October 28, 2010 No Comments

The Effects of Closing A Credit Card Account

With more and more people getting in trouble with credit cards, they are deciding whether after they pay the cards off, if closing the account would be the best option. In many cases, it may be the best choice. However, there are both positive and negative affects and can have consequences on your credit score that irreversible. And these affects on credit scores are something that most people do not even realize.

For starters, when you cancel a line of credit, there are affects to your credit score. In many instances, even if the line of credit is not being used, it shows future creditors that you close out accounts if they are not being used. It sends a message that you do not feel comfortable in holding credit lines that are waiting to be used. More than likely, future creditors may not hold this against you. However, in some cases creditors only want to give lines of credit to customers that are able to keep it open for a long period of time because it increases the chances that the consumer will use it. (more…)

Filed under: Credit Card Information

Tags:

September 17, 2010 No Comments

Six Mistakes Committed By Students When Using Credit Cards

As students are mostly at the start of their financial life, they have virtually no idea about the importance of personal finance management or credit history. Most of the students do several mistakes when using credit cards. Here are six of them.

1. Thinking that using many credit cards can improve credit score and credit history. This is a very serious mistake and it may ruin their financial situations for years to come. They need to be financially strong to maintain more than one card at one time. Each card must be paid in full each month. And the logic also doesn’t work. If they have enough income to maintain six cards, they may not need a credit card at all! For most students it becomes next to impossible to maintain the payment schedules of many cards. Ultimately delayed or non-payment payment on a card or two cards will result in lower credit score. (more…)

Filed under: Credit Card Information

Tags:

January 26, 2010 No Comments

How Credit Card Companies Trap Their Customers

It is one of the most profitable businesses for banking industry: credit cards. The nearly magical convenience of these plastic cards encourages our compulsive behaviors. With more than a billion of credit cards in circulation which account for trillions of dollars of consumer spending, the world economy has obviously gone plastic.

Many families use their general-purpose, personal credit cards such as American Express, Discover, Visa and Mastercard to make ends meet; these cards have become discreet lifelines for people in financial straits. But more prudent consumers use plastic strictly for convenience. While it would seem that they — who charge a small fortune each month on their credit cards — are the ideal customers, actually, they are what some in the banking industry call a “deadbeat.” That is because they pay their balance in full each month. The best customers are those who make a minimum payment each month, as a large percentage of the payment goes toward the interest. (more…)

Filed under: Credit Card Information, Credit Card Tutorial

Tags: