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13 Jul 2010 11:54

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Biz: Credit scores: FICO says some doing worse, others doing better

  • 25.5% of all consumers have credit scores below 600 – far higher than usual (blame unemployment)
  • 17.9% of all consumers have credit cards above 800 – also higher than usual (impressive) source
  • » Why this matters: Low scores tend to stick around a long time, as much as seven to ten years, making it hard to recover from bad decisions or worse luck. But it appears that those who stayed afloat during the recession learned an important lesson – paying down debt and spending less is better than having a low credit score.
Posted by Ernie Smith • 0 Comments • Permalink

02 Jan 2010 17:36

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Biz: Debit vs. credit: Some quick notes on using bank cards

  • With the new credit laws taking place in February and later this year, now’s a good time to start thinking about how to react to the changes now. As a result, debit cards will be in heavier use. But before you get started, here are some things to consider:
  • Introductory points:
  • 40% of credit card users pay their balances monthly – something important to note. Paying off said debt can help you avoid some of the larger interest charges
  • opt-in a change coming to overdraft fees in mid-year; the often-costly fees on debit accounts are responsible for $25-$38 billion each year in bank profits
  • Usage tactics:
  • debit Debit cards are easier for many consumers to acquire, and are a good cash replacement. They’re better to use for small purchases, but tend to have many fees.
  • credit The better your score, the better the credit. It’s easy to rack up heavy debt, but when used properly, they’re advantageous for larger purchases in particular.
  • Safety considerations:
  • In cases of theft By and large, you have more protections with credit – Visa and MasterCard protect consumers from all liability above $50. Debit cards will credit accounts as well, but it’s up to the bank, who takes responsibility for the loss.
  • In cases of disputes Again, users of credit have the legal advantage here – if a charge is disputed, you don’t have to pay while the charge is disputed. With debit cards, this is in the hands of the banks, not the consumer.
  • General protip If you use a debit card to make a purchase, don’t use the PIN. Instead, sign for the purchase. You get many of the same protections you would with credit cards, and you pay fewer fees for the privilege.
  • Other things to consider:
  • scores Paying back credit cards has a direct effect on your FICO score – important for large loans.
  • benefits Overall, you get stronger benefits – such as points – with credit cards than debit cards.
  • buffer Debit overdraft fees can come in handy if you’re short, but they can quickly add up. source
Posted by Ernie Smith • 0 Comments • Permalink
 
 
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