Ewan Captures : Financial Blog

Posts Tagged ‘Pitfalls’

If you own credit cards, chances are you want some of their limits increased. There are many positive reasons for raising the limit such as being able to consolidate card balances, increasing credit score, or simply to make larger purchases. Whatever the reason, there are a few things you should know that may help out the process in increasing the limit.

1) Be sure to read the terms and conditions of the card. Be disciplined and stick to them. Being a good customer always makes it easier to raise your credit limit.

2) Be aware of the pitfalls that may arise if you increase your limit. If you are raising the limit simply to afford larger purchases, be sure you are able to handle the higher monthly payments.

3) Pay more than your monthly minimum payments. This will put you on good terms with the company, and make them more apt to raise your limit when you ask.

4) Use your credit cards often, instead of using them just for emergencies – and of course pay them off. This may sound counterproductive. However, this ensures a predictable credit history, and will appeal more to creditors when making a decision.

5) Call your credit company and ask them what their regular procedure is in order to increase your credit limit. Some companies will automatically increase your limit if they see a good payment pattern. However, some companies will only increase your limit if you ask. Some companies will also have a short form to submit on their website which will allow you to increase your limit.

Debt consolidation is a common tactic for people with mounting debt. For some, it’s a way to consolidate payments, reduce interest, and streamline their budget. It might sound like a great idea when you feel like your bills are starting to spiral out of control.

Some people find that their debt is mounting and they’ve got several payments to make throughout the month. When those individuals look at the interest rate for each payment it can quickly become apparent that they’re beginning to have a heavy debt load.

Is Debt Consolidation the Answer?

If you are two payments or more in arrears, you probably won’t qualify for a debt consolidation. Your credit needs to be in generally good order, otherwise you’ll appear to be a risk to lenders.

And, if you move to this form of debt, you could suddenly require collateral. This could put your property at risk of being repossessed if you miss payments. Those who have unsecured credit cards and small loans could suddenly have their home and / or vehicle on the line. Is this a risk you’re really willing to take?

Consolidation Could Lead to Increased Debt
One of the common pitfalls of consolidation happens when you don’t take this as an opportunity to get out of debt. Many consumers feel the relief by paying off their debts but then run credit card balances right back up. Now, you’ve got a consolidation loan AND more debts on top of that.

Consolidating debts isn’t the answer for everyone. But it could be worth at least investigating as an option. You may want to sit down with a debt counsellor or credit counsellor to talk about your various options.

Making an informed decision about your debt load is wise. By looking at your options and your specific situation you can make an action plan for getting out of debt as well as putting money away for the future.

Only you can improve your financial situation. Through careful budgeting, through paying off your debts, and through making wise financial decisions, you can take the pressure off. Debts can be dangerous to your health, your wealth, and your relationships. A careful look at your spending habits, your debts, and your financial decisions could serve you well. Before you decide to try to get approved for a debt consolidation, consider talking to a financial expert.

Here is some simple, money saving, advice for when refinancing a mortgage. These tips can easily help a homeowner avoid some expensive pitfalls which can be easily avoided when refinancing a home loan. Mortgage refinancing is not a hard thing to do, and with this advice, it will be even easier.

Always make sure, just like any big purchase you ever make, to shop around. Different mortgage lenders and banks will offer homeowners different interest rates, different loan types, and often both. This means what is considered a good deal at one mortgage lender, may not be the best deal you could be getting from an alternative lender, or loan type. Even if you have found a mortgage lender you like and trust, get a few different quotes. Make sure they include all closing, and associated filing fees. This way, you can ask a lender why their rates are higher, than the ones you have quoted, which you can show them in hopes they will match it.

Homeowners should know exactly why they want to refinance their home loan, and then choose the appropriate refinancing loan type. Do you want to save money every month? So you want smaller monthly payments? Would you like to tap into some of your homes equity? These are all important questions.

Homeowners who want to save money every month should attempt to get a mortgage refinancing into a new home loan with a lower interest rate. Right now, odds are the average interest rates are lower than the rate you have on your home loan. Saving 1% in interest on the mortgage easily adds up to a lot of money, and pays down your principal a little quicker as well. Homeowners who need a lower mortgage payment can refinance into a new extended length loan. This is simply extending the length of your home loan, and getting reduced payments instead of cash from the equity. Homeowners looking to get cash out of their homes value should attempt to get a cash back refinancing. This is when a homeowner refinances into a new mortgage which is larger than the mortgage they have now and pockets the difference.