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Is Your Credit Score Keeping You In Debt

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If your credit score is low, getting out of debt can be much harder. It diminishes your ability to take certain actions that could improve your situation, leaving you with an uphill battle that may seem insurmountable. Once you’re in deep, digging your way out of debt is a cumbersome task even if your credit score is stellar. However, if yours is poor, the journey is usually rougher. However, that doesn’t mean things can’t improve. If your credit score appears to be keeping you in debt, here’s what you need to know.

How a Bad Credit Score Makes Getting Out of Debt Harder

When your credit score is poor, particularly if it has been for some time, reducing your debt is often challenging. Usually, you’re stuck with high-interest rates. As a result, a larger portion of your monthly payments goes to interest than they would if your rate was better, slowing your forward progress.

Additionally, you have fewer alternatives to explore that can help you get out of debt faster. For example, many people recommend personal loans for consolidating high-interest debt. But, if you don’t qualify or can’t get a better rate, that might not be a suitable option.

What You Can Do to Improve Your Debt Situation

While certain options for getting out of debt might not be viable, that doesn’t mean all hope is lost. There are things you can try, even if you have bad credit.

First, you can see if you have access to a reputable credit counseling agency, ideally a non-profit that is affiliated with the National Foundation for Credit Counseling. They can work with you to develop a functional budget, often at no cost.

Additionally, for a small fee, a credit counseling agency may be able to set up a debt management plan. In these scenarios, they work with your creditors to secure lower interest rates and reasonable payments. Then, you’ll be able to pay off your debt faster and pay less in interest.

Negotiate Your Debt Settlement

If you can afford to send a lender a lump sum near what you owe in total, then your second option is to negotiate your one debt settlement offer. In these cases, you may be able to pay less than the full amount you owe. However, this isn’t always an option and does have drawbacks. It could hurt your credit more, or you may have to claim any forgiven amount as income, impacting your taxes.

You may be able to qualify for a personal loan if you have a friend or family member with good credit who is willing to cosign. However, you could put your relationship at risk if you can’t make your payments.

Similarly, if you have access to a 401(k) loan, you could use the value of your retirement account to get things under control. But that means putting your financial future at risk as a means of controlling your debt.

Bankruptcy Could Be The Best Option

For those who have an impossible debt situation, bankruptcy might be the best choice. Again, this approach hurts your score, but that doesn’t mean it isn’t the best answer. You may be able to stop any current and future collection efforts on your existing debts, effectively getting them discharged legally.

While these options may not seem great, they might be worth exploring. If you can get your debt under control, building your credit score up after might be possible. Then, you can move forward, aiming to make smart choices to prevent you from struggling with debt or your credit score again.

 

Is your credit score impacting your ability to get out of debt? Share your thoughts in the comments below.

 

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When Should You Use Your Credit Card?

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When Should You Use Your Credit Card

One of the most controversial topics in personal finance is that magic piece of plastic in your wallet. Everyone you ask will have a different opinion, with many just saying to avoid them altogether. While I wouldn’t call someone a fool for holding that opinion, I do honestly think credit cards have a place in your life.

The major hurdle here is assessing exactly how large that place is, and your ability to stay disciplined. Studies have shown that sliding a piece of plastic that isn’t linked to your cash makes  it easier to spend money. As a result, going overboard is extremely common. So, for those who aren’t sure how to maximize the benefits of credit while mitigating the risk, here is the answer to the golden question: When should you use your credit card?

When?

An obvious first step is to address the main question. There are a few use cases that I find the most low-risk as far as habit-forming goes. The first is bill payment. Selecting one low-cost bill to put on your credit card each month will make sure that you have utilization to build credit, but don’t run the risk of overspending.

Bills tend to stay relatively similar every month, so “going crazy” when using a credit card to cover a bill isn’t all that tempting. If you are too young to have bills quite yet, consider using your card to cover something else that you usually already cover with cash. The important part here is to make sure you are using it once or twice a month. Keeping the use infrequent keeps you from getting used to leaning on the card.

How much?

This one is a little less subjective. As far as responsible wealth management goes, a credit card is too high-interest to be heavily utilized. I don’t care what “rewards” you get. If you were the one benefiting the most from those reward programs, they wouldn’t exist. Credit bureaus do want to see some usage every month, though, and the highest scored utilization level is typically 1-9% each month.

If you keep your bill or routine credit spending in this range, your FICO score will increase rather quickly. A more obvious underlying rule here is to never spend more than you can pay off at the end of the month. Our directive is to never get interest charged on our credit card spending– that’s money in the toilet. Pay your card off every single month in its entirety. Then watch as your credit limit and FICO score skyrocket.

Know Yourself

To close this one out, here is a vital piece of the puzzle. You need to evaluate whether you should even have a credit card. If you have filed bankruptcy in the past, or came close due to impulsive spending, having a credit card in your pocket is a bad move. If you haven’t had enough time to get into a situation that dire, but know you have spending issues, don’t try it out.

Credit cards can help you in many ways, but none are as severe as the ways they can hurt you if misused. So, take a look inward before considering any of these rules, and make sure you have the discipline to stay focused on your goals. Just like any other addiction, impulsive spending is a temptation that never really goes away. Be responsible and don’t test waters in which you have already drowned.

 

 

Can An Unused Fingerhut Account Affect Your Credit Score?

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Fingerhut has been around since 1948. The company operates largely by extending shoppers credit lines that can be used to buy items from the Fingerhut catalog or at select partner businesses. Over time, a shopper may even qualify for a credit card that can be used anywhere. But not everyone continues to use Fingerhut. It isn’t uncommon for people to leave their accounts sitting open and unused. If you’re wondering whether an unused Fingerhut account affects your credit score. Here’s what you need to know.

How Fingerhut Credit Options Work

Mainly, Fingerhut targets consumers with less-than-perfect credit histories. Many have turned to the company to make purchases or even try and improve their credit scores. The company offers two main credit options: an installment loan and a store credit card-style account.

With the installment loan, the credit line is somewhat finite in nature. Usually, this account helps borrowers show that they can repay what they owe responsibly. After making a purchase, the borrower repays the principal and any applicable finance charges. Then, once they finish repaying, they might qualify for the store card-style account.

The credit account functions like a store credit card. It’s revolving, so users can make additional purchases whenever there’s enough room on their account. This option comes with a pretty high annual interest rate of 29.99 percent.

If a borrower keeps using their Fingerhut credit account responsibly, they might be able to convert their store card into a regular credit card. Then, they can use it at stores besides Fingerhut.

Fingerhut Credit Bureau Reporting

No matter which kind of account a borrower has, Fingerhut reports the activity to all three major credit bureaus. This means the size of the credit line, as well as other details, like payment history, make their way onto your credit report.

Depending on how a borrower uses or treats their Fingerhut account, they can impact their credit score. For example, making all of your payments on time and not maxing out your credit line could boost your score if you don’t have great credit. In contrast, reaching your credit limit or missing payments could hurt your score.

How an Unused Fingerhut Account Affects Credit Scores

If a revolving credit account is unused but open, it still impacts your credit score. First, the limit on that account is part of your available credit, a number that shows how much credit you can access practically immediately. Second, it affects your credit utilization ratio, a reflection of how much available credit you have, and how much credit you are using.

Both your available credit amount and credit utilization ratio are part of your credit score calculations. In some cases, your available credit amount can harm your credit or, at least, make it harder to obtain new credit. However, that depends on a variety of factors, including how large your Fingerhut credit line is and how much other credit you have available.

The impact of your credit utilization ratio can be fairly dramatic. If your unused Fingerhut account helps you keep your ratio low, say at 30 percent or less, it’s having a positive impact in that area. If, by closing your Fingerhut account, your credit utilization goes up substantially, then leaving it open might be a better choice.

Finally, your Fingerhut account’s age plays a role in your credit score. The average age of your accounts does impact your credit. Usually, the higher the average age, the better. If closing your account lowers the average age of your open accounts, such a move could cause your score to fall.

Should You Close an Unused Fingerhut Account?

Whether closing a revolving Fingerhut account is a smart idea depends on your unique situation. If leaving it open means you are tempted to acquire more debt, you might want to shut it down to avoid that situation.

Otherwise, you need to examine your situation carefully. For example, are you planning on opening a new credit account in the near future? Would closing the account dramatically raise your credit utilization ratio? Is your current credit score good, great, or exceptional, and could potentially weather a slight decrease?

Every person’s credit score situation is different. You need to examine how various factors might raise or lower your score. That way, you can decide if closing the account is right for you.

 

Do you have an unused Fingerhut account? What about a credit card? Are you worried about how it impacts your credit score? Share your thoughts in the comments below.

 

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The Only Reasons For Getting A Horizon Gold Card

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horizon gold card

If you have don’t have much credit history or have poor credit, finding financing options can be a challenge. The Horizon Gold card advertises that it’s meant for individuals who don’t have a great credit history, so you might think it’s a viable option for repairing or building your credit score. While this might technically be true, the Horizon Gold card isn’t necessarily a strong choice.

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Netspend PayPal Prepaid Mastercard MLB Team Card Design

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Netspend PayPal Prepaid Mastercard

When you are a sports super fan, you might go out of your way to showcase your love for a specific team. While t-shirts, hats, posters, flags, and similar branded items are the most commonly used, some fans look for other opportunities to show off their love for their favorite Major League Baseball (MLB) team. If that sounds like you, Netspend has you covered. With a Netspend PayPal Prepaid Mastercard, you can choose MLB designs that feature your favorite team’s logo.

Netspend Prepaid Mastercard MLB Team Designs

Baseball fans can be incredibly dedicated to their teams. Now, with the Netspend MLB prepaid Mastercard, you can show off your enthusiasm every time you make a purchase with the card.

Netspend has a range of MLB designs to choose from, starting with one that features the MLB logo. The company also has a version for every MLB team, including every option from the Arizona Diamondbacks to the Washington Nationals.

Getting a Netspend MLB Prepaid Mastercard

If you want to have a Netspend MLB prepaid Mastercard, the process is fairly simple. New customers begin by choosing their team card design from the available options, using a dropdown menu.

Next, you provide some basic personal information. Netspend needs your name, address, and email address to start your application.

Then, you can choose between some direct deposit choices. However, this step is technically optional, as you can select “None at this time” if you don’t want to set that up.

If you are approved and your card is set, you gain access to a range of features once you activate your Netspend prepaid Mastercard that features your favorite MLB team logo. Along with direct deposits that might allow you to get paid up to two days faster, you are also enrolled for Payback Rewards, a cashback program. Additionally, text alerts and mobile check loading are available, as well as access to the Netspend Mobile App, which allows you to check your balance, review transactions, and more.

You can also head to one of the 130,000+ reload locations to put funds on your card. This can include grocery stores, check-cashing locations, and a number of other physical destinations.

Using the MLB Team Card as a Netspend PayPal Prepaid Mastercard

With the Netspend MLB Mastercard, you can add funds to your account using PayPal. Begin by logging into your PayPal account. Next, go to your profile and click “Update Bank Account.” Then, click “Add Bank.”

At this point, you can enter your Netspend account details. If you don’t know your account number and routing number, sign in to your Netspend account. Next, select “Direct Deposit” from the main menu. Then, you’ll see the details you need in a gray box on the righthand side of the screen.

If you are enrolled in Anytime Alerts, you can also text DIRECT to 22622. After sending the message, you’ll get a reply with your account number and routing number. Alternatively, you can call Netspend at 1-866-387-7363 for those details. Just make sure to choose the “Other Services” option to get sent to the right department when you call.

With your account and routing numbers in hand, you enter those details into PayPal. Within a couple of days, you’ll see to small deposits into your Netspend account from PayPal. You need these amounts to verify your account.

Once you see the small deposits, log back into PayPal, and go to your profile. Click “Update Bank Account” and then click “Verify Bank Account.” Choose your Netspend account and enter the two small deposit amounts into the boxes. Finally, click “Continue” to finish verifying the account.

After that process is complete, you can withdraw PayPal funds to your Netspend card, turning it functionally into a Netspend PayPal prepaid Mastercard.

Netspend Prepaid MLB Card Fees

With any Netspend prepaid card, you’ll have to contend with some fees. Exactly which ones you’ll encounter depends on how you use your card. For example, you can choose to pay $9.95 a month and get free transactions. If you have $500 a month in direct deposits, that fee drops to $5.00. Alternatively, you can pay up to $2.00 per transaction.

Using an ATM comes with a $2.50 per withdrawal fee and a $0.50 balance inquiry fee regardless of whether you use the pay-as-you-go or monthly plan approach for transactions. Cash reloads also cost $3.95 no matter what.

However, loading the card through PayPal doesn’t have a fee, making it a way to avoid an extra cost. If you use a mobile check deposit, it’s free if you are willing to wait for up to 10 days. But speeding up the process will cost you, with the fee usually falling between 1 and 5 percent of the check amount for same-day processing.

If you don’t use your account for 90 days, you’ll end up with a $5.95 inactivity fee. There are also a few other potential fees that apply in specific situations, like declined ATM transaction fees and over-the-counter withdrawal fees.

Ultimately, the Netspend prepaid MLB Mastercard does let you show off your team spirit. But it’s important to understand the various fees you’ll encounter. Otherwise, you could dwindle your available balance down surprisingly quickly.

Do you like prepaid cards with sports team or other designs? Share your thoughts in the comments below.

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What Is The User’s Liability For Unauthorized Use Of Total Visa Card?

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If you have unauthorized use on a Total Visa card, you may be in luck. The most you’ll be responsible for is $50, but it’s more likely to be $0.

Total Visa Card Disclosures

The fine print in the Total Visa card disclosures says, “…You will not be liable for unauthorized use of your Card or Account… Certain exceptions apply, and you may be liable for up to $50.00.”

The disclosures go on to discuss the situation when you should call and how to reach them the fastest, which is the toll-free number. The exceptions depend on how quickly you report the card lost or stolen. If you contact the company before the unauthorized use, you won’t be held liable for any purchases made after that. For example, if you lost the card and call before the unauthorized use, you won’t be held responsible. If you contact the company within two days, you may be responsible for up to $50.

FTC Rules

The Federal Trade Commission (FTC) states that if you exceed those time limits, you may be liable up to $500 or more based on how long it takes for you to report the unauthorized charges or missing Card. If it’s been over 60 days, you might be liable for all of the costs. Although, most of this won’t apply to the Total Visa Card because the limit is $300, and the disclosures clearly say up to $50. You can also check your renters’ or homeowner’s insurance policy for stolen card coverage.

Tips to Avoid Paying a Fee

To avoid owing $50 or more with any of your cards, here are some tips. First, always review your statements for any unusual charges. Also, it is a good habit to keep your receipts until the fees have shown on your statement, and you can compare the final costs. Next, once you have found an inconsistency, immediately contact the bank or credit card company. Make a note of when you called to report the discrepancy. The FTC suggests that you follow-up with a written letter or email and track all correspondence. Ask for a delivery receipt if you mail in your letter.

Next, I’d encourage you to look at your previous monthly statements for any other unusual charges, especially small ones. I recently heard of a woman that had several months’ worth of transactions that she missed because they were so little. Her credit card company dismissed them, but that is not always the case.

Avoid Fraudulent Charges

The best thing to do is to avoid potential fraud before it happens. Protect your cards and PINs. Don’t carry every card with you if you don’t need them. Don’t write your PIN down anywhere. Don’t share your card information or PIN. Avoid giving your card numbers over the phone, especially in public areas. Also, don’t give your card information during incoming calls; it might be a scam call. Mark through any blank spots on your receipts so they can’t be filled in later.

If you are using your account wisely and protecting your information, you will reduce your liability. Report any activity as quickly as possible to minimize your payout.

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