Your Credit Questions and Answers

 There are several fine print qualifiers on the Zero Percent Credit Card Offers.  With good credit in time you will get a lot of these offers. With a brand new card with a Zero Percent Offer you will be able to write a check or charge items on your card to start the Zero Percent Offer.     Usually there will be a t hree percent origination fee if you choose to write a check.  Sometimes if you charge the amount you are going to get the Zero Percent loan on you will not have to pay the three percent fee.  Three percent is not Zero Interest but what can you do? Small Business Using Zero Percent Credit Card Offers When I owned a small business, several times I used these Zero Percent Offers to buy inventory.  I had set up auto-pay so the payments were always made on time.  I also kept the offer from the credit card company in a file.  I would write down the date I received the offer and the date I used it.  I would track the terms of th...

Why is your Credit Score Important? Your credit score is a measure of your creditworthiness and financial stability, based on the information contained in your credit report. It is used by lenders, landlords, and other organizations to assess your risk as a borrower or tenant.  A higher credit score can make it easier to qualify for loans, credit cards, and other financial products, and may also result in lower interest rates and fees. Your credit score is important because it can affect your ability to borrow money, rent an apartment, or even get a job. Your Credit Score is also used by insurance companies to determine your premiums and by utility companies to determine your deposit requirements. In short, your credit score can have a significant impact on your financial opportunities and well-being. It is important to build and maintain a good credit score by paying your bills on time, keeping your debt low, and protecting your personal information from identity theft. Who Can Ac...

  What is difference between your Credit Report, Fico Score, and your Credit Karma Score? Your Credit report is your history of borrowing that has been submitted to at least one of the three credit reporting agencies (Equifax, Experian, and Transunion).   I always just check my Credit report by using Credit Karma. You can do it every day if you want and it will not affect your score. Your FICO score is a number between 400 and 850 that is calculated using your reported history.  FICO stands for the Fair Issac Company that first came out with a numbering system to rate your credit worthiness.  There are lot of different credit rating systems that banks use to evaluate your credit.  The Vantage 3.0 scoring model is used by Credit Karma and many other services and will be close to your FICO score.   

What is Credit? Credit is your proven ability or inability to make payments over time and make your payments on time. What is your Credit Score? Your credit score is a number that comes from a formula applied to your credit history. This formula is used to estimate the likelyhood of you missing a payment in the next year. How Credit Scores are Calculated 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.  There are a few different methods use 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 pe...

Cash Advances on Credit Cards Cash Advances do not get Float or Grace period. If you take a cash advance on your Credit Card interest will start being calculated the day the cash advance is processed. You will not get the float or the grace period on the cash advance and some card issuers will not give you float or a grace period on other charges you made after the cash advance. Cash Advance Special Promotions Sometimes in special promotions you can get a cash advance with zero interest. However there is always a "processing fee" usually of 3% or $5 whichever is larger. The interest free period on most of the zero interest promotions will be 12 to 18 months. However with most of these offers if you miss a payment your rate will jump to your normal rate on this card of 16-25 percent. My History with Zero Interest Credit Card Offers I used to buy inventory for my business with credit cards. I would often get Zero Interest offers from some of my cards. Usually they had a t...

  NO GRACE PERIOD OR FLOAT FOR YOU That is right you do not get a grace period or float on your purchases if you did not pay off your credit card last month. What is Float ? If you have a zero balance on your credit card and you charge an item, Float is the time period after you charge the item until your statement prints.  Actually your payment becomes due on the statement date.   What is a Grace Period ?  After the statement prints you have at least 21 days (federal consumer protection laws) until the payment is past due this is your grace period.  The 21 days is your interest free grace period.  If you pay within the grace period you will not be charged interest as long as you paid your card in full last month and pay it in full this month.  If you do not pay within the grace period interest will be calculated from the statement date which is 21 days earlier! Who gets the Grace Period ? If you paid off your credit card last month you will not b...

The Credit Card Minimum Payment Trap One of the most common traps that people of all ages get into is the Credit Card Minimum Payment Trap.  The minimum payment is usually between 1% to 3% of your balance plus interest and any outstanding fees.  The Card will also have a minimum payment such as $30 or $20 if your balance ever gets that low.      Until I ran these examples I did not realize how expensive it was to pay the minimum credit card payment and how long it would take to pay off a balance by just paying the minimum. Here are some excellent Minimum Payment Trap examples I have created using the Bankrate.com Credit Card Calculator. $6,000 Borrowed on your Credit Card. Credit Card Terms for this example: 18% interest  1% Minimum payment, $30 minimum payment. Your initial minimum payment $150. Your payment will drop a little every month as you pay down the balance.  The first month you will pay $60 in principle and $90 in interest. ...