CreditSense

4 Factors to Consider When Choosing a Credit Card

One of the reasons that there are so many credit cards to choose from is that not every card is right for everyone. If you pay off your balance every month, you will want a different card than someone who carries a balance. Also, if you charge enough, you might be willing to pay an annual fee in order to receive rewards like airline miles in proportion to your purchases. Use the sites in this section to find out which credit card is best for you.

We recommend that you limit yourself to one or two credit cards. This makes it easier to keep track of your balances and to avoid mistakes like late payments and penalties. It can also help your credit rating, since people who have a large number of credit cards tend to be viewed as more of a credit risk.

Some factors that you might want to consider when choosing a credit card:

Fees: This is probably the most important consideration. Fees include the annual fee, the interest rate charged on balances (called the Annual Percentage Rate or APR), late payment penalties, and any other fees they charge. If you plan to pay your bill in full every month (as we strongly recommend), you’ll want to find a card with no annual fee. If you expect to carry a balance, you’ll want to choose a card with a very low interest rate, ideally one that guarantees that low rate for an extended period. Find out if there is a grace period before interest starts accruing, and if so, how long it is. Also find out how interest is calculated (for example, the average daily balance of the last cycle, or of the last two cycles, or something else entirely). Some issuers charge a fixed APR, while others charge a rate that’s tied to an index such as the prime lending rate. Finally, find out whether there are any other charges, and under what circumstances they are assessed. For example, most credit card issuers charge a fee for cash advances, and some charge a fee when you close the account.

Read the full article here http://www.investorguide.com/igu-article-91-credit-cards-what-to-consider-when-choosing-a-credit-card.html

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Game Players: The Credit Bureaus

There are two big players in the credit game: the credit bureaus and the financial institutions. Let’s take a look at the credit bureaus, to better understand their motivations and how they make their money because, by following the money, we will find their motivation.

The credit bureaus are information repositories. That means they track the financial transactions of consumers and they keep independent records of payment history for those transactions. Because each bureau is independent, credit scores may vary by as much as 100 points between them. These credit score variations also occur in part to the fact that all lenders don’t report to all three bureaus so there is inconsistency in what is being reported to each of the bureaus. The bureaus motivate lenders into reporting their customer information to them by offering lenders deep discounts on every credit report purchase they make.

Selling credit reports, while lucrative, is not where the bureaus make most of their profits.  Their chief money making opportunity, is the selling of lists from all the consumer information they collect. The targeted mailing lists you receive in the mail are because the bureaus know a lot about you. They know if you wear glasses or contacts, the general the age of your children; they know what types of toys you buy and what types of stores you buy from. They track all of that data. If you go to a watch store and make a purchase they’re going to know, because every subscribing lender who reports to the credit bureau has a subscriber code that enables them to report the types of things that you buy. The bureaus then sell the lists they compile to other providers of goods and services so they can reach their target markets.

Credit bureaus are highly financed loophole experts. They are required to obey the letter of the law while finding as much “wiggle room” to operate within it as possible. For instance, it’s illegal for the credit bureaus to track how old we are. Even though your credit report has your date of birth on it, they are not supposed to use your date of birth as part of their tracking or scoring. Since they can’t legally track your age by birthdate, the tracking algorithms incorporate when your first credit accounts were opened. Most individuals pick up their first credit accounts between the ages of 18 and 22, so it is easy enough for them to track when an account has been open for 20 years, thus putting a person in the perfect consumer target range. It doesn’t matter that the account has been open for 20 years; it just means that you fit within the best age demographic that they’re trying to sell to marketing companies. Another metric they work around is that they cannot track how much money you make. Their loophole for this is to code and track what zip code you live in. There is a different scoring value associated with your address if you live in a 90210 zip code, than if you lived in El Segundo, a mere twenty miles away. Obeying the law by the letter every way they can, credit bureaus find other ways to get the information they need to make their lists even more targeted and specific. By making them more targeted and specific they become more valuable, and that enables the bureaus to sell them to merchants at a premium.

Come back for part 2 of this article and our follow up article: Understand the Financial Institutions

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The History of Credit Reporting Part 2- Credit Blacklisting

Credit Blacklisting

In the late 1800s, we moved into the industrial world where costly machines became big economic movers. Again, the relationship between the borrower and the lender was still often based on a local relationship. When Henry Ford sold cars, or when the Singer family began selling sewing machines, the these machines cost too much. People began to finance these individual purchases, and again, interest was always charged in this process.

In the 1950s, merchant associations began to crop up. One of the key features of these merchant associations was to keep track of the borrowers who were good payers and the borrowers who were not-so-good payers. This was the birth of the credit reporting system. These merchant associations began to hire people who kept track of everybody’s books. The tabs and transactions that were at the grocer’s or the butcher’s or the dealership or the local mercantile exchange, began being tracked and collected. Each individual grocer would keep their books, and then would report how they had done in the previous quarter. It was then the job of the individual at this merchant association tracking these people to match up John Smith at the butcher, with John Smith at the grocer, and John Smith at the mercantile exchange, and how well John Smith had paid with each one of these individual merchants. If John Smith wanted to borrow money for the harvest, they would be able to see how well John Smith had retired these debts.

It was a crude system. Accounting meant entry, by hand, into massive ledgers, but as systems go, it was an efficient system to get a personal experience for each one of these merchants and to be able to deliver

to fellow merchants the financial reputation or the bill-paying abilities of each of their customers who used credit.

The evolution of credit as we began to move from the industrial into the technological world, carried good news and bad news. The good news was that merchants could protect their interests by being able to lend with lower risk to individuals they could trust, and they could either charge more or stay away from the individuals who had not proven themselves. The bad news was that, based on local politics, an individual, for completely unrelated, non-financial reasons could be blackballed. So, if one merchant had a bad nonbusiness related experience or a tiff for a completely different reason than their financial payment capabilities, this individual could be blackballed. This created an opportunity where all the power was in the hands of people who may have had non-financial interests.

In 1971, it had become so bad, so many people were complaining about the use of credit, being blackballed, or being held financially hostage, that Congress stepped in and, for the first time, created what is called the Fair Credit Reporting Act. It’s an exhaustive, revolutionary piece of legislation, which essentially cut out any emotional reasons, any nefarious reasons, and any personal reasons why someone couldn’t receive credit. They eliminated the notion of race, creed, religion, and color. In a time when these merchant associations began to develop and become increasingly complex, the law began regulating them, and the FTC was able to monitor organizations that might not have had absolutely pure intentions when it came to tracking the financial capabilities of consumers.

With the introduction of personal computers and computing, one of the very first adopters of computer technology happened to be these merchant associations because they could see that the more information they gathered and the more information they could process, the more accurate they would be at making recommendations to merchants.

Within a few years of the Fair Credit Reporting Act being passed, an entirely new industry was born. It was called credit services or credit repair. By the end of 1974, people began using the Fair Credit Reporting Act to dispute negative information and have negative information removed from their credit reports.

Between 1971 and the early 1990s,there was a massive, consolidation of credit reporting agencies. The individual city, district, and regional merchant associations began to be bought and swallowed up by what has become the final big three: Experian (originally TRW), Equifax, and TransUnion.

Experian, Equifax, and TransUnion began to adopt and literally buy out all the credit reporting agencies around the country. So these three behemoths, each earning billions of dollars a year in revenue, have the capacity to literally run, record, and manage our credit lives.

In 1992, a little over 20 years after the Fair Credit Reporting Act, 19 state attorney generals sued TRW, (Experian), for a laundry list of privacy violations and record keeping mishaps. Over 70 percent of all credit reports had errors, sloppy record keeping, and inaccurate data entry l. So, they sued TRW and said that if TransUnion and Equifax didn’t volunteer to comply with the mandates that had been imposed upon them by the settlement agreement, they would sue them individually as well. Ultimately the three credit bureaus complied.

Knowing the bureaus’ desire to comply with regulations it begs the question, “Why are the bureaus so unfriendly?” The simple answer is: we are their data, not their customers. Merchants, financial institutions, insurance companies, are the customers of the credit bureaus.  They don’t care about us. If

they had a perfect world, they would never talk to us; they would never reveal their information to us and they would never give us any idea what’s really happening behind their curtains.

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The History of Credit Reporting Part 1

The history of credit can defined by three periods of time that existed in the financial world. First, there was the agrarian world, where society was farming and agriculturally based. Humankind had moved past the hunter-gatherer stage, and had turned toward farming. Thus, the vast majority of the wealth was built on the ownership of land.

Around the turn of the twentieth century, came the Industrial Revolution, which created the industrial world, and where the ownership of machines, from the cotton mills to the distilleries, was what created wealth. Now, toward the latter half of the twentieth century and into the new millennium, the shift has been toward a technological world where technology, the ownership of technology, and the use of technology and information, is what drives wealth. So, let’s start from the beginning and go over these periods and see how credit was used in each one of them.

Credit Since the Beginning

The very first records in human language were shopping lists and accounting records written in Assyria over 5000 years ago. Interestingly enough, the very first things that were written were the accounting of money and the trading of assets. They had shopping lists, animal inventories, and, of all things, beer-making inventories.

In the 1800s, we began to see local merchants keep extensive records of their process for accounting.  In that time, the local merchant was the individual who would lend seed, timber, and tools to farmers, and at the end of the growing season, would collect more seed, more grain or more fruits and vegetables as the results of the harvest. So, lending was a localized experience. The lenders and the borrowers knew each other well; they were members of the same community—most of the time the same villages. Each lender slowly amassed small fortunes by charging interest on how much they lent out. If the farmer borrowed five bushels of seed grain, the lender would collect six bushels back from the harvest, and the farmer kept the remainder. So, credit in an agrarian society, was personal and face-to-face, where farmers would say, “Put it on my tab” to local merchant to get things they needed and that they would be able to pay off at the end of the growing season.

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Three Quick Tricks for Credit Score Optimization

By: Stuart Hunter

Drive-up meals, overnight shipping, and quick fixes; in our culture of impatience, we like things to happen quickly. The same mentality is common when it comes to repairing our credit score. We know it is important to have as high a score as possible and that when practiced over a long enough time period, a dedication to using credit responsibly will cause your credit score to rise. But what if you need results quickly? If you are searching for an easy way you may be able to raise your credit score by a few points, here are three tricks of the trade:

1) Make payments on your credit cards immediately before the reporting date so your credit reports show the lowest balances. To find out the best date to make a payment, your credit report should show when your creditors are sending account updates to the credit bureaus. When you find out this date, make it a point to pay your credit cards about 3 to 5 days prior to when the accounts get reported. Your reports will then reflect the lower outstanding balance, instead of the higher balance, giving your credit score a little boost.

Read the full article here http://www.creditrepairthoughts.org/Article/Credit-Score-Optimization–Three-Quick-Tricks/613

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What Could You Do With An 800+ Credit Score?

MAXIMIZE YOUR WEALTH-BUILDING POTENTIAL WITH AN 800+ CREDIT SCORE!

The most powerful tool at your disposal to create wealth and prosperity is your personal
credit profile. The wealthy have known this for generations and have leveraged their credit
profiles to amass fortunes. Unfortunately, most people are unaware of this fact, and
wander through life abusing, misusing, and ignoring their personal credit profiles—the very
asset that would deliver wealth and prosperity if it were only designed and used correctly.

CreditSense™ is NOT a credit repair company. Credit repair companies claim that they can
improve your credit score by removing negative listings from your credit report. The truth is,
removing negative listings from your credit report does not guarantee that your score will
improve. But it doesn’t end there. These very credit repair companies do not know what
they are doing when it comes to building a credit profile. Not knowing any better, they send
you out to obtain the very credit cards and installment loans that will limit your credit score
and make your credit profile toxic.

CreditSense™ is a total credit solutions company—we know the secrets to building
powerful and resilient personal credit profiles that result in an 800+ credit score—and we
use credit repair as only one of numerous processes to achieve that goal. While deleting as
many negative items from your credit report as possible is an important step in credit score
improvement, simple credit repair is not enough—you must focus on building a
fundamentally sound credit profile as well.

CreditSense™ does just that. It was established to provide a comprehensive solution to
real credit challenges for real estate investors, business owners, entrepreneurs, and savvy
consumers nationwide. Since its beginning, CreditSense™ has maintained an A+ rating
with the Better Business Bureau.

To get a complimentary analysis of your current credit
profile and situation and receive this free report, contact
us at CreditAnalysis@CreditSense.com or call
866-598-2808

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Discover More Card Upgrades Rewards for May 2012

Digging your Discover More Card?  For rewards aficionados, The 5% category rewards are a hot ticket, For the month of May Discover just updated its rewards program.  In May you’ll get 5% rewards on $300 in purchases on top of all the regular rewards categories which covers restaurants and movies up to $1,500 in purchases.  Does this mean it’s the absolute best rewards card?  Keep in mind that the Chase Freedom card is a direct competitor and give you 5% cash back on movies and groceries as well.. Let’s see how the two cards stack up:

So depending on your spending habits, you may want to consider the Freedom over the Discover More, plus the signup bonus of $100 that comes with the Freedom is hard to offer.

Conclusion:

Weigh the way you spend before you decide on a rewards card rather than being dazzled by the offer of the week.

Filed under: Chase, Credit Card Reviews, Discover, Uncategorized
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Tips to Repair Your Credit Now

Your credit is more valuable than you might think. Having good credit is important to getting approval for bank plastic, loans, and mortgages. For those who have bad credit, do not worry. This article has great advice on credit repair to ensure that you will not get hold of rejected from any financial institution.

Stay organized. Filing your credit card and other loan bills all together in the location that is easily accessible will go quite some distance in keeping you organized and able to stay on your bills. It’s easy to forget to cover a bill that you have carelessly tossed in a growing pile of unwanted send. Segregating your bills will help to prevent this.

Read the full article here http://www.creditrepairthoughts.org/Article/Repair-Your-Credit-Now-With-the-Tips/105170

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Maximizing your British Airways 100K Bonus

The biggest gripe with the 100K British Airways bonus is that some of the rewards tickets come with a hefty bunch of taxes and fees.  (Flying to Europe for example)  However we’re here to give you the low down on where the fees are and where they aren’t when redeeming for Avios points.

Here are a few examples of just how bad the fees can get:

• LAX – London Heathrow:  $655 in fees and 50,000 Avios Miles
• Philidelphia – Paris:  Business Class:  A Whopping $1099 in fees and 80,000 Avios Miles 
• Other East Coast Itineraries to Europe range from 80,000 to 120,000 miles with fees hovering around $1000!

So where are the good itineraries you can take advantage of your 100K Avios points?

Using your Avios points on American Airlines works out to be pretty sweet, and springtime in Seattle is the time to get out of town to the nearest tropical destination which usually ends up being Hawaii

• SEA to Kauai in Economy:   Only 25,000 Avios points for a round trip ticket with fees of only $22.  Your 100K bonus could get 4 tickets!

So maybe you’re not interested in Europe, but would rather get to Asia instead.  The good news for you is that the fees and taxes are much less expensive for Asian destinations.

• On American Airlines you can use 70,000 Avios points and only $302 in fees to get you from Chicago to Shanghai.  Not too shabby.

Conclusion:

Don’t be dismayed by the prohibitive fees for US flights to Europe.  Use your signup bonus wisely and fly on American Airlines with your Avios points to US or Asian destinations instead.  That credit card sign up bonus will stretch a lot further!

Filed under: Avios Miles, British Airways, Chase, Miles and Points
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Can I Repair my Credit on My Own?

Credit repair on your own – yes you can! Many of our readers (even yours truly) have removed negatives from their reports using the techniques on this page. By the way, everything a credit repair company can do for you, you can do for yourself at a fraction of the cost.

• The basic strategy to repairing your credit is as follows:

• Get and review your credit report.

• Analyze your report.

• Make a list of all items you consider to be questionable or negative. Clearly identify each item in your report you are disputing and explain why you are disputing this information.
• Write a dispute letter to the credit bureaus.

For the full basic strategy read the full article here http://www.creditinfocenter.com/repair/Repair.shtml

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