Sometimes we all make unwise financial decisions or take on more credit than we can handle. Sometimes we acquire bad credit from unfortunate circumstances like going through a divorce, loss of a spouse,  or experience  medical issues that results in the inability to work or excessive medical bills. Regardless how you get into debt, I think we can all agree that its much easier to get into debt than to get out of it.

If you have bad credit, or have no credit history, chances are you can still get a credit card but it will cost you more and the terms will not be as good as those who have good credit. For example you may be approved for a credit card with a $500 credit limit, and you’ll probably pay an outrageous  interest rate, anywhere from 22% to 33%.  If you choose to take the card, use it wisely and make sure to make your payments on time. Keep in mind you’re using this card as a tool to better your credit and not another way to purchase.

If all else fails…get a secured card.

For those who don’t trust yourself or nothing else seems to work, you may want to consider getting a secured card. It’s very simple, you put your own money into a saving/checking account and that amount, or a portion of it, becomes the security of your credit card. If you don’t pay your bills, the card issuer will take the money from your reserved account to pay your debt. It may be hard to come up with the initial amount to deposit but it’s a good way to build a credit history. Since your main goal for using a secured card is to build your credit, make sure that the card issuer reports to a credit bureau, if not, the card is not going to help you build your credit. Many people who have used this method and have successfully made 12 to 18 months of timely payments then upgrade to a regular credit card.

As with any credit card offers, you have to beware of disreputable card issuers, especially with secured cards. Make sure to read and study the fine print before applying. Do not accept any offers from people that contact you about secured credit cards, make sure to do your own research and contact the company yourself. Ask questions whether there are application or processing fees and the interest rates and fees. Generally secured cards carry higher interest rates and higher fees.

…if all else fails , get someone to cosign a credit card.

If you can find a relative or a good friend who is willing to help, get them to cosign on a credit card for you. Keep in mind that if you decide to go this path and don’t make your payments, you can ruin the credit of the cosigner who would have to pay off your debt. So be extra careful, you wouldn’t want to do this to someone who was willing to go out on a limb for you.

Keep in mind that paying the bill in full every month is not necessary, but paying-off the monthly charges, and on time, will eventually prove that you’re no longer a credit risk!

Digging your way out of credit card debt can be an overwhelming and feeling hopeless.  It is embarrassing for friends and family members to know that you’re struggling to pay your bills. You also may be tossing and turning at night thinking about how to get out of your current debt situation. You are not alone. With hard work and discipline, you can work your way out of debt!

If getting out of credit card debt is something you want to accomplish, then there are some basics you need to follow. You need to know what is on your credit report and understand why it is there, develop a plan to pay down that debt, and change your way of spending so that you can avoid repeating your mistake.

The first thing you need to do is to find out what the creditors have on report for you. Why is this important? A credit report is your personal record of your credit payment history as reported to credit bureaus by bank, credit card companies, department stores, and other types of businesses you’ve borrowed from. This is where potential lenders get information that will determine the decision on whether or not they want to take a risk issuing you credit. It’s very important to understand how credit reports work because you can protect your rights and avoid being taken advantage of by credit repair clinic and the so-called credit doctors.

If you are considering on purchasing a home or applying for any other types of loans, you will need a good credit report. It is always good to know what is on your credit report before your lender looks into it, this way you will have the opportunity to clean up any mess or errors you may have on your record. You may also want to consider canceling any credit cards you are not using because lenders will include your credit limit as potential debt. If you have credit cards with no balance but with credit limit totaling $10,000, for example, the lender will consider it as an additional $10,000 of potential debt and may reduce the amount of the loan they are willing to give you.

Whats in a credit report?

Your credit report includes basic personal information such as name, current and previous addresses, telephone number,  social security, date of birth, and current and previous employers. The credit history portion includes information about each credit account, including things like when the account was opened, the credit limit, current balance, monthly payment, and your payment pattern during the past several years. In this report, they also include any bankruptcies, accounts sent to collection agencies, unpaid child support or alimony, tax liens, bounced checks, unpaid traffic/parking tickets, car repossessions, evictions from apartments, court records, and names of businesses or individuals who have obtained a copy of your personal credit report. Your credit report pretty  much reports everything that lenders may be interested in knowing. Some information that your credit report does not contain is information about your race, origin, religion, personal lifestyle, political affiliation, medical history, or other information unrelated to your credit history and ability to repay credit debt.

Review your entire credit report. Most financial advisers would recommend that you obtain a copy of the free credit report that you are entitled to once a year and review it carefully. If you have been rejected or turned down for credit, housing or employment due to your credit report, you may be entitled to a free copy of your credit report as well. There are three main credit bureaus that are available to you: Equifax, Experian, and TransUnion. All other credit companies obtain their information from one of these three. Since the information in your credit report may differ somewhat from one bureau to another, it is wise that you obtain a copy of your report from each of the three major bureaus once a year. If you cannot afford all three credit bureaus, then consider ordering your report from Equifax since it is the largest reporting bureau. Upon receiving your credit report, if you find an error in the report you can call or write to the credit bureau explaining the error in detail in 100 words or less. You want to provide any documents that may help prove your statements.  Your payment history will stick around for a long time. Chapter 7 bankruptcies will stay on your credit report for ten years from the filing date and Chapter 13 bankruptcies will remain on the report for seven years from the date fully paid or ten years if not paid as agreed. Unpaid tax liens may stay on your credit report as long as fifteen years.

So how do Lenders use the Credit Report?

Lenders typically use the information in your credit report to evaluate your personal character, your total debt capacity and your collateral or capital. Their study of your character is also based on the stability of your employment and residency history. They will check to see how often you have changed jobs, how often you moved and the length of time you stayed at each address. These kind of information gives the lenders a feel for your personal stability and an overall general assessment of your character. To evaluate your debt capacity, they will look into your living expenses, open credit account limits, current debts, and other payments to get a feel of how much debt you can afford with your current spending habits and your income. Another huge factor that goes into the lenders decision on lending credit is your credit score. Your credit score is a number or rating which indicates how likely you are to make payments on time and repay loans, based on information in your credit history. This score is computer generated and factors in your current income, education, job stability, how often you have changed addresses, whether you are a home owner, debt to income ratio, and past payment history.

You may obtain your credit score, or FICO score for a fee. All three major credit bureaus offer this option with your credit report or as a separate option. If you find that your credit score is not so great, do your best to improve your credit score by concentrating on paying your bills on time, paying down your credit balances, and avoiding new debt. Improving your credit score is not an over night task, and may take a long time, but is well worth the effort.

Studies show that people tend to spend more on gift cards than on gift certificates. The average gift card in 2004 was $50, which was twice the amount people would spend on the average gift certificate. Although gift cards seems to be more popular than gift certificate, plastic still hasn’t completely killed paper yet. Gift certificate can still be purchased in various amounts, and are good at various shopping, dining, and entertainment establishments.

So whats the difference between gift cards and the gift certificates?

Well besides the paper vs. cards issue, for gift certificates, you may receive cash back if your purchase was less than your certificate amount. For example, you buy a $20 DVD with your $30 gift certificate and you can take your $10 and buy yourself lunch. If you buy a $20 dvd with your $30 gift card, then you will have $10 waiting for you the next time you stop by the store.

Now a question to those small business owners, do you offer gift certificates to your customers?

Many don’t because the potential of fraud scares them. However, with the right precautions, anyone can take advantage of this great sales tool. Here are some general tips on protection against gift certificate fraud:

• Record all the certificate numbers, date of sale, and the exact dollar amount. Make sure to note when each certificate has been redeemed.
• Do not buy generic gift certificates from office supply stores. These can easily be duplicated and not worth the trouble. Invest in custom designed certificates.
• Use security features like an embossed logo or watermark to prevent photocopying.
• Try to avoid huge cash refunds. It’s best to state on the certificate that if more than $10 worth of change is due, it will be reissued as another certificate.

The thing is, although this seems like a hassle to go through when you can simply go with cards, not all companies can afford cards. The cost of a typical gift card can easily range from $.50 – $3.00, and this is a fee you want to avoid if possible. So if you’re a small or medium sized company, chances are you can’t afford to give your customers the card option, but that doesn’t mean you should stay away from gift certificates. Gift certificates are a great way for you to expand your client base.

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Personal credit Reports include personal information, employment information, payment history, a list of creditors, any bankruptcies you may have or lawsuits.

Since credit reports are what many employers are using now days as a way to gauge one’s personal habits and tendencies, it’s a good idea to check your credit report once a year just to make sure that your report is indeed correct. It’s very important to make sure that your credit report is not only correct but also you want to show that your credit history is consistent and promising.

Here are some general credit report tips.

Some credit report payment history tips:

• Pay your bills on time. Delinquent payments and collections can have a major negative impact on your overall score.
• If you have missed some payments, get current and stay current. Be consistent. The longer you pay your bills on time, the better your credit report.
• Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.
• If you are having trouble makings ends meet, consult your credit counselor. This will not improve your report immediately, but if you can begin to manage your credit and pay on time, your report will eventually get better as time progress.

Some positives and negatives that will affect your credit score.

Positives:

• Steady/consistent employment
• Active credit use of few accounts.
• Remember, credit to debt ratio is very important.
• Do not request for new credit cards.

Negatives:

• Late payments
• Missing Payments
• inconsistent employment.
• Multiple credit card accounts
• Small finance loans
• Bankruptcies and Foreclosures

Many people assume that because they have never missed a payment that they have good credit. They are a few minor things that the average person overlooks that could be costing them points. These are all minor things that can be easily and effective taken care of if you know what to look for.

Check out your credit report and see for your self.

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Follow these 5 steps to be on your way to being credit card debt free. 

1. First thing, you need to stop the credit card offers. You want to get away from all these tempting offers. You can actually force credit card bureaus to stop selling your information at 1-888-5-OPTOUT. Call the number to get the forms.
2. Reduce your interest rates. The average credit card interest rate goes for about 18%, which is really high. You want to be in the 7%-12% range. You can call your credit card provider and negotiate for a lower interest rate. If you have been a customer for a while, then it should be really easy to negotiate. 
3. Stop using your credit cards. If you’re trying to reduce your debt, the last thing you want to do is to keep adding to it. If you have a hard time not using your cards, then take them out of your wallet or purse and leave them at home. If those methods doesn’t work, you can even cut up your cards.
4. Always pay more than the minimum due amount. Credit card companies love it when you only pay the minimum amount because the balance is calculated based on a system so that they can extend your payment plan as long as possible to make optimal profit.
5. Consolidate your debt. Once you have reduce the interest rates of your cards, you want to combine your credit card debt into the card with the lowest interest rate.

Once you have stopped using your cards, reduced your interest rates, and have consolidated your debt, then you’re heading in the right direction for paying off your credit cards.

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1. Help your child understand the value of saving money.  Here is where you start showing them the importance and the  benefits of saving money. This can be done with a simple but balanced form of an allowance. While they are young, giving them small amount of money will help them prepare for the future when the amount becomes larger.
2. Discuss the privileges and pitfalls of owning a credit card.  Show that credit cards can be a very powerful tool which could help you dramatically with your finances and also in return, how you could misuse a credit card and how much that could affect your life.
3. Give your teen ‘real world’ experience with money and budgeting. Instead of buying their yearly school clothes yourself, give them a set amount and let them decide what they need and what they don’t need. Emphasis that that is all they are getting so chose wisely.
4. Teach your child how to track spending. Get them in the habit of tracking their spending by either getting a notebook or a creating a simple excel spreadsheet on your computer.
5. Cover the basics of investing. It’s never too early to start explaining the general overviews of investing. The earlier you start, the better they’re equipped when it’s actually time for them to start investing.

1. Chinese food – This one is really stupid considering I have a meal plan on campus which is completely already paid for. I just need to throw out all my carry out menus from my room.
2. Starbucks - Ah, how I love coffee. This one is going to be a little hard to stop but I am going to try to cut down little by little. I go about 5-7 times a week. I love their new Dulce de Leche Latte. Such temptation makes this one quite tricky.
3. Random grocery shopping. Yes, I am truly a college student. I all I do is eat and study. Although I love the infamous Ramen Noodles, I tend to spend a little more on the hot pockets and frozen pizzas.
4. Car gas. Gas price is no joke. Especially since my car only takes premium fuel.
5. Pure junk. Stop carrying my cards and cash everywhere. Simple.

I think that if I am able to cut down on these 5 things I can save so much more. I’m going to set my target date for May 21st. Until then, I plan on keeping a record of how much I would of spent and instead saved.

There’s the good and the bad:

When I look at debt, I see it as two kinds of debt. There’s the good debt and the bad debt.

You accumulate good debt when you’re borrowing money for a student loan or for a home. You just have to make sure that you don’t borrow more than you can pay back.

Bad debt is using your credit card to buy things like food, clothes, DVD, etc. This is the easiest way to fall in debt. When you get in the habit of buying things with your credit card, in return you also want to get in the habit of paying it off in full that month.

The general rule is that you don’t want to get in a habit of using your card unless you plan on paying every back that month, this is the fastest way of falling in debt. Here I have gathered 3 general debt management tips.

Debt management tips:

1. Make a budget journal. Most people spend thousand of dollars without too much though as to what they’re buying and that’s why people are surprised at how high they’re credit card is. Get a nice journal and start writing down everything you spend. At the end of the month you’ll know not only how much you spent but also what you bought. This way, you will know what you can cut back on and how much less you want to spend the following month.
2. Pay off your highest-rate debts first. On average, most people have more than one credit card. The key to getting out of debt is to first pay down the balances on credit cards that charge the most interest rate while paying at least the minimum due on all your other debt. Once you finished paying off the highest rate, then start tackling the one next highest.
3. Expect the unexpected. You want to expect the worse can happen at any given time, so start making an emergency account. You want to have enough saved to last you 3 – 6 months of living expenses in case of those emergencies. If you don’t have an emergency fund, a trip to the hospital or damaged car can seriously upset your finances.

If you end up with more debt than you can manage, then you should get some help whether it’s from a professional or someone you know before it’s too late. It may be embarrassing to ask a relative for some help but that’s alot better than ending up with bad credit.

For one period of time, I went living only on cash and cash only. So that means no credit cards, no debit cards, no plastic. I would go to the ATM once a week, to my own bank to avoid the ATM fees, and take out 40 bucks and that would be it for that week.

After trying the cash method, I then went on to try carrying only credit cards and debit cards. I found this method to be a lot more effective, not only in saving money but also keeping my self organized.

Here is a list I gathered from my experiment which gives all the reasons why credit cards are better to carry then cash.

• I don’t know if it’s just me but when I see cash in my wallet, it’s more appealing to spend it. I would make a decision on what to buy based on how many ones I had.
• When you use your credit card, you don’t have to worry about getting change, you get charged for the exact amount and you don’t have to worry about what to do with the “leftover” cash.
• If you like to hold on to your receipts to keep track of your finances, it is a lot easier to keep them organized when you have everything listed online from the use of credit/debt cards. This was a huge factor for me.
• When you carry cash, you’ll end up getting a lot of lose change and for the most part, people don’t save them. They scatter and gets lost.
• Carrying lose change is easy to lose track of and hard to manage. Especially when you’re on the go.
• As lazy as it may sound, when using your card you don’t have to worry about counting your money, just pick and swipe.
• With all the rewards and promotions credit cards companies have to offer these days you can get great deals on flyer miles and even redeem points for household appliances.
• When using your credit card, you can also be improving your credit score at the same time.

 So there you have it. I gave you 8 reasons why credit cards are better than cash. It’s true that there are also reasons for why cash is better than credit cards also but overall I still think that credit cards is the way to shop. GO PLASTIC!

My first credit card had a limit of 2,000 dollars and back then, that was a lot for me. I was really happy to know that I was worthy of being offered a credit card with that high limit. Ever since then, I’ve always been trying to see how much of an increase I can get by calling and asking every 3 months. So I guess in a way, that was one of my motives for wanting to increase my credit score, so that one day I can have a credit card with limit that’s over 20,000.00 dollars. And now that I finally got this limit, I hate to say it but I think I’m going to have to decline it.

So you’re asking why decline the offer I’ve been working so hard for? Well there are plenty of reasons I guess. Here are 5 reasons:

• Accepting this credit card with 25,000.00 might lower my credit score. Although my initial reason to build my credit was to have an enormous credit limit, now I’m looking in to buying a house within the next four years. I need to keep my credit score up so that it will help me get the necessary amount for down payment for the house.
• I already have 3 credit cards and another one is not necessary, especially since I am in the process of getting out of debt from my previous credit cards. Accepting this credit now would be really stupid move for someone whose trying to get out of debt.
• Having high credit limit is not always a good thing. One, it can lower your credit score, and also what if your wallet gets stolen? Then what? The higher the limits your credit cards has, the more damage the person who finds it can do.
• Having that high credit card might just influence me to go out and use that card. Not a good thing.
• I really don’t have the use for it. I’m just happy that I got offered

Anyways, on top of my credit card offer which was going for the rate of 12.15%,I was also offered an auto loan for 50,000.00 at 6.24% and also a personal loan for 3,000.00 at the rate of 11.5%. In total, it comes to a nice grand total of $78,000.00! And although it’s very tempting, I’m not accepting any of this.