A Personal finance blog for saving money and earning more and thus having a better life
You must be getting periodical mail offers to earn $100, $200 or $300 by applying for credit cards? Sometimes they may have even appeared on your Facebook wall or instagram or in your email box
If you were like me, you’d been putting them in trash. But they are not spam or phishing attempts. These are offers from genuine banks.
In the last post, I touched upon the idea of credit card rewards and sign-up bonuses. Now I am going to expand it a bit and share my experience with you. For those who’re joining late, this is about travel hacking to get (almost) free airfare and hotel stays, multiple times a year. Let’s embark on the journey now.
I was near 100% credit card user for the last 10 years. I used to pay only mortgage and utility bills using my bank accounts. For everything else, I used credit cards. As a result, I earned a lot of credit card rewards and cash backs.
This is the first of a series of posts I am going to write on credit cards and travel hacking. I started with this hobby recently and I want my readers to get benefited by what I have learned so far. If travel is your thing and you can use credit cards with ease, this series is just for you!
Often we, personal finance bloggers, ask our readers to limit credit card usage. That’s only applicable for people who have had a bad history is handling credit cards. Typically if you are a person who likes to carry credit card balance month to month you shouldn’t use a credit card at all. financially it makes no sense!
This weekend I was doing some de-cluttering exercise at home. Many unwanted papers I got rid off. While doing so, I came across a handwritten note at the back of my old bank statement, probably it was the first bank statement I received after opening an account with Bank Of America. The title said “A Complete Guide to credit score”.
I came to America in August 2005, I belonged to a country where there is no system for maintaining credit scores. There, Lenders, and probably government too, believe in the fact that money can be reclaimed by force.
Anyways, that’s another story, which I will touch upon a bit in various upcoming blog posts. Today’s topic is about that handwritten note.
This post is towards Canadian readers. All of us want to improve our credit scores to borrow money at a lower interest rate when we buy a home, refinance the home or buy our cars. One way to improve the score is by having credit cards and using them well. But to have a credit card you need to have a good credit score. It’s a vicious cycle, how to get approved for a credit card with bad credit?
Each financial decision you make has an impact on your credit score. In general, your credit score is a reflection of how well or how poor you manage your finances. In recent times I applied for 3 different credit cards, total 4 in this year alone. I got approved for all of them. I apply for cards in a bunch of 3-4 every 6 months. This ensures I get sign-up rewards and bonus constantly, they are free money.
Credit card debt is the worst type of debt. People fail to pay off credit card debt. Most of the time the debt relates to retail purchases that do not retain resale value, which is why the debt is so hard to shift, and why it builds up so fast. Credit cards usually have higher rates of interest than almost any other kind of money lend – this is another reason the amount you owe seems to rise almost faster than you can pay it back.
Today on my way back from work, on NPR radio I heard about declining credit card delinquency rate in the US, in fact, delinquency is at 7 years low right now. That was very good news for us. and a sign of recovering the economy but if you see deeper, the problem is still intact. Problem with paying only paying the minimum due amount every month.
Steve recently lost his job at a sporting goods manufacturing company, he has 3 credit cards each with high balances. He now lives on the emergency fund (What exactly is an emergency fund)and a little help from his wife’s income as a playschool teacher. They have two children of age 10 and 6. Besides losing his job, Steve did invest in Forex, from best forex broker in UAE but unfortunately, that investment is also suffered heavy losses.
Because of a combined debt of $25K he has to pay $500 per month to keep his credit card active and credit score in-tact. But, he obviously can’t afford to make that payment every month. He has the below options in front of him
But it is not the best option available for you, a simple effort can bail you out of the situation, your card issuer deals with cases like Steve’s 1000 times a day. Instead of looking help elsewhere, try looking into the card companies itself for help.
Managing your money can seem like a complex thing to get right. Indeed, one in six adults is said to have financial worries in the UK. And, in the USA, that is one in every three adults. The key to keeping on top of things when it comes to your finances is to understand all of the options open to you and when to use them best to your advantage.
One clear example of this comes with the use of credit cards. These little pieces of plastic are, according to the UK Cards Association, used to make almost 300 million purchases a month in the UK. But how to best manage a credit card?
This post is dedicated to my Indian readers. As the government takes a landmark decision for demonetizing the existing Rs. 500 and Rs. 1000 bank notes, while leaving the use of plastic money unaffected, it is sure to affect the way people look at plastic money. Clearly, the decision will have a lesser impact on people who already use credit cards and debit cards while greatly affecting those who rely heavily on cash.
Though the use of credit and debit cards has increased in the last few years, a majority of Indians still prefer to transact in cash. While most of the people do not like the idea of using credit cards due to a fear of overspending, some of them shy away as they believe it would have an adverse effect on their credit history and bring down their credit score.
In order to get a good credit score, you need to be using credit, but many can be wary when using credit cards, all too aware of the potential problems that they can cause further down the line. However, with some savvy shopping and a good understanding of how to build up your credit rating without ranking up a debt too, you can start to reap the rewards that many credit card companies will offer.
Whether you’re looking to apply for a new card, or you want to start using your existing card more, below you’ll find some top items to purchase that can help you to build your credit.
