Posts Tagged credit card
Recent and Dangerous Credit Card Changes that have been Happening
Posted by Top Home Loans in Credit Information, Economy, General Banking on January 31st, 2009
With financial institutions finding it harder and harder to lend money at low interest rates, credit card companies are being forced to do things that they would have never even dreamed about in the past. Due to the economic meltdown, the financial institutions have been forced to add new terms to credit cards to help to reduce the amount of risks that the company is being exposed to.
Some of the major methods that the credit card companies are using to help to regain a hold on the credit card industry include the following:
- Increasing card holders monthly payments from 2% to 3% or more.
- Decreasing the amount of available credit for users
- Attaching new ’service charges’ to the cards.
- Raise interest rates on the card.
Recently, credit card reforms have been passed; however, these reforms will not be effective until the summer of 2010. The best way to protect yourself against these extreme credit card changes is by paying down or paying off your credit card balances. Do this and you won’t be affected by these new dramatci changes.
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How Job Security Effects Your Mortgage Payment
Posted by Top Home Loans in Credit Information, Economy, General Banking, Mortgage Advice on November 27th, 2008
When purchasing a property, you will always assume that your employment is dependable and you will be using it throughout the course of the mortgage; however, what do you do if things get tough? What would you do if you unexpectedly lost your job or your company went under? Even tough your boss may tell you that your job is safe, that does not necessarily mean that the company you work for is safe from downsizing.
Savings and Equity
With your portfolio, it is a good idea to keep at least 3 months worth of liquid money that you can easily access. This could be in savings or short term investments that are guaranteed.
The second thing you will want to confirm is that you can access the equity in your property if you need it. You could have a ton of equity and lose your house because you stopped making your monthly payments; the bank does not care how much money you have, they just care that you are making your monthly payments on time. Once you stop making your monthly payments, then you go into default on the mortgage, and the bank has a right to the property. Protect yourself from any potential of foreclosure on your property with certain key techniques to protect yourself during economic hard times.
Bail Yourself Out
If you have your back against the wall and you have no chance to save yourself from missing a mortgage payment, it is usually the easiest option to decide to skip your payments. Skipping your payments; however, is the worst thing that you could do, because the missed payments will generally start to snowball and things will get worse not better.
The best option is to make your mortgage payments; however, you do have to take care of food and water for your family. If at this point there is no money left, then your last resort is to use credit.
Credit can act as your financial savior if you have no cash and no job. This is because it may what is able to keep your head above water until you get the job to pay the bills or the financial crisis ends. Once you are back to work, then you will be able to make the required payments to restore your finances.
Emotion and Your Mortgage
If you get laid off and begin missing your mortgage payments, then it is easy to blame yourself for the mistakes that you have made in your life; however, understand that the primary cause of what is happening to you could not of been preventable by you but is just a result of the economic system. It may hurt a lot to be in serious financial trouble; however, do not let it get you down because sooner or later things will get better.
Before things get bad, make sure that you are aware that things can and will go bad. Make sure that you take the necessary steps to make sure that you do not become another statistic of the economical system and the economic despise. Take care of yourself and your family first, and you must realize that this could happen to anyone at any time. Do not beat yourself if things get difficult because most people are there with you during these tough times.
What you Need to Know about Living on Revolving Credit
Posted by Top Home Loans in Credit Information, Economy, General Banking on November 22nd, 2008
For a lot of people, things are bad, and I mean really bad. Many of us are resorting to doing things we have never dreamed would ever happen. We are working jobs we never imagined we would have to work, or we may not even have a job. Our job may be next on the chopping block. At this point in our life, the only way to keep our head above water is to pay credit products with credit products. This may mean making your mortgage payments or your loan payments with a credit card or a line of credit; however, what will happen once the banks are forced to put an end to revolving credit like your credit cards and lines of credit?
Your Credit Card Account Agreement
With your credit card, their are some extremely crucial things that you should be aware of. The first thing is that the bank reserves the right to cancel your revolving credit at any time. This means that if the bank ever gets into a position where it is mandatory for the bank to not lend out anymore money, then they may have to cancel your revolving credit, and the bank might go as far as trying to collect your loan in full immediately. The odds of this actually occurring are low; however, make sure that you realize that this is a real possibility of the bank.
The second real concern of your credit card and revolving credit refers to fees and interest rates. The account agreement lists several different fees in regards to interest, penalties, and other miscellaneous fees. The credit card company, also, reserves the right to make any modification to these interest rates, penalties, and fees at any time. This means that at any time your fees may change dramatically.
Another big questions is: when can a bank require immediate repayment of credit card/line of credit? The truth of that is that if your card is behind in a monthly payment, then the bank reserves the right to cancel your card and call the loan in full; however, the bank reserves the right to make an amendment to the agreement at anytime to change the agreement so that this is different and fits the banks needs.
Why is this Important?
This is extremely important information because banks are having a harder and harder time collecting the money that they need in order to survive. The banks are also deciding to lend less and less money. As the credit market tightens, the banks will have to find new sources to obtain the money it needs in order to survive, and the banks will do what they have to in order to survive.
This is extremely important because if you have no liquid cash available except for what is on a credit card or a line of credit, then if the bank decides to close these networks off to try to save themselves, then you will not have any access to available funds. Make sure that you keep at least 3 months salary available as an emergency back up. At this point in our economy, I would strongly suggest keeping this in real cash assets or even in gold. It is not unlikely that gold will depreciate but it is harder to trade. Cash will allow you to easily trade for what you need, but may depreciate further.
Don’t gamble by living off of credit cards and lines of credits because if the bank decides to shut this method off, then you might be holding the bag. Make sure that you have enough money available cover your needs for a few months in case something major happens. Take care of your self first and you will have no problem surviving if things continue to go wild in this wild economy.