Your Credit Questions and Answers

Most of us never even think about our Credit Card Statement date.  However it can make a big difference in the timing of how you pay your bills.  Credit Card Statement Date This can be an important date depending on when you get paid or when you normally charge items.  Normally the statement date is 30 days after the day the credit card company issued the card.  So this can be virtually any day of the month except the 29,30,31 as all months don’t have those days.   Where to find Your Credit Card Statement Date This is the last day that charges are included on your bill for the last month. At the top of your statement it will state the time period that this bill includes. Changing the Statement Date I changed my statement date to give me the longest float and grace period to pay my Credit Card. You can change your statement date with most credit card issuers.  It will usually take two months and cannot be done more than once a year.   It is very ...

Do Not make Just the Minimum Credit Card Payment If you only make the minimum payment you are in effect getting a loan from your credit card company.  This is a very very bad idea. 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.  Interest and Balance add up Quick You now lose both the float and the interest free grace period. You are now just like 60% 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.  If you ever listen to a Dave Ramsey radio broadcast you will hear a ton of people telling stories of how their credit got away from them.   Carrying just a $500 Balance is Expensive Here is an Example of carrying a $500 balance on your card. You carry a $500 balance and you spend $800 per month for gas and groceri...

  A friend of mine used his debit card for everything.  He normally didn’t have any issues.  One day he forgot about a major bill that went through on his Debit Card.  It went through on a Friday and emptied his account.   He made seven or eight little purchases over the weekend.  Each purchase went through however the bank nailed him for $20 on each of the purchases.  The bank would not delete all of their charges.  He ended up with $100 in extra bank fees.   If the bank had just refused payment he would have checked and discovered his account was empty. Fees like this waste a lot of money.  If he used a credit card and paid it off every month he would not have had the overdraft debit card fees. Debit Card Fees I stop by a local pub regularly.  Several people the first thing they do after they walk in the door is go over to the ATM and get cash.  The ATM charges $4 for cash.  Many people will get $20 or $40 from the ...

 So many businesses that offer credit to customers do not want to take real strong action on customers who do not pay their bills.  So they work with Collect Agencies. After a certain period of time without getting paid the business will write off the debt and sell the debt , or turn the debt over to a Collection Agency. Selling  the Debt to the Collection Agency The Agency will pay between 4% and 10% of the debt balance depending on several factors involving the debt.  Those factors include Age of debt, last payment on debt, amount of debt, how much other business the collection agency does with the lender. Turning the Debt over to the Collection Agency There are a couple of ways this can work.  The lender can pay a fee per bad debt or the lender can give the Agency a percentage of the collection. After being contacted by a Collection Agency Never admit to owing money until the debt is verified.   A lot of collection attempts are made that are actual...

Collection Agencies have a bad reputation that they work hard to uphold.  Yup. However I would always be extremely polite when dealing with them.  They have a tough job and often will be able to work with you if you are nice. Contact the collection agency:  Warning everything you say will be aggressively used against you. The only thing I would admit to is my name and my mailing address. From your Credit History call them.  Ask them for their address. Send them a debt validation demand. ??? Before paying off the debt, reach out to the collection agency to verify that the debt is valid and negotiate the terms of payment.  You can request a written validation of the debt to confirm its legitimacy. Negotiate a payment plan with the Collection Agency: You must get the agreement in writing before paying them any money. If it is a large amount the maximum you should offer to pay is 50%. Do not make a payment or agree to a plan that does not delete the collection from ...

  Should I just close the account?  Will the late payment continue to show on my account? When I did not know better that is what I would have done.  The problem is your late payments will stay on your credit history for seven years on your account if you close the account.  It is unlikely you will be able to get the late payment taken off if you no longer have a business relationship with the company you were late with the payment.   ****My OOPs:  I had a Credit Card with Lowes that I did not have set up on autopay.  I missed a payment as I forgot I had charged something on it.  I owed them around $100.  I missed a payment and it showed up on my credit report.  Before the missed payment I was at 780.  The missed payment lowered me to 725.  I did not panic.  I paid the bill as soon as I realized I missed the payment.  I did not try to eliminate the late payment fee. My goal is to get the late payment removed, I ...

Even though you have sent the Secured Credit Card an advance equal to your credit limit you still have to make the payment on time.  If you are late with your payment to this card it will get reported to the credit bureaus as a Late Payment. You have 21 days after the statement prints (this is the statement date) to make the payment.  The mail will take a few days to get to you so from the day you receive the statement you will not have 21 days.  Do not wait to make payments on your credit cards.  A friend of mine always waited until the last day to make her house payment and credit card payments.  Then she was frantic to make it to the bank.  Sometimes she forgot.   Yup she ended up with bad credit. Be sure the Secured card you get is reported to the credit bureau.  If you get your secured card from your local Credit Union or one of the major banks like Chase, Wells Fargo, Capital One they will most likely report to the Credit Bureau.  ...

  In the United States, there are three major credit reporting agencies (CRAs) - Equifax, Experian, and TransUnion - that collect and maintain information on your credit history. Each CRA uses a slightly different method to calculate your credit score, but they all consider similar factors, including: Payment history: This accounts for a large portion of your credit score and reflects whether you have made your payments on time. Late or missed payments can have a negative impact on your credit score. Credit utilization: This refers to the amount of credit you are using compared to the amount of credit available to you. Using a high percentage of your available credit can be a sign of financial strain and may hurt your credit score. Credit history length: A longer credit history can be a positive factor in your credit score, as it shows that you have a track record of managing credit responsibly. Credit mix: Having a diverse mix of credit accounts, such as a mortgage, a car loan, an...

This page links to all of the Articles in the Blog. Credit Basics What is Credit?   What is difference between your Credit Report, Fico Score, and your Credit Karma Score? Why is your Credit Score Important? How are Credit Scores Calculated? Where to get your Credit Report/Score for Free Why are Credit Cards Important? Debit Card Advantages and Disadvantages Debit Card Debacle Debit Card Fees The Credit Card Minimum Payment Trap Student Loans and Debt Building Credit Building Credit with No Credit History What is a Secured Credit Card? Secure Credit card Special Note What is a Credit Builder Loan? What is an Authorized User? How do Airline Miles work?    How to choose a Bank or Credit Union Managing your Credit No Grace Period or Float for You Managing your Credit Cards with Auto pay Credit Card Cash Advances Zero Percent Credit Card Offers The Tenth/Twenty-fifth Credit Card Game OOPS I missed a Payment How the Minimum Credit Card Payment will Break You Credit Card Statem...

Closing a credit card will improve your credit score. If you close an older card it may cause your average credit age to be shorter. If you owe money and you close one of your credit cards it will lower your credit available and increase the percent of credit available used which will also lower your credit score. Checking your credit report will lower your credit score. Only when you request a loan and a company checks your credit score will your credit score be lowered. You can check your credit for free through each of the three credit bureaus once a year. Or I just use Credit Karma and check my credit at least every month and sometimes more often. You need to carry a balance on your credit card to improve your credit score. Just having the credit available helps your credit. If more than ten percent of your available credit is shown on your monthly statement it will decrease your credit score. Carrying a balance over ten percent will hurt your credit score usually. Paying...