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What is the Credit Trap?

The Credit Trap that a third of US Households have fallen into usually starts with buying an expensive vehicle. The other initiator is not paying off credit cards monthly. "Oh well I will just pay it off next month" said the new Credit Card owner. This will lead quickly to large debt. How the minimum Credit Card payment keeps you broke! It doesn’t seem like much money for interest, the first time you just make the minimum payment.  You find yourself $500 or $50 short so you just make the minimum payment.  You now lose both the float and the interest free grace period on future purchases until you are paid in full. You are now just like 40% of credit card holders who carry a balance.  It is so easy to let the balance ride and not get around to paying it down.  This will cost you. A Lot. If you ever listen to a Dave Ramsey radio or Youtube broadcast you will hear people telling stories of how their credit got away from them. $20,000 in credit card debt is nothing ...
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Keeping Your Credit Cards Safe While Traveling

  Traveling with credit cards can be convenient, but it's important to take steps to keep them safe and secure. Here are some tips for safely traveling with credit cards: Notify your bank: Before you travel, let your bank or credit card company know where and when you will be traveling, so they can monitor your account for suspicious activity.   This is especially true if you are traveling overseas.  I was in Malaysia once and neither of the two bank cards I took with me would work.  My buddy had an AMEX that worked so we did not have to clean hotel rooms to get out of Kuala Lumpur. Carry only what you need: Only carry the credit cards you need for your trip and leave the others at home. This will reduce the risk of losing them or having them stolen.   My Note:  If I am leaving town I carry cards from three different banks, Chase, Cap One, and Wells Fargo.   Close to home I always carry two cards from different banks.  Recently I tried to use...
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Dealing with Lenders and Customer Support

  How to talk to your Credit company First off remember this conversation will probably be noted and recorded on your account.  Next time you call the customer service agent will be able to see the notes of this conversation.  I am always friendly, and nice.  Since I am probably asking for a favor, I ask for help.   If the agent cannot help me I respectfully ask to speak to the supervisor.  If the supervisor cannot grant my request I ask them for suggestions.   Never be a jerk to your Lender This will not be reported to the credit bureau but the will be put on the internal record of your credit card or loan account.  It will state how much of a jerk you were to deal with.  Next time you call the customer service agent will see your previous call notes.  Customer Service agents often deal with angry customers, don't be one of them. Nicely ask them for information and if you want them to help you with something ask nicely for h...
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To Cosign or Not to Cosign

What is a Cosigned Loan? A cosigned loan, is a loan where a second party, the cosigner, agrees to be equally responsible for repaying the loan if the primary borrower fails to do so. The cosigner is providing a guarantee to the lender that the loan will be repaid, even if the primary borrower defaults.   My Advice to a Cosigner Never ever cosign a loan.  You are risking your credit rating, which can be very fragile, for someone who either has no credit or has bad credit.  In either of these cases you should not risk your credit. A Friend and His Daughter A friend of mine cosigned a truck loan for his adult daughter (28 years old) and her husband.  They both work and make good money, but have bad credit.  He told them he would cosign for their nearly new truck, however it was very important for them to make the payments on time.   After a year he checked his credit and they had a late payment that was 60 days late.  They lived right next door and did no...
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How to Pay Your Credit Card

 When To Pay Your Credit Card Bill? You will have 21 days from the statement date to get the payment to the Credit Card Company.  If you are mailing your payment it can take up to five business days for your payment to reach the credit card company.  It is a good idea to pay your credit card bill as soon as you get it.   If you miss it by one day they can charge you interest back to the date of the charges and a late fee.   Do not be late. When is the Payment Due? The Payment Due Date is stated on every bill and it will be the same numerical day every month.  So this month's bill shows a Payment Due Date of July 17th, then every bill will have a Payment Due Date of the 17th. Should I Leave a Small Balance on My Credit Card? No.  There is no benefit to your credit score or your relationship with the bank to leaving a balance unpaid.  Always pay your credit card bill in full.   The credit card company makes money just by you spending money on t...
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1987 Problem with my Credit

I am about to have my last birthday of my 7th decade.  I know, a strange way to say I am turning 69. I was 33 years old with a problem. I had no idea how credit worked. I had a couple of credit cards which I usually paid on time (but not always).  At 28 I had purchased my first house with owner financing.  The woman I bought my first house from did not check my credit as I made a significant down payment.   At 33 years old I was applying to purchase my second house and I was going to rent out my first house. We applied for a home loan from a bank, however my wife at the time had missed a payment on her credit card and I had missed a payment on my credit card. The Bank required an explanation as to why we had missed payments.  I thought it was silly as neither of our missed payments were for more than $25.  My income at the time was significantly more than needed to easily make the payments and other than a small loan on the first house we were debt fre...
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Buildiing an 800 Plus Credit Score

A perfect FICO or Vantage 300 Credit Score is an 850.  The lowest score is a 300. An 800 plus credit score is excellent and what most people aspire to.  To earn an 800 plus credit score you must have at least three different credit sources, no missed payments in the last 7 years, Less than a 10% credit utilization, and an average credit history of at least 6 years.       800 Plus Credit Score Requirements The requirements for an 800+ score are rarely stated but here's what I have found: You must have at least three sources of credit. An example  might be  two credit cards and a car loan. Three to five credit cards may get you there. If you add in a Personal line of credit, that will help. You cannot have any missed payments in your credit history in the last 7 years. This is pretty much an absolute. Missed Payments will kill your credit score, especially when you are first starting to build your credit history. You cannot have any Coll...
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