Steve Repak's Blog - Posts Tagged "equifax"
How I Overcame My Obstacles and Paid Off My Credit Card Debt
I knew a person who came from extremely humble beginnings. Growing up, he didn’t have that much. Kids made fun of the clothes he wore, and when he got into high school he worked evenings and weekends just to have a little spending money. Neither of his parents had a college degree, so education wasn’t much of a priority. He graduated from high school and decided to join the Army.
This was the first time he saw real money. He took home about $700 every two weeks. His clothes, housing, and food were paid for by the military, but he had trouble saving money and would always find himself with nothing in the bank. After about a year in the Army, he got his first credit card. Before his signature on the back of the credit card was dry, he’d maxed it out.
Even though he lived paycheck to paycheck with a maxed out credit card and no money in savings, he was promoted to private first class. A higher rank meant a higher salary, which gave him the opportunity to get another credit card—and he soon maxed that out.
You might be thinking that he would eventually catch on, but the cycle continued to repeat. He would get promoted, make more money, get more credit, and max out his credit cards. As long as he could make the minimum payments, he thought had a handle on his debt. He would always tell himself that the next time he got promoted, he would have more money to pay off credit card debt.
I’m sorry to say that after 12 years in the Army, he left with $32,000 in credit card debt. I’m even sorrier to tell you that this person was me.
I know what it feels like to live paycheck to paycheck and have nothing in savings, a poor credit score, and a mountain of debt. I want to let you know that there is hope if you can follow these four steps:
1. Admit there is a problem. I thought that because my friends had debt, it was OK for me to have debt, too. I had to admit that I had a spending problem—I spent more than I earned. Nobody likes to admit that he or she has a problem, but you have to take responsibility in order for things to get better.
2. Start spending less. What helped me curb my spending was keeping a spending journal. In it, I wrote down exactly where, what, and how much I was spending each day. After doing that for a few weeks, I started keeping more money in my pocket.
3. Build your savings. It might not make a lot of sense, but the only way I was able to get out of debt was to build up my savings. When I first started saving, I would have to use my credit card when an emergency came up. After I built my savings and those emergencies reared their ugly head, I was able to take care of them without resorting to credit cards.
4. Make a plan and be flexible. That’s not a mistake. Don’t make a plan and then stick to it no matter what. There were times I felt I would never be able to pay off all of my debt because things would happen and throw me off track. I had to be flexible and adjust my plan.
What worked for me was making minimum payments on my debts with the lowest interest rates, and paying more towards the cards with the higher interest rates. You could also start by paying off the card with the lowest balance and working up from there. The only wrong way to approach paying off your debt is to not have a plan at all.
http://blog.equifax.com/credit/how-i-...
This was the first time he saw real money. He took home about $700 every two weeks. His clothes, housing, and food were paid for by the military, but he had trouble saving money and would always find himself with nothing in the bank. After about a year in the Army, he got his first credit card. Before his signature on the back of the credit card was dry, he’d maxed it out.
Even though he lived paycheck to paycheck with a maxed out credit card and no money in savings, he was promoted to private first class. A higher rank meant a higher salary, which gave him the opportunity to get another credit card—and he soon maxed that out.
You might be thinking that he would eventually catch on, but the cycle continued to repeat. He would get promoted, make more money, get more credit, and max out his credit cards. As long as he could make the minimum payments, he thought had a handle on his debt. He would always tell himself that the next time he got promoted, he would have more money to pay off credit card debt.
I’m sorry to say that after 12 years in the Army, he left with $32,000 in credit card debt. I’m even sorrier to tell you that this person was me.
I know what it feels like to live paycheck to paycheck and have nothing in savings, a poor credit score, and a mountain of debt. I want to let you know that there is hope if you can follow these four steps:
1. Admit there is a problem. I thought that because my friends had debt, it was OK for me to have debt, too. I had to admit that I had a spending problem—I spent more than I earned. Nobody likes to admit that he or she has a problem, but you have to take responsibility in order for things to get better.
2. Start spending less. What helped me curb my spending was keeping a spending journal. In it, I wrote down exactly where, what, and how much I was spending each day. After doing that for a few weeks, I started keeping more money in my pocket.
3. Build your savings. It might not make a lot of sense, but the only way I was able to get out of debt was to build up my savings. When I first started saving, I would have to use my credit card when an emergency came up. After I built my savings and those emergencies reared their ugly head, I was able to take care of them without resorting to credit cards.
4. Make a plan and be flexible. That’s not a mistake. Don’t make a plan and then stick to it no matter what. There were times I felt I would never be able to pay off all of my debt because things would happen and throw me off track. I had to be flexible and adjust my plan.
What worked for me was making minimum payments on my debts with the lowest interest rates, and paying more towards the cards with the higher interest rates. You could also start by paying off the card with the lowest balance and working up from there. The only wrong way to approach paying off your debt is to not have a plan at all.
http://blog.equifax.com/credit/how-i-...
How to Live a VIP Lifestyle on a Budget
There’s a saying that good meat isn’t cheap and cheap meat isn’t good—in other words, you get what you pay for. So when you’re on a budget, how can you enjoy the finer things in life without breaking the bank?
Fortunately, you can treat yourself and the ones you love to some VIP-style fun every once in a while, even if you don’t make a million dollars a year. Here are a few ways you can eat out, travel, and have fun on a budget:
Dining out
Going out to eat is definitely a treat, and costs can quickly add up. Save money by not ordering drinks and instead only ordering water. Non-alcoholic beverages and wine are where restaurants make most of their profits.
Another way to save a little money while still being able to eat great food is to go out for lunch instead of dinner. The portions will most likely be smaller, but that means your bill will be smaller, too. You can also try a different day of the week. Many restaurants offer deals on slower-traffic days in order to drive more business.
Traveling
Try vacationing in the off-season. You can find some great vacation packages by booking during off-peak months, and resorts and beaches may not be very busy during those times.
If you are flying, try scheduling your flight to leave and return during the middle of the week or booking flights with connections instead of non-stop or direct flights. It won’t be as quick, but it will be cheaper (and you’ll have some time to stretch your legs). You may also want to consider alternate means of transportation, such as bus or train, if time is not a factor and if your travel destination is only a few hundred miles away.
The finer things
If you love to be pampered, consider checking out the local beauty colleges or spa training schools in your area instead of pricier salons or spas. You’ll save money, and the person taking care of you will appreciate the opportunity to further perfect his or her craft. You can also try daily deals sites, such as LivingSocial and Groupon, which often have discounted prices for spa and salon services. But buyer beware: You can definitely wreck your budget if you don’t know when to say no to a deal.
If you prefer a good shopping spree to unwind, gently used could be the way to go. Consider shopping at clothing consignment stores and online stores. You can find new and nearly new items for a fraction of the price.
Can you travel, eat out, and enjoy the finer things without breaking the bank? I think you can as long as you have some self-control, are able to budget, and remember that you aren’t a multi-millionaire. What are your tips for enjoying yourself on a budget?
via http://blog.equifax.com/retirement/ho...
Fortunately, you can treat yourself and the ones you love to some VIP-style fun every once in a while, even if you don’t make a million dollars a year. Here are a few ways you can eat out, travel, and have fun on a budget:
Dining out
Going out to eat is definitely a treat, and costs can quickly add up. Save money by not ordering drinks and instead only ordering water. Non-alcoholic beverages and wine are where restaurants make most of their profits.
Another way to save a little money while still being able to eat great food is to go out for lunch instead of dinner. The portions will most likely be smaller, but that means your bill will be smaller, too. You can also try a different day of the week. Many restaurants offer deals on slower-traffic days in order to drive more business.
Traveling
Try vacationing in the off-season. You can find some great vacation packages by booking during off-peak months, and resorts and beaches may not be very busy during those times.
If you are flying, try scheduling your flight to leave and return during the middle of the week or booking flights with connections instead of non-stop or direct flights. It won’t be as quick, but it will be cheaper (and you’ll have some time to stretch your legs). You may also want to consider alternate means of transportation, such as bus or train, if time is not a factor and if your travel destination is only a few hundred miles away.
The finer things
If you love to be pampered, consider checking out the local beauty colleges or spa training schools in your area instead of pricier salons or spas. You’ll save money, and the person taking care of you will appreciate the opportunity to further perfect his or her craft. You can also try daily deals sites, such as LivingSocial and Groupon, which often have discounted prices for spa and salon services. But buyer beware: You can definitely wreck your budget if you don’t know when to say no to a deal.
If you prefer a good shopping spree to unwind, gently used could be the way to go. Consider shopping at clothing consignment stores and online stores. You can find new and nearly new items for a fraction of the price.
Can you travel, eat out, and enjoy the finer things without breaking the bank? I think you can as long as you have some self-control, are able to budget, and remember that you aren’t a multi-millionaire. What are your tips for enjoying yourself on a budget?
via http://blog.equifax.com/retirement/ho...
Four Reasons Why Renting a House May Be Better Than Buying One
Growing up, I was constantly told that buying a home was the American Dream. When I was in the military, I was sometimes looked down upon because I was a renter, but it just made more sense for me at the time.
Here are four reasons you might consider renting rather than buying a home:
1. You are a traveler. I think back to my time in the military, when I had to pick up and move every three to four years. If you’re in a profession that requires you to move often, like I was, renting could easily be a better choice. Buying and selling a home are expensive endeavors, and getting involved with either one could wind up being a losing proposition, depending on how long you will own the house, the housing market in your area, and current interest rates, among other things.
2. You moved to an overheated market. Depending where you are geographically, your local real estate market may be red hot, requiring you to overpay to get the house you want. Think Houston, Texas, in the 1980s, just before it fell victim to the oil bust; Silicon Valley up until the dot-com bust in 2000; and, most recently, the pre-Great Recession housing market.
Comparing local rents to local home sale prices might help you determine if it makes better sense to rent rather than buy a home. If home values are high, consider renting until prices drop and you can score a deal on your dream home.
3. You hate commitment. Maybe you don’t want to be tied down for 20 or 30 years; maybe you don’t want to have to worry about maintenance costs, taxes, and fluctuating interest rates; or maybe you just want to have a change of scenery every once in a while.
And heaven forbid your neighborhood should deteriorate or a shopping center should pop up on the vacant land behind your house. It is a lot easier to get away from a not-so-good neighbor or neighborhood if you are renting.
4. You are starting over or just starting out. Financially speaking, if you are in one of these situations, you might not be able to come up with a nice down payment, or your cash flow could be a little unpredictable. There is nothing wrong with saving for a few years or waiting until you are sure you can afford a mortgage payment along with the taxes, insurance, HOA dues, and utilities that come with homeownership.
Some people like going to the beach, while other people like going to the mountains—renting versus buying is the same thing. The choice may simply come down to personal preferences. You can still live the American Dream if you don’t own a house, especially if homeownership doesn’t make sense for you.
via http://blog.equifax.com/real-estate/f...
Here are four reasons you might consider renting rather than buying a home:
1. You are a traveler. I think back to my time in the military, when I had to pick up and move every three to four years. If you’re in a profession that requires you to move often, like I was, renting could easily be a better choice. Buying and selling a home are expensive endeavors, and getting involved with either one could wind up being a losing proposition, depending on how long you will own the house, the housing market in your area, and current interest rates, among other things.
2. You moved to an overheated market. Depending where you are geographically, your local real estate market may be red hot, requiring you to overpay to get the house you want. Think Houston, Texas, in the 1980s, just before it fell victim to the oil bust; Silicon Valley up until the dot-com bust in 2000; and, most recently, the pre-Great Recession housing market.
Comparing local rents to local home sale prices might help you determine if it makes better sense to rent rather than buy a home. If home values are high, consider renting until prices drop and you can score a deal on your dream home.
3. You hate commitment. Maybe you don’t want to be tied down for 20 or 30 years; maybe you don’t want to have to worry about maintenance costs, taxes, and fluctuating interest rates; or maybe you just want to have a change of scenery every once in a while.
And heaven forbid your neighborhood should deteriorate or a shopping center should pop up on the vacant land behind your house. It is a lot easier to get away from a not-so-good neighbor or neighborhood if you are renting.
4. You are starting over or just starting out. Financially speaking, if you are in one of these situations, you might not be able to come up with a nice down payment, or your cash flow could be a little unpredictable. There is nothing wrong with saving for a few years or waiting until you are sure you can afford a mortgage payment along with the taxes, insurance, HOA dues, and utilities that come with homeownership.
Some people like going to the beach, while other people like going to the mountains—renting versus buying is the same thing. The choice may simply come down to personal preferences. You can still live the American Dream if you don’t own a house, especially if homeownership doesn’t make sense for you.
via http://blog.equifax.com/real-estate/f...
How Realistic Is the Cash-Only Lifestyle?
If you are in debt, you may have heard that you should stop using credit cards and switch to cash, at least temporarily.
But could using only cash really help you get out of debt? Not necessarily. If getting out of debt is your goal, there are three tried and true habits to keep in mind:
1. Spend less money than you take home each week.
2. Build an emergency savings account.
3. Develop and follow a get-out-of-debt plan.
Here are some of the potential pros and cons to consider when using either cash or credit cards:
Potential cons of using cash
One of the biggest disadvantages of carrying cash, of course, is that you can lose it. If you lose your credit card, you can cancel it and get a new one. Not so with cash. Also, if you use an ATM to withdraw cash, you may be charged fees, which is like throwing money away. Worst of all, flashing cash can make you a target for thieves.
Some pros to using cash
A great technique for getting spending under control is using what is known as the “envelope method,” where you have an envelope of cash for each different category of spending. For example, you might use an envelope specifically for food expenses, such as groceries and eating out, another for clothes, and a third for transportation.
You may also want to have an envelope for discretionary (fun) spending. It is OK to spend money on things you like or things you like to do—the key is to budget for those expenses just like you do for your savings, rent, credit card payments and other expenditures. With this method, you are only allowed to spend what is in the envelope and not a penny more.
Potential cons using credit cards
If you continue to use credit cards and you don’t have your spending under control, you may never get out of debt—it’s that simple. But even if you do have your spending under control, you still may be tempted to use credit cards the wrong way.
Balance transfers with introductory or teaser rates are a good example. It may sound enticing to consolidate your credit card debt with a balance transfer offering a low introductory rate, but you should always read the fine print. The 0 percent promotional rate is typically just that—a promotional rate that may not last forever. These offers typically last anywhere from six to 12 months and then the rate increases, often to a higher rate than you had on your old card.
In addition, there are usually transfer fees, which typically are around 3 percent but can be much higher. Make sure you understand these fees before consolidating your debt. There are online calculators you can use to see if transferring balances to a new card will really help.
Finally, if you do decide to consolidate your debt, you may want to consider paying more than the minimum payment due. Consider making your payments on the new card, at a minimum, equal the payments you were making on the old cards. In other words, you may want to avoid consolidating your debt and then paying less toward it.
Some pros to using credit cards
You can make credit cards work for you if you are disciplined. For example, there are credit cards where you can earn unlimited cash back on everyday purchases, with no expiration and no limit on how much you can earn. As always, make sure you read the fine print, as there are often annual fees for these credit cards.
The main thing to keep in mind is this: If you use a credit card with rewards, you still want to pay the balance in full. It will defeat the purpose of getting rewards if you have to pay interest, which could be more than the value of the rewards.
Building your credit, of course, is another benefit, and it’s very hard to build your credit history if you use only cash. Additionally, there are some circumstances in which you might want to use a credit card, such as booking a hotel or renting a car.
Remember, whether you use cash or credit, getting out of debt is only possible if you build a plan, spend less money than you earn, build your savings, and stick to it.
courtesy of http://blog.equifax.com/credit/how-re...
But could using only cash really help you get out of debt? Not necessarily. If getting out of debt is your goal, there are three tried and true habits to keep in mind:
1. Spend less money than you take home each week.
2. Build an emergency savings account.
3. Develop and follow a get-out-of-debt plan.
Here are some of the potential pros and cons to consider when using either cash or credit cards:
Potential cons of using cash
One of the biggest disadvantages of carrying cash, of course, is that you can lose it. If you lose your credit card, you can cancel it and get a new one. Not so with cash. Also, if you use an ATM to withdraw cash, you may be charged fees, which is like throwing money away. Worst of all, flashing cash can make you a target for thieves.
Some pros to using cash
A great technique for getting spending under control is using what is known as the “envelope method,” where you have an envelope of cash for each different category of spending. For example, you might use an envelope specifically for food expenses, such as groceries and eating out, another for clothes, and a third for transportation.
You may also want to have an envelope for discretionary (fun) spending. It is OK to spend money on things you like or things you like to do—the key is to budget for those expenses just like you do for your savings, rent, credit card payments and other expenditures. With this method, you are only allowed to spend what is in the envelope and not a penny more.
Potential cons using credit cards
If you continue to use credit cards and you don’t have your spending under control, you may never get out of debt—it’s that simple. But even if you do have your spending under control, you still may be tempted to use credit cards the wrong way.
Balance transfers with introductory or teaser rates are a good example. It may sound enticing to consolidate your credit card debt with a balance transfer offering a low introductory rate, but you should always read the fine print. The 0 percent promotional rate is typically just that—a promotional rate that may not last forever. These offers typically last anywhere from six to 12 months and then the rate increases, often to a higher rate than you had on your old card.
In addition, there are usually transfer fees, which typically are around 3 percent but can be much higher. Make sure you understand these fees before consolidating your debt. There are online calculators you can use to see if transferring balances to a new card will really help.
Finally, if you do decide to consolidate your debt, you may want to consider paying more than the minimum payment due. Consider making your payments on the new card, at a minimum, equal the payments you were making on the old cards. In other words, you may want to avoid consolidating your debt and then paying less toward it.
Some pros to using credit cards
You can make credit cards work for you if you are disciplined. For example, there are credit cards where you can earn unlimited cash back on everyday purchases, with no expiration and no limit on how much you can earn. As always, make sure you read the fine print, as there are often annual fees for these credit cards.
The main thing to keep in mind is this: If you use a credit card with rewards, you still want to pay the balance in full. It will defeat the purpose of getting rewards if you have to pay interest, which could be more than the value of the rewards.
Building your credit, of course, is another benefit, and it’s very hard to build your credit history if you use only cash. Additionally, there are some circumstances in which you might want to use a credit card, such as booking a hotel or renting a car.
Remember, whether you use cash or credit, getting out of debt is only possible if you build a plan, spend less money than you earn, build your savings, and stick to it.
courtesy of http://blog.equifax.com/credit/how-re...
