Less than $2,500 More than $2,500
Always Never Sometimes

Once an individual has discovered that his identity has been stolen, the individual may be confronted with a great deal of anger and disappointment. What’s even worse is all the frustration he may encounter as he attempts to clean up his credit. Since identity theft usually begins as a financial crime, the most significant part of clearing up the damage is repairing the mistakes due to unauthorized charges and accounts that were opened in the victim’s name.

The best technique for correcting fraudulent activity on a credit report is to start fixing the problem immediately and be patient. The quicker mistakes are discovered, the simpler it is to clean them up. It is important to remember that even when mistakes are found early, disputing charges on a credit report and the entire removal process will take some time. Here are some immediate steps that one can take to minimize the damages:

Request A Fraud Alert

The three credit bureaus maintain records of every individual’s credit history. In the event that someone has fraudulently use another individual’s financial or personal information, one of the credit reporting agencies can be contacted and a request for a fraud alert can be initiated. A fraud alert does not cost the victim anything. The victim will only have to provide proof of his identity. The credit reporting agency that was contacted is required to notify the other two agencies.

By placing a fraud alert on the credit report, it makes it difficult for an identity thief to open any new accounts in the victim’s name. Once the fraud alert has been placed on the credit report, any new accounts or transactions would require a telephone call to the victim for verification purposes. The initial alert will remain on your credit for 90 days. It can also be renewed for an additional 90 days. Victims of identity theft can order a free copy of their credit report from each of the three credit reporting agencies. It is important for victims to make sure that their contact information is always up to date in the event they have to be contacted.

Review The Credit Report

Once a fraud alert has been placed on a credit report, all victims of identity theft are entitled to a free credit report from each of the credit reporting agencies. The credit reporting agency that is contacted will brief the victim on his rights and how he would go about obtaining a free copy of his credit report. When ordering a credit report, it is beneficial to ask that full Social Security numbers not be visible.

Once it has been determined which accounts were tampered with or fraudulently opened, it is suggested that the individual speak with someone in the fraud department and follow-up with a letter. When following up with a letter, send it certified mail and request a return receipt. This will allow the individual to have a record of the communication.

Once the credit report has been received, it needs to be reviewed in detail, and the necessary steps must be taken to remove all fraudulent activity off the credit report. Errors must not only be disputed with the credit reporting agencies but also with the fraud department of every business. If there are errors listed on the credit report that are due to identity theft, ask each credit reporting agency to block the information that is being disputed. This prevents the fraudulent information from appearing on the credit report. The credit reporting agencies are required to block transactions due to identity theft.

Request an Identity Theft Report

To create an identity theft report, one must file a complaint with the Federal Trade Commission. An identity theft report is there to assist with debt collectors, credit reporting agencies, and businesses in which fraudulent accounts were opened in the victim’s name. The benefits of having an identity theft report are the victim can have fraudulent information deleted from his credit report, stop companies from contacting him about fraudulent accounts, and it allows him to add an extended fraud alert to his credit report.

Monitor Your Credit Reports

Unfortunately, resolving identity theft issues take time. It is important to document and keep track of all the telephone calls, mail, and documents that are associated with the incident. When speaking to the credit reporting agencies, it is wise to write down the date, time, and the name of the company representative that provided assistance. When mailing documents, it is best to send copies and keep all originals. Keep track of important dates and follow up with each credit reporting agency to ensure that all the negative information has been deleted.

Most state laws protect individuals who are victims of identity theft. Any fraudulent accounts that were opened without the victim’s permission, the victim is not responsible for the debt. The liability for unauthorized use of a credit card is usually limited to $50. However, if the matter was reported prior to any fraudulent financial activity taking place, then the victim is not responsible for any unauthorized accounts or purchases.

Reporting unauthorized transactions as quickly as possible can have a great impact on the victim’s financial losses. In some states, if a victim reports the loss after two days of being aware of the identity theft, then the victim may be responsible for paying fees up to $500. If fraudulent activity is not reported within 60 days, the victim could be responsible for all fraudulent activity.

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We take for granted that there are stages of our lives we each go through, such as childhood, youth, middle-aged and elderly. So it is with our financial life, which also has, or should have, at least four major stages. Not everyone completes all four, but each of us should be aware of what those stages are, what is required to reach them, and the financial goals we should be pursuing at each stage.

Stage One – Survival

Most of us have been in this simplest financial stage at some point in our lives. In fact, some people never leave it. For many this is often the beginning stage of financial life, when we are first starting out and trying to make it in the world of money. The focus of this first phase is to put together the financial means to be able to survive in the world without enduring major hardships. These are the key components of attaining Stage One financial security:

  • You should be carrying no credit debt from month to month.
  • You should have enough money in the bank to be able to pay all your household expenses for one month if you suddenly lost your job.
  • You should have a term life insurance policy equal to ten times your yearly income.
  • You should have an affordable household budget that you maintain on a monthly basis with consistency.

If you are having trouble attaining all of the goals of Stage One, it is probably because you need to spend less, earn more or both. With proper discipline, you should be able to reform your finances in order reach these goals and to move up to Stage Two.

Stage Two – Stability

At the end of Stage One you are doing okay, but your financial position would still be endangered by things like a sudden job loss or another unexpected cause of fiscal stress. Your goal in Stage Two is to enhance your financial position enough to give yourself some sense of security and financial stability that can be maintained in the face of the normal kinds of adversity that typically occur in most people’s lives. You still won’t be rich, or even really financially secure, but you will at least have some reasonable short-term financial security and have laid the foundation for building further success. To complete Stage Two, you should:

  • Increase your savings until you could pay all your household expenses for three months without any income if need be.
  • Your student loans have been paid off.
  • You have created a will or trust for your loved one’s financial security.
  • You have started a retirement account and are making contributions every payday.

The goals in Stage Two are more long term and may take more time to achieve than the goals in Stage One. Yet, attaining them will create the financial bedrock upon which the attainment of Stage Three of your financial journey will be built.

Stage Three – Upward Mobility

The first two stages required primarily discipline and hard work. Both of these traits are also required in Stage Three, but now you want to direct your fiscal energy specifically on removing the remaining barriers to your financial freedom. This means directing your focus on these three goals, which when achieved will leave you free of most of your remaining financial burdens:

  • Raising your retirement account contributions to whatever level is needed to ensure that you have whatever you need in order to continue to live your current lifestyle, assuming that you stop working in your early 60′s.
  • In addition to what you are putting into your retirement fund, you are saving between 20 and 25 percent of all the money you earn to use for investments in stocks, bonds and other income generating activities.
  • You own your car free and clear with no car payments.

Don’t focus too much at this stage on what the actual sums of money you are dealing with are. Your retirement goals can be quite limited, provided it covers a lifestyle you are comfortable with. Your savings rate can be restrained if your expenses are firmly under control and your car can be quite modest as long as it is paid off. The goal is to keep moving forward and upward, whether it be fast or slow.

Stage Four – Financial Freedom

The final financial stage to which we all aspire is one where financial issues are no longer a major concern. Ideally, at this stage you should not only be making money, but actually giving some of it away to the people and causes you find worthy of your charity. But before you can attain that level of financial freedom, you need to accomplish the following goals:

  • Get that mortgage off your back by paying off your home.
  • Your retirement plan is fully funded and available whenever you decide you need it.
  • Your money from investments is enough to survive on without holding a job. You now work as much or as little as you want to.
  • Begin to do serious research into what people, causes or organizations could potentially prove worthy of your generosity, then begin budgeting whatever portion of your income you are comfortable with towards a charitable giving plan.

We are all unique individuals, so one person’s vision of financial success is likely to be different from another person’s in some important details. But whatever your fiscal dreams may be, you must complete all four of the financial stages of life to fully attain them. How quickly and by what exact means you move through those stages will vary depending upon your specific circumstances. Yet, with discipline, determination and a focus on the specific goals required of each financial phase, you too can one day arrive in the wonderful realm of complete financial freedom.

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With the aggregate national student loan debt now at more than $1 trillion, many people are increasingly finding themselves in difficult financial situations. The question of reducing or forgiving student loans is therefore becoming increasingly common. The average student loan debt for the class of 2014 is approximately $33,000 – the highest amount ever for any graduating class. For those that cannot fully pay back the debt, the balance grows and becomes higher and higher over time.

For people in financial distress as a result of student loans, the possibility to reduce or even eliminate the debt may be the only viable option to avoid financial ruin. Yet there is a common misconception that student loans cannot be forgiven. Many people would be surprised to learn that it may, in fact, be possible to reduce or even eliminate this debt.

Credit is granted via two main types of student loans: government and private. Depending on the nature of the loan, the ability for loan forgiveness greatly differs. In general, government loans are much easier to reduce; private loans, on the other hand, are difficult, but not impossible, to eliminate.

Government Loans

Government loans can be reduced or forgiven in a variety of situations. It is important to keep in mind that there are several types of government loans and not all loans will qualify for every situation. The following is a summary of the most common situations under which a debtor may qualify for reduction or forgiveness.

Income-based Forgiveness

This option is best for those whose incomes are relatively low compared to their debts. The income-based repayment plan allows one to make monthly payments, which are a function of income and the federal poverty line. The amount paid each month is 15% of the difference between adjusted gross income and 150% of the federal poverty line. For example, if a borrower earns $40,000 per year and has $60,000 in debt, then using the 2014 national poverty level for $11,670 for a single-person household, his annual payment would be: 15% * (($40,000)-(150% * $11,670)) = $3,374.25; the monthly payment would therefore be $218.19.

After successful payments for 25 years, the remainder of the loan will be forgiven. Only federal student loans, such as Stafford, Direction and Consolidation, are eligible for this plan.

It is extremely important to note that while this is one of the most common loan forgiveness plans, it also usually falls under the category of taxable income. In other words, the amount of debt that is forgiven counts as income and requires the borrower to pay income tax on it. For example, someone who has had $30,000 of debt forgiven and is in the 35% income tax bracket would have to claim this amount as income and pay $10,500 of taxes.

Public Service Forgiveness

Borrowers may have their loans forgiven by working in certain eligible public service jobs. Only Direct loans are eligible. Not all jobs qualify but amongst the most common ones that do include public school teachers, police officers and firefighters. In general, employment with government agencies or non-for-profit organizations that are designated as tax-exempt by the IRS qualifies. To qualify for loan forgiveness, borrowers must work in a qualifying job for ten years and make 120 monthly on-time payments, after which the remainder of the loan will be forgiven.

Teacher Loan Forgiveness

Teachers who have been teaching full-time in low-income schools for at least five years may apply to have up to $17,500 of loan debt forgiven. PLUS loans are excluded from this option. To determine if a school qualifies as low-income, one can check the U.S. Department of Education database, which is published every year.

Stafford Loans

Borrowers of Stafford Loans may be eligible for attractive debt forgiveness programs if they work certain jobs in the public sector. The purpose such programs is to encourage people to work in jobs that benefit the public and pay salaries that are relatively low compared to the costs of education. There are various eligible occupations, including teachers at low-income schools, public lawyers, law enforcement, social workers and more.

Private Loans

While government loans offer various reduction or forgiveness options, the same cannot be said for private loans. Such private loans are amongst the hardest to eliminate and many times cannot be discharged even in bankruptcy. Nevertheless, there is a perception that private student loans will always be with the borrower for life no matter what. This is not true and although they can be difficult to reduce or eliminate, this is not impossible.

There have been many situations where at least part of a student loan has been eliminated in bankruptcy. It is impossible to provide a strict guideline for situations that may allow one to have these types of loans reduced. However, in general, those who are in bankruptcy and can prove the financial inability to repay at least part of their student loans may be able to have at least some of the debt discharged. In general, certain types of private loans are typically easier than others to discharge. They include:

  • Loans to attend a school that is not on the Department of Education’s list of “eligible educational institutions.”
  • Loans provided by large-scale lenders such as big banks or financial institutions.
  • Loans for education programs that are not offered at traditional four year colleges (generally this includes vocational and job-specific training such as truck driving or beauty schools).

The process of attempting to reduce or discharge any private student loan debt is usually not easy and does require a good lawyer, but good news is that it can be done. The assumption that such debt can never be reduced is not correct.

Although student debt is a huge problem in the United States right now, it does not have to be a lifetime financial burden for all borrowers. In many cases, such debt can be reduced, forgiven or discharged. Due to the various laws and available options, students should generally always attempt to take out government loans first and turn to private loans only when necessary. Public loans have set guidelines for the reduction or forgiveness of debt and private loans can only sometimes be reduced or discharged in bankruptcy. Of course, more than anything, prospective students should do their homework and determine their total future debt and realistic salary expectations so that they do not get stuck with unexpected debt that they cannot realistically pay off.

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There never seems to be enough money for parents of small children or college students looking to buy clothes and supplies for the upcoming school year. However, there are ways that those who need to get their kids or themselves ready for the upcoming school year to buy all needed items without breaking the budget. What are some ways to create a back to school budget and stick to that budget?

Part I- Create a Plan

Get a List of Supplies

The first step is to create a list of everything that is needed to prepare yourself or your children for the upcoming school year. Kids who are in elementary school or junior high may receive a supply list that spells out everything that they will need for the upcoming year. High school and college students may receive a general list of what they will need from their teachers on the first day of school or during the first week of the school year.

When parents know what their children will need or what they will need to buy for themselves for the upcoming school year, it may be worthwhile to identify what they can get from others or buy used. For example, it may be possible to borrow a calculator from an older friend or relative or buy textbooks online as opposed to in the school bookstore.

This could result in savings of hundreds of dollars each semester or per school year. Typically, retailers will have clearance specials on supplies such as pens, paper and notebooks during the last week of summer vacation or during the first week of school to clear out inventory. This could be a great time to buy supplies without paying much for them.

Decide Where to Buy School Clothes

Buying supplies for the classroom is only one part of getting ready for the school year. The other part is determining where to buy clothes, shoes and other accessories to help yourself or your child look good and feel confident heading into the new school year.

Fortunately, many retailers will offer back to school discounts that can help a shopper save 40 percent on a pair of pants or 50 percent on a pair of shoes. State and local governments may also waive sales taxes during the week leading up to the new school year to further help parents and older students buy what they need.

Part II-How to Pay for the Supplies

Create a Budget Ahead of Time

No matter how much a person may need to buy, it is important that he or she create a budget and stick to it. Aside from waiting for sales or borrowing goods from others, it may be possible to save money by shopping at thrift stores or going to outlet stores where designer goods may be heavily discounted. It may also be worthwhile to look for retailers that sell gently used brand name clothing at discount prices while also providing store credit in exchange for clothing that an individual may no longer want.

Cash or Credit?

The first thing that an individual needs to decide is whether he or she will pay for school supplies with cash or with credit. While spending with cash makes it easier to stick to a budget, buying goods on a credit card provides financial flexibility for those who may have multiple kids to buy supplies for or doesn’t have enough money in the bank to buy a new pair of glasses or $500 worth of textbooks.

Take Advantage of an Incredible Teaching Moment for Kids

One way to engage children and teach them how to be fiscally responsible is to let them have some say over what they buy for the upcoming school year. Parents can give their children $100 for clothes that can be spent on anything that they want. However, that is all the money that they have. Once the money is gone, the kids are stuck with what they have in their closet or what is bought for them.

Ultimately, this will help teach kids how to make their own style decisions as well as learn how to stick within a budget. When children are exposed to the financial realities that their parents face, they may be less likely to protest when they don’t get the designer clothes that they want and appreciate what they have already. An arrangement such as this one may also be beneficial if kids are at an age when they don’t want to go clothes shopping with their parents anymore.

Part III-Learn From Your Experiences

Keep Detailed Lists Each Year

It is a good idea to keep a list of all the purchases that have been made in years past. This can help shoppers remember when and where they did their shopping so they know where to go to get a great deal this year and where not to go if they spent too much. As time goes by, it becomes easier to instinctively know where and when to shop based on what a family’s needs are.

Try to Keep Spending Consistent Each Year

Another way to teach kids about budgeting and keeping costs to a reasonable amount may be to show them how much was spent last year on school supplies. A game can then be created where the challenge is to keep spending within 3 percent or some other predetermined increase from the year before. Children can learn while having fun at the same time, and parents can encourage frugality by offering to spend any remaining funds on a future trip to the mall where their son or daughter can buy whatever he or she wants.

Back to school shopping does not need to be a time of high drama or stress. With experience and a little bit of research ahead of time, it will get easier to create a shopping list, create a budget and get everything needed while staying within that budget. Over time, parents and older students will be able to complete their shopping quickly and on their own schedule.

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Good financial practices and money management skills are necessary for virtually everyone, regardless of how much they earn or the amount of disposable income that they have access to. Proper planning for the future is also an essential part of successful money management. For instance, discovering where each dollar goes and budget development are two wise activities for anyone who wishes to avoid financial crisis. However, sometimes a person may need help with designing an appropriate budget. Here are some essential tips on successful budgeting and other money management skills:

Developing a Realistic Budget

Most experts agree that the key to financial success at any income level is by developing a realistic budget. Setting goals, being able to live comfortably within one’s income and being aware of where each dollar is spent are all aspects that factor into proper budgeting. However, this task can be a bit overwhelming for those who have little or no experience managing money. As a result, some people seek the help of a financial planner when designing a household budget.

Assessing Debt to Income Ratio

The first step someone should take when attempting to take control of his or her finances is to complete a realistic income to debt ratio assessment. Consumers should begin by creating a list of all their income sources. After this has been completed, a list should be made of their fixed expenses, the latter of which refers to those that do not fluctuate each month, such as a car payment or mortgage. Next, variable expenses should be listed, such as money spent on clothing, recreation and entertainment. Creating this list of expenses, even those that seem insignificant, is the best way to track spending patterns and identify necessary expenses. This way, the person can prioritize his or her expenses and eliminate unnecessary purchases. The objective of this task is to ensure that basic needs such as food, housing, education, insurance and healthcare are met.

Both bookstores and public libraries are good sources of essential information concerning money management techniques and budgeting. Additionally, computer software programs are also available to assist individuals to develop and maintain a budget, balance a checkbook and create a strategy for paying off debts and saving money.

Identifying Spending Leaks

Identifying spending leaks is absolutely essential. Spending leaks are defined as money that seems to disappear without one knowing exactly where it went or why. Almost everyone has experienced this phenomenon at some point in their life and it can be very frustrating. One exercise that a financial planner or online money management course may recommend is taking the time to write down where each dollar is spent for one full month. This log will typically include both large expenses, such as monthly utility bills or mortgage and car payments, and small expenses that may seem inconsequential at the time they are made. The latter often add up to a surprising amount of money. This is a very practical way to determine if unnecessary expenses are eating away at money that could be saved for a rainy day.

Avoiding and Eliminating Debt

Another factor that should be addressed by anyone interested in successful budgeting is debt. Outstanding debt can quickly spiral out of control if a person is not careful with things such as credit cards, personal loans and similar arrangements. It is essential that one understand that consumer credit is nothing more than the spending of future income. Therefore, most experts recommend avoiding the continuous use of credit unless one is expecting a windfall with which to pay off his or her various loans. Most individuals who are knowledgeable and experienced with regard to money management will also advise consumers to avoid arrangements such as payday loans or similar ventures at all costs. This is because such arrangements simply wreak havoc with one’s future income and can eventually make it impossible to structure a realistic budget.

Dangers of Impulse Spending

Frivolous spending is one of the most formidable enemies of those attempting to adhere to a budget. The ability to resist spending money on items that are truly unnecessary is key to a sound financial future. There is one simple tip for eliminating this type of spending, which is to implement a cooling-off period before making an unplanned purchase. In most cases, after thinking about the item for a day or two, the individual will find that future financial success will outweigh the desire for the unnecessary object.

Small Changes for Big Savings

Consistency is the key when saving money. Even small amounts eventually add up to a substantial figure, and it is often the simplest actions that result in the greatest savings. For instance, one might try adding a bit of water to a bottle of all purpose cleaner when it begins to run out. Anyone who has tried this with household cleaners or similar products can attest to the fact that the added water does nothing to lessen the product’s performance.

Another example of a great way to save money on household products is choosing a box of powdered dishwasher detergent as opposed to dissolving tablets. This is because the trap of convenience is where many individuals end up spending far more than they should on certain items. Many times such products do not really save the consumer as much time as he or she may think. Most people would agree that pouring detergent from a box is just as easy as placing a dissolving tablet in the dishwasher, although the price difference between the two items can be as high as three dollars.

Those who must buy lunch during their work week can save almost $400 a year by simply ordering ice water with their meal rather than a soft drink. This is another great example of how little things add up.

Getting in Touch With Creditors When Money Problems Arise

Finally, anyone who is struggling financially should immediately get in touch with his or her creditors to explain the source of the difficulties and request a modified payment plan that will allow the consumer to manage the debt in a positive way. It is never wise to wait until delinquent accounts have been passed on to a collection agency. Once this has happened it is a sign that the creditors are no longer willing to work with the client to clear the credit card debt or other outstanding loans.

Although no one is perfect with regard to budgeting money, implementing the aforementioned tips will go a long way toward keeping control of one’s spending. Therefore, anyone whose goal is successful money management should not procrastinate, but he or she should follow the steps outlined above to create a realistic and practical household budget and make every effort to adhere to it throughout the year.

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The allure of a black charge card is undeniable. Anyone who is handed the card will usually immediately recognize a black card by its unusually heavy weight as it is made of pure titanium. Yet, aside from the vague notions of elite wealth that a black charge card implies, very few actually understand how black cards, or charge cards for that matter, even function. Charge cards operate very differently from a credit card as with a charge card the holder is required to pay the entire balance of the card every month or face an initial late fee comparable to a checking account’s overdraft fee. For many, the very point of having plastic is to accumulate a balance that one doesn’t have to pay down all at once so the idea of charge cards may seem unusual, and they do have various aspects that make them more or less desirable.

The Charge Card

As it stands, charge card services work very simply: qualified applicants pay a sign-up fee and a subsequent monthly fee for their card which has a total limit that reflects each customer’s individual debt to income ratio along with many other aspects of their credit history. As mentioned, these cards must be paid off in full every month and failure to do so repeatedly can have a very negative effect on one’s credit. The majority of people have a difficult time making one big lump payment every month and as a result, most charge card companies are extremely selective in who they approve and good credit is a must. Most charge cards come in varying levels of status, many beginning at a gold card and reserving the “black” designation for the elite class. Each card offers varying levels of benefits and demands an escalating scale of fees as the basic cards usually cost around $100 per year and the some black cards are known to require a $2500 initial start-up fee plus $7500 per year after that. For a little perspective on how lucrative the card is, a recent report has put the average black card holder at $16.3 million in total assets and $1.3 million in annual income.

Why a Charge Card?

Just as traveler’s checks were introduced as a way to circumvent the hassle of currency when traveling internationally, charge cards are meant to replace cash completely. While many balk at having to pay the entire card down every month, it allows a user to completely replace hard cash while earning numerous benefits for every dollar that they are charging to their account. Some of the biggest benefits offered by charge card providers to their customers are services that replace broken items purchased on their cards including phones and computers, as well as included car rental insurance, roadside assistance and free event tickets. As the level of the card increases, as do the perks reserved for black card holders which can include personal shoppers, first-class flight upgrades, free nights at exclusive hotels around the world and the oft-rumored non-existent credit limit. In theory, one could buy a house in full on their black card, as long as they have the means to pay their balance off at the end of the month.

Credit Considerations

Aside from the so-called “perks” of charge cards, up until recently they have presented holders with a significant advantage in terms of their credit score. Under the old methods of calculating credit, charge cards were viewed similarly to credit cards and its credit limit was determined to be the highest balance the card ever held. In that frame, charge cards looked like high-limit credit cards that were constantly paid down monthly and usually had a low balance, which is an absolutely terrific asset for one’s credit. More recently though, charge cards have been viewed more accurately and while they do not offer the same almost unfair advantage in the credit score world, having a charge card is still viewed more positively by credit agencies as one must have stable income and an already great credit rating to even be approved for a charge card in most cases.

Why a Credit Card?

The biggest positive of a credit card is the ability to charge now and pay off gradually. Credit-wise, the best thing one could do for their credit with a credit card is continually pay the card off every month as this inspires a rise in one’s credit score and a rise in their card’s credit limit. A high balance of “revolving credit accounts”, a.k.a. credit cards, can really damage one’s overall credit score and the interest rates of most credit cards makes them financially unwise for long-term debt. Nonetheless, credit cards are absolutely key in the financial world and the easiest way to build credit is with a credit card. High-end charge cards are usually not available to those with a short credit history or poor credit and are really not options in terms of building or rebuilding credit, but there are cards that work similar to charge cards called “secured credit cards” that function in a similar manner but are used specifically to rehabilitate bad credit. Also, many credit cards now offer benefits like a “cash back” program that refunds users a certain percentage charged every month and competitive frequent flier miles that make the allure of charge card benefits less glaring.


In the end, charge cards and credit cards are both great options and offer very similar benefits especially following recent changes in credit score calculation. For many, charge cards maintain their allure because of their position as a status symbol and the “black card” will most likely continue to be the ultimate accessory for the wealthy for some time to come.

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Your credit score has a lot of influence over your finances. And you know that there are ways to build up your credit score: make payments on time, have a mixture of different credit types, keep debt down, apply for credit only when needed, and more. But are there certain things that you can’t control?

It is often hard for younger applicants to get approved for credit. Why is this? Does age influence your credit score?

Looking at Age Is Perfectly Legal

Lenders are entitled to look at age. However, no company should use age to discriminate against an applicant. State and federal laws on financial lending are crystal clear on credit scoring systems. It does not matter whether their company has hired FICO soft-wares and any other proprietary scoring system; the law allows credit scoring systems to consider the age of all applicants as long as they do not practice discrimination against the elderly.

Though Age Matters, Scoring Systems Do Not Consider It

Applicants are requested to write their date of birth along with their personal information. The law allows credit scoring systems to use age when calculating credit score for their applicants. However, the credit reports generated by credit companies have indicated that age is not used in the calculation. FICO’s credit scoring systems do not utilize or factor in age when calculating applicant’s score.

Age Is Important For Credit Score Maintenance

For applicants or credit card owners looking for ways to maintain their credit score solid, age becomes an integral factor. Even though credit scoring systems do not use age to calculate credit score, companies such as FICO have realized that older people are a better credit risk. For one, they have had a lot more time to build their credit history. The company realized that approximately 55% of clients over the age of 60 years recorded scores of above 750. If FICO’s statistic is anything to go by, aged people are better when it comes to credit taking and payment. They tend to make prompt payments for their credit cards better than the youthful counterparts. Credit card and installment loans reports indicate that young record more debts than older people. They end up getting lower credit scores. Companies find it easier to transact with the older lot because credit reports have produced high-credit scores and lower credit risk overtime. Simply put, many lenders will think twice when loaning out money to a client of a certain age bracket.

Factors That Credit Card Owners Use to Backup Age Influence

Cardholders may think that companies will look at their age and stop at that. A few habitual things can help shape their credit scores and lead to more appealing credit reports.

Proper Management of Credit Card Portfolio

Cardholders should make prompt payments. The age factor is not considered in isolation. FICO calculates credit score using payment history of the clients. So, as long as the user continues to have great payment history and avoid payment defaults, bankruptcies and foreclosures, the score will go up.

Age might initially work against their application, but a well maintained credit card portfolio can persuade lenders. It creates an impression that the applicant is credit worthy and most importantly that they have a responsibility to watch over the maintenance of their credit card score.

Therefore, all applicants should realize that they have no control over the age influence when it comes to calculation of their credit scores. All they can monitor is their habits related to credit card payment history and loan history. Age is out of control, and the credit scoring systems have the freedom to use it in the calculation. All that an applicant do is keep their credit card portfolio in order and pray that age bracket works to their advantage. Age influence is real, and they should come to terms with the bitter truth.

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Many Americans fail to plan for retirement. Gone are the days when an employee could just show up for work for 30 years and then collect a sizable pension for the next 30 years while they sat on a beach or hit the golf links. Today, workers are more likely to have access to a defined contribution plan. These plans have only what the employee puts into them, along with any employer matching funds. They are not guaranteed payoffs that last until death. Recent polls show that 60 percent of Americans have less than $25,000 put away for retirement. Millennials are not in any better shape for the most part. Only 17 percent expect to retire with 80 percent of their working income available.

The Time to Start Saving Is Now

It does not matter if one is 25 or 55. If an individual has access to an income, he or she should start to save money toward retirement now if they have not already done so. Of course, the amount of income they have will to some extent dictate the amount of savings they are able to sock away. The reason saving today is better than saving tomorrow is related to the time value of money. A quick check of a standard retirement calculator will show that an individual who saves $5,000 per year from ages 25 to 35 and then leaves the money alone until age 65 will have a larger nest egg available at age 65 than one who started saving at 35 and saved $5,000 per year, provided they earned the same 8 percent rate of return on their investments. This example just goes to show that using the power of time to your advantage is one of the best money moves a person can make.

Ways to Save

Many Americans think they make too little to save. If they fail to save, they will have too little to live in retirement. Therefore, the cost of not saving is great. There are several ways to start a retirement account. Some are sponsored by employers. Others receive all of their funding from individuals.

401k Accounts

One of the more common retirement savings vehicles is the 401k account. These have been around for several years, and they provide a tax-sheltered way to save for retirement. Many employers offer these accounts, and all an employee has to do to start saving is fill out an application form and then give an authorization for a specific deduction that can be a certain dollar amount each pay period or a certain percentage of pay.

The best time for employees to use a 401k for retirement investing is when their employer offers to match a certain percentage. One of the more common matches are 100 percent of the first 3 percent of the employee’s salary. Therefore, an employee who makes $2,000 a month would not have only $60 per month invested. With the employer’s match, that money would get an automatic 100 percent return to $120. Employer matches can be less than dollar-for-dollar, but it is always a good idea to invest at least up to the match.

Traditional 401k accounts also have a tax advantage. The income tax owed on this income is deferred until the money in the account is withdrawn. This can cut tax expenditures today so that the impact on current net pay is lower.


Individual Retirement Accounts, more commonly known as IRAs, are another option that can benefit those who do not have the benefit of an employer match in a 401k. The traditional IRA will cut down on an individual’s taxable income during the year he or she makes a contribution. Like the traditional 401k, the tax is due on earnings when the money is withdrawn.

Roth IRAs are a newer addition to the retirement planning stable. Contributions to a Roth IRA are not tax-deferred. They are funded with after-tax income. The benefit comes when the holder of the IRA withdraws funds from the account. Any gains are tax-free. This could conceivably lead to a very large payout in the future. Those who start investing in an IRA early can definitely benefit over the longer term more than someone who begins investing later in life.

Plan to Save

Regardless of which avenue an individual takes, it is important to set a plan. It is even more important to actually stick with the plan. Those who are able to stick with a plan for the long run will be able to build a solid nest egg by retirement.

Keep from Debt

One thing that can really derail a retirement plan is debt. Interest costs cut the available funds for retirement savings. It is much better for an individual to have their money work for them than it is for them to have to work for money to pay for the privilege of borrowing money. Those who can avoid debt will be more likely to stick with their retirement plan.

The time to save for retirement is right now. Millennials and Gen Xers alike can benefit from starting as soon as possible. Even Baby Boomers who still work should be saving toward their eventual retirement. Those who have employer-sponsored plans that offer matching funds should go that route at least to the amount of the match. Those who do not have this benefit should open up a Roth IRA and start there. They might have to give up on cable or eating out a few times a month, but their future selves will definitely thank them for their discipline as they are able to thrive in their golden years.

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One of the most important parts of learning how to use credit is learning how to use it responsibly. A new credit card does should not mean out-of-control spending – as a matter of fact, people will quickly learn that they can spend more if they remain in control than if they splurge.

For anyone who is trying to control their impulse buying on those purchases that seem to sneak in under the radar, here are a few of the top ways to stop out-of-control spending.

Go into the grocery store with a list.

Shoppers who attend grocery stores and other ongoing shopping expenditures with a list have much better luck in sticking to a budget than people who walk into a store unsure of what they actually want to purchase. Keeping a list tends to focus the mind on those items; as such, the buyer will literally not see those impulse items that are placed in strategic locations around the store in order to increase the chances of a purchase.

Clip coupons out of the Sunday paper.

Although there are many other ways to get news more quickly than the daily newspaper, there is no better place to get local coupons. The Internet is great for chain stores; however, for buyers who are looking to get discounts on things such as groceries and local warehouse staples, the Sunday paper is still the best place to look. As a matter of fact, the papers have begun to include more coupons in their Sunday editions simply because they recognize that this is the reason that they are able to stay in business. Clip those coupons before going to the store in order to save even more money on each trip.

Buy staples in bulk.

If you can make your purchases of groceries and things like underwear and T-shirts in bulk, then you can save more money for the luxuries that make your lifestyle great. Getting a warehouse membership is usually one of the best investments that an individual can make in this type of a lifestyle. Warehouse memberships allow people to make these stable purchases without having to spend a great deal of money at once. The staples will also last much longer, saving people money in the long run as well.

Detail uses for your credit cards.

For people with more than one credit card, a detailed plan for each of those financial devices is a great way to stop out-of-control spending. For instance, many individuals will have one credit card for emergencies only. Yet another credit card will be for gas and groceries. Another credit card will be for impulse purchases once a month. Credit cards that are meant for impulse purchases are usually paid back by the end of the month so that they do not carry a balance. This leads directly to the next tip:

Try not to carry a balance from month to month unless you absolutely have to.

Much of the burden of financial debt comes from interest payments and late fees rather than from principal payments. If it is at all possible, do not carry a month-to-month balance on impulse credit cards. Ideally, the only payments that should have interest-bearing accounts are long-term payments on large assets such as cars and houses.

More Serious Issues

For individuals who have dug themselves into a more serious financial hole, there are many steps that can be taken in order to bring back financial balance. Below are just a few of the ways in which an individual can help him or herself get back on the right financial track.

Debt management

Debt management is the first step in obtaining professional financial assistance with a budget. This is usually the first service that should be considered before any other type of professional financial help.

Debt management is not as invasive as other forms of credit management. The extent of the professional help will be for the financial professional to give you advice on a schedule and check in with you routinely. However, you will not be required to turn over any financial records to the professional, nor will you have any other records given to outside third parties.

Credit consolidation

Credit consolidation is a step between out-of-control spending and bankruptcy that has given many people options that they otherwise would not have had. Credit consolidation attempts to find a third-party creditor that will help to alleviate some of the debt that has accumulated over a period of time. Credit consolidation is usually only an option if there is more than $10,000 worth of debt and no viable, immediate income stream that can be directed towards paying off that debt.

Credit consolidation is also very helpful when there is an unexpected emergency in a household. Consolidation is useful for setting aside debt when there has been a death in the family, especially a breadwinner. Unexpected unemployment is also a reason to get debt consolidation services.

Some of the benefits of credit consolidation include lower monthly payments, a single bill rather than multiple payments to different companies and a barrier between the borrower and creditors that can alleviate some of the pressure that is usually involved with paying back a late account. Many creditors will also forgo late fees and other penalties if they see that a borrower is attempting to work with a credit consolidation company that is highly reputable. They are much more interested in getting some of their money back rather than overcharging fees and forcing the borrower into bankruptcy. Bankruptcy usually means that none of the money on account will be paid back, and the company must write the debt off as a total loss.

Depending on the individual situation of a borrower, there are many other ways that can be used to stop out-of-control spending. Some of these methods involve financial professionals; others are self employed methods of controlling a budget. Whatever methods are used, make sure that they are reputable and effective. There is no reason that any borrower should have to deal with the repercussions of out-of-control spending when there are so many ways to curb it before it becomes a huge problem.

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Are you interested in obtaining a credit card and not sure which type to get? Believe it or not, all credit cards are not created equal. During the first three months of 2014, more than 990 credit card offers were sent out – an indication of how many different types there really is. Depending on the type of credit card you get, there are differences in interest rates, fees and various options. Choosing the right credit card involves research, knowing what you want in a credit card and what’s available out there. Read this informative guide on what to look for in a credit card offer.

Type of Credit Cards Available

There are several types of credit cards being offered. Before you know what to look for in a credit card, it’s important to know what’s available. Here are the most common types of credit card offers.

  • Balance Transfer Credit Cards – These are the most popular credit cards because they allow borrowers to transfer balances from other credit cards onto this card. In many cases, transfer credit cards come with a 0% interest rate on purchasing for the first year. Although the upside of these cards is that they allow borrowers to pay off other credit cards, the downside is that they often card a transfer fee, which can add up to a substantial amount.
  • Convenience Check Credit Cards – These cards come with checks that consumers can write that are tied to credit cards. While convenient, they often come with a higher interest rate.
  • Cash-back or Rewards Credit Cards – These credit cards have been very popular since they first came out in the 1980s. They give back cash, often up to 5%, on every dollar spent on purchases. They often specify what type of purchases they cover, e.g. groceries, gasoline, home improvement supplies, etc. Some also give airline miles or points to be used towards other purchases.
  • Secured Credit Cards – This type of credit card is typically used by individuals with no credit for those who have bad credit but are trying to rebuild their credit. The borrower generally has to put some money into an account to be used as collateral or security. Secured credit cards generally have a higher interest rate.
  • Gas Cards – These credit cards are used for purchases at gas stations. They’re usually either general or brand-specific, which means consumers must make their purchases at a certain brand of gas station. Both offer rewards or rebates based on the gas and/or merchandise purchases that were made that month.
  • Basic Credit Cards – These are what the name entails. They’re a basic credit card that allows consumers to make purchases and pay the money back in monthly installments. They don’t offer rewards, rebates or cash back. Interest rates on basic credit cards vary from low to extremely high, depending on the card and the issuer.
  • Brand-specific Credit Cards – This type of credit card is used at specific places of business such as hotels, restaurants, department stores and can only be used at that specific store or establishment.

What to Look for in a Credit Card Offer

What a consumer looks for in a credit card depends a lot on what the card is needed for as well as their spending habits.

  • Interest Rates – This is probably the most important thing to look for in a credit card because it can make a big difference in determining the monthly payment. Consumers are often shocked when they see their final balances, which are much higher than their initial purchases. Ask these three questions.
  1. After the initial low interest rate, who much will the interest be?
  2. How long does the 0% or low interest rate last?
  3. Do they offer a fixed or variable interest rate?
  • Annual Fees – Many consumers get credit cards with low interest rates only to discover later that the card is bombarded with various high annual fees. Some charge processing fees, servicing fees, activation fees and more, and these often more than make up for the low interest. Prior to signing up for a credit card, consumers should double check about annual fees.
  • Credit Limit – Consumers who only need a credit card for occasional use are not going to be too concerned about the credit limit. On the other hand, those who have a large purchase in mind are going to need one with a larger credit limit. However, new borrowers or those who might be compulsive shoppers should start off with credit cards that have a low credit limit to avoid getting too far in debt.
  • Know the Fine Print – When choosing a credit card, interest rates may be the single deciding factor to the consumer. In fact, many consumers check interest rates and nothing else when applying for a credit card However, just because the credit card comes with a low interest rate doesn’t mean that it’s not going to get their money some other way. Consumers should read all the fine print before signing their name on the dotted line.
  1. Are they charging fees for cash advances?
  2. Do they allow transfers?
  3. What type of late payment fees will there be?
  4. What about over-limit fees?
  5. What type of transaction fees do they carry?
  6. Are consumers automatically enrolled in credit protection services?
  • Grace Period – The grace period, which begins on the day consumers make a purchase and goes to the day it begins accruing interest, can also play a big part in how much consumers end up paying for credit card purchases. Believe it or not, some credit cards have no grace period, which means they begin charging interest on the same day purchases are made. What makes this unattractive is that it makes it very hard to pay these credit cards off because they’re constantly accruing more interest. Consumers should look for credit cards that offer the longest grace period.


Credit cards can be a very helpful financial tool when used properly and in conjunction with good spending habits. Hopefully, this article can help consumers make wise choices not only when using their credit cards but also when choosing a credit card. They should keep in mind that just because a credit card company is advertising that they offer the best credit card is no guarantee that it really is the best or the best for them. Another point to remember is that the best credit card offers do not have to send flyers in the mail to get customers – customers come to them!

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