Credit Cards-Is Life fantastic with Plastic

August 2, 2010 by  
Filed under Living Debt & Credit Free

Ah, credit cards, the thing we love to hate the most.  Let’s face it though; there really is only 2 days a month that we really feel that way. I don’t believe I need a drum roll for this, do I?  We all know the days. Like when our favorite mail carrier drops off the bill, or when we put the stamp on the envelope and kiss our hard-earned money good bye.

For me personally, it wasn’t so much of the fact that it was time for me to pay for my purchases, as it was that I agreed to pay more then the asking purchase price and not by a little either. By the time interest rate is factored in, plus the length of time you actually pay it off, wow, that’s just flat out depressing (not to mention crazy and foolish). Having the ability to use credit cards is not a bad thing, but for most of us, we  just need to use them more wisely.

Using credit cards wisely can be a nice safety net for you and your family. We never know when an emergency will arise, when one of our favorite appliances decides to go on a long awaited vacation(and decides not to come back), or when we really do need an everyday item, but we just don’t have the cash at the moment.

So yes, life can be fantastic with plastic, but only when we use our credit cards properly.  And as life generally goes, we only learn the good lessons after we totally have screwed something up.

Your Credit Rating And What It Affects

August 2, 2010 by  
Filed under Living Debt & Credit Free

Any time you take out credit for the purpose of making a purchase, or for any other reason in fact, this will affect your credit rating. This information goes into a file which is held by any one (or more) of a number of credit rating monitoring agencies in your country. Any payments you make (or miss) and any changes to your account are recorded in this file. Depending on the agency, your credit rating is judged on the basis of the information held on this file. Any payments you make are given a positive score (the higher the payment, the better the score) and any you miss are given a negative score.

The scores are tallied into an overall score marking your credit history, and your worthiness for further credit. This is then consulted by any company or lender who wishes to appraise your application for credit. If you have a history of missing payments, then the low score you receive will make it less likely you can secure credit for a further purchase. A history of making payments on time and in full will make it more likely.

Of course, there are other things taken into account. Your monthly income is also important, as even people who are very responsible when it comes to making the payments expected of them will struggle when it comes to paying a monthly payment that makes up a significant portion of their monthly income. Over commitment is a major reason why people fall into serious debt, so pay attention to your commitments.