married. I’ll tell you how we do it.
For some reason, my husband and I have never qualified for federal education grants. I guess the government thinks we make too much, but I’d like to see where that money goes. Anyways, since we don’t qualify for grants, we have always put our college tuition on our credit card. We were paying over $4,000 per semester before I graduated. We put both tuitions and all of our books on our credit card and it has benefited us so much.
We have a reward credit card and have redeemed so many points because we do this. By putting our tuition on our credit cards, we have really racked up the points. And, we have racked them up fast. We have been able to get so many free products this way. In fact, we paid for almost our entire Christmas last year by just using our points - it only takes money management and common sense to be able to enjoy your money!. That includes the gifts we got for our families and friends. That was quite a feat, considering we are still students.
Are you really scared thinking that my husband and I are in debt over our heads? Actually, other than our home and one car, we don’t have any debt at all. We have been extremely careful as we pay for college with our credit card. At the beginning of the semester, we use our reward credit card to pay our tuition. We make extra payments on the card every time we get paid, so we pay off the high balance before it accrues too much interest. Basically, we were looking for any sort of relief from paying so much in tuition. We found the solution by paying for our tuition with our reward credit card.
Yes, we have paid a lot in tuition with our credit card. But on the other hand, we haven’t had to pay for other products that we needed. We got these products for free because we redeemed the points we had earned. Make a plan before you put your college tuition on your credit card. Be careful to pay it off the next month, or certainly before another semester starts. You’ll be so glad you paid your college tuition with your credit card. We are.
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