Have you ever been asked or tempted to attend a seminar that supposedly will tell you how to turn a small amount of money into millions? You see these seminars promoted on late night television infomercials and advertisements in newspapers. While it is certainly might be tempting to try out, many people are well aware that they are a scam. These seminars are full of empty promises and require participants to open their checkbooks in order to hear the “secret” to making millions. Take a look at this Dilbert comic strip to see what happens at these seminars without having to spend a dime of your own money.
September 5th, 2008 by Tom
Hey Tom!!
So, I have a Chase credit card and the intro APR period is over, so it’s going up to 15%. Does it hurt my credit score to get one (or two) new cards with the intro APR? I just need them until I get a better-paying job. Also, my friend said I should lie about my income so that I can get a higher credit limit. Thoughts? – Caitlin, Boston, MA
I need a little further information to fully answer your question. Do you currently carry a balance on your Chase card and are leery of the rate increasing to 15 percent? Or are you debt free, but want a credit card with a 0% APR just in case you do decide to carry a balance?
If you are looking to make a balance transfer to a card with a 0% introductory rate, you should be aware that many of these cards have balance transfer fees, usually about 3% of the principal balance. Keep in mind that credit card companies will do what is called a “hard pull” on your credit report every time you apply for a new card. This will temporarily hurt your credit score because they are voluntary.
In the second scenario, if you are looking to purchase a home or take out an automobile loan or student loans from a private lender, then I would be hesitant to open two new credit cards. At the same time, if opening new credit cards will help you save a good amount of money in interest payments, then you should do that. It is important to maintain a good credit score, but it would be foolish to pay thousands of dollars in interest in order to salvage your credit score. Be sure to pay your bills on time, even if it is just the minimum, and keep your debt to credit ratio in check in order to improve your credit score.
While you may feel uneasy about opening the new credit card accounts, keep the other factors that make up your FICO score in mind. Take a look below to see the diagram of how the Fair Isaac Corporation computes it.
To answer your last question, I would never recommend lying about your income in order to obtain a higher credit limit. Your friend is definitely correct in telling you to get a higher credit limit because it will make your debt to credit ratio smaller. As you can see in the pie chart above, the debt to credit ratio is one of the main components in formulating your FICO score.
September 2nd, 2008 by Tom
The days of easy credit appear to be coming to an end. Credit card companies have been decreasing credit limits for consumers over the past six months. As a result, some people are finding it harder to buy things when they are forced to pay immediately.
While easy credit is coming to an end for some people, card companies are continuing to mail pre-approved credit offers to those with a solid credit history. Remember, one can opt out of these pre-approved mailings.
August 31st, 2008 by Tom
If you’re like me, you might receive one or two credit card offers in the mail every day. These annoying letters attempt to entice consumers to sign up for them with promises of a 0% APR for six months, sporting goods, or bonus airline miles. While some people might enjoy receiving these mailings, the majority of people that get them do not. In addition to creating more trash that needs to be thrown out, these credit card offers also increase the risk of identity theft. Although it may appear to be overkill, shredding these pre-approved credit card offers is highly recommended, as it makes it harder for potential thieves to acquire your personal information.
If you are sick of these mailings there is help. Under the Fair Credit Reporting Act (FCRA), a person is able to opt out of receiving these mailings. In order to do this, one has to go to a website and enter some personal information. The website is www.optoutprescreen.com and it works in conjunction with four consumer credit reporting companies (TransUnion, Equifax, Innovis, and Experian). It will take up to a few months to completely stop receiving credit card offers, but the amount of junk mail one receives from credit card companies will be reduced significantly.
August 30th, 2008 by Tom
