Dear Debt Adviser: I am considering refinancing my mortgage. My plan is to take out cash to pay off my $80,000 credit card debt, which is more than the $63,000 I owe on the house. I can easily handle the new monthly payment. With the savings from not making credit card payments, I can make additional payments on the mortgage principal. My current mortgage has 11 years remaining, and the new mortgage would be for 15 years. So in other words, I'd be paying my house off in about the same time frame, anyway. Would this be a well-advised move? -- Robert
Dear Robert: Eighty thousand dollars on your credit cards? That is a huge amount of debt. Before you do anything, I want you to seriously analyze how you acquired so much debt. You must be sure that you can live day to day without racking up another $80,000 in new debt after any refinancing.
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Tuesday, July 5, 2011
Monday, July 4, 2011
Prepaid Credit Cards: Stay within Budget this Summer
The cost of living is causing many Brits to worry about their finances this summer, so this article takes a look at how the consumer can take the stress out of budgeting.
A prepaid credit card can be used in a similar way as a normal credit or debit card, in that users can make purchases with it in retail shops, online, and to retrieve cash.
Even if a consumer has a bad credit rating, they will be able to receive a prepaid credit card as a person’s credit history is not even analysed.
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A prepaid credit card can be used in a similar way as a normal credit or debit card, in that users can make purchases with it in retail shops, online, and to retrieve cash.
Even if a consumer has a bad credit rating, they will be able to receive a prepaid credit card as a person’s credit history is not even analysed.
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Wednesday, June 15, 2011
Credit Cards Becoming Harder To Get
New research by Credit Confidential shows that it is becoming more difficult for consumers to obtain unsecured credit from lenders.
By comparison, secured loans such as mortgages are now 13% more likely to be rejected, meaning one in three people will fail in their secured loan application. This is the highest failure rate since the height of the financial crisis in 2009.
Failed applicants also face an additional challenge: ‘footprints’ in their credit history.
Each time an application is filed, it is noted on your credit history, which is shared among credit card companies. If they see you’ve been turned down elsewhere, especially more than once, they are less likely to approve your application.
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By comparison, secured loans such as mortgages are now 13% more likely to be rejected, meaning one in three people will fail in their secured loan application. This is the highest failure rate since the height of the financial crisis in 2009.
Failed applicants also face an additional challenge: ‘footprints’ in their credit history.
Each time an application is filed, it is noted on your credit history, which is shared among credit card companies. If they see you’ve been turned down elsewhere, especially more than once, they are less likely to approve your application.
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Tuesday, June 14, 2011
5 Money 'Rules' Meant to be Broken
There are many money "truisms" that can keep you in the poorhouse.
You've probably heard them all, from ancient admonishments against any borrowing, to modern urban legends such as "you have to carry a balance to build credit."
So while some money rules should be taken with a grain of salt, others just need to be thrown out with the trash.
"A lot of times there's that kernel of truth in there," says Bill Druliner, financial counselor and group manager for GreenPath Debt Solutions. "Or it's true in some situations and not in all in others."
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You've probably heard them all, from ancient admonishments against any borrowing, to modern urban legends such as "you have to carry a balance to build credit."
So while some money rules should be taken with a grain of salt, others just need to be thrown out with the trash.
"A lot of times there's that kernel of truth in there," says Bill Druliner, financial counselor and group manager for GreenPath Debt Solutions. "Or it's true in some situations and not in all in others."
Read full story
Resources:
Monday, June 13, 2011
Beware prepaid card scams and the Bluetooth Bandit
One nice, unexpected bonus about researching credit card crime has been the lessons one picks up. In fact, both would-be victims and criminals can learn a thing or two by what's been going on in the news lately. Not sure what I mean? Well, here's what all people--both the good guys and the bad--can learn from the latest in credit card thievery.
The lesson for would-be crooks: If you're annoyed at your ex, don't steal her credit card. And certainly don't tell her you're stealing it.
The crime: In Bracebridge, Ont., James Hynes, 49, was apparently irked because his ex-partner had hidden the keys to his truck. So Hynes took her credit card from her purse, showed it to her through the window and then left. Even more stupid, Hynes then proceeded to take out a cash advance of $2,000 with the card and spent $960 of it before the police found him.
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The lesson for would-be crooks: If you're annoyed at your ex, don't steal her credit card. And certainly don't tell her you're stealing it.
The crime: In Bracebridge, Ont., James Hynes, 49, was apparently irked because his ex-partner had hidden the keys to his truck. So Hynes took her credit card from her purse, showed it to her through the window and then left. Even more stupid, Hynes then proceeded to take out a cash advance of $2,000 with the card and spent $960 of it before the police found him.
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Thursday, June 9, 2011
Wise To Prioritize Credit Cards Over Mortgage Payments?
The U.S. Census Bureau expects 188 million active credit card holders this year. Credit reporting agency Transunion says there is a growing number of Americans who are paying their mortgages late so they can pay their credit card bills on time. Host Michel Martin and personal finance expert Alvin Hall discuss whether or not logic exists behind this balancing act. They also review other important news in the credit world.
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Tuesday, June 7, 2011
10 ways to improve your credit score
With tougher credit standards post-housing boom, it's more important than ever that would-be home buyers have good credit.
But what do you do if you don't?
Advice and tips on improving your credit score are all over the Internet, in variations of five or 10 or seven. Many of the lists are pretty obvious and tend to repeat each other -- telling you to do simple things like pay your bills on time, don't max out your credit cards and know what your credit score is.
But there's one list I think is a little better at About.com, called "10 Things You Can Do Today To Improve Your Credit Score."
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But what do you do if you don't?
Advice and tips on improving your credit score are all over the Internet, in variations of five or 10 or seven. Many of the lists are pretty obvious and tend to repeat each other -- telling you to do simple things like pay your bills on time, don't max out your credit cards and know what your credit score is.
But there's one list I think is a little better at About.com, called "10 Things You Can Do Today To Improve Your Credit Score."
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