“Bad Credit Habits”: How To Avoid High Fees
January 20th, 2010 by adminIndividuals with problematic credit histories often suffer unfairly from high mortgage, insurance, and car loan rates. On top of that, they have difficulty getting approved for credit cards. The whole situation can get extremely frustrating. Frequently, I get emails from consumers wondering what they can do to rebuild their credit. The first thing I tell them is to get a credit card designed for people with bad credit. The second thing I tell them is written in bold: READ THE FINE PRINT.
There are only a limited number of credit cards for individuals with bad credit. At first glance, many look the same. They all help build and rebuild your credit by reporting to the major credit bureaus on a monthly basis. They all provide you with the Visa or Mastercard you need to make many purchases. And they are all necessary evils that can save you thousands of dollars in mortgage and car loan rates in the future. However, you must read the fine print before applying for one of these credit cards, as they often charge high yearly fees, set-up fees, and even monthly fees. Here, I will examine a few examples of charges current “bad credit” credit cards bury in the fine print. Of the three major cards I will examine, only one stands out as consumer-friendly.
“Bad Credit” Credit Card #1: This credit card charges a very low interest rate for an unsecured credit card. However, your first fine print glimpse reveals that there is a one time setup fee of $29. Not too bad. So far, since the next charge is a one time fee of $95. So far, we’re up to $124 in expenses. That’s got to be it, right? No. Add in another $48 for the annual fee and $6 per month in account maintenance fees. That’s brings the cost of your new credit card to $244 the first year, and $120 each additional year. This is no small change, and a card such as this should be considered only if you cannot be accepted for a better unsecured credit card for bad credit.
“Bad Credit” Credit Card #2: This credit card charges a very high interest rate for an unsecured credit card. This can’t be good. But the setup fee is only $29. Maybe this card isn’t so bad. There is that pesky monthly maintenance fee of $6.50 per month which brings the cost of this unsecured credit card to $107. Maybe we’ve found a bargain. Not quite. The annual fee is a whopping $150. Yes, $150 every year. That not only brings the initial cost up to $257, but you will also pay $228 a year just to maintain the credit card. There has to be a better offer.
“Bad Credit” Credit Card #3: This credit card is available as both a secured and unsecured credit card, based on the issuer’s review of your credit history. The interest rate is average, even competitive. Now, the fine print reveals that there is a one time setup fee. However, based on your credit, this fee can be as low as $0 or as high as $49. So far so good, especially if your credit is not that bad. But, there must be a huge annual fee. Not exactly. The annual fee for a secured credit card is only $35, and for an unsecured credit card, this fee can be as low as $39 or up to $79. So far, the cost of this card ranges from $35 to $128. Now its time for the monthly maintance fee. This one has to be huge. Or not. Its $0. That means the most you could possible be charged to obtain this credit card is $128, about half of what competing cards are charging.
Clearly, there are substantial difference between “bad credit” credit cards. Of the three offers we have examined, only one doesn’t take you to the cleaners. In fact, “bad credit” credit card #3 provides great value. All positive changes to your credit history and credit score will translate into lower loan rates, lower credit card interest rates, lower insurance rates, and ultimately, thousands of dollars in savings. The path to rebuilding credit has its costs, but in the long term, rebuilding your credit with a “bad credit” credit card is the fastest and most cost-efficient way to correct the often unfortunate circumstances that have damaged your credit in the first place.
5 Proven Mortgage Refinance Tips For Lower Fees And Costs
October 20th, 2009 by adminBy handling these costs wisely, you can make your mortgage refinance tips even more effective and save remarkable sums in your monthly payments.
The structure of your mortgage refinance loan, PMI avoiding and an ability to buy lower interest rates are the ways.
1. Mortgage Refinance Tips, Close Credit Card Accounts.
What credit cards have to do with your mortgage refinance tips? A lot! When you close inactive credit card accounts, you can improve your credit score, which means lower interest loans possibilities to you.
This is wise to do by a letter to the credit card company. In this way you will have a document, if there is a need to handle the issue later on.
As a second step you have to check your credit report after 30 days to make sure, that it includes the comment that your credit card accounts have been closed by Customers Request.
This is important, because this report can be seen by other lenders later on, so they see that you have done the closing and not the company. Remember to correct all the mistakes, which can affect your future possibilities to get a loan.
2. Mortgage Refinance Tips, Avoid Hidden Cost Of PMI.
PMI, private mortgage insurance, can hit you, if you do not do the refinancing right. Why? Around 30 % of the people, who will refinance their home loan take certain part of their home equity as a cash to pay home improvement or paying some other big costs.
By paying off credit cards or improving your home, this can be extremely smart, but if you borrow more than 80 % of the home equity, you must pay PMI, private mortgage insurance, which can be hundreds per every year.
3. Mortgage Refinance Tips, Short Term Loan.
Usually short term mortgage loans offer lower interest rates than the long term ones.This means lighter monthly payments but also shorter payment time. The result is a larger monthly payment, but you can still save thousands later on.
4. Mortgage Refinance Tips, Ask About Fees.
Every mortgage refinance case includes fees, which are costs you do not necessarily remember to ask. They have several fancy names: document prep fees, courier fees, administrative fees etc. And lenders must disclose these costs, fees, within three business days of a mortgage loan application.
Now you can do the following. Request an official list of these fees from every company, you have asked an offer. When you have them all, add the fees to the interest rate of the mortgage loan. You will be surprised, when you notice that the cheapest offer has not the lowest interest rate.
5. Mortgage Refinance Tips, Pay Points.
When you plan to live in your home for many years, you can save money by paying points for lower interest rates. This happens by paying upfront fees by which you guarantee that the interest rates are lower during the rest time of your loan.
