credit notes 9 11 07

credit notes 9 11 07 - Power Pay Two assumptions o Commit...

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9/11/07 Notes Payment History Issues Issue Pro Con Joint Owner Helps Liability Authorized signature Helps Not Liable Inactive cards Shows less than 50% usage Only used in Computation if in last 3 months Keeping credit cards under your 50% limit is best way to get good FICO score. Credit Score Issue Interest Rate Charged goes up as you become more of a risk to them. Universal Default If you are late on a payment on ANY loan…. Other lenders can raise THEIR interest rate. Credit Payments: Pay on time Two or three cards Guard against extremes Extremes: Late payments Collection agencies Charge offs Judgments, liens, garnishments Large amounts of available credit Debt Consolidation? STOP CHARGING NOW! Choose an amount to pay each month and do not change from that amount Make automatic account transfers
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Unformatted text preview: Power Pay Two assumptions o Commit to paying the same each month until out of debt o NO NEW DEBT in the time period Other Options Negotiate interest rate Transfer from high interest to low interest credit cards Only 3 Choices 1. Raise your income 2. Reduce your debt 3. Change your standard of living Legal issues around credit (stolen card, how much money do I lose) Truth in Lending Law o Comparison on one offer to another o Protection of fraud o Displays cost of credit in terms of payment What about debit cards? Electronic Funds Transfer Act Equal Credit Opportunity Act Prohibits discrimination Fair Credit Reporting Act To Ensure: 1. Confidentiality 2. Accuracy 3. Consumers right to know...
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credit notes 9 11 07 - Power Pay Two assumptions o Commit...

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