Have You Looked at Your Credit Cards Lately?

As you’re going through your receipts for filing your taxes, one of the things that you might want to consider looking at, along with everything else, are your credit card statements for the past year… How much are you paying for interest? How many annual fees do you pay? Has your credit changed? Do you have the available credit that you need to cover any emergencies that might crop up in the new year?

If you’re not sure of the answers to these questions, now is the best time to sit down and study those bills. Make a detailed list of each credit card that you have, showing the balance on the card, the interest rate that you’re being charged, any fees that you pay, any rewards that the card offers, and how much available credit that you have on each one.

Then, take a look at your credit score over the past year. Has it changed? Is your credit score better now than it was six months or even a year ago? If so, you might qualify for a better credit card, with a lower interest rate, more rewards, and a low or even no annual fee. If you don’t have a credit card, and your score has improved, now might be the best time to apply for a credit card. (If you can only get a secured card, you might want to consider using a little bit of your tax refund to get started with a secured card!)

Once you’ve listed all the details of your current credit, then you might want to consider upgrading one or more of your credit cards to a card with features that are more aligned with your needs and your current credit score.

Here are our best picks for credit cards to give you an idea of what’s out there:

Can’t Find the Right Credit Offer?

Sometimes, even after you’ve perused all the websites that you can find searching for the right credit card, the perfect loan, or even the right credit reporting / monitoring vendor, you still can’t find what you want.

What should you do?  Just take whatever offer you got in the mail?  Settle for less than you want or need?  Pay more interest?  More annual fees?

Absolutely not!

When you run out of options, we encourage you to let the experts help you to find just the right credit card, or personal loan, or whatever you need.  Use the tools that you’ll find online, get your free credit scores, let them “match” you to the best credit cards for your credit score.

Otherwise, you’ll pay way too much for far too little.

Credit Cards & Catalogs

Well, the season is here again! If your mailbox is like mine, every day it is stuffed with both catalogs and credit card offers.

Buy now! Pay later! 15 months interest free! Pre-approved! Save money on interest!

But before you fill those credit card applications out, you might just want to sit down at your computer and compare what exactly you would be getting when you sign up for that new credit card.

Are you getting the best possible interest rate for your credit score? Remember, most of those mailers are based at least partly on the demographics for your area, meaning that it’s not just your credit that is considered, but also that of your neighbors, and other people around you.

Are there hidden fees? Is the length of the balance transfer offer the best one available for your particular credit score range? Read the fine print carefully. Over the past few years, there has been an increase in the number of credit card companies charging a monthly usage fee as opposed to an annual fee, especially if you’re in the lower tiers of the credit score ranges. That monthly usage fee could apply even if you don’t carry a balance on your card.

Are you absolutely certain that the offer is legitimate? Sadly, some of the credit card offers that you receive in your mailbox could very well be identity theft scams masquerading as credit card offers. Before you fill out any application (mail-in or online), verify the source!

Here at Fresh Start Card Offers, ALL of our online applications link directly to the credit card, catalog, or loan provider, so you can be sure that your personal information is safe!

Interest Rates are Climbing!

If you’ve been watching the financial market lately, you’ve undoubtedly noticed that the Federal Reserve has raised the interest rate on federal funds once again.  It’s now at 1.75% to 2.00% and they’ve signaled that there are two more interest rate increases coming this year.  But, what does that mean to you?  And how will it affect your finances?  Even though you may not think so, this rate increase will most certainly hit your pocketbook in less than 30 days, and the next two rate hikes?  You will feel those almost immediately, too.

So, if you’re planning to buy a home, refinance the car, or take out a personal loan to pay off those credit cards, there is no time to waste.  Interest rates on that new home, car, or personal loan will almost certainly go up immediately, as will the rate on those credit cards that you’re paying on every month.

Personally, we’re looking at taking out a personal loan to pay off the credit cards, to save money on the credit card interest and pay them all off sooner, so we will do this sooner rather than later, as that extra .25% will affect both the personal loan rate AND the interest rate on the credit cards.  Plus, with two more increases expected this year, NOW is the time to lock in that fixed rate, regardless of what you’re planning to buy.

What about you?  Think a personal loan might be the right choice for you?  Take a look at these offers:

Should You Apply for Credit Cards Online?

With all of the “data breaches” making the news lately, nearly everyone worries about sharing personal information of any kind anywhere… so, it’s only normal to wonder if you should even apply for credit cards online?   Is it safe?  Are you putting your information at risk?  Perhaps you’re better off responding to some of those offers that pile up in your mailbox this time of year?  Maybe you should pick up an application at the bank or in the store instead?

The truth is, you’re just as safe applying online for credit cards as you are anywhere else.  In fact, you might be a little safer online.  Those offers and applications that you fill out and mail contain your information, too.  The difference is those are handwritten… and those handwritten pieces of paper are handled by so many people once you drop them in the nearest mailbox.  From the post office to the creditor themselves, you really have no idea what happens to those applications… someone has to enter your info into the computer, someone has to review your application, someone has to file it, shred it, or do something with it once it’s been entered into the system… it seems to me that if you put your own information into the computer to start with, it might actually be a little safer than that.  But, that’s just my thinking.

Still, it never hurts to follow a few basic rules when applying online for a credit card:

Know your credit score before you even start looking for credit cards!  Remember, the more credit cards you apply for, the more “inquiries” pop up on your credit report, and those inquiries can lower your credit score.  So, check your credit score, and then only look for credit cards that typically approve those with your credit level.  There is no sense in applying for a card that requires “Excellent” credit if your credit score is only “Fair.”

Have all of your options available before you actually apply for a credit card. Find a safe, secure site, like FreshStartCardOffers.com, and then carefully review every credit card offer to determine if it’s a card that you will actually benefit from having… What’s the interest rate?  Is there an annual fee?  Are there any rewards that come with the card (cash back, points, airline miles, etc.) or are there any hidden charges that aren’t immediately evident?

Once you’ve made your decision about the cards that interest you or that you feel confident that you will be approved for, it’s time to fill out the application.  Make sure that you have your personal information readily available so that you don’t have to stop and go look something up.  You’ll need your social security number, annual income, home address, employer’s name and address, etc.  Don’t risk getting halfway through an application, then have to stop and look something up, only to find that the website has “timed out” and you have to start over at the beginning – get it done right the first time.

Finally, after you’ve filled out the application in its entirety, it’s time to submit your application – some lenders will give you an instant decision while others will respond by letting you know that you either don’t qualify or they need more information.  Don’t get discouraged if you don’t immediately qualify.  The lender is required to send you a letter if you are rejected, or they may simply need information that is not readily available, or they may even have another option if you don’t qualify for the first one, like the Fingerhut Fresh Start program that is offered through the Fingerhut Credit Account issued by WebBank .  Be patient and answer any questions once you get their response.

Remember, good credit is a marathon, not a sprint!

 

 

Think You Don’t Need a Credit Card?

You know, I read an interesting study the other day about Millennials and credit, and in the study, it stated that Millennials utilize personal loans at a rate of 98% higher than the previous generation, and they open auto loans at a rate that’s 21% higher than the previous generation, but they also open far less credit card accounts, averaging two less credit cards than their parents.  At first glance, those credit card statistics sound pretty good, don’t they?  But does it really make sense not to have some credit readily available on credit cards?

While a personal loan looks good on paper, what with the lower interest rate and all, there are drawbacks that you might want to consider before you decide not to open any credit card accounts.

First and foremost, available credit on a credit card is instantly available. Unlike a personal loan, which can take a couple of days between the time you apply and the time the money is deposited into your bank account, the amount of available credit that you have on a credit card is available at all times, day or night, regardless of where you happen to be at the time (ever had an emergency when you’re on a road trip – a personal loan doesn’t work at 3:00 am when you’re 300 miles from home).

Secondly, with a credit card, you can actually pay the balance off every month if you so choose and never pay a penny’s worth of interest.  That’s not the case with a personal loan.  Even though the rate on a personal loan is usually substantially lower than a credit card, you’ll still pay interest on the principal every month.  Over time, even that lower interest rate will add up.

And finally, even though many personal loans are reported to the major credit bureaus, not every company does, and what’s reported won’t show available credit, so your credit score may be impacted by not having any readily available credit (that’s about 30% of your credit score).

So, what should you do if you’re trying to limit your reliance on credit cards?  The answer is pretty simple – get at least one good credit card, use it sparingly, and pay off the balance every month!  That way, you’ll have the benefit of instantly available credit when you need it, but you can opt to pay no interest at all just by paying the balance in full when it’s due.

Think Twice About Those Credit Card “Preapprovals” You Get in the Mail!

Well, it’s that time of year again… every year, beginning in late summer and lasting almost until Christmas, we are continually bombarded with those “Preapproved” Credit Card offers in the mailbox. You know the ones that I mean…open this or that credit card, no interest until 2018, etc. Tempting, aren’t they? But, should you sign up for one?

Most people who get credit card offers in the mail assume that preapproved means you’ll automatically be approved should you decide to sign up for the card. But, the truth is, that’s not necessarily the case.

What exactly does being “preapproved” for a credit card mean?

Banks, financial institutions, and credit card providers use a pre-screening process to determine which consumers may be a good fit for a particular credit card. During this process, the bank checks credit histories and credit scores through a third party or credit bureau, and if they meet the criteria, the bank may send out a “preapproval” offer. But that preapproval offer does not necessarily mean that you will actually get the credit card in the event that you actually do apply.

You see, the preapproval credit check was a soft inquiry, meaning that there was not impact to your credit score during the prescreening process, however, when you apply, the bank or financial institution will do a “hard” credit inquiry, and once they take an actual closer look at your credit, you may not ultimately qualify for the offer, or the actual interest rate that you are offered may be different than what was shown on the offer (based on your credit). Even worse, that “hard” credit inquiry may have hurt your credit score.

So what should you do with those “preapproved” credit card offers?

Typically, I use the preapproved offers in my mailbox to see if they’re actually the best offer available to me. The terms of these offers is often better than those available to the general public. For example, if the card offers me the opportunity to get a zero percent APR for more than a year, or a free balance transfer with a lower interest rate, then it may be worthwhile to transfer a balance from a higher interest rate card.

Of course, before you apply, do your homework. Make sure that the credit card fits your needs, that the interest rate is actually lower, and that it is appropriate for your credit score (otherwise you may be denied).

Irresponsible Credit Card Habits

Whether your credit is extremely good or extremely bad or somewhere in between, it’s really easy to fall into the habit of using your credit cards irresponsibly… whether it’s that shopping spree you just couldn’t resist or that cash crunch you’re trying to avoid, irresponsible use of your credit cards can really get out of control if you’re not careful.  And those bills can be difficult, if not nearly impossible to pay off, and it really hurt your credit score in the long run.  So, it pays to be smart when it comes to credit and credit cards.

Here are a few smart rules to stick to when it comes to using your credit cards:

  • Plan ahead when you’re going to use a credit card.  What will you use the card for?  How much will you allow yourself to charge?  And, more importantly, what time frame will it take to pay the balance off?  Purchases made with a credit card should be carefully considered… Are you buying a new television?  New tires?  A new fall wardrobe?  If you’re using the card to buy something that’s on sale, will the interest charged against the purchase ultimately cost more than if you’d waited and purchased the item with cash instead, even if you have to pay full price?
  • Unless you’re using your credit card to earn rewards and paying the card off every month, don’t use your credit card for everyday purchases like food, gasoline, utility bills, or entertainment.  Not only will you be paying on the card long after you’ve used up the consumable goods, but you’ll be paying interest, too!  See if you can’t cut a few corners elsewhere in your budget so you aren’t forced to use a credit card for everyday purchases.
  • Avoid cash advances unless you have no other option!  Cash advances usually come with a transaction fee (2-4% of the advance or a flat fee, depending on the card) and have a much higher interest rate than regular credit card purchases.  That means you’ll have extra charges that will take a lot longer to pay off.
  • Always try to pay more than the minimum payment due on the credit card.  Remember, every dollar that you can pay off saves you money!  Interest charges over the life of a credit card balance can be astronomical.  Have you ever paid attention to the section on your statement that shows how long it will take to pay off the balance if you only make the minimum payment?  And how much the interest will amount to?  Wow!  It normally take YEARS to pay off even a few hundred dollars.  Do yourself a favor and pay as much as you can every month and get that bill paid off!
  • And, speaking of payments, always allow plenty of time for your payment to clear… One of the biggest mistakes you can make is waiting until the last minute to pay your bill, only to discover that the site is “down for maintenance” or that it can take up to three days for your payment to post and your payment is due now.  Waiting until the last minute is a risk you can’t afford to take – just one late payment showing up on your credit report can cost you lots of points on your credit score and you may even find your interest rates rising on other credit cards and loans… all because you waited too long to make your payment!

Remember, the goal with credit is to have it available, but don’t misuse it!  Credit reporting is much more sophisticated these days… they don’t just look at whether or not you have credit and pay your bills!  There are lots of factors that are taken into consideration, including evidence of responsible usage.  Make sure you use your credit wisely!