by Adam | Mar 21, 2017 | Credit Repair
Whether intentional or not, using your credit card regularly can rack up debt in the blink of an eye. It’s easy to get in over your head with credit card bills and interest fees, but there are some options to help you pay down that debt quickly and avoid paying huge interest fees. One of these options is to use a balance transfer card. What is a Balance Transfer Card? Using a balance transfer card does NOT eliminate the debt. It is simply paying off an old credit card with a new credit card, but the new credit card offers you an interest-free period of time, usually 6-18 months, to save you money on interest payments. There is sometimes a balance transfer fee, usually around 3 percent of your balance, but you can often find special offers that have no balance transfers fees. When shopping for a balance transfer card, try to find ones that offer no balance transfer fees and 0% APR for as much time as possible, preferable at least 18 months. Keep in mind that a balance transfer card is another credit card, and opening a new account will result in a temporary ding on your credit. But if the new account has a higher limit than your current card, then your utilization ratio will improve. This actually improves your score and may make up for the small drop. Consider your Current Credit Situation Balance transfer cards are competitive, so make sure you’re in a good position to be approved before applying. You should have a decent credit score and no big red flags on your credit...
by Adam | Mar 8, 2017 | Credit Repair
Finding out that you’ll be receiving a significant tax refund can be exhilarating, especially if you’re living paycheck-to-paycheck or finances are tight. Coming into a good amount of money can get your wheels turning about finally being able to take a vacation, buy a new car, or buy something you’ve always wanted. But if your credit score could use some TLC and spending responsibly hasn’t been your best attribute, consider using your tax refund to set yourself up for future financial success rather than contribute to the cycle of spending and debt. Here’s how. 1. Pay off debt Your very first priority should be to pay down your debt, especially on revolving credit like credit cards or lines of credit. You want to get your debt utilization ratio down to 30 percent at the most, so check your balances against your total available and do some quick math. If you’re using more than 30 percent of the credit available to you, this has a negative effect on your credit score. Figure out how much you need to pay off to get below 30 percent. Better yet, pay off the whole balance if possible to give yourself a fresh start on responsible spending. 2. Settle Outstanding debts If you have any accounts that have been sent to collections or are overdue, settle these immediately. Just be aware of the statute of limitations that may restart for a partial payment, allowing borrowers to sue you or collectors to continue contacting you. If possible, make an arrangement for payments or pay of any debts sent to collections in full to rid yourself of...
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