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Key Credit Card Strategies to Follow

Credit scores and credit ratings are two financially related categories which can determine whether or not financial institutions will lend money to borrowers. Before an individual can acquire funds from a bank, credit union or other type of lending institution, the lender will check the credit ratings and credit scores of the applicant in their determination of whether or not to lend money to that particular person. If one wishes to find out how they can go from a bad credit card rating to an excellent credit card rating, there are five steps the prospective borrower should take in order to make their chances of obtaining funds much more likely.

1. Decrease Credit Card Debt to 10% or Below

One of the best ways to improve a credit card rating and take that current bad credit card rating and boost it to an excellent credit card rating is to try to get all of your credit card debt to 10% of the credit card limit or lower. Doing so will show other lenders that you have a good enough credit card rating to be given a higher credit card limit yet you choose to keep your balance low by paying off current debt on a continual basis. For those who may have high balances, if one desires to boost their bad credit card rating to an excellent one, decreasing the current debt of each credit card to below 10% of the credit limit is a step in the right direction.

2. Keep Overall Spending on Credit Cards to a Minimum

Although creditors want to see some form of spending action take place on credit cards, they do not want the spending to be excessive. Keeping overall spending on credit cards to a minimum not only will keep the credit card debt on each individual card to a reasonable amount but it will make it more likely that the individual can pay off their credit cards in a timely manner.

3. Don't Recklessly and Unnecessarily Apply for Credit Cards

Many people do not know that every time you apply for a new credit card, an inquiry is made on your credit report. The more inquiries which are made, the less likely it is that lenders will provide you with credit which could in turn make it more difficult to go from a bad credit card rating to an excellent credit card rating. Therefore, only apply for the credit cards which you truly need and will use. The fewer applications you fill out for credit cards, the better it is on your overall credit rating.

4.Increase Your Credit Limits Whenever Possible

It may sound unusual, however increasing your credit limits on your credit cards will help to make your bad credit card rating head towards an excellent credit card rating. Doing so not only shows other creditors that you are a valued customer with your current lenders but also allows the 10% or less balance on the credit card bill to be more probable.

5. Do Not Close Unused Cards

Another tip to help boost one's credit card rating from a bad to an excellent status is to keep unused credit cards open. Although this may be tempting for some, try to resist the urge to spend any money using that particular credit card yet keep it open. By doing this, the cardholder is establishing a credit and helping to increase their credit card rating in a favorable way.

BCG Blog Editor

How To Avoid Needless Credit Card Fees

You can avoid fees by carefully managing your account. Here are common fees and tips on how to avoid them:

1.  Annual or monthly fee: Common on charge cards, rewards and airline miles credit cards and on secured and sub-prime cards. Sometimes applied if you don’t use your card at least a few times during the year.

TIP : Consider the overall value when comparing fee and no-fee cards. If you are  thinking about  getting a rewards or airlines miles card, make sure the card’s benefits are worth the cost of an annual fee.

2.  Application processing fee: Charged on many sub-prime cards and some secured  cards when an account is opened.

TIP : Secured credit cards are generally much better deals than sub-prime credit  cards, and you can find secured credit cards that don’t charge application fees.

3.  Account reopening fee: Charged if your account is closed or cancelled by the  issuer and you ask to have it reopened.

TIP : Pay your bills on time to avoid card cancellation and an account reopening fee.

4.  Balance transfer fee: Charged for transferring a balance from one card to  another, this fee is commonly assessed as a percentage of the balance transferred.

TIP : When you apply for a new card, ask about balance transfer fees. Most  companies don’t  charge these fees to new cardholders for the first month or two.

5.  Bounced check or returned item fee: Charged if your check bounces.

TIP : Make sure you have sufficient funds in your bank account to cover your  check.

6.  Cash advance fee: Charged as a percentage of the cash advance, with minimum  charges                     common.

TIP : Cash advances are an expensive way to get cash. Not only do you pay a fee,  but interest  on cash advance balances begins to accrue immediately. Instead, use  your ATM or debit card to withdraw cash from your checking or savings account  at ATMs.

7.  Foreign currency conversion fee: Charged when you make purchases overseas  and the charges have to be converted to U.S. dollars.

TIP : If you plan to use a card while traveling outside of the U.S., shop around to find a card  with a currency conversion method that is favorable to you.

8.  Late fee: Charged if your payment is late, sometimes even if it is received on the due date after a certain hour.

TIP : Always pay your bill on time. If you send your payment by mail, allow at  least seven days for the payment to reach your issuer. Consider other payment  methods, such as online bill pay,  pay-by-phone or automatic payments. Ask if  your issuer offers e-mail reminders.

9.  Pay-by-phone or computer fees: Charged by some companies to pay your bill  by phone or computer.

TIP : Avoid last minute, fee-based payment methods. Look for online bill pay,  pay-by-phone or  automatic payments that do not carry a fee.

10. Over-the-credit-limit fee: Charged if you go over your credit limit.

TIP : Know your credit limit. Call your card issuer in advance if you need an  increase. Ask your issuer if it has free e-mail services that alert you when you are  approaching your credit limit.

11.  Statement copy fee: Charged for extra copies of monthly statements.

TIP : File statements for the past three years in a secure location. If you sign up  for online access to your accounts, you can download your statements and keep  them in your computer.

12.  Stop payment fee: Charged when you stop payment on a credit card convenience  check.

TIP : Be cautious about using convenience checks. If you write one and it is lost,  you may no be able to avoid this fee.

13.  Wire transfer fee: Charged when you use your card to transfer money or when  you buy money  orders, lottery tickets or casino gaming chips.

TIP : Pay for these services with a personal check or cash.

   BCG Blog Editor

U.S.

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BCG Blog Editor

Experian Launches Site For Small Businesses

Experian, which provides commercial financial information such as credit scores, has just  launched a new Web site for small businesses at www.BusinessCreditFacts.com.

Almost half the banks that lend to small businesses say that their use of credit scores in lending decisions reduces the level of credit risk in their small-business loan portfolio, according to an SBA survey.

The Web site provides:

• Answers to questions about establishing business credit, what credit information is available on a business credit report and how best to maintain good business credit
• Tools to submit requests to update a company’s credit report demographic information
• Links to owners’ own business credit report and score and to services that allow continuous monitoring of their business credit file
• Tools to enable an owner to contact suppliers and encourage them to report their payment experience with the small business

Be sure to contact a BCG Credit Coach on what is you best strategy to not only upgrade your business credit, but how to access the credit you need to expand and succeed.

BCG Blog Editor

How Do I Compare Credit Cards?

The interest rates and fees should be the first thing to consider when comparing credit cards. The annual percentage rate (APR) applies towards the balance carried over month-to-month on a credit card. Finance charges, on the other hand, may apply towards individual purchases. Some businesses charge fees simply for allowing you to make a credit purchase with them.

Attractive introductory rates of interest often apply for first-time cardholders. This period of zero or low interest usually lasts for the first six to nine months, depending on the company. Before you apply for any of these tempting deals, keep in mind that once that period expires, certain interest rates and fees will begin to apply towards your credit balance. There are tables available online that can help you determine what card is best for you.

Financial professionals will often urge consumers to never "max out" a credit card (hit or overspend the credit limit), or to even come close. The closer one gets to a credit limit, the more risk he or she takes with a poor credit history. The idea is to carry as little debt as possible. For many of us, this is simply not credible; however, try to stay on the low end, 30 percent or below, of the credit limit. Smart credit card consumers will use credit to fund wise long-term investments, rather than spontaneous purchases that one simply doesn't have the funds to pay for.

BCG Blog Editor

Credit Checks

Credit checks are necessary for many things in life, such as purchasing a home, renting an apartment, buying a car or any other large item. It is very crucial that you know the status of your credit so you are aware of your financial and credit standing. Thanks to credit checks, it's easy to know where you stand in terms of your credit status and history.

In a credit check, your financial history is detailed in an easy-to-read format. You can quickly see what a lender would see if and when they were to view your credit history. The information on credit checks is obtained from trustworthy sources, such as public records and your creditors.

How Credit Checks Work

Your credit history is usually reported to a credit bureau by your creditors. There are three major credit bureaus and your credit information is stored with them. They can only report your information to those who are authorized by law to view your credit.

An authorized source does not have the right to view your credit history whenever they wish. They must have a valid reason for seeing your credit such as your request to rent an apartment or obtain a credit card. Prospective educational establishments or employers sometimes require that they view your credit history.

When you apply for credit with any institution, you can be assured that the creditor will be checking your credit history. Any time you apply for any kind of store credit card, such as department store credit cards or gas cards, your credit will be checked before approved. It's essential that you are aware of your credit standing at all times.

Obtaining Credit Checks Online

It is very smart to review your credit history, say every six months. This way you can be completely apprised of your credit situation and take all the necessary steps to rectify any bad report, and potentially any that are false. Thanks to the ease of the Internet, it's now easy to obtain your credit checks online.

There are many websites available that allow you to view your credit history via the Internet. There are some services that offer subscriptions where they check your credit every day. Credit checks are also a good way to catch identity theft early on; when you subscribe to a service that checks your credit daily, they will alert you of any fraudulent activity.

Spend some valuable time to browse some credit checks sites on the Internet today. It's wise to take some time to compare between various sites until you find one that has all the features you need in a credit check site. You'll find that the Internet makes the process of checking your credit easier than ever.

BCG Blog Editor

Potential Threat to Your Credit Report

Did you know that your credit also could suffer from an unpaid parking ticket, a traffic fine you ignored or a forgotten library book?

A growing number of local and state agencies are using private collection companies to boost their revenues. More than 600 public libraries from Eugene, Ore., to Broome County, N.Y., turn unpaid accounts over to private collectors like Unique Management Services. Cities and courts hire others, including Municipal Services Bureau, to track down overdue parking, traffic and court fines.

Many collection agencies quickly report these overdue accounts to at least one of the three major credit bureaus, and the black marks send consumers' credit scores tumbling. Anyone who's had a spat with a phone company, health club or an insurer turn into a collection knows that this is a pretty big club to waive over the heads of consumers.

The lesson is this: Pay all bills and keep an eye on your credit report because you never know who is reporting and who is not.

BCG Blog Editor

Welcome to the BCG Blog!

Welcome to our very first Blog. Designed to inform and empower.

BCG believes in the old addage, "Knowledge is Power." We know that we have a responsibility to ensure that you are kept up-to-date on the fast moving world of business finance.

While there is a lot of clutter, confusions, complex terms and otherwise a fast moving world of international commerce, BCG brings to you easy-to-understand and vital information so you make the best moves to achieving financial success.

Our blog is just an ongoing action to lead the way in terms of financial education.  Whenever you have questions or problems, feel free to call one of Financial Coaches.

If we do not have the answer, then we will go the extra mile to find it for you.

BCG was formed by a team of experienced business professionals who overcame their own problems in understanding business finance and credit when forming earlier, additional corporations in other fields. In our own learning curve, we saw not only an opportunity, but a huge need in the business world.

Best,

BCG Blog Editor