Are Balance Transfers Still a Good Idea

Spring is a good time to review your finances and one area that just about everyone can work on would have to be credit cards. Unlike other finance guides, we don’t think that credit cards are a bad idea. In fact, you should have a few cards in your wallet for a variety of reasons. You can earn rewards, have a source of emergency funds, and also have a chance at building better credit for larger purchases in the future. In fact, it would be very difficult to prove to mortgage companies that you can handle a mortgage if you’ve never had any credit cards.

The problem is that people can get over their heads, charge up too much on a card, and throw off their credit profile. Yet the good part about rebuilding credit is that there are plenty of ways to do so, and balance transfers is just one tool of many to achieve this goal.

But are balance transfers still a good idea? Should you consider a balance transfer with zero interest? There are still plenty of great credit cards that have amazing offers for new customers. If you’re going to explore your options, there are a few things that you should know first.

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How to choose the right credit card

How do you use your credit card?

If you always pay your credit card bills in full each month you could choose a cashback credit card that gives you back a percentage of everything you spend. With a balance transfer credit card you could transfer a credit card debt and pay no interest for more than a year. Alternatively, if you regularly borrow on your card you should look for the lowest rate. Here we explain how to choose the right card.

Cashback and points credit cards

You should only look at the benefits credit cards give like cashback, points or AirMiles if you always pay your credit card bills in full and as a result don’t pay any interest on your borrowing.

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3 Pitfalls to New Credit Card Offers You Should Know About

We love credit! It’s a powerful tool that can give us the things we really want in life. Try buying a house completely in cash. You might have great-grandchildren before you actually pull off this goal. If you’re going to buy a house, chances are good that you’re going to need a mortgage. A bad credit score pulls down your ability to get a great mortgage. You can still find lenders that will take a chance on you, but they have to make money. They’re more than happy to charge you an enormous amount of interest just to have you own your own home. And since they’re shelling out the cash, they get to make the rules. You might have a lower limit of purchasing than another person, which means it’s going to be three times as hard to find your dream home. What a drag.

But it doesn’t have to be that way if you’re willing to use credit wisely and rebuild your score. Even if you have excellent credit, be aware that it only takes a handful of mishaps and mistakes to send your credit score plunging down.

Here are 3 pitfalls to new credit card offers that you should be aware of.

1. Expiration Dates on Promotions

When the credit card says “0% APR for six months”, they really do mean it. So you need to make sure that you get your purchases paid off on time, every time. If you have any balance due when that promotion is up, guess what? They will charge interest on it.

Credit Card Offers

2. Order of Purchases

Cash advance? Purchase? Did you know that the credit card company categorizes these things ahead of time? If you are given a special promotion, you need to make sure that it actually goes for the type of purchase that you’re doing. If your promotion is for new purchases only, don’t expect to be able to use it with a balance transfer. And speaking of balance transfers…

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Why You Should Check Your Credit Score Before Applying for Credit

If you’ve ever had the misfortune of being refused credit, somewhat surprisingly, you will know just how embarrassing and frustrating it can be. Whether it happened in the bank during a mortgage application or in a mobile phone store during the registration process, it can leave you upset and facing a degree of uncertainty. However, you don’t have to leave your next credit application to chance. Follow link to get your credit score and check that your credit status is an accurate reflection of your circumstances.

What is a credit score?

A credit score is a numerical indication of your worthiness for credit. Lenders calculate a specific score based on your credit file, your history with the lender in question and the information you supply at the application stage. Lenders will take very different approaches to compiling a credit score, depending on the type of credit being applied for, the level of risk they deem acceptable and their chosen business model. Because you are probably making repayments, paying your bills and making new applications for credit on an ongoing basis, it stands to reason that your credit score will change regularly. Depending on the lender and the type of credit you’re applying for, just a few points either way on your credit score could determine the success or failure of your application. For more information about how Experian calculate your credit score play this video.

Credit Score

What can affect your credit score?

Catching up with late repayments or paying off a debt completely should improve your credit score significantly. However, missing a credit card charge deadline or allowing your mobile phone contract to slip into default could drastically reduce your score. Other factors that can play a part include your length of service with your current employer, your history with the lender in question and whether or not you’re on the electoral roll.

Unfortunately, there is no defined number at which you can expect to have all your credit applications approved. Whereas an application for a mobile phone contract might be approved without delay, a mortgage application on the same day could be refused. Some lenders specialise in providing credit for people with low credit scores. However, they charge high levels of interest and they are far fewer in number since the economic crash of 2008.

What are the advantages of knowing your credit score?

Making an application for credit without knowing enough about your current credit status could end in an embarrassing rejection that you weren’t expecting. You may also be forced to pay a rate of interest that you hadn’t budgeted for. Although a favourable credit score from a leading credit reference agency won’t be a 100 percent guarantee of getting the finance you need, it will provide you with an indication of your chances of success. It will also alert you to any credit issues that could be responsible for a particularly low score.

By regularly checking your credit score and keeping an eye on the information held against your name, you can enhance your ability to obtain affordable credit for the most important purchases in life.

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Are You Really Making Money With Your Rewards Credit Card?

The credit card industry is well known for having all sorts of different incentives to get you to sign up. One incentive that has lasted for ages would have to be the rewards credit card. From miles, to points to other prizes for usage, it’s clear that this is a tradition that’s going to stick around for a while. But are you really making money on this incentive, or just kidding yourself?

Some see rewards cards as the perfect way to make a little money back that would otherwise be out the door. When you use the credit card, you’re essentially getting money today at the prize of paying it back later, with interest. If you can’t pay the money back, that’s when you really have trouble coming your way.

It’s best to make sure that you are still being responsible with your card, whether it has rewards or not. Renting a car or making hotel reservations so much easier when there’s a credit card involved.

rewards credit card

Still, the question nagged at us enough to make another guide.

If you’re going to get a rewards card, make sure that you read the fine print. You want to make sure that you are going to be able to get actual rewards from it. Sometimes rewards aren’t unlocked unless you reach a limit amount of spending. If a high limit card is in your reach, weigh your options.

The nice thing about the industry is that it’s very competitive. Just about everyone wants you to check out their card, even though the features probably aren’t that different. The interest rate on a rewards card might be higher than what you like. Others like them because the points you earn actually help lower the annual fee down to where you might not have one at all.

You have to think about your overall spending pattern. Just how do you spend? If you’re the type that runs up the card every month and then pays it off, you might want to back off. On the other hand, you still need to try to use the card occasionally to make purchases. If you aren’t using the card, then it doesn’t help you improve your score. There’s nothing to report, which means that it doesn’t move your score up or down. Unfortunately, this is a problem when you try to go get a car loan. They want to make absolutely sure that you are going to be able to handle your expenses, and that means that you will need to prove that you can also handle credit. They know that there are going to be basic needs that you can’t get out of paying. You have to be ready, willing, and able to balance both parts of your life.

Rewards cards have their place in your wallet. The important lesson here is to make sure that credit doesn’t take over your life. Pay early, not just on time. There could be delays in processing that slow you down if you’re mailing it in the post, and who wants that? It can go on your credit reference file as a late payment anyway, which is not what you want at all.

Hang in there! Great credit takes time to build!

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Car Hire Without A Credit Card

Hiring a car is no easy task, there are tons of terms and conditions and restrictions that vary from rental company to rental company. One of the major hurdles people struggle to get over in relation to hiring a car is the fact that across the world the standard accepted payment is through a credit card which can be problematic for many.

There are a few issues with credit cards being the only accepted payment, one of which is the fact they can do a credit check on you and decline you based upon the result. Another is that majority of people either don’t have a credit card or just don’t like using it as it’s so easy to get into accidental debt. Car hire can be essential as it makes or breaks people’s holiday and people that didn’t have a credit card where running out of options, until Indigo Car Hire announce their great new deal available worldwide.

The solution, Debit card car hire, that’s right Debit cards can now be accepted across the globe which gives people an alternative option when it comes to hiring and one that doesn’t involve a credit check. They have however announced that there is some restriction as to which debit cards can be accepted for payment which can be categorised into three main points.

  • Firstly, the card must be in the same name as the driver. What this means is that the name that is printed on the bottom left of the card matches that on your driver’s licence.
  • The second point is that the numbers on the card must be embossed this means that they are raised significantly from the surface of the front of the card and indented upon the back.
  • The final thing is it must be a Visa Debit card, however in very irregular cases Mastercard debit cards are also accepted but only in selected locations mostly within the UK.

If you meet these restrictions then you will be able to hire a car without a credit card. You don’t have to put up with the hassle of trying to work around hiring a car anymore, its simple quick and easy. If you have any credit problems then this is the perfect option for you as it’s an alternative not involving the usual credit card issue.

Please also keep in mind that pre-paid cards, cash cards and cash are never accepted and this is on a worldwide scale. These types of payments are seen as unreliable by rental companies as if anything was to happen to the car they have no tie to the driver who has made the payment.

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Do You Really Want Your Spending Limit Raised on Credit Cards This Summer

One area of contention with a lot of personal finance people is found within the world of credit cards. A lot of people say that they’re not necessary. We’re going to be a little contrarian and tell you that we think credit is a good thing. However, you need to make sure that you have a lot of self control in order to make the credit cards scheme work for you. If you don’t have willpower and control, you’re going to end up hurting your finances more than helping it. You just need to know the way you spend.

For some people, raising their spending limit is definitely a good thing. On the other hand, if you’re not careful you could give yourself temptation that you don’t need. See why you have to know what type of spender you are? If you’re someone that uses credit for emergencies only, then an increased spending limit can be a good thing. You just need to know where you stand and what you’re actually going to be able to accomplish.

The perfect time to get started is definitely now, while it’s all still on your mind. Why wouldn’t you want to start while it’s still on your mind? If you’re going to get a spending limit raise, here’s what you need to think about.

First and foremost, the credit card company is going to give increases to people that have demonstrated that they can handle it. Just because you might be making more money at work doesn’t mean that you’re automatically entitled to a spending limit increase. If you’ve been late with your credit cards, you will need to make sure that you figure things out for yourself. Otherwise, you’ll end up getting rejected. It’ll be waste of your time. On the other hand, if you’re been doing really well with paying all of your credit cards on time, you’ll be able to get the increase.

Be prepared for the credit card company to start you off with slow increases until they really are sure that you’re going to be doing the right things with credit. We think that smaller increases are nice because you’re able to stop yourself if you end up going overboard. Why wouldn’t you want to make sure that you have more credit?

Aside from the additional spending power when you need it, it helps your utilization score. This means that if you get a credit card increase without spending it, you could improve the percentage of credit in use. This usually leads to a rise in your credit scoring. The higher your credit rating overall, the more likely it is that you’re going to get the best offers from lenders. Building your credit is something that you will have to do over time, but it’s definitely worth looking into. Good luck!

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