09-10-2008 by Tons.

Credit card offers are a jumble of small print and percentages, and there are some key points that you should focus on when evaluating a card’s pros and cons. If you’re on the hunt for a new card, make sure you take the time to compare and contrast several different offers so you can select the best one for your lifestyle. CNN Money wants us to know how to spot a credit card ripoff, and here are the main areas that I focus on when I’m sorting through the fine print.

* APR: The annual percentage rate will appear in big bold print, but that number doesn’t tell you everything about how much you’ll be charged to borrow money. Pay attention to whether the APR is fixed or variable; I always seek out a fixed APR over a variable one so that I don’t have any interest rate surprises when the prime rate increases. Most rates are variable, so be sure to do your due diligence, and if there’s an introductory rate, take note of when it expires.

There are two more aspects of a credit card offer you should especially keep in mind, so just read more.

* Default rate: While none of us ever plan on making a late payment or going over our credit limit, mistakes do happen. Find the explanation next to an asterisk that describes what actions (or inaction) would trigger the default rate, which can be more than 30 percent!
* Finance charges: Issuers can calculate a finance charge in one of two ways: two-cycle average daily balance / two-cycle billing or average daily balance. Because two-cycle billing means you might pay interest on debt you’ve already paid off, ideally you want a card that uses your average daily balance to calculate the finance charge.

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07-21-2008 by Tons.

Your credit score is a number that is calculated from information on you credit report.  It rates the risk of extending credit to you.  Some factors your credit score takes into account are your payment history, amounts owed, and the length of your credit history.

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07-18-2008 by Tons.

The most obvious way to blow your credit score is to make a late payment. Even if your credit score is solid, a single missed payment could cost you as much as 100 points, say many financial advisers. According to the Fair Isaac, the company that calculates your FICO score, payment history accounts for 35 percent of your total score. And that credit score will help determine what kind of rates you can score when applying for home or car loans. So first things first: Figure out your credit score.

Your FICO score, a number between 300 and 850, is based on five criteria:

• payment history
• amounts owed
• length of credit history
• new credit
• types of credit used

You can find out yours at myfico.com. According to Experian National Score Index, one of the major credit bureau companies, the average credit score in America is currently 692. Those with scores well above 700 will qualify for the best interest rates out there.

But even if you pay your bills on time religiously, your credit score may be endangered. Here are ways charge card sins could cost you some precious credit score points.

1. Not asking for what you want
Don’t accept everything your credit card company offers as written in stone. If you don’t want that credit line increase, ask them to reduce it back to your old one. Had one late payment? If your record is squeaky clean, ask them nicely to remove the blemish from your credit history (which, remember, could cost you up to 100 points on your credit score). They could say no, but they could very well say yes because they value you as a customer. Ask anyway. Your credit score will thank you.

2. Accepting credit line increases
Being the responsible, on-time bill-payer that you are, your credit card company rewards you by upping your credit line. This isn’t necessarily a bad thing, but remember how much you can afford to reasonably charge. Resist the urge to spend more or risk being unable to meet your new minimum payments.

3. Consolidating your accounts
So you’re considering transferring all your credit card balances to one card so you’re only dealing with one bill every month. It sounds sensible, right? A big no-no, according to the keepers of the credit score. Think of it this way: One big balance looks a whole lot worse than multiple low balances. Appearances are everything.

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