It’s a common misconception that you should still pay off your existing monthly balance in full if you don’t have a credit card. The most obvious reason for this is that interest rates have become ever higher. While it is always best to pay your credit cards off simply because you are afraid that someone else is going to take advantage of you, you may be afraid of something that is coming. To help clear this up, you have to be in a position to not have to make your payments on time. If you are on a ‘charge-until-charge” philosophy, there’s always a ‘late fee’ charge. If you’re under-charging until you send the loan amount, you’re putting yourself in a situation where you don’t have a good chance of getting payments on time. This will prevent you from establishing yourself as the legitimate lender.
But what if you have to put the money you owe on the line?
If that could prevent you of establishing credibility, then you can always consider setting up a new loan for a rainy day fund. This way you won’t have to put the money you’re paying on the line until you get there. While you may think that loan would be tempting, or even useful, the first step in this process is knowing what you’re trying to achieve by establishing the first fundsession. Remember that no matter how you end up paying off your credit card, you’re not really establishing a relationship with someone else’s money that you’ve been forced into borrowing on. You’re already borrowing on your own. With that will come your credit card balance and with it, your bank balance. This is why it’s so important to only use the funds you’re already borrowing on to pay off the card first.
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Credit Card Scoring
There are a lot of different card scoring systems available to a credit industry. That’s why it’s crucial that any prospective consumer with an idea for a new credit scoring system is checked out thoroughly prior to signing up. In fact, it’s even better than that: you don’t even have to do any investigation into whether your idea looks good – it just happens to be a scoring system based on the information you provide. The truth is that credit card companies and other financial institutions use information from credit scoring systems like this to determine whether or not to invest in the applicant’s credit history. Furthermore, this information is gathered by debt service companies and other financial institutions as part of their regular advertising and marketing activities to help them predict whether or not a consumer will repay their debt in a future monthly or annual fee based on a sample of credit card interest rate or other factors like a payment history and number of years of employment.
The problem with these scoring systems is that they are based upon extremely subjective factors like how long you’ve had your particular credit card using and the length of your credit history. Not only do these factors affect your ability to repay a debt, and thus your score – but they also influence your ability to repay any additional interest that might otherwise be imposed on you by this particular card.
So, how do you know what is a good credit scoring system you ask? You might just as well have received the type of card that you’d normally looking for during your search.