All About Credit Cards

Is it really that important to raise your credit score? Maybe. Lenders have "break points" between scores that get you one interest rate or another. Suppose you have a score of 688, and the lender drops the mortgage rate by .5% at 690. Those two points can cost you an extra $20,000 in interest on a $170,000 loan (over 30 years at 6.5% instead of 6%). Is that important enough for you? What can you do?

Eight Ways To Raise Your Credit Score

There are ways to raise your credit score. Some of them take more time than others to have an impact, but if you start working on it now, you can boost that score before long.

1. Check credit reports for errors. If there are errors that are hurting your score, contact the credit reporting agency that issued the report and challenge them. The agency is obligated to investigate and correct any mistakes within thirty days. If a creditor doesn't respond to their inquiries, they have to automatically remove the item in question (you may have to remind them about this part of the law).

2. Pay off balances every month. It is just good for your future, as a way to keep you out of excessive debt. It can save you a lot in interest also. Finally, it demonstrates your ability to manage your debt, and so increases your credit score.

3. Have the right number of credit cards. At least two is best, but having more than five or six can actually lower your score.

4. Pay bills on time. Borrow money to get those bills paid on time, if you have to. Paying on time has the biggest positive impact on your credit score. Unfortunately, paying off old delinquencies won't immediately raise your credit score, because these will still show as being paid late, but start paying on time now, and with time, these old late payments are deemed less important.

5. Manage your credit card balances. It's best for your credit score if the balance on a given card is less than 50% of the limit on that card. Manage your use of your cards to keep the balances below this amount. If, for example, you have three cards with limits of $2,000, $3,000 and $2,500, it is better to have a $600 balance on each than $1800 on one.

6. Don't apply for too many cards and loans. These applications generate inquiries on your credit reports. Having oo many inquiries in a short time lowers your score. Avoid applying for a lot of cards in a given year.

7. Keep and cancel the right cards. When you close accounts or cancel cards, do it right. Old accounts are better than new ones for your credit score. Keep those old ones open, even if the balance is zero. Also, because it's best to keep balances below 50% of the card limits, you might consider canceling your lower-limit cards if you regularly keep balances on your cards.

8. Be careful about whom you borrow from. Furniture stores and others help you finance your purchases, but through finance companies. This can lower your score. If you can't pay cash, it is better to borrow the money from a bank or credit union.

Maybe you noticed that this is almost a list of things that lower your credit score. It basically is, and you should keep that in mind. Paying things bills on time and avoiding the things that lower your score - that is the best way to raise your credit score.

With so many credit card deals on the market, consumers can have a hard time deciding on the right deal for them. There are many rate options for new credit card customers. These include cards with a 0% interest rate for a fixed period, low balance transfer rates or introductory rates. However, there are also cards which feature a low standard interest rate.

Who Should Get A Single Rate Credit Card?

A single rate credit card can be a useful option for those who are looking to transfer large sums of debt which they are hoping to pay off. As well as transferring balances from other credit cards, new credit card customers are often able to transfer balances from high interest store cards. Some may even be able to transfer outstanding loans to a lower rate credit card.

Is There A Catch?

Unlike other cards, a single rate credit card has one rate for all transactions. This means there should be no extra charge for cash withdrawals, credit card cheques and purchases. It's always best to read the fine print to make sure, though.

To get the best from a single rate credit card, try to pay off more than the minimum amount. This will reduce the amount owed as well as the amount to be paid each month.

What About Introductory Rates?

The whole point of a single rate credit card is that it offers one rate for all transactions. Most credit cards with a low standard rate offer that rate only, with no introductory low rate. Those that do offer a low rate for a fixed period often charge for the balance transfer. The charge in this case is usually 2% of the amount transferred. This can soon add up when people are transferring large balances.

What Kind Of Interest Might I Have To Pay?

Credit card interest rates vary widely. Aside from the 0% preferential rates and the cards within the 20%+ bracket, there are several cards with rates between 8.9% and 17.9%. It's best to look at the other advantages a particular card offers before making a final decision.

Do Single Rate Credit Cards Offer Rewards?

Like other credit cards, some single rate credit cards offer reward schemes. Some cards give a cash back reward of a percentage of spending over certain thresholds. For example, consumers who spend under £3,000 a year might get a cash back reward of 0.5% of the amount spent. People who spend over that amount might get a cash back reward of 1% of the amount spent.

Other possible rewards are Nectar points; air miles or other travel incentives; points which can be exchanged for vouchers, travel or cash; and travel insurance.

There are also several credit cards that contribute a fixed proportion of your spending to certain charities. The card issuers may also offer a donation to these charities as an incentive for opening an account with them.