Of course, we will
recommend certain cards for people with damaged credit…you
should have a credit card to re-build credit.
There are many ‘bad-credit’
cards from which to choose…many are flat-out bad…a
couple are less bad. We will recommend the ‘less
bad’ cards.
Having "average"
credit will cost you...a lot!
How much is 'a lot'? Having a low
credit score means that you will pay more in
interest than your friends with credit scores
of 720 or higher. In fact, the ‘Average American’
with damaged credit will end up paying over
$5,000 more in interest than someone with
good credit!
Someone with poor credit can end
up paying over $15,000 more in interest
payments. Now, that’s a lot of money down the drain!
Think of all the ‘toys’ you could buy with
$15,000.
How important Is good Credit when It Comes To credit
Cards?
*
**Higher minimum monthly payment is due to new regulations
requiring credit card issuers to set minimum payments
to an amount that includes all finance charges (interest
and fees) plus at least 1% of the outstanding principle
balance.**
Credit card agreements
generally are not written accounts
when the state has a seperate statute of limitations for
open ended accounts. Although an open ended account may
be founded on a written agreement, because it is specifically
defined with a lesser statute of limitations, the lesser
would apply.
Know the Statute of
Limitations regarding credit card accounts. By the way,
opening an account on the Internet is considered a written
agreement.
What’s
Worse Than A Bad FICO?
When it comes to credit cards,
it’s deadly to make the minimum payment
each month. How deadly, you ask?
Seeing is believing, right? Well
then, see for yourself just how 'deadly' it is to make
minimum monthly credit card payments. Of course, you realize
credit card issuers love minimum monthly payments -- they
love you for doing that.
Annual fees, late fees & interest
payments generate billions each year for card issuers.
But did you know....
...that if you start paying your
balance in full each month, your card issuer
may drop you. If you run up a big monthly
balance and pay in full each month, you're making them
money in per transaction fees charged each merchant.
Yikes!
I'm Throwing Away HOW Much Money?
The minimum payment
on credit card debt is calculated as a percentage of your
current balance.
The minimum payment
drops as your balance is paid, but thanks to the magic
of compunding, you'll end up making outrageous interest
payments for a long, long time.
It will take you 313 months to
be rid of your $5,000 card debt. In that time, you will
pay $7,115.42 in interest!
In interest!
Not principal. Just
INTEREST!
The chart above reflects a one-time
$5,000 dollar purchase to a credit card at 18% interest
with a measly 2.5 minimum monthly payment.
On average, people walk around
with SEVEN (7) credit cards. These same average people
carry a 52% credit-to-debt ratio. In other words, on
each card with a $1,000 credit limit, these average
people carry a $520.00 card balance or 52%
credit utilization.
What's the big deal? The big
deal is that credit utilization accounts for 30% of
your FICO. The more debt you carry, the harder your
FICO gets pounded. What's is a 'good' credit utilization?
Keep your D2C ratio to 30% or lower.
By the way, do you know each
time you apply for credit, a potential creditor pulls
your credit report resulting in what is called a 'hard'
inquiry? Every 3-5 credit pulls slam your FICO for 12-36
points!
Those irresistible department store
offers for $10.00 off your purchase or 20% discount are
so enticing. Home Depot offers 10% up to $250.00 off your
store purchase with their Home Depot card. It's just a
short application that will take just a couple minutes
to complete.
In the meantime, that FICO assassin
is knocking points off your score. Can your FICO afford
all those 'hard' inquiries. Is that department store offer
worth it?
|
It’s
not about cutting up my credit cards. It’s
about controlling my use of credit cards.Once
I regained control of my cards, I stopped paying
only the minimum and running up my balance....
–Kendra
T., Boca Raton, FL
