Author: <span class="vcard">Dave Peter</span>

Understanding Credit Card Rewards The Proper Way

Reward credit cards are packaged in several types, each one offering rewards programs calibrated to suit particular spending patterns. But they all have the same basic premise: the more purchases you charge to the reward credit cards the greater the rewards.

Types Of Reward Credit Cards

Frequent flyer credit cards. Points earned from a frequent flyer credit card normally go to the frequent flyer program of the airline you prefer. The points you earn is largely determined by the monthly spend made using the card. Aside from free flights, the frequent flyer credit card rewards may include free hotel stays, travel insurance, etc.

Credit Cards With General / Catalogue Rewards.

The credit card usually has partners in the program who provide the products offered for redemption under the rewards program. These items could be anything (the possibilities are endless) from gift cards, home appliances, holidays, shopping vouchers, magazine subscriptions, etc.Credit cards with Cash-back. These cards offer a very simple program: your account is credited for a certain percentage of the amount spent on particular items. As an example the card may offer a rebate from participating gas stations.

Credit Cards With Instant Rewards

These programs are more straight forward. There are no points to accumulate; you will simply receive an instant reward from participating merchants. This could take the form of an immediate discount, a buy-1-take-1 offer, or buy X items and get the Next free, etc.

Getting Value From Reward Credit Cards


Your credit card should fit your spending behaviour. If you use charge often and prefer not to carry any balances, reward credit cards that allow you to accumulate points should work best for you.

If you cannot pay off the entire amount due each month, point-based reward credit cards will be irrelevant. Rewards programs are partly funded through higher interest rates on purchases; if you pay your bills in full by the due date then you may avoid all interest charges, otherwise it could be very costly. Any balances not paid by the due date will attract the high interest rate. The cost of the high interest charges is likely to far exceed the value of any rewards earnt.

Often rewards cards have an annual fee. Their value to you therefore depends on whether the worth of benefits you receive exceeds the cost of being in the rewards program.

One quick way to measure that is to estimate how much you have to spend to get $1 of reward. One card may award you 1 point per $1 spend, whilst another gives 1.5 points per $1. In this example to redeem a reward worth 6,000 points you thus need to spend $6,000 on the first card and only $4,000 on the other.

A further method is the point currency concept developed by Cannex. Point currency gives you the spending value of your rewards points. All you need to do is divide the number of points for the reward item of your choice by the recommended retail price. The lower points needed the higher its value because you consume fewer points to get the reward.

For example, one program may require 10,000 points to win an item worth $75 in retail, but another program may need 12,000 points. The point currency in the first program is 10,000 divided by $75 or 133.3 points per $1 for the first, and then 12,000 points divided by $75 or 160 points per $1 for the other.

As far as the rewards item is concerned, the first program gives you better point currency. Note though that if you incorporate the first method and the example described above, you may need to spend $10,000 to accumulate the required points in one program (at 1 point earned per $1 spent) but only $8,000 in the other (at 1.5 points earned per $1 spent).

Your spending pattern and the offers from credit cards can change over time – try to keep tabs on whether you are still benefitting from a credit card scheme.


Understanding Your Credit Report Like A Pro

Ordering your credit report is the first step to becoming an enlightened credit user and consumer. Unfortunately, when it finally arrives you may be disappointed to see that – as far as you are concerned – it looks like a lot of gibberish! It’s important to understand what you’re looking at if you’re going to be smart about your credit.

Conveniently, all three of the credit bureaus use similar formats when they compile your report. That means that if you can understand one, you’ll likely be able to understand the rest. Here are the major categories and what they really mean.

Identifying Information

There will be a bunch of personally identifiable information on your credit report. Don’t be surprised to see your full name, home mailing address, date of birth, recent employment information and Social Security number. All of those data points are used to accurately identify you.

Name changes (including potential aliases) may be detailed here. Women whose names have changed through marriage or divorce will certainly see more than one entry.

Trade Lines

All of your active credit accounts will be documented on your credit report. The basic information about each will be listed. You’ll see the type of account, the length of time that it has been open, your borrowing limit, the total amount of the loan, the owed balance and the regularity and punctuality of your payments.

Regarding type, there are three basic types:

1. Revolving accounts – these tend to be credit cards. Revolving accounts are charge accounts with established credit limits. They require a payment each month.

2. Installment accounts – most traditional loans. Installment accounts are loans with a fixed extension and fixed, regular payments. Imagine your car loan – that is an installment account.

3. Mortgage accounts – these are the big guys. Mortgage accounts are likely to be the biggest accounts on your report. When you are buying a home or borrowing against your home, you are using a mortgage account.

Credit Inquiries

Your credit report is accessible by companies to whom you apply for any form of credit, such as 1 hour payday loans. Every time that they check in on it, it is called an inquiry. Those credit inquiries will appear on your report so that other would-be creditors know how often you are applying for credit.

There are a few ways to categorize credit inquiries.

Hard inquiries are the ones that matter most. Those normally show up when you apply for a new $500 payday loan or credit card.

Soft inquiries are just like little check-ups. They occur even when you look at your own report.

Another categorization is by separating them along the lines of “voluntary” and “involuntary.” Voluntary inquiries are approved by you. Involuntary requests are usually made by companies offering promotional and pre-approved deals.

Public Items

Credit bureaus collect information on the public record, also. If you appeared in court as a result of unpaid debts or other owed monies, you may see that show up on your report. Many times, these are big red flags for creditors.

Among other things, bankruptcies, foreclosures, law suits and liens appear under this section.

Satisfactory And Negative Accounts

This is the meat and bones of your report. In this section, you will see all of your satisfactory accounts separated from all of your problematic ones. It will be very easy for anyone looking at your report to see how you fare with your credit.

If you miss payments, defaulted on a loan, are racking up debt or causing some other credit-related issue with one or more of your accounts, it will be separated and included in a section called “Negative Items.”

For anyone looking for the nitty gritty, check out the Equifax report first. Equifax includes a neat, one-page summary of all your accounts. The data included there is easy to read and process. Length of your credit history, overall debt-to-credit ratios and other really helpful information can be found there.

Review all of the satisfactory and negative accounts, but pay especially close attention to the bad stuff. Sometimes errors show up on your report! If you find one, address it immediately. It could be seriously injuring your credit.

Formats And Codes

While each of the reports is generally the same, it probably won’t hurt to get familiar with each of them individually. After all, each may use different systems to represent public records information, payment histories and other data.

Equifax report information, Experian report information, Trans-Union report information – once you’ve reviewed these pages, you should be fully capable of interpreting the coding of any of your credit reports!

How frequently should I check my report?

Conventional wisdom suggests checking your report once annually. If you feel like you want to look at it more frequently than that, the only thing stopping you is the cost. Each bureau is required to give you one free copy per year. The main exception to the once-per-year advice is that you should look it over before making any big purchases so you don’t run into any surprises.

Why do the reports differ?

The credit bureaus do not share information with each other (because they are actually profit-seeking private corporations and thus, competitors) and not every business reports to all of them. Most companies find it sufficient to report to just one. That’s why you get differences.

What is my “High balance”?

This number represents the peak amount that you have ever owed on that account. If you once owed $1,000 and now only owe $100, the high amount is still $1,000.

How can I check my late payment status?

Each of the reports makes your late payment information pretty self-explanatory. If you see numerical representation of late payments, the only number you want is a zero. “30,” “60,” “90” and “120” are all bad, and the bigger the number, the worse off it is. “Never late” is the written version of “0.”

I’m seeing some interesting phrases – “charged-off,” “placed for collections,” etc. – what do those mean?

Notations such as these mean that you went months without making an owed payment. As a result, the creditor wrote the debt into their accounting books as a loss. They didn’t expect you to suddenly show up and pay what you owed. These are quite bad, as far as potential lenders are concerned.

I’m married – are our credit reports related?

Not necessarily. All of your individual, private accounts will be listed on your credit report only. If you share joint accounts with your spouse, however, those will be documented on both reports. That condition also applies if you’ve made your spouse an authorized user/signer on your credit accounts.

Are my credit report and credit score connected?

Yes. In fact, your credit score is the briefest possible representation of your entire credit report. Without the report there would be no grounds upon which to base your score. Good report, good score.

“Account close by credit grantor” – is that bad too?

Yes, this is also a phrase you don’t want to see. This happens when a creditor suspects that your debts are exceeding your ability to pay. If that occurs, the creditor eliminates your access to the funds.

If you have more questions, keep checking around the site. We have answers to all your credit-related concerns!


How To Improve Your Credit Scores In 90 Days

Credit repair does not have to take forever. There are things that only time will heal, but the right strategies can turn your credit scores around quickly. Are you ready to do what it takes to see your numbers pop? It’s not hard if you know what to do. Here are the best short term credit repair strategies available. Put them all together and you get credit repair magic.

FICO Authorized User Accounts

Fair Isaac Corp has finally shut down the authorized user account broker industry. The latest release of the FICO scoring software is carefully designed to eliminate all benefit from purchased authorized user credit card accounts. But there is credit repair gold hidden in the news. Fair Isaac makes it abundantly clear that legitimate authorized users will continue to reap the same score benefits as always. So call Mom or Uncle Bob and have them add you to one or two of their excellent credit cards.

Get Two Or Three New Secured Credit Cards

You should see a significant jump in your scores from the new authorized user accounts, but this is not a substitute for building new credit in your own name. If your scores are too weak to get regular credit cards, just apply for a couple of small secured cards. This is a powerful credit repair strategy. Make sure to use less than 20% of the available limit on the card. If you max these new cards out it will be credit repair suicide. You have the power. Don’t blow it; use less than 20% of the card.

Pay Down Revolving Balances

Maybe you have plenty of credit and don’t need authorized user accounts or secured credit cards. If you have existing revolving debt you have the ability to move your scores very quickly by paying your balances down. There are five levels of card usage acknowledged by the credit scoring model: 20, 40, 60, 80, and 100%. If you want to boost your credit scores you should go for the gusto and pay your balances down below 20%. If you don’t have the resources to do this you should think about borrowing from a relative or friend. Make it happen if you can. This can add up to over 100 points.

Pump Up Your Credit Limits


There are two sides to the balance vs. limit formula. If you can’t get the balances down see if you can get the limits up. If you can reduce the ratio of card usage you will get the benefit regardless of how you did it. Just pick up the phone call each of your credit card issuers if they will increase your limits. It can’t hurt to ask. Sometimes credit repair takes nerve.

Challenge Your Collections

Get a copy of your three credit reports. Identify the collections and dispute all of them. Sound crazy? Actually, it’s almost crazy not to do this. Collections change hands often. It’s the nature of the industry. Did you know that the FTC requires collectors to withdraw reporting of collections if they sell the account to another collector or return it to the original creditor? Unfortunately, there is no incentive for them to cease reporting and no punishment if they don’t. If you dispute a collection and the collector no longer owns the debt it will be removed. But take care and read the next section carefully, because there is some potential credit repair danger.

Credit Repair And Your State Statutes

Challenging collections is a smart and justified credit repair strategy. But there are cases where it is simply not advisable. If the collection is larger than $1000 and within the statute of limitation (SOL) for collection through the courts, you just might wake a sleeping beast. The SOL for collection is usually less than the reporting period limit, and in many cases as short as three years. Check the SOL for your state and the state in which the account was open; the longer period applies. If the SOL has expired you can dispute with no fear. If the collector verifies the information as it appears on your report you should be able to negotiate the balance and maybe even have the account removed from your credit report.

Credit Repair Assistance

Credit repair help is always just a phone call away. There are many things that can be done to clean up your credit report and get your scores moving in the right direction. If you don’t have the time to do the job properly, call a credit repair professional. Don’t do the job half-way. It’s far too important. Pick up the phone and let a professional make your credit repair project a great success.


Why Do Banks Make So Much Money?

Banks make so much money because they can create money, effectively out of nothing, by lending. Every single pound in your bank account was created by a bank. Banks basically make money by lending money at rates higher than the cost of the money they lend. More specifically, banks collect interest on loans and interest payments from the debt securities they own.


Helping You Get The Credit You Deserve!

Are you fed up with bad credit? Are you ready to begin cleaning up your credit reports and improve your credit score? Here are a few tips from a credit repair professional that can give your credit score the boost that it needs.

Credit Repair And Your Payments

So you’ve decided to repair your credit. You need to enure all your payments are made on time from this moment on. Organize your finances and make sure there’s enough room in your budget for occasional unexpected expenses. Successful credit repair will require a certain amount of effort and you don’t want to undo your hard work and go backwards. Credit repair can transform your life so put in the effort and you’ll be rewarded.

Review Your Credit Reports

You can get copies of all three of your credit reports online from any of the sites listed at the end of this post:

Account Limits

Credit repair can be a daunting process. I recommend you take one small step at a time. Start by checking the credit limits on your revolving accounts. A significant portion of your credit score is based on the ratio of your current revolving balances to your credit limits. Many credit card companies under-report these limits and inadvertently do damage to your credit score. If you find any under-reported limits then inform the creditor and provide a copy of a credit card statement to the credit bureaus.

Eliminate Extraneous Accounts

Examine your credit reports for extraneous accounts, such as closed and paid accounts that are being reported as open with a balance. Also look for duplicate accounts. A duplicate account with no derogatory information can have a negative impact on your credit score. Duplicate accounts are a common occurrence and they can be rectified quite easily with a bit of credit repair. It is the credit bureaus rather than the creditors that most often cause these errors so a letter to the offending bureau should solve the problem.

Challenge Collections

The debt collection industry is the biggest single contributor to credit reporting errors and as such is well worth your attention. The FTC has made it clear in the “Fair Credit Reporting Act” that when debt is sold from one collector to another or returns it to the original creditor they should withdraw their reporting of the item. However, there is no incentive for compliance with this directive. You should therefore challenge collections as part of your credit repair effort.

Use Debt Validation

If you receive a collection letter then open it immediately and be prepared to respond. For a 30 day period following receipt of such a letter you are in control, legally. Don’t miss this credit repair opportunity. If a stranger were to knock on your door and ask for money would you give it to them? I hope not. Don’t give anything to a debt collector without first validating the debt. You have the legal right to demand proof from a debt collector that they have not only the legal right to collect the debt but also an objective accounting of the amount they are claiming. Do this within 30 days and do it in writing.

Know Your Statutes Of Limitation

Debts are not collectable indefinitely. If you’re beginning a credit repair effort this is one of the most important facts to know. Statues of limitation vary based on debt type and state. A search on Google is all it takes to find this information. Once the statute of limitation has expired a debt collector can no longer sue for the debt, and therefore will be unable to get a judgment. If a debt is past the statute of limitation then a debt collector has no legal way to collect. This provides you with two great credit repair options. You can send them a cease communication letter and you’ll never hear from them again, or alternatively you can contact them to negotiate payment. Once they know you understand your rights they should be content to settle with you.

Save For The Future

With all the effort you’re placing into your credit repair project you’ll want to ensure that nothing unexpected comes along to put you back to square one. The best credit repair insurance is a healthy savings account. If unexpected expenses occur then you’ll have some money set aside.


Strategies To Help Build And Maintain Credit

Almost everyone has some type of credit score. Some people have good credit, others have bad credit, and still others don’t have any at all. Because of these many different stages of credit, there are many different solutions to building credit. The following are a few strategies to help you get started at whatever stage you are at.

Different Strategies For Building Credit

Not having any credit is a better place to start than having poor credit, because you don’t have to rebuild any poor credit you may have had in the past. If you’re looking at building credit, the best way to do so is through applying for an individual, major credit card. For someone who doesn’t have any credit history, you might have to ask a family member, or trusted friend, with good credit to co-sign for you. Once you get approved for a credit card, make sure you pay all of your monthly payments. Remember that if you do miss a payment, your co-signer has to pick up the responsibility. Another option for someone who doesn’t have credit history is to apply for credit cards supplied by gas stations or department stores. These cards are pretty easy to get approved for, and if you stay on top of your payments, you will start building good credit. Usually after you go six months without a delinquent payment, you will be entitled to more credit and more options. If you want to pay off the previous loan you got to relieve your co-signer of their duty, you can take out a personal loan, pay off your previous loan, and start making payments on your new personal loan. Just remember not to ever borrow more money than you can pay back, and avoid high interest rates and upfront fees.

Different Strategies For Bad Credit

If you have already established credit, but you ran into some problems and it’s not very good, the place you need to start with is your credit history. You need to know what and with whom you’re dealing with. Your credit report will have all your transactions on it both good and bad. You can receive a free report once a year which can be obtained from either TransUnion, Equifax, or Experian. After you have reviewed your reports, and you know what you are dealing with, make sure that there are no activities on it that you did not authorize.

If you notice fraudulent charges on your report, immediately send notice to the credit bureau, and they will be required to follow up with an investigation. Once you feel you understand why your credit score is what it is, start paying off your bills one by one. Work on your secured debts first, and then move onto your unsecured debts, which can be put off a little longer. Repairing your credit is not an easy process, but it will be well worth your time. One strategy that takes discipline and sacrifice is to give up something that costs you money that you enjoy, and don’t do it anymore until your debts are paid off. This means you might have to get creative when it comes to entertainment or cellular phone services. Another helpful strategy is to use all the resources that are available to you. If you are good at selling things, maybe you could try to barter some goods on the internet; if you are good at business, maybe you might try opening up a small side business to get a little extra income. If you are being resourceful, cutting back on expenses, and researching your options, you will find yourself climbing slowly out of debt. Try to do everything in your power to never miss a payment, and you will not only get out of debt, but you will help yourself stay out of debt as well.

Good Credit Scores

Finally, if you already have good credit, give yourself a pat on the back—it’s not an easy thing to do in today’s fast-paced, immediate gratification society. What you want to do is keep your score, or even try to increase it if possible. Maintain, or update, your monthly budget so you can continue paying your bills on time. Don’t become reckless with your good credit and start applying for credit loans that you don’t really need. A good word of advice is to payoff what you owe now and buy what you want later. If you have good credit already, don’t get careless and forget all the work it required to get it that way.


How To Try For A Better Credit Score

The current economic turn down has rendered a lot of us in financial turmoil. With job cuts, rising prices and unstable incomes, a good number of people have suffered from low credit scores and bad credit rating. We may be helpless about the situation happening to us as of the moment, but take refuge in the fact that there are around 30 million Americas suffering from a nasty credit report.

Besides, there will always be a number of ways to make your situation better. Remember that having a disappointing credit score as of the moment does not mean having it forever. There are solutions to get you out of the rut and improve your credit rating situation.

Remember that you are dealing with businesses, and thus, top-of-the-line assistance also entails not-so-affordable fees and charges. Try to look for a credit repair company that does not charge professional fees that are too steep. Moreover, a good firm should give you a schedule of payments outright before signing you up and not ask you for unexplained fees as you are being assisted. Needless to say, stay away from fly by night companies, especially those that only offer their services on the internet and do not have a physical office.

As for your own efforts to improve your credit situation, a lot of your energies can be channeled with just doing some steps with your credit card. You are not expected to act like a guru who can hike up your credit rating in just a matter of a few months, but hopefully your small efforts with your credit card will contribute to an improved credit standing over time.

For a better credit score, you should prioritize paying off or paying down your credit card debt first. Credit cards are such a major contributor to your credit score that paying them down will surely boost your rating dramatically compared to paying off your other loans such as auto or student loans and mortgages.

Credit card balances below 30% of the limit will certainly add points to your score, as credit rating agencies take note of the amount of credit you are actually using versus the limits available to you. You may hear people advising you to pay off the card with the highest interest rate first, but that will relieve you more in terms of your finances. If your primary aim is to make your credit rating higher, pay down the card (or cards) which you are close to reaching the credit limit with.

As you may have notice, credit card use is a major contributor to your credit score. Using your cards often, which eventually results to huge balances, will affect your scores whether you actually pay them each month or not. As mentioned earlier, your credit score is primarily affected by the ratio of your available credit and the amount you actually take advantage of.

Thus, the lower the amount of your available credit you use, the higher your score will eventually become. Beside, the report that is being presented to credit bureaus that ultimately calculates your score contains the balances reflected on your statement, not the payments you have made.

Be smart by “tricking” the credit bureau that you still have a big chunk of your credit card limit available with a low balance. Better yet, if you plan to pay off your credit cards, let the card accounts stay open for a few months. Don’t cancel the credit card account right after you’ve paid it to zero balance just yet. Let your credit card company report your balance-free account to the credit bureau, which will factor that in your score computation. That tactic will definitely fix you score.

A month before your account’s anniversary is when you finally cancel your account (that should be zero-balance already) altogether, so that you will avoid being charged of annual membership fees (unless you have arranged for other payment schedules such as monthly or quarterly installments or if you have an annual fee-free card).

We have included additional resources to help you with your research. They include information about a credit report,  credit score range, credit score USA ,  debt facts and how to getting a good credit score.

I sincerely wish you luck as I do know the stresses that bad debt will bring.