American Express Sends Out Surveys For Possible Changes To AmEx EveryDay Preferred & Blue Business Plus

American Express is in the process of revamping all of the credit cards it offers. Usually American Express sends out a series of surveys trying to gauge the interest of different benefits. Today surveys were sent out for the EveryDay Preferred & Blue Business Plus asking for a ranking of the following benefits ($10 monthly for EDP and $25 monthly for BBP): PayPal, Walmart, Target, Home Depot, Nike, Streaming.  I suspect we will see both of these cards refreshed later this year.

Source: doctorofcredit.com

Understanding the Perk of a Credit Card Extended Warranty

September 10, 2019 &• 4 min read by Beverly Blair Harzog Comments 8 Comments

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Many manufacturers warranty their products against defects or certain other issues for a period of time. This is known as the manufacturer’s limited warranty, and depending on the product, it might provide coverage for a period as short as 30 days or as long as three or more years. In many cases, by swiping the right piece of plastic at checkout, you can get an automatic credit card extended warranty.

What Is Extended Warranty Coverage?

An extended warranty is any coverage that goes beyond what the manufacturer provides automatically when you buy a product. Extended warranties are often available for purchase from third parties.

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  • I just watched a documentary on the dark web, and I will never feel safe using my credit card again!
  • Luckily I don’t have to worry about that. I have ExtraCredit, so I get $1,000,000 ID protection and dark web scans.
  • I need that peace of mind in my life. What else do you get with ExtraCredit?
  • It’s basically everything my credit needs. I get 28 FICO® scores, rent and utility reporting, cash rewards and even a discount to one of the leaders in credit repair.
  • It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.
  • …we live in Oklahoma.

Get everything you need to master your credit today.

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For example, you might purchase an appliance at a home-improvement store like Home Depot or a piece of electronics at a big-box store such as Best Buy. When you pay, you might be asked if you want to purchase extra warranty coverage of several years beyond the manufacturer warranty. In some cases, these warranties step in to provide additional coverage, such as replacing the product if it is damaged or falls victim to typical wear and tear.

What is a Credit Card Extended Warranty?

Some credit card accounts come with a special perk. If you purchase a qualifying product with your card, the card network backs your purchase with an extended warranty coverage. The extended warranty coverage that comes with some of the best credit cards usually extends the manufacturer’s warranty for up to a year longer.

The length of an extended warranty offered can vary by card, and the credit card network won’t extend a warranty past a certain time. Typically, if the manufacturer offers more than a five-year limited warranty, no card network adds time to that. Some only add time if the manufacturer’s warranty is three years or less. Others only add to a manufacturer’s warranty that ends within 12 months.

How Can You Tell if Your Credit Card Includes Extended Warranty Protection?

Many major cards, including some on Visa, American Express and MasterCard networks, offer warranty protection. The best way to find out if your credit card company includes this perk is to read your benefits guide, which is included in the paperwork that came with your card. You can also usually find this information online if you have an online account for the card or you can call the customer service number for your credit card issuer and ask.

Does My Visa Card Have an Extend Warranty?

If your card is a Visa Signature card, then this extra perk is included. Simply look for the words Visa Signature on the front of your card. If you don’t see those words, consult your benefits paperwork or call customer service to get the details about card benefits.

Does Capital One Offer Extended Warranty?

Yes, some Capital One cards come with extended warranty protection. This is because Capital One cards are typically issued on either the Visa or MasterCard network, and it’s the network that provides the warranty coverage.

Does the Costco Visa Include Extended Warranty Perks?

Yes, someCostco-branded Visa credit cards include an extended warranty perk. This is also true for several other branded cards for various stores, hotel chains or airlines.

How Does the Visa (or Other) Extended Warranty Work?

Credit card extended warranty programs have some unique guidelines but do tend to follow the same overall concept. You pay for an eligible item with your credit card. If a covered issue arises after the manufacturer’s warranty coverage is up but before the extended time period covered by the card network, then you can file a claim to be reimbursed for the loss. To file a claim, you’ll need to call the benefits administrator for your credit card issuer.

  • American Express: 1-800-225-3750
  • Visa: 1-800-882-8057
  • MasterCard: 1-800-622-7747

When you make a purchase with your credit card, keep the receipt in case you need to file a claim. Also keep the manufacturer’s warranty, receipt, serial number and product description information on hand. You’ll need all of this information when you make the phone call to file a claim.

Make it a habit to start a paper file whenever you spend big on something. That way, you’ll be ready in case you need to use this benefit. But do note that not all purchases are covered by these rewards. Examples of what’s not covered include boats, motorized vehicles, computer software and used or pre-owned items.

Extra Protection by Paying with Credit Cards

The credit card extended warranty isn’t the only perk you might get when you pay with your credit card. Some cards offer buyer’s remorse protection, ensuring you can always return eligible items within certain windows, or travel and road protections for peace of mind when you find yourself 100 miles or more away from home.

Understanding how credit cards work and what benefits you get from yours lets you get added value when making purchases. Start off right by choosing the best credit card for your needs and using it wisely as one resource in your personal money management toolbox.


Sign up now.

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What Is Cash Back?

What Is Cash Back? – SmartAsset

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Cash back is a rewards benefit that many credit cards offer to cardholders. By taking advantage of it, you’ll receive back a prespecified percentage of certain purchases you make. Many credit card companies will provide higher cash back rates on certain types of purchases, such as airfare, gas, food and more. Cash back is just one way that credit cards offer rewards, as mileage and points are some alternatives.

Before you spend too much money with your credit cards, make sure you have a financial plan in place. Speak with a financial advisor today.

What Is Cash Back?

The most commonly recognized style of cash back is what you have likely seen advertised as cash back credit cards. This specifically refers to earning a certain percentage of your credit card purchases back as cash rewards. However, cash back rates vary widely, as do the categories that they apply to.

You usually won’t see credit card cash back rates higher than 5%, while 1% is the typically minimum you will earn. Cash back categorization is significantly more complex though, with a merchant category code (MCC) system being the main organizing force.

MCCs run the entire cash back industry, as they ultimately decide how each purchase you make is classified. These designations coincide with cash back rates set by the issuer of your card. For example, you could use your card for a $50 dinner at a steakhouse, which has a “restaurant” code. If your card offers a 2% cash back rate on all spending at restaurants, you’d earn $1 cash back.

Familiar alternatives to cash back include point- and mile-based programs, though many cardholders are partial to cash back. Cash back affords cardholders an independence that is ideal, since you can redeem it for nearly anything.

Popular Cash Back Credit Cards

Discover, American Express, Mastercard and Visa all have cash back rewards credit cards available for prospective cardholders. Each abide by their own set of regulations, though card issuers decide on cash back rates, promotions and bonuses. Chase, Wells Fargo, Citi and Capital One represent some of the most active card issuers on the market today.

Below are a few examples of what you can expect to earn when looking for a cash back credit card:

Cash Back Credit Cards
Costco Anywhere Visa Card by Citi 4% cash back on eligible gas up to $7,000 per year, 3% cash back on eligible travel and restaurants, 2% cash back in-store and online with Costco and 1% cash back elsewhere None
Bank of America® Cash Rewards credit card 3% cash back in a category of your choosing, 2% cash back at grocery stores and wholesale clubs and 1% cash back on all other purchases (up to a quarterly cap of $2,500 in combined grocery/wholesale club/choice category purchases) $200 bonus cash back for spending at least $1,000 over your first 90 days
Capital One® Quicksilver® Cash Rewards Credit Card Unlimited 1.5% cash back everywhere $150 cash back bonus when you spend $500 during your first three months
Citi Double Cash Card 1% cash back on your purchases and another 1% cash back when you pay your bill None
Capital One® Savor® Cash Rewards Credit Card Unlimited 4% cash back on dining and entertainment, 2% cash back on groceries and 1% cash back elsewhere $300 cash back bonus for $3,000 spent over your first three months
TD Cash Visa® Credit Card 3% cash back on dining, 2% cash back at supermarkets and 1% cash back on everything else Earn $150 cash back when spending $500 within the first 90 days (See Terms)
USAA Preferred Cash Rewards Visa Signature Unlimited 1.5% cash back on everything None
Blue Cash Everyday Card from American Express 3% cash back on up to $6,000/year at U.S. supermarkets (then 1%), 2% cash back at U.S. gas stations and select U.S. department stores and 1% cash back on other purchases $150 bonus cash back for spending $1,000 over your first six months

Getting Cash Back at Retailers

Picture this: you’re buying some groceries on a Sunday morning, but know you’ll need $40 cash to fill up your car with some gas later. You could swipe your debit card at the supermarket and then head over to the ATM. Or you could ask for cash back right from the cashier, eliminating the extra errand.

The above situation represents the alternative definition of cash back. It’s ultimately the use of a cash register as if you were swiping your debit card at the ATM. When you request cash back from a cashier, your bank account will be charged the amount you asked for. This enables the funds to be pulled from your account so the cash can be placed in your hand.

Although this generally only applies to debit cards, there are a few exceptions for credit cards. Discover® allows cardholders to ask for cash back at more than 50 large retail stores without a transaction fee.

Bottom Line

There are many benefits to utilizing credit card rewards programs. But spending money that technically isn’t yours will always involve some level of risk. If you’re in good financial shape, though, cash back and other types of credit card rewards can help you take more vacations, save money on purchases and more.

Credit Card Tips

  • Managing your credit cards and any debt you accumulate using them is a major part of your long-term financial outlook. Consider working with a financial advisor to make sure you’re managing your money with your goals for the future in mind. SmartAsset’s free matching tool can connect you with up to three advisors in your area. Get started now.
  • If you’re someone who wants freedom when spending credit card rewards, you may prefer cash back to a points- or mileage-based reward system. However, keep in mind that cash back rates are sometimes less than those in point-centric programs.
Chris Thompson, CEPF® Chris Thompson is a retirement, savings, mortgage and credit card expert at SmartAsset. He has reviewed hundreds of credit cards and loves helping people find the one that best matches their financial needs. Chris is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society for Advancing Business Editing and Writing. He graduated from Montclair State University where he received the Journalism Achievement Award. Chris’ articles have been featured in places like Yahoo Finance, MSN and Bleacher Report. He lives in New Jersey and is a Mets, Jets and Nets fan.
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Source: smartasset.com

Does Paying Off a Loan Early Hurt Your Credit Score?

December 15, 2019 &• 5 min read by Deanna Templeton Comments 56 Comments

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Paying off debt to build credit is a pretty well-known strategy. It can help improve your credit score, especially if you’re carrying a large balance on your credit cards. So if you have other types of debt, like car or home loans, paying off those accounts might seem like a step in the right direction.

But here’s the thing—having a mix of accounts in your credit history is goodfor your credit score. You’ll actually want to have a good mix of revolving and installment loans. So does paying off a loan early hurt credit?

#animation-wrapper max-width: 450px; margin: 0 auto; width: auto; height: 600px; font-family: ProximaNova-Regular, Arial, sans-serif; #animation-wrapper .box background: linear-gradient(#0095D8, #1D4BB6); color: #fff; text-align: center; font-family: ProximaNova-Regular, Arial, sans-serif; height: 130px; padding-top: 10px; .content .box p margin: 0 0; .box .btn-primary color: #fff; background-color: #ff7f00; margin: 10px 0; .chat ul margin: 0; padding: 0; list-style: none; .message-left .message-time display: block; font-size: 12px; text-align: left; padding-left: 30px; padding-top: 4px; color: #ccc; font-family: Courier; .message-right .message-time display: block; font-size: 12px; text-align: right; padding-right: 20px; padding-top: 4px; color: #ccc; font-family: Courier; .message-left text-align: left; margin-bottom: 6px; .message-left .message-text max-width: 80%; display: inline-block; background: #0095D8; padding: 8px 15px; font-size: 14px; color: #fff; border-radius: 30px; font-weight: 100; line-height: 1.5em; .message-right text-align: right; margin-bottom: 6px; .message-right .message-text line-height: 1.5em; display: inline-block; background: #1D4BB6; padding: 8px 15px; font-size: 14px; color: #fff; border-radius: 30px; line-height: 1.5em; font-weight: 100; text-align: left; .chat background: #fff; margin: 0; border-radius: 0; .chat-container height: 450px; padding: 5px 15px; overflow: hidden; .spinme-right display: inline-block; padding: 15px 20px; font-size: 14px; border-radius: 30px; line-height: 1.25em; font-weight: 100; opacity: .2; .spinme-left display: inline-block; padding: 15px 20px; font-size: 14px; color: #ccc; border-radius: 30px; line-height: 1.25em; font-weight: 100; opacity: .2; .spinner margin: 0; width: 30px; text-align: center; .spinner>div width: 10px; height: 10px; border-radius: 100%; display: inline-block; -webkit-animation: sk-bouncedelay 1.4s infinite ease-in-out both; animation: sk-bouncedelay 1.4s infinite ease-in-out both; background: #000; .spinner .bounce1 -webkit-animation-delay: -.32s; animation-delay: -.32s; .spinner .bounce2 -webkit-animation-delay: -.16s; animation-delay: -.16s; @-webkit-keyframes sk-bouncedelay 0%, 100%, 80% -webkit-transform: scale(0); 40% -webkit-transform: scale(1); @keyframes sk-bouncedelay 0%, 100%, 80% -webkit-transform: scale(0); transform: scale(0); 40% -webkit-transform: scale(1); transform: scale(1); .ad-container padding: 15px 30px; background-color: #fff; max-width: 690px; box-shadow: 1px 1px 4px #888; margin: 20px auto; .ad padding: 10px 6px; max-width: 630px; .ad-title font-size: 20px; color: #07b; line-height: 22px; margin-bottom: 6px; letter-spacing: -.32px; .ad-link line-height: 18px; padding-left: 26px; position: relative; .ad-link::before content: ‘Ad’; color: #006621; font-size: 10px; width: 21px; line-height: 12px; padding: 2px 0; text-align: center; border: 1px solid #006621; border-radius: 4px; box-sizing: border-box; display: inline-block; position: absolute; left: 0; .ad-link a color: #006621; text-decoration: none; font-size: 14px; line-height: 14px; .ad-copy color: #000; font-size: 14px; line-height: 18px; letter-spacing: -.34px; margin-top: 6px; display: inline-block; .ad .breaker font-size: 0; .box .box-desc font-family: ProximaNova-Bold, Arial, sans-serif; font-size: 17px; font-weight: 600; width: 225px; margin: 0 auto; .btn display: inline-block; margin-bottom: 0; font-weight: 400; text-align: center; vertical-align: middle; touch-action: manipulation; cursor: pointer; background-image: none; border: 1px solid transparent; white-space: nowrap; padding: 6px 12px; font-size: 14px; line-height: 1.428571429; border-radius: 4px; -webkit-user-select: none; -moz-user-select: none; -ms-user-select: none; user-select: none; font-family: ProximaNova-Semibold, Arial, sans-serif; text-decoration: none; .btn-group-lg>.btn, .btn-lg padding: 10px 16px; font-size: 18px; line-height: 1.3333333; border-radius: 6px; #ad-4 font-family: Arial, sans-serif; background-color: #fff; #ad-4 .ad-title color: #2130ab; #animation-wrapper .cta-ec background: #79af3e; color: #fff; width: 155px; height: 41px; font-family: ProximaNova-Semibold, Arial, sans-serif; font-size: 14px; margin: 10px auto 4px auto; #animation-wrapper .ec-logo display: block; margin: 0 auto; width: 140px; @media (max-width:500px) .ad padding: 20px 18px; max-width: 630px;

  • I just watched a documentary on the dark web, and I will never feel safe using my credit card again!
  • Luckily I don’t have to worry about that. I have ExtraCredit, so I get $1,000,000 ID protection and dark web scans.
  • I need that peace of mind in my life. What else do you get with ExtraCredit?
  • It’s basically everything my credit needs. I get 28 FICO® scores, rent and utility reporting, cash rewards and even a discount to one of the leaders in credit repair.
  • It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.
  • …we live in Oklahoma.

Get everything you need to master your credit today.

Get started

Does Your Credit Score Drop When You Pay Off Debt?

Unfortunately, paying off non-credit card debt early might make you less credit-worthy according to scoring models. When it comes to credit scores, there’s a big difference between revolving accounts (such as credit cards) and installment loan accounts (such as a mortgage or student loan).

Paying an installment loan off early won’t improve your credit score. It won’t necessarily lower your score, either. But keeping an installment loan open for the life of the loan could help maintain your credit score.

Credit Cards vs. Installment Loans

Credit cards are revolving accounts, which means you can revolve a balance from month to month as part of the terms of the agreement. Even if you pay off the balance, the account stays open. A credit card with a zero balance—or a very low balance—and a high credit limit is good for your credit score because it helps lead to a low credit utilization rate.

Installment loan accounts affect your credit score differently. An installment loan has a set number of scheduled payments spread over a predetermined period of time. When you pay off an installment loan, you’ve essentially fulfilled your part of the loan obligation. The balance is brought to $0, and the account is closed.

Does Paying Off a Loan Build Credit?

Paying off an installment loan as agreed over time does build credit. In part, that’s because 35% of your credit score is based on timely payments. And if you make timely payments for five or more years on an installment loan, that’s a lot of goodwill for your credit score.

Types of Credit and Length of Credit History

Credit scores are typically better when a consumer has had different types of credit accounts. It shows that you’re able to manage different types of credit. Your credit mix actually accounts for 10% of your credit score.

The age of your credit impacts your credit score. It accounts for around 15% of your score. Eventually, closed accounts fall off your credit score, which can reduce the age of your overall credit—and subsequently, your credit score.

Does Paying Off a Loan Early Hurt Credit?

If you’re thinking about paying off an installment loan early, take some time to think about it. Could you keep it open? It could be an active account with a solid history of on-time payments. Keeping it open and managed shows creditors that you can maintain the account responsibly over a period of time.

Consider other possible consequences of paying off a loan early. Before you pay off your loan, check your loan agreement for any prepayment penalties. Prepayment penalties are fees that are owed if you pay off a loan before the term ends. They’re a way for the lender to regain some of the interest they would lose if the account was paid off early.

Paying Off a Mortgage Loan Early

Sometimes paying off your mortgage loan too early can cost you money. Here are steps you can take to lighten those expenses:

  • When paying extra toward a mortgage each month, specify that the extra funds should be applied toward your principal balance and not the interest.
  • Check with the mortgage lender about prepayment penalties. These penalties can be a percentage of the mortgage loan amount or equal to a set number of monthly interest payments you would have made.
  • To help protect your future credit score, always make sure you have money set aside for emergencies and only pay extra if you can afford to do so.

Paying Off an Auto Loan Early

If you’re looking to pay your auto loan off early, there are several ways you can do so. When paying your loan each month, it might be beneficial to add an extra $50 or so to your payment amount. That lets you pay off the loan in fewer months and pay less in interest over the loan term. If possible, specify that the extra amount is to pay principal and not interest.

Another option is to make a single, large extra payment each year. Mark the payment as an extra payment toward principle. Do not skip another auto payment because you made this one, as your lender might consider you late if you do.

Repaying and Paying Off Student Loans

There are no prepayment penalties on student loans. If you choose to pay student loans off early, there should be no negative effect on your credit score or standing. However, leaving a student loan open and paying monthly per the terms will show lenders that you’re responsible and able to successfully manage monthly payments and help you improve your credit score.

The Bottom Line: Will Paying Off a Loan Improve Credit?

Paying off a loan and eliminating debt, especially one that you’ve been steadily paying down for an extended period of time, is good for both your financial well-being and your credit score. But if you’re thinking of paying off a loan early solely for the purpose of boosting your credit score, do some homework first to ensure it will actually help. If paying a loan off early won’t help your score, consider doing so only if your goal is to save money on interest payments or because it’s what’s best for your financial situation.

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Source: credit.com

No-credit-check Apartments: How To Rent An Apartment With No Credit History

These days, a good credit score is a requirement for everything from buying a home to setting up a cell phone contract. In many cases, it’s also a necessity if you want to rent an apartment.

couple moving into apartment

That’s because a strong credit history proves that you make your payments on time and follow through on your financial obligations. This is especially important to potential landlords.

When a landlord is considering tenants, they’re looking for someone who isn’t a financial risk and will be able to pay rent every month. So what should you do if you’re trying to rent an apartment but don’t have any credit history yet?

7 Ways to Rent an Apartment With No Credit History

Fortunately, it is possible to rent an apartment with no credit history. If you find yourself in this situation, let’s look at seven steps you can take.

1. Rent from an individual owner

If you’re trying to rent an apartment from a management company, there may be stringent rules in place. A credit check will likely be required and you’ll have more people to convince.

Instead, try renting an apartment from an individual owner. That person may be more willing to work with you if you can prove that you have a stable income and a savings buffer. 

2. Explain your financial situation

It can help to sit down with the individual who owns the apartment complex and give that person some backstory on your financial situation. Assuming that your reasoning makes sense, doing this could greatly improve your likelihood of getting approved.

Explain why you don’t have any credit history and what steps you’re taking to improve your finances. For instance, maybe you don’t have any credit because you’re debt-free. This means that you don’t have any debt payments and will have more cash flow available to pay rent every month. 

3. Show proof of income

If you don’t have any credit history, a landlord is going to want to see some evidence that you can afford to pay your monthly rent. Ideally, your rent payments will be less than one-third of your monthly take home pay.

That means if you earn $4,000 per month, your rent payments should be lower than $1,200. But what should you do if your monthly income is low and there’s no way you can keep the rent payments under one-third of your paycheck?

Well, in this situation it will help if you have an emergency fund. If you have enough money in savings to cover three to six months of rent payments, this may be enough to appease a landlord. 

4. Offer to move in immediately

The last thing any landlord wants is to have empty rental properties because that means they aren’t earning any money. That person still has to make the mortgage payments and pay for repairs, and this costs a lot less when they’re earning rental income.

So the landlord may be more willing to work with you if you’re able to move in right away. If that person is still hesitant, you could offer to sign a short-term lease as a trial. If things go well, then you possibly extend the lease in the future.

5. Provide references

One of the best ways to earn a potential landlord’s trust is by providing references. Ask former employers, co-workers, or teachers to provide character references for you. This will show a potential landlord that you’re a hard worker who has integrity.

And if you’ve rented an apartment in the past, you should ask your previous landlord for a reference. This will go a long way toward showing that you’re committing to paying your rent on time every month. 

6. Ask someone to co-sign for you

If your limited credit history is proving to be a big problem, you can ask a parent or friend to co-sign the lease for you. An ideal co-signer is someone who already has a high credit score and can pass a credit check easily. Essentially, you get to take advantage of that person’s good credit history.

However, you should only ask someone to do this if you’re certain you can afford the monthly rent payments. If you can’t, that person will be on the hook for making those payments for you. And the credit they worked so hard to build could be damaged.

7. Offer to pay a larger security deposit

And if all of the following ideas fail, you could always offer to put down a larger than normal security deposit. A security deposit is a sum of money that you give your landlord as a kind of insurance policy.

If you skip out on your rent or damage the apartment, your landlord gets to keep the security deposit. If everything goes well, the security deposit will be returned to you at the end of your lease.

Putting down a large security deposit could help a new landlord feel more comfortable renting an apartment to you. However, make sure the terms of your security deposit are clearly outlined in your rental agreement.

Start Building Your Credit Today

Hopefully, a lack of credit history won’t prevent you from renting the apartment of your choice. But keep in mind, this is only a short-term solution. Going forward, you should be focused on building good credit so you don’t find yourself limited financially.

A good credit score takes time to build but there are things you can begin doing now to move forward. Here are three ways you can start building your credit.

Become an authorized user

One of the easiest ways to start building credit is by becoming an authorized user on someone else’s credit card. As an authorized user, you can take advantage of that person’s good credit and begin building your own.

However, before becoming an authorized user you should ensure that person actually has good credit. If they stop paying on their credit card, it could end up hurting you more than it helps.

Apply for a secured credit card

If you have zero credit history, it can be really tough to take out a credit card. In that case, applying for a secured credit card may be the way to go.

With a secured credit card, you’ll pay a one-time security deposit to get approved for the card. This security deposit will then serve as your credit limit and the amount you’re authorized to spend. It’s less risky for a lender since they aren’t technically loaning you any money.

Take out a credit builder loan

A credit builder loan is another good way to build your credit score. Once you’re approved for the loan, the funds will be held in a bank account for you. From there, you’ll make payments on the loan until it’s paid in full.

And while you’re paying it off, your payments will be reported to the credit bureaus. Once you’ve paid the loan, you’ll receive access to the money.

Bottom Line

When you’re trying to rent an apartment with no credit history, you’ll likely encounter some challenges along the way. But fortunately, no-credit-check apartments do exist, and it is possible to rent an apartment with no credit history whatsoever. By applying the tips we outlined in this article, it’ll be easier for you and the landlord to come to an agreement you’re both happy with.

But keep in mind, building strong credit should be your top priority going forward. A good credit score will make it easier for you to buy a home, take out a loan, and even land a job in the future. So begin taking small steps today to start improving your credit score.

See also: How to Get an Apartment With Bad Credit

15 Numbers You Need To Know To Make Smart Financial Decisions

Over the weekend I was reading an article in the Wall Street Journal that talked about 15 key numbers to know in order to make smart financial decisions and ensure your financial future.

The numbers they thought you should know included numbers related to investing, taxes, debt, financial planning and credit.  Some of the numbers were pretty obvious I thought, but others may not be something you’d think about right off the bat.

Just for fun I thought I’d go through their 15 numbers, and talk briefly about why they believe they’re important to know.

15-numbers-you-need-to-know

15-numbers-you-need-to-know

15 Important Numbers To Know

So what are the 15 important numbers that everyone should know? Let’s break them down by category.

Investing

If you want to ensure a good financial future, you need to pay close attention to your investments, and how much you’re paying to invest. Here are 5 key numbers to know in investing.

  • Percentage of Your Savings in Stocks: While there isn’t really a set answer as to how much of your savings should be in stocks, you should at the very least know how much risk that you’re taking. Your percentage of stocks will depend a lot on your age and risk tolerance, but one rule of thumb is to have your age in stocks, while another is to have twice your maximum tolerable loss in stocks. (25% loss is the max, only 50% or less in stocks).
  • Maximum 401(k) Contribution: If you have a workplace 401(k) plan and you’re not contributing to the max, you may want to think about increasing your contributions. For 2015 the max you can contribute to a 401(k) is $18,000, while for a Roth IRA the max is $5,500.  Why should you increase your contributions? According to Fidelity Investments the typical worker earning $75,000 and assuming a 7% return over 35 years will earn $365,000 more if they increase their contributions to 10% from 8%.  Small changes can mean big returns!
  • Price/Earnings Ratio of Stocks: To figure out if it’s a good time to buy stocks, you can figure out what the average price/earnings ratio of the stocks in the benchmark indexes is.  For example, according to the Wall Street Journal in January 2015, P/E of the S&P 500 recently sat at 19.73, which was below the average of the past 20 years of 22.47 (but higher than historical average of 16.92 since 1936).
  • Average Yield on Bonds: Bonds typically deliver far more predictable returns than stocks, and as such are a good source of safety for most investors in their portfolios. It can be difficult to predict bond returns in the short term, but historically if you look at the current yield of bonds and bond funds, it will give you a good indication of what long term returns will be.
  • Average Expenses of Your Funds: An individual investor can’t control what the market does to their portfolio, but there are things that they can control. For example, the expenses they’re paying for their investments. Know what your expenses are and do your best to keep costs low. For me that means investing in low cost index funds that don’t have a lot of fees.  Take a look at what your expenses are in your portfolio by signing up and using a service like Personal Capital and their investment checkup tools.  Another great place to check what your expenses are is investment site FeeX.

Taxes

Knowing just how much you make, and what your state’s tax laws are, can be key to your financial well being.  Here are 2 key numbers you should know.

  • Adjusted Gross Income: Your AGI can have a big impact on which tax deductions and credits you are eligible to claim. You can find your AGI from the bottom of the first page of your Form 1040 tax return. If you find your income is close to a certain threshold for you to be eligible for a certain tax credit, you can do things to reduce your taxable income, like boosting contributions to your 401(k).
  • Your State’s Estate-Tax Exemption Amount: If you’re closer to retirement and end of life planning, you may want to figure out what your state’s estate tax exemption amount is.  The federal estate tax is due at more than 5 million dollars per individual taxpayer, or 10 million for couples.  But many states have much smaller exemption amounts, for example New Jersey has a $675,000 estate tax exemption.  If you find you’re near or above that limit you can do things to reduce the estate before you pass, including giving gifts to family members and charity. If you don’t, you could be hit with a estate tax bill of up to 20% (source).

Planning

Not only do you have to plan for your investments and taxes, but other day to day numbers are important to know. For example, these 5 planning numbers.

  • Your Fixed Living Expenses: You need to get a firm grasp on what your regular recurring expenses are.  It is important for retirement planning, for saving up a large enough emergency fund and for figuring out if there needs to be cuts made to your budget.  Most advisers are going to recommend that once you figure out what your regular expenses are, that you save up an emergency fund that is equal to 6-8 months of expense, or even more if you’re particularly risk averse.
  • Yearly Health-Care Bill: Some health care costs like your insurance premiums can be relatively predictable, while others like your how much of your deductible you end up paying can vary quite a bit from year to year.   Take a look back at your spending in previous years and figure out just how much you believe you’ll spend in the coming year. Also factor in which type of plan will be a better deal for your family.  A higher premium policy with lower deductibles, or a lower cost plan that has you paying more before coverage kicks in.
  • Cost to Rebuild Your Home:  Know what your cost to rebuild your home would be, and it isn’t necessarily what your home would sell for. In many cases it’s much less than a sales price once you figure in the cost of the land (which you wouldn’t need to rebuild).  The only caveat might be if you have an older home with lots of architectural detail that would be hard and/or expensive to replace.  Talk with an insurance agent and/or a local construction contractor to get an estimate of what it might cost to rebuild. For us, we just built our house last year so we have almost an exact estimate of what it would be to replace and rebuild the house.
  • Price-to-Rent Ratio: If you’re buying your first home or getting ready to downsize, it’s good to know what the price-to-rent ratio is for your area.  To figure that out you would just figure out the average home sale price for your area, and then divide it by the cost of renting a similar property for the year. If the resulting number is less than 20, buying is probably a better option according to some experts.  For my area the average sales price was $306,220, and the average rent for the year was $17,568.  So that comes out to a price to rent ratio of 17.431.
  • Life Expectancy: How long you can expect to live will affect all sorts of decisions you make including how you invest, how much you withdraw in retirement, long term care and more.  Figure out what your life expectancy might be using an online calculator like “The Living To 100” life expectancy calculator.  Mine wasn’t exactly encouraging at 80 years old, but I know that could improve with some weight loss and exercise added to my regimen.

Debt

Another important area to know your numbers in is the area of debt.  The 3 most important include:

  • Your Monthly Debt Service: You should know what you spend every month on any debt you have such as a mortgage, auto or student loans, credit cards and so on.  If more than half your paycheck is disappearing towards debt service every month, you may have problems. A higher level of debt means it’s a lot harder to reach your financial goals.  Do your best to reduce the debt where you can by paying off higher interest debt like credit cards, and using a debt repayment plan that fits your needs.
  • Your Mortgage Interest Rate: Your mortgage payment is one of those debts that it can be easy to put on auto-pilot and forget about – even though it’s one of your largest monthly bills.  Know what your mortgage interest rate is, because it may be too high! You may want to consider refinancing your mortgage into a lower rate, especially if you can drop your rate by at least 1 percentage point.
  • Your FICO Credit Score: Your credit score can have a big impact on  how much you’ll pay in interest on your next loan.  For example, a good credit score versus a bad credit score can mean hundreds of dollars on your monthly mortgage payment, and thousands of dollars extra paid over the life of the loan.  To stay on top of your credit score you can check one of the equivalent credit scores at sites like Credit Karma, Credit Sesame or Quizzle, or pay a small fee to get your actual FICO score.  Details about how to get your credit score for free here.

So those are 15 of the most important numbers to know in order to make sound financial decisions, according to the Wall Street Journal.

What numbers would you say are important to know, beyond the ones listed above?  Which of the above do you think are the most important?

Source: biblemoneymatters.com

How to Get Approved for Credit in a Financial Downturn

Source: goodfinancialcents.com

What Do New FICO Changes Mean for Me?

Have you ever applied for a credit card, car loan or mortgage? If so, then one of the first things the lender looked at was your FICO score. It has a major impact not only on getting approved in the first place, but also on the interest rate you will receive after approval.

On August 7, FICO announced some pretty major changes in how they will be calculating that ever-important number. Before you can understand how the changes will or won’t impact you, you need to have a firm grasp of the basics.

What is my FICO score?

Your FICO score, or credit score, is a number ranging from 300-850 that shows lenders how reliable you will be in repaying your debts. A bad score is anything below 560, not very good is 560-659, good is 660-724, very good is 725-759, and anything above 760 is classified as great. While it is best to be in the great range, you can sometimes qualify for the best available interest rates with 720 or above.

In order to calculate your credit score, FICO pulls information from your credit reports from the three major reporting agencies: Experian, TransUnion, and Equifax. When banks and other lending institutions consider your application, they look at several factors. The first is usually your FICO score, which will either get you in the door or get it slammed in your face, but after that they consider other aspects of your finances, such as income and the detailed history on the credit report itself.

What are the changes, and how will they affect me?

There will be four notable changes to how FICO evaluates your credit score once the announced new model is released. Some of them will be very good for some people, some of them will be bad for others, and some of them may prove to show negligible changes.

The first, and biggest, is that medical debts will no longer be considered when calculating your score. This is a huge relief. Many otherwise fiscally responsible people go into massive debt when a medical emergency happens. Others don’t even know they owe money on medical bills in the first place, as they thought their insurance was going to cover their costs. When they realize they owe money, the responsible consumers pay it back, but it still leaves a scar on their credit report and, therefore, their FICO score.

With this new change, your FICO score will not be impacted. In fact, if you have no other negatives on your credit report (which would mean you most likely have a halfway decent score), you can expect to see your FICO score increase by up to 25 points.

Changes will also be made in considering debts that you have paid off. Currently, after you’ve paid off a debt, it stays on your credit report for seven years. That will continue to be the case after FICO’s updates go into effect, but FICO will no longer look at those debts, even though they show up on your credit report. If you have consumer debts that you have paid off, and they’re the only thing holding you back, you may see your score improve, as well.

There will also be an update to consider the creditworthiness of people who do not have an extensive report, taking into consideration things beyond just paying your month-to-month bills on time. (A lot of times, the people you are paying those bills to don’t even report that anyways.) Depending on how this is done, it could be a boon for those who are unable to get credit not because they are irresponsible, but simply because they have never chosen to borrow money before.

The final update is not good news for those who hold consumer debt. If you owe money and it isn’t paid in full, you can expect to see your credit score take a hit.

Hold your horses – and your enthusiasm.

While FICO has announced that it will make these changes, the new model has not gone into effect. It will not be ready to release to lenders until late 2014 or early 2015. Even then, banks have to choose to adopt it. Thismodel will be FICO 9. FICO 8 was introduced in 2009, and some lending institutions still have not updated since FICO 7. Just because they are releasing a new model doesn’t mean that your lending institution will apply it to their evaluation process.

Another thing to remember is that while your FICO score gets you in the door, banks will look at your credit report. All of those things FICO ignores will still show up. If your medical debts are deemed too oppressive for you to possibly be able to pay for a mortgage on top of them, you may still be denied. And while FICO will ignore debt that has been paid off and closed, it will still stay on that pesky credit report for seven years for all of your potential lenders to see.

While these changes could be a great way to get your foot in the door with lenders, they’re not a holy grail to your credit problems. The same tried and true wisdom will still apply: Spend responsibly, make sure the information on your credit report is accurate and pay off any debts as quickly as possible.

Femme Frugality is a personal finance blogger and freelance writer. You can find more of her writing on her blog, where she shares both factual articles and esoteric ruminations on money.

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