Category: Protecting Your Identity

NEW YORK (CBSNewYork) — Whether you’re doing your holiday shopping in stores or online, consumer experts stress caution.

For many Americans, those holiday deals add up to a mountain of debt come January.

“They don’t plan,” Eric Stuerken, a consumer credit expert and co-founder of Better Qualified, told CBS2’s Jessica Layton.

He said his office is always buzzing with clients after Christmas.

“One of the biggest mistakes is they don’t buy on cash. They’re going into their credit lines or their credit cards,” he said. “Thirty percent of our credit score is based on what we use. It’s called utilization. So if you’re using more than you’re used to and you max out your card near 100 percent, your score is going down 30 percent.”

Stuerken said in most cases, cash is king. It keeps people within their financial means.

What about those store credit cards that offer big percentages off when you open them? He says that depends on how good you are at paying off your purchases.

“In the end of the day, you’ll probably have an interest rate somewhere in the high 20s. And if you can’t pay it off and you’re making the minimum payment, that purchase you thought you were saving 50 percent on – it goes back to what you purchased and sometimes even more,” said Stuerken.

Beware of your personal shopping habits. Starting too early may mean you spend too much over the next month. Start too late, and you could splurge on something unnecessary.

Just as Santa Claus makes a list, you should write down exactly what you can afford and stick to it. You can also check out hot europe deals to ensure that you’re getting the best price on the market.

“The numbers sink in and you’re not waking up in January to a reaction where it’s, ‘Oh my god, I did this,’ and now the rest of your month is a panic mode of how you’re going to start to pay this stuff,” Stuerken said.

Bottom line: being generous does not mean over-spending.

Doug Constable is one of the best pre-insolvency advisors specializing in helping business with cash flow difficulties. He is a professional bankruptcy and insolvency expert and the author of “What to do When You Can’t Pay Your Debts”.

4 Steps to help avoid falling into debt

Fast internet services and instant gratification has made it harder for people to avoid falling into debt today. All you need to do is make a few clicks on your mouse, and you can buy anything you want and have it delivered to your doorstop.

However this ease of buying things may leave you spending more than you can afford. Moreover, the unstable economy wherein businesses lay off employees or reduce their paycheck by half, and the rising cost of living has led to many people falling into massive amounts of debt. This is why you need to be very careful about your spending habits to avoid falling into debt. You also need to follow the following information to avoid falling into debt.

1. Creating a budget is the best thing you can do to avoid debt. With a budget, you know how much money you need, how many bills you need to pay, and how much you can afford to spend. After paying off your monthly expenses, you can place the rest of the money in a savings account for a rainy day. Avoid spending money on unnecessary things.

2. Make only cash payments. You tend to spend less paying in cash than by using your debit or credit card. Fix and spend only that money every day. With physical money in hand, you know how quickly money comes and goes, and this encourages you to spend less.

3. Making investments help you avoid falling into debt, especially in an economic turmoil. By starting an investment plan, you have a more secure financial future, also there are good options like doing day trading, using resources online for this you can see more here about this subject. While investing in precious metals is a wise decision, it’s better to invest in different items to protect your assets. Precious metals like gold and silver retain its value even when the value of paper currency drops as their value depends on supply and demand, where its demand is usually higher than its supply.

4. Another great way to avoid falling into debt is by opening a savings account for a rainy day. Open a savings account through your bank or online store; just make sure its interest rate gives you more bang for your buck.

It is very important that you know how to avoid debt, especially in tough economic times. If you learn how to create and stick to a budget, keep an eye on where you spend your money, make wise investments, make only cash payments and open a savings account, you will be able to avoid debt and have a secure financial future.

Need Help?

If you still need help with controlling your debt and/or improving your credit, fill out the form below and get a free credit consultation from a credit expert at Better Qualified.

Credit Tips To Help You Avoid Dangerous Mistakes

Credit cards help you easily and conveniently buy things you want (not necessarily need) and even help bail you out of a jam. Unfortunately all this comes at a price; moreover, uncontrolled spending and credit card use leads to various financial mistakes which come with long-term effects. While you may know the dangers of running up credit card balances, there are a few other dangerous mistakes you may make and some tips for avoiding them. These credit tips are even more important than ever coming into the holiday season.

PAYING THE BARE MINIMUM

While banks use different formulas for calculating the minimum amount due every month, most start with one or two percent of the outstanding balance. This is then added to fees for late payments, monthly interest charges and exceeding credit limit. Whichever way it’s calculated, just paying the minimum leads to lots of interest payments with time. Try to pay off as much of your balance, if not all every month.

LATE PAYMENTS

FICO states that payment history is the largest component, consisting about 35% of the score. This is sensible as lenders want to know how promptly their borrowers were at making payments in the past as no one likes getting paid late.
Not only do late payments lead to a low credit score (1x30day = 20-100pts), it also results in late payment fees from the bank. This not only costs you more but also boosts your monthly minimum amount.

HIGH UTILIZATION RATIO

Next to payment history, FICO checks the ‘amount owed’ which constitutes 30% of a credit score. This is calculated using the borrower’s credit utilization ratio or the amount of available credit used. So if you have card with a $6000 credit limit and you use $3,000, you have a 50% utilization ratio.

High ratios harm your credit score and affects your ability at securing loans on favorable terms. It also leads to less credit availability during emergencies. As high utilization ratio also indicates deeper financial problems, it’s time to do some serious budgeting if your ratio creeps up. On an average, Oster recommends, “keeping your utilization ratio below 30%.”

NOT READING YOUR STATEMENTS

As banks move towards paperless billing and automatic bill pay services, you may forget to check your monthly statement. This is dangerous as you may overlook some wrong charges and pay for services or products you haven’t bought. There is also a chance of you becoming a victim of identity theft or other forms of credit fraud.

Moreover ignoring your monthly credit card statement may lead to your losing command over your finances. This in turn may make it difficult for you to reach your personal finance goals. So make it a point to set aside a few moments every month to review your paper and digital statements and make it a part of your monthly budget review routine.

You will have to wait for the next post to learn about a few more credit card mistakes you should avoid making.

Need Help?

If you still need help with controlling your debt and/or improving your credit, fill out the form below and get a free credit consultation from a credit expert at Better Qualified.