Your Credit Questions and Answers

 This is a Credit Card Use Game to get the most float out of your credit cards. I have one card that has the statement date of the Tenth of the month and another card with the statement date of the Twentyfifth of the month.  Any purchases I make on the Eleventh of the month to the twentyfifth, I make on the card with the statement date of the tenth.  Any purchases I make from the twenty sixth through the tenth I make on my credit card with the 25th statement date. My cards I have on autopay and they pay ten days after the statement date.   This is a very simple game to setup and it gets me maximum float on my purchases.   You can change the statement date on any of your credit cards.  It will often take two months for the change to fully take effect.   This worked really well when I was spending a lot of money on my credit cards for my business.  It is a simple game that gets maximum float. If you only use one credit card you can be...

A Credit Builder Loan is a type of loan designed to help individuals with little or no credit history establish or improve their credit score. The loan is typically offered by a financial institution such as a credit union or community bank. The way it works is that the borrower applies for the loan and is approved for a small amount, usually between $300 to $1,000.  The loan proceeds are then deposited into a savings account, which the borrower cannot access until the loan is paid in full.  The borrower then makes regular payments on the loan, typically over a period of 12 to 24 months. As the borrower makes payments on time, the lender reports the borrower's payment history to the credit bureaus, helping to establish or improve the borrower's credit score. Credit Builder Loans to Establish Credit Credit builder loans can be an effective way to establish or improve credit score, especially for people who have no credit or bad credit history. It's important to review the t...

A secured credit card is a type of credit card that requires a security deposit before it can be used. The deposit acts as collateral for the credit line and is used to cover any unpaid balances or fees if you stop making payments.  Secured credit cards are often designed to help people who have a bad credit history or no credit history. They are similar to a prepaid card but they require you to make monthly payments They report to credit bureau, which can help to build your credit score if you make the payments on time or hurt your credit score if you miss or make your payments late. Even though you make the deposit on a Secured Credit Card you will still have to make the payment on time when the statement comes.  This is how you start building Credit.    On Time Payments are Critical Often if you make your payments on time for six months or a year the secured credit card company will refund you the deposit on your card and give you a credit line.  This will o...

The steps to Building Credit with No Credit history are quite simple. and become an authorized user on a friend or relative's credit card to Build Credit with no Credit history . Lending institutions are nervous about loaning money to someone who has no credit history. Do not wait to start building your Credit History. It takes time for your credit to age and for your score to grow. Build a Credit History with No Missed Payments Much like if you move to a new town and someone you just met wants to borrow money.  The banks have no history to work with.  Your goal is to build a history of borrowing money and always paying it back on time. Step 1. Get a Checking Account First get a checking account from your local bank or credit union.  Many credit unions will have free checking accounts.  I refuse to be nickel and dimed by a bank, get a checking account with no monthly fees. Call around to the banks and Credit Unions in the area that have a location near your home...

  How Autopay works Autopay automatically takes money from a checking or saving account and applies it to your Credit Card payment or loan.  It is a little different with different credit card companies.  Some will require you to send in a signed payment transfer from your checking account.  Others you can sign up online.  You can sign up and autopay the whole balance, or just the minimum payment.  You can turn it off  or change from minimum to total balance at any time once you set it up. Usually you can set up Autopay with your Credit Card company to make the payment ten to fifteen days after your statement date. If you might not always have enough money in your checking account to make the whole payment, it is still a really good idea to have the minimum payment come out of your checking or savings every month. My Autopay Solution This is my solution for making credit card payments on time. I have over a dozen different credit cards. I have auto-pay...

Debit Card Advantages The main advantage to Debit Cards is they do not affect your credit and you do not need good credit to get one. Basically they have replaced checks as a way to get money out of your bank account. Normally debit cards do not help your credit. They do not affect your credit history. Debit Card Fees It amazes me when average income people use a Debit card pay $2 to $5 to get money from their ATM.  Broke by a thousand little cuts.  In my opinion it is crazy to pay $2 to $5 for a $20 or $50 withdrawal, actually any withdrawl.  We get upset about interest rates of 18%.  A four dollar fee to get $20 from your bank account is 20% charge just to access your money.  Be very careful of Debit Card Overdraft fees! Nearly anywhere you can get a Debit Card cash advance you could just pay for your purchase with a debit or credit card. Debit Card Horror Story A friend of mine used his debit card for everything.  He normally didn’t have any issues....

For most people a Credit Card is their first experience with credit.  To develop a good credit history and a good credit score this is usually the first step.   Credit Cards also offer a convenient way to make purchases online or over the phone.  They can provide protection against fraudulent charges too.   Credit Cards can also offer purchase warranties, cash back, or points on certain purchases.  As the first step in building your credit score it is very important to always make the payment on time. You cannot rent a car if you do not have a credit card.   Credit cards are great for paying for unusual large expenses that may come up that you have not planned for.  However it is really expensive to allow your balance to grow and not be paid off monthly.

The Credit Card Minimum Payment Trap will often lock you into debt forever . The minimum payment is usually 1%, 2% or 3% of your balance plus interest and any outstanding fees.  The Credit Card will also have a minimum payment such as $45 or $35 when your balance gets that low. Do not get into this trap as over the long term it will cost you a lot of money.  Solving the Trap is easy. Pay off your credit card every month .   Credit Card Minimum Payment Trap Loan Examples Here are some excellent examples I have created using the Bankrate.com Credit Card Calculator. $6,000  Credit Card Loan Minimum Payment Trap Terms for this example: 18% interest  1% Minimum payment, $30 minimum payment. Your initial minimum payment $150, this will drop as you pay down the balance.  The first month you will pay $60 in principle and $90 in interest.  The second month $59.40 principle and $89.10 in interest. It will take 291 months (over 24 years) and you will pay $...

I use Credit Karma to get my Free Credit Report.  It is really easy to sign up.  They present the sections of my credit score clearly.  They have a few articles that give suggestions on building credit.  I get into my Credit Karma account about once a week.  It is easy quick and it will tell me if anything has changed.  I take a quick look at all of my account balances and check if any new accounts were opened---that would mean someone has hacked my identity.   My Changing Credit Score I have watched my score change with changes in my situation and credit card balances.  I have said this elsewhere, I have spent a lot of money on my cards for business.  The changes in balances on cards can make a significant change in my score.  Even with my overall credit card usage under 15% if one of my cards is at 70% it will bring down my score by 30-40 points.   Update My Credit Report March 2023. I recently spent $8,500 on one of my...